The Destabilization of Bolivia and the "Kosovo Option"

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By Michel Chossudovsky

The secession of Bolivia’s Eastern provinces is part of a US sponsored covert operation, coordinated out of the US State Department, in liaison with US intelligence.

The death squads armed with automatic weapons responsible for killing supporters of Evo Morales in El Porvenir are supported covertly by the US. According to one report, "USAID has an "Office of Transition Initiatives" operating in Bolivia, funneling millions of dollars of training and support to right-wing opposition regional governments and movements."(The Center for Economic and Policy Research, September 2008). The US also provides support to various opposition groups through the National Endowment for Democracy (NED).

The expelled US Ambassador Philip S. Goldberg worked under the helm of Deputy Secretary of State John Negroponte, who directly oversees the various "activities" of US embassies around the World. In this regard Negroponte plays a far more important role, acting behind the scenes, than Secretary of State Condoleeza Rice. He is also known as one of the main architects of regime change and covert support to paramilitary death squads both in Central America and Iraq.

Philip S. Goldberg’s mandate as ambassador to Bolivia was to trigger the fracture of Bolivia as a country. Prior to his appointment as ambassador in early 2007, he served as US Chief of Mission in Pristina, Kosovo (2004-2006) and was in permanent liaison with the leaders of the KLA paramilitary, who had integrated civilian politics, following the NATO occupation of Kosovo in 1999.

Supported by the CIA, the Kosovo Liberation Army (KLA), whose leaders now head the Kosovar government, was known for its extensive links to organized crime and the trade in narcotics. In Kosovo, Goldberg was involved in setting the stage for the subsequent secession of Kosovo from Serbia, leading to the installation of an "independent" Kosovar government.

In the course of the 1990s, Goldberg had played an active role in the break up of Yugoslavia. From 1994-1996 he was responsible for the Bosnia Desk at the State Department. He worked closely with Washington’s Special Envoy Richard Holbrooke and played a central role as Chief of Staff of the US negotiating team at Dayton, leading up to the signing of the Dayton Accords in 1995. These accords were conducive to the carving up of Bosnia-Herzegovina. More generally they triggered the destruction and destabilization of Yugoslavia as country. In 1996, Goldberg worked directly as Special Assistant to the Deputy Secretary of State Strobe Talbott (1994-2000), who together with Secretary of State Madeleine Albright, played a key role in launching the war on Yugoslavia in 1999.

The Central Role of John Negroponte

Deputy Secretary of State John Negroponte plays a central role in the conduct of covert operations. He served as US ambassador to Honduras from 1981 to 1985. As Ambassador in Tegucigalpa, he played a key role in supporting and supervising the Nicaraguan Contra mercenaries who were based in Honduras. The cross border Contra attacks into Nicaragua claimed some 50 000 civilian lives. During the same period, Negroponte was instrumental in setting up the Honduran military death squads, "operating with Washington support’s, [they] assassinated hundreds of opponents of the US-backed regime." (See Bill Venn, Bush Nominee linked to Latin American Terrorism, Global Research, November 2001)

"Under the rule of General Gustavo Alvarez Martnez, Honduras’s military government was both a close ally of the Reagan administration and was "disappearing" dozens of political opponents in classic death squad fashion.

(See Peter Roff and James Chapin, Face-off: Bush’s Foreign Policy Warriors , Global Research, July 2001)

This did not prevent his nomination to the position of US Permanent Representative to the UN under the Clinton administration.

The Salvador Option

Negroponte became Ambassador to Iraq in 2004, where he set up a "security framework" for the US occupation, largely modeled on the Central American death squads. This project was referred to by several writers as the "Salvador Option".

While in Baghdad, Negroponte hired as his Counselor on security issues, a former head of special operations in El Salvador. The two men were close colleagues going back to the 1980s in Central America. While Negroponte was busy setting up the death squads in Honduras, Colonel Steele had been in charge of the US Military Advisory Group in El Salvador, (1984-86) "where he was responsible for developing special operating forces at brigade level during the height of the conflict.":

"These forces, composed of the most brutal soldiers available, replicated the kind of small-unit operations with which Steele was familiar from his service in Vietnam. Rather than focusing on seizing terrain, their role was to attack ‘insurgent’ leadership, their supporters, sources of supply and base camps." (Max Fuller, For Iraq, "The Salvador Option" Becomes Reality, Global Research, June 2005)

In Iraq, Steele was "assigned to work with a new elite Iraqi counter-insurgency unit known as the Special Police Commandos". In this context, Negroponte’s objective was to encourage ethnic divisions and factional strife, by triggering covert terrorist attacks directed against the Iraqi civilian population.

Negroponte was appointed as the Head of the Directorate of National Intelligence in 2005, and subsequently in 2007 came to occupy the Number Two position in the State Department.

The Kosovo Option: Haiti

This is not the first time that the "Kosovo model" of supporting terrorist paramilitaries has been applied in Latin America.

In February 2003, Washington announced the appointment of James Foley as Ambassador to Haiti. Ambassadors Goldberg and Foley are part of the same "diplomatic stable". Foley had been a State Department spokesman under the Clinton administration during the war on Kosovo. He was involved at an earlier period in channeling support to the Kosovo Liberation Army (KLA).

Amply documented, the Kosovo Liberation Army (KLA) was financed by drug money and supported by the CIA. ( See Michel Chossudovsky, Kosovo Freedom Fighters Financed by Organized Crime, Covert Action Quarterly, 1999 )

At the time of the Kosovo war, the then ambassador to Haiti James Foley had been in charge of State Department briefings, working closely with his NATO counterpart in Brussels, Jamie Shea. Barely two months before the onslaught of the NATO led war on 24 March 1999, James Foley, had called for the "transformation" of the KLA into a respectable political organization:

"We want to develop a good relationship with them [the KLA] as they transform themselves into a politically-oriented organization,’ ..`[W]e believe that we have a lot of advice and a lot of help that we can provide to them if they become precisely the kind of political actor we would like to see them become... "If we can help them and they want us to help them in that effort of transformation, I think it’s nothing that anybody can argue with..’ (quoted in the New York Times, 2 February 1999)

In other words, Washington’s design was "regime change": topple the Lavalas administration and install a compliant US puppet regime, integrated by the "Democratic Platform" and the self-proclaimed Front pour la libération et la reconstruction nationale (FLRN), whose leaders are former FRAPH and Tonton Macoute terrorists. (For further details see Michel Chossudovsky, The Destabilization of Haiti, Global Research, February 2004)

Following the 2004 coup d’Etat which led to the downfall of the Aristide government, KLA advisers were brought into Haiti by the United States Agency for International Development (USAID) to assist in the country’s reconstruction. (See Anthony Fenton, Kosovo Liberation Army helps establish "Protectorate" in Haiti, Global Research, November 2004)

Specifically, the KLA consultants were to assist in restructuring the Haitian police force, bringing into its ranks, former members of FRAPH and the Tonton Macout.

[In support of] the "Office of Transition Initiatives," (OTI) ... USAID is paying three consultants to help consult for the integration of the former brutal military into the current Haitian police force. And who are those three consultants? Those three consultants are members of the Kosovo Liberation Army." (Flashpoints interview, November 19, 2004, www.flashpoints.net )

USAID’s "Office of Transition Initiatives" (OTI)

The Salvador/ Kosovo option is part of a US strategy to fracture and destabilize countries. The USAID sponsored OTI in Bolivia performs much the same function as a similar OTI in Haiti.

It is also worth noting that there was an Office of Transition Initiatives (OTI) in Venezuela, where a plot, according to reports, was recently uncovered to allegedly assassinate President Hugo Chavez. The role of the OTI office in Venezuela is discussed in Eva Golinger’s recent book "Bush vs. Chavez."

The stated purpose of US covert operations is to provide support as well as as training to "Liberation Armies" ultimately with a view to destabilizing sovereign governments. In Kosovo, the training of the Kosovo Liberation Army (KLA) in the 1990s had been entrusted to a private mercenary company, Military Professional Resources Inc (MPRI), on contract to the Pentagon.

Pakistan and the "Kosovo Option"

It is worth noting that in Pakistan, recent developments point towards direct forms of US military intervention, in violation of Pakistani sovereignty.

Already in 2005, a report by the US National Intelligence Council and the CIA forecast a "Yugoslav-like fate" for Pakistan "in a decade with the country riven by civil war, bloodshed and inter-provincial rivalries, as seen recently in Balochistan." (Energy Compass, 2 March 2005).

According to a 2006 report of Pakistan’s Senate Committee on Defence, British intelligence was involved in supporting the Balochistan separatist movement. (Press Trust of India, 9 August 2006). The Bolochistan Liberation Army (BLA) bears a canny resemblance to Kosovo’s KLA, financed by the drug trade and supported by the CIA.

Washington favors the creation of a "Greater Balochistan" [similar to a Greater Albania] which would integrate the Baloch areas of Pakistan with those of Iran and possibly the Southern tip of Afghanistan, thereby leading to a process of political fracturing in both Iran and Pakistan. (Michel Chossudovsky, The Destabilization of Pakistan, December 30, 2007)

Cheney Is Ordered to Preserve Records

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A federal judge on Saturday ordered Dick Cheney to preserve a wide range of records from his time as vice president.

The decision by the judge, Colleen Kollar-Kotelly, is a setback for the Bush administration in its effort to promote a narrow definition of materials that must be safeguarded under the Presidential Records Act.

The Bush administration’s legal position “heightens the court’s concern” that some records might not be preserved, Judge Kollar-Kotelly said.

A private group, Citizens for Responsibility and Ethics in Washington, is suing Mr. Cheney and the Executive Office of the President to ensure that no presidential records are destroyed or handled in a way that makes them unavailable to the public.

In a 22-page opinion, Judge Kollar-Kotelly revealed that in recent days, lawyers for the Bush administration balked at a proposed agreement between the two sides on how to proceed with the case.

Mr. Cheney and the other defendants in the case, Judge Kollar-Kotelly wrote, “were only willing to agree to a preservation order that tracked their narrowed interpretation” of the Presidential Records Act.

The administration, the judge said, wanted any court order on what records are at issue in the suit to cover only the office of the vice president, not Mr. Cheney or the other defendants in the lawsuit. The other defendants include the National Archives and the archivist of the United States.

In response to the ruling, a spokesman for Mr. Cheney, James R. Hennigan, said, “We will not have any comment on pending litigation.”

The lawsuit stems from Mr. Cheney’s position that his office is not part of the executive branch of government.

This summer, Mr. Cheney’s chief of staff, David S. Addington, told Congress that the vice president belongs to neither the executive nor legislative branch of government, but rather is attached by the Constitution to Congress. The vice president presides over the Senate.

The lawsuit alleges that the Bush administration’s actions over the past seven and a half years raise questions over whether the White House will turn over records created by Mr. Cheney and his staff to the National Archives in January.

Wall Street Is Licking Its Chops at the Bush Team's Multi-Hundred Billion Dollar Giveaway Plan

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By William Greider

Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting the Wall Street Journal solution to the crisis: Dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses -- many hundreds of billions, maybe much more. What's not to like if you are a financial titan threatened with extinction?

If Wall Street gets away with this, it will represent an historic swindle of the American public -- all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called "responsible opinion." If this deal succeeds, I predict it will become a transforming event in American politics -- exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice.

Christopher Whalen of Institutional Risk Analytics, a brave conservative critic, put it plainly: "The joyous reception from Congressional Democrats to Paulson's latest massive bailout proposal smells an awful lot like yet another corporatist lovefest between Washington's one-party government and the Sell Side investment banks."

A kindred critic, Josh Rosner of Graham Fisher in New York, defined the sponsors of this stampede to action: "Let us be clear, it is not citizen groups, private investors, equity investors or institutional investors broadly who are calling for this government purchase fund. It is almost exclusively being lobbied for by precisely those institutions that believed they were 'smarter than the rest of us,' institutions who need to get those assets off their balance sheet at an inflated value lest they be at risk of large losses or worse."

Let me be clear. The scandal is not that government is acting. The scandal is that government is not acting forcefully enough -- using its ultimate emergency powers to take full control of the financial system and impose order on banks, firms and markets. Stop the music, so to speak, instead of allowing individual financiers and traders to take opportunistic moves to save themselves at the expense of the system. The step-by-step rescues that the Federal Reserve and Treasury have executed to date have failed utterly to reverse the flight of investors and banks worldwide from lending or buying in doubtful times. There is no obvious reason to assume this bailout proposal will change their minds, though it will certainly feel good to the financial houses that get to dump their bad paper on the government.

A serious intervention in which Washington takes charge would, first, require a new central authority to supervise the financial institutions and compel them to support the government's actions to stabilize the system. Government can apply killer leverage to the financial players: Accept our objectives and follow our instructions or you are left on your own -- cut off from government lending spigots and ineligible for any direct assistance. If they decline to cooperate, the money guys are stuck with their own mess. If they resist the government's orders to keep lending to the real economy of producers and consumers, banks and brokers will be effectively isolated, therefore doomed.

Only with these conditions, and some others, should the federal government be willing to take ownership -- temporarily -- of the rotten financial assets that are dragging down funds, banks and brokerages. Paulson and the Federal Reserve are trying to replay the bailout approach used in the 1980s for the savings and loan crisis, but this situation is utterly different. The failed S&Ls held real assets -- property, houses, shopping centers -- that could be readily resold by the Resolution Trust Corporation at bargain prices. This crisis involves ethereal financial instruments of unknowable value -- not just the notorious mortgage securities but various derivative contracts and other esoteric deals that may be virtually worthless.

Despite what the pols in Washington think, the RTC bailout was also a Wall Street scandal. Many of the financial firms that had financed the S&L industry's reckless lending got to buy back the same properties for pennies from the RTC -- profiting on the upside, then again on the downside. Guess who picked up the tab? I suspect Wall Street is envisioning a similar bonanza -- the chance to harvest new profit from their own fraud and criminal irresponsibility.

If government acts responsibly, it will impose some other conditions on any broad rescue for the bankers. First, take due bills from any financial firms that get to hand off their spoiled assets, that is, a hard contract that repays government from any future profits once the crisis is over. Second, when the politicians get around to reforming financial regulations and dismantling the gimmicks and "too big to fail" institutions, Wall Street firms must be prohibited from exercising their usual manipulations of the political system. Call off their lobbyists, bar them from the bribery disguised as campaign contributions. Any contact or conversations between the assisted bankers and financial houses with government agencies or elected politicians must be promptly reported to the public, just as regulated industries are required to do when they call on government regulars.

More important, if the taxpayers are compelled to refinance the villains in this drama, then Americans at large are entitled to equivalent treatment in their crisis. That means the suspension of home foreclosures and personal bankruptcies for debt-soaked families during the duration of this crisis. The debtors will not escape injury and loss -- their situation is too dire -- but they deserve equal protection from government, the chance to work out things gradually over some years on reasonable terms.

The government, meanwhile, may have to create another emergency agency, something like the New Deal, that lends directly to the real economy -- businesses, solvent banks, buyers and sellers in consumer markets. We don't know how much damage has been done to economic growth or how long the cold spell will last, but I don't trust the bankers in the meantime to provide investment capital and credit. If necessary, Washington has to fill that role, too.

Finally, the crisis is global, obviously, and requires concerted global action. Robert A. Johnson, a veteran of global finance now working with the Campaign for America's Future, suggests that our global trading partners may recognize the need for self-interested cooperation and can negotiate temporary -- maybe permanent -- reforms to balance the trading system and keep it functioning, while leading nations work to put the global financial system back in business.

The agenda is staggering. The United States is ill equipped to deal with it smartly, not to mention wisely. We have a brain-dead lame duck in the White House. The two presidential candidates are trapped by events, trying to say something relevant without getting blamed for the disaster. The people should make themselves heard in Washington, even if only to share their outrage.

Republicans Allege McCain Covered up His Collaboration with the North Vietnamese While a POW

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By Steven Rosenfeld

A 1992 video featuring a Republican senator, Republican congressman and top Capitol Hill staffers who worked on Vietnam prisoner of war and missing in action issues say John McCain collaborated with North Vietnamese while a POW, and then covered up that involvement to the detriment of POW/MIA families seeking access to classified Pentagon records about their own family members.

The video raises probing questions about the 2008 Republican presidential nominee’s war record, especially after McCain made his captivity a major part of his qualifications for the presidency at the Republican National Convention. In 2004, the GOP focused on Democratic nominee John Kerry’s war record to criticize his candidacy.

To date, the video has been posted on a handful of blogs but has been ignored by the mainstream media. While it features Republican stalwarts on POW/MIA issues, it also suggests that McCain’s war records at the Pentagon and in North Vietnam would reveal potentially very controversial details about the GOP’s presidential candidate.

The nearly eight-minute video is posted on YouTube under "Vietnam Veterans Against McCain." It begins with the title, "1992 Senate Select Committee on POW/MIAs," and features ex-Sen. Bob Smith (R-NH), Rep. Robert Dornan (R-CA), senate staffers Tracy Usry, James Lucier, and military family members Lynn O’Shea, of the National Alliance of Families and retired Army Cpl. Bob Dumas, whose brother was a POW lost in the Korean War, and Joseph Douglass, Jr., author of Betrayed, about America’s missing POWs. The video has no author credits.

The footage begins with Douglass, Usry, O’Shea and Smith all saying that McCain worked to kill legislation that would have opened the Pentagon’s classified archive of POW/MIA files. "Many, many documents were held back for no reason," former Sen. Smith said. Dorman said legislation that passed the House with no opposing votes was single-handedly blocked in the Senate by McCain. "On the Senate side, we had one person standing in the way," Dornan said, referring to McCain.

Dumas then gave the reason why - the Pentagon’s records would reveal McCain had collaborated with the Vietnamese. "He didn’t want nobody to check his background because a lot of POWs who were with him in the camp said he was a collaborator with the enemy," Dumas said. "He gave the enemy information they wanted."

Lucier, identified as a former U.S. Senate Chief of Staff, said "we do know that when he was over there, he cooperated with Communist news services in giving interviews that were not flattering to the United States." Usry, identified as U.S. Senate Minority Staff former chief investigator, said "information shows that he made over 32 tapes of propaganda for the Vietnamese government."

Dornan said there were transcripts of other POWs reacting to McCain’s false statements, saying, "Oh my God, is that Admiral McCain’s son Is that the admiral’s son? Is that Johnny, telling us that our principle targets are schools, orphanages, hospitals, temples, churches? That was Jane Fonda’s line." Dornan said those transcripts are in war museums in North Vietnam, where McCain, as a senator, pressured the country not to release them or face opposition concerning normalization of relations with the United States.

"McCain could not have wanted those to turn up in the middle of a presidential race," the ex-congressman said. "He knows that. I know that. And a few other people know that. That’s why he was against Bob Dole’s legislation."

Dornan then offered another interesting explanation why McCain refused an offer by the North Vietnamese to be released. Dornan said those released first were collaborators, which would have ended McCain’s military career and hurt the Navy, where his father commanded the Pacific fleet.

"Nobody takes that one step beyond that," Dornan said, speaking of McCain’s refusal to be released. "If Admiral John McCain’s son had accepted this princely status and come home in 1967, while others sat there for five years, what would the Navy have done with the son of an admiral who opted to get special treatment and come home? No Navy career. No House seat. No Senate seat. It would have been the end of his career."

Why the Polls Drive Us Crazy (and Shouldn't)

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By Joshua Holland

There was a lot of talk last week about John McCain’s "momentum" -- about the Republican brand rebounding.

And a dark cloud of gloom descended over many of those hoping to bring an end to the Bush era. "We’ve seen this before," was a common sentiment. A reader recently sent me a story, written during the lead-up to the 2004 election, about Kerry’s seemingly indomitable lead in the polls -- a lead similar to Barack Obama’s 8-point (average) advantage in the horse race a few weeks ago.

Then, this week, the storm clouds parted and the sun shone down on progressive America as Obama seemingly regained his mojo. Now he has surged back into the lead!

This emotional roller coaster is bad for one’s psychic health and entirely unwarranted. The bigger picture is this: For about 10 days during the past 10 months -- after Sarah Palin’s introduction to the country but before Americans got a good look at her beliefs -- McCain inched ahead of Obama in the national head-to-heads. Now, the tide appears to be turning back in Obama’s favor: As the electorate has gotten enough of a look at Palin to distrust her, her once-high approval numbers have taken a nosedive. And McCain continues to say brilliant things like the economy is fundamentally sound and he won’t meet with the dastardly prime minister of Spain.

More to the point, the significance of those head-to-head polls -- the yardstick featured in so much political reporting -- is completely overblown. The reality is that nobody knows what’s going to happen in November. It’s an unprecedented election in two ways: a black man is vying to become the president of the United States; and in the midst of an economic meltdown, voters are feeling an unprecedented degree of pessimism about the direction the country is heading.

Clearly, there is reason to believe that the "Bradley effect" -- the historical fact that some of those who tell pollsters that they’re ready to vote for a person of color won’t -- will have an impact on the election. How big will that impact be? Nobody knows.

Just as clearly, Obama has inspired a massive groundswell of interest, particularly among younger voters. Will they vote in numbers we’ve never seen before? Nobody knows (many have only a cell phone, and cell phone users are rarely polled).

At the same time, we know that in times of pronounced pessimism, people tend to vote the ruling party out of office. Yet, John McCain has spent a career carefully nurturing an image of independence from his party. Will he overcome the tarnished Republican brand? Nobody knows.

Those uncertainties are what ultimately make the polls almost meaningless. Pollsters don’t offer us their raw data; they weight their results in various ways -- by age, party identification, past voting records, etc., in order to make their samples conform more or less with past experience. In an election for which we essentially have no past experience, it all becomes much more art than science.

Consider how they did during the primaries. Through the first five months of this year, Zogby’s polling was off by an average of almost 7 points, Fox News by 4 points and Survey USA by 4.5 points. Mason-Dixon’s average error was more than 8 points, and Rasmussen was off by more than 7.

Don’t get me wrong -- those national polls, taken as a whole, are a good indication of broad trends in the mood of the electorate and are not without value. But the reality is that the nationwide polls we see being released almost every day are a poor indicator of what will happen come November.

Remember that we don’t vote for president in the United States -- we vote state by state for electors who vote for the president. As I write, new polls show Obama up by 9 points in Michigan, 5 points in Pennsylvania and a couple of points in Ohio -- all crucial swing states.

The problem is that it’s costly to poll each and every state, so many of those electoral college maps one sees in various publications are based on "trend estimates" -- on statisticians essentially reading the tea leaves, and often doing so using stale data. Of the 12 states that are in play this year according to The Politico, only three have had polls of registered voters within the past week, and all three of them show Obama in the lead. (There are more recent polls of "likely voters," but pollsters’ "likely voter" models are a source of quite a bit of controversy and should be taken with more than just a grain of salt until just before the election.)

The second reason is that modern elections in America are largely mechanical affairs. It’s true that Americans are not as deeply divided on the issues as they are commonly portrayed in the "red states versus blue states" narrative, but they are sharply divided in terms of partisan loyalty, or at least they have been during the past few elections. That means that winning will often come down to which campaign can better motivate its respective ground troops in a handful of swing districts in a handful of swing states. Obama’s chief strategist, David Plouffe, told the Los Angeles Times that he ignores the national polls almost entirely because the campaign’s focus is on registration and turnout in the 18 states they identified as the battleground (which is now down to maybe 10). "We stay laser-focused on these two factors," he told the Times. That may have been a bit of bravado, but there’s no question that the Obama campaign has put an enormous emphasis on local organizing. As Daniel Nichanian wrote recently, "It increasingly looks as though this close election may be determined by investments on the ground, in local precincts across the country, an area of the campaign that Barack Obama’s organization and supporters have excelled at." Nichanian added: "But this is not the type of edge pollsters pick up on."

There’s quite a bit happening that polls have a hard time tracking, and much of it should be encouraging for Obama’s supporters. The partisan identification of voters in many swing states (which I should point out is a less-than-rock-solid indication of voting, but important nonetheless) is looking very good for the Dems. Consider this graphic from Brian Schaffner at Pollster.com:

(click for larger version)

Not all states keep track of these data, but in six of the seven states included in the analysis, Democratic registration is on the rise, while the number of Republican loyalists appears to be declining.

But even those numbers don’t tell the whole story. As Time Magazine reported, younger voters -- people under 35 -- a demographic in which Obama beats the socks off of McCain, are registering in pretty significant numbers. In 10 of the swing states, more than half of all new registrants this year are under 35.

Also not necessarily reflected in the partisan breakdowns are new citizens who will be eligible to vote for the first time. In 2006, there were 15 million naturalized immigrants who were eligible to vote. A huge effort on the part of immigrant-rights groups is expected to raise that number by 10 percent in 2008. If they can pull of the feat, that would be 1.5 million new voters, many of whom are clustered in swing states like New Mexico, Nevada, Florida and Colorado -- each of which Bush won by less than 5 points in 2004. Among Latino voters, 40 percent of whom voted for George Dubya in 2004, the key question is whether McCain can overcome the Republican brand, now seen by many as a party dominated by nativists. A recent poll of "Hispanic" preferences in four key battleground states showed that Obama is doing better among that group than Kerry did in 2004, and by a significant margin.

The other part of that equation is whether and whose votes are being counted. There’s quite a bit of agreement across the political spectrum that America’s electoral system is deeply flawed, and whether one believes its biggest problems are hackable voting machines and Republican voter suppression or Democrats registering people who are ineligible to vote, the polls aren’t going to say whether it will be a fair contest.

The takeaway from all this is that those inclined to mope when the polls don’t look good -- especially the national polls -- shouldn’t. There’s no point, because they mean little. If one wants to see an end of the Bush era, or a continuation of it, a better use of one’s time is to get involved. Drive an old lady to her polling place. Put in some hours at a phone bank.

This is an American election, and the party that does a better job motivating its loyalists -- and perhaps expanding their numbers -- and protecting their votes will win. You don’t need a poll to tell you that.

Popular Scams of the Rich and Famous

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By Richard Backus

There are an ever-increasing number of linkages between politicians, big businesses, and rich individuals designed to promote their joint prosperity at the expense of the general public. Money flows in both directions between these “players” under various “pay for play” schemes. Because they unfairly absorb federal tax revenue or deprive the general public of legitimately earned benefits, I refer to these schemes as “scams'. Most are technically “legal' being based upon law or statute, or founded upon government policy and practice, but have been set up in ways designed to benefit favored individuals. In most cases, these practices are promoted by Republican politicians serving their primary clients, rich individuals and “big business”. Hopefully, in the coming elections, legislators will be chosen which will have the courage to rectify these abuses. The following are just a few of the more popular scams.

Social laws, uncertain as to constitutionality, have been passed to control the general populace, and are generally ignored by those creating them, as evident in many recent court cases. Prostitutes do quite a brisk business during political party conventions, and a “madam” recently interviewed claimed that the "family values" group, the Republicans, are the the best customers. But all this has been pretty well hidden from public awareness by the establishment media, and grudgingly and belatedly disclosed, if at all, after previously promulgated on blogger sites. This situation was not reported during the 2004 conventions by a single major U.S. media, and I read about it only in foreign news sources, the Guardian and Reuters. So much for the fearless American press! But news media in the U.S . practice self-censorship because they are fully aware of what they can and cannot report. Anything critical of the rich and famous is forbidden.

There has been no effort to contain medical expenses that have caused a great many of the financial problems currently plaguing the U.S. The AMA and ADA have so well financed the campaigns of our legislators that we are now facing multiple financial crises substantially directly cause by health care costs. The 2007 federal government deficit of approximately $180 billion would have become a $300 billion surplus simply with a reform of this sector. Americans pay, on average, nearly $7,000 per person for medical costs, whereas citizens in the next-highest-cost developed pay around $3,200 per person. Bringing the U.S. health costs in line with those of the rest of the western world would save U.S. citizens directly $720 billion and the federal government $480 billion more. The U.S. physician's claim is that costs are so high because we get the best health care in the world. This is a real con job. The World Health Organization ranks the U.S. 26th in quality of health care of the advanced countries. The major problem is that a monopoly has been created by limiting the number of teaching hospitals as well as the number of students who are entitled to enroll. The selection process for medical school positions involves the usual custom of picking predominantly children of those politically connected. The "special" qualifier for positions in the few medical schools places offered, that determines appointment more often than demonstrated academic excellence, is participation in extra-curricular activities indicating "leadership" abilities. This is a standard trick for all appointments in this vast conspiracy, made to benefit unqualified candidates supported by political elites. It avoids the serious business of determining the truly deserving (who are frequently passed over because they are considered “nerds” (because they study so much)) and for admission committees to give preference to candidates whose academic performance is not quite up to par. George W. qualified as a possible “leader” because he was a cheerleader at Andover, and others are selected because of their participation in college political activities. When training people for highly technical and critical jobs (e.g., physicians), the last thing the candidate should be doing is playing political tricks or scheming for political office. They should be studying.

The whole system of "globalization" is simply a way to exploit workers worldwide thereby maximizing the profits of essentially western-owned multinationals. The results are now coming in, as demonstrated by the current disinflation in the western countries. By allowing multinationals special tax breaks and accounting practices the U.S. government has encouraged the transfer of almost all high wage U.S. jobs overseas to low wage (exploited) workers. By simply calling these lost jobs "low skilled" they have convinced U.S. workers that they really deserve less for their labor, which in many cases were the most stressful and demanding in the country, Soon middle level professional jobs will be moved overseas as well, and similarly described, no doubt, as "low skilled". This includes engineering and product design, paralegal and brokerage back office jobs, and accounting and auditing jobs as well. Even radiologists will miraculously end up as "low tech" workers.

Still extant farm subsidies unfortunately not only violate those “economically sacrosanct” principles of globalization but result in higher prices for the American consumer as well as increased cost to the American taxpayer. As a bonus, they frequently produce serious economic consequences for other "global" players, especially for our South American "partners" (and incur their resentment).

The U.S. government has made no effort whatsoever to assist in providing support for displaced U.S. workers by demanding reciprocity of employment opportunity with those countries whose citizens are flooding the U.S. labor market. While surveying foreign papers in Europe and Australia/New Zealand for jobs in the IT business, I found loads of ads promising unlimited amount of IT opportunities in the U.S. But ads for IT jobs in these same countries all ended with statements that these local jobs are reserved for their own citizens. Recently the U.S. government passed an amendment to its visa rules allowing other country's workers to enter the U.S. for 6 months without a prior job offer. Most other western countries did the same I believe, offering job opportunities for U.S. workers. But there was a limit to the ages of these workers, 27 years I believe, suspiciously approximating the average age of the children of our current members of Congress. These job opportunities can not possibly benefit those most damaged by U.S. outsourcing policies, those who had irreplaceable (at their ages) experience, without finances to retrain, and facing huge and continuing family bills in the U.S. They still have no realistic possibilities to work overseas even though the great god “globalization” based its legitimacy on the free movement of capital and labor. What a joke!

The entire USAID program has become an excellent way to feed money to political supporters. This scam involves granting taxpayers money as USAID “aid money” to friendly foreign governments with "tied" aid (agreements to purchase in most cases U.S.-made products and services). The so-called "aid" money never reaches the country supposedly receiving it. The "receiving" country gets products and "advice" from U.S. corporations and individuals selected from the U.S. governments "preferred list" of suppliers. The organizations providing these services and products are basically weapons suppliers and "international" accounting and law firms providing "advice" to the recipient country's government. These “select” suppliers and “advisers” are, of course, those companies and individuals who are the major suppliers of campaign finance funds. The recipient country gets weapons systems and armaments used by the local military to control discontented locals (and also expected to support U.S. regional political goals). The result is a lot of money is transferred to American multinationals and private companies located in the U.S. with the bill payed out of taxpayers funds. This is an excellent way to create campaign finance funds with the bill paid by U.S. taxpayers.

Flight of capital from the U.S., (unrestrained by laws regularly established by other more prudent governments) is increasing the risk of a banking default in the U.S. and a drastic drop in the dollar. It is accelerating at the same time that foreigners dollar holders (private and public) are thinking twice about keeping their funds here because the U.S. government has shown no interest or willingness to restrain this process.

The much ballyhooed one-man, one-vote election under a democracy simply does not exist. With the caucus system still being practiced in many states, the candidates the public finally gets to vote for (essentially one of 2 choices) have been chosen by the powers-that-be within each state, and under these conditions, the private citizen's vote is practically meaningless.

Most of the efforts of the U.S. government to contain Communism have involved the setting up of American-friendly foreign governments who were willing to turn a blind eye to exploitation of their country's resources and populace by U.S. corporations. To make matters worse, the U.S. Government, which has established these regimes, insist on calling the resulting U.S.-friendly governments (oligarchies of the rich at best) as "democracies" when,in reality, the government which it replaced was far more democratic than the one established by the U.S. government. This was all done under the pretext of constraining Communism, but was also a handy scheme for U.S. businesses to gain possession or control of the few assets these poor countries possessed and a new supply of exploitable local workers. Now that Communism is no longer a realistic treat there is no longer any pretext for doing this. No governments should be overthrown by actions of the U.S. government regardless of its having a political or economic system inimical to presumed western interests, and certainly no one should be going around bragging about setting up a "democracy" when the opposite occurred.

Bidding on all levels of government contracts is also riddled with ways to allow the contract manager to give the contract to a friend. If the manager's friend is not the low bidder, the manager can simply reopen the bidding on any number of pretexts and advise his friend what he needs to bid to get the contract. Bids can be thrown out as "non-serious" bids without notice, on the basis that the bidder is incapable of performing at that price. This device is used when the winning bid is so low that even the manager's friend can't compete even knowing the prospective winning bid price. This is because he is really a 'prime contractor', won't be doing the work, and needs extra funds to cover his “cut” and to cover possible gratuities for the contract manager. The government has even set up a separate agency, at taxpayer expense, to "prove" this type of fraud can not occur. All the public exposure over the years of these practices puts the lie to the honesty of this organization.

The FED's constant claim of incipient inflation over the last 18 years (when none has ever materialized) has finally resulted in our current economic crises. The latest FD-sponsored recession might well be the final straw that breaks the back of U.S. consumers. There is a serious "moral hazard" involved in improper disclosures of these continuing, unpredictable, and totally uncalled- for adjustments in interest rates as well.

The federal government has been playing footsie with fascism for quite a long time, supported only by the inability of the general public to recognize it. Ecclesiastic appointments, corporate management, charity, "brain trust" ,foundations, university appointments, and even scholarship awards are controlled by political elites, with the consequent assurances that these appointees will play ball with the politicians and their “sponsors”. The Pols now essentially control everything under the direction of the rich and famous.

The “justness” of the U.S. legal system can be compromised by anyone with unlimited funds. The Constitution certainly would not have countenanced the use of multiple lawyer (with political connections) for any one case, for jury selection advisors, and the abusive use (and misuse) of expert witnesses.

Foundations, “brain trusts”, charities, and other non-profits are the most dangerous potential source of political influence-buying of all these “scamers”. Foundations, formed by individuals to avoid inheritance taxes, can provide jobs, grant contracts, and purchase goods and services from a large number of politically-sponsored individuals and companies. They pay no taxes even when they accumulate funds, which they call “surplus”. These surpluses can be invested with the proceeds not subject to taxes. Their employees are well compensated and live quite luxuriously while on 'company business'. Contract awards and grants tend be generous, and the foundations can purchase supplies and services without oversight. Most recipients of this largess are politically-connected and are expected to promote political goals and to funnel funds to political campaigns.

There are literally hundreds of thousands of other varieties of non-profits,categorized as NGOs, which conduct their businesses in essentially the same way. They are set up to perform certain socially-beneficial services, but after all the above-mentioned expenses, only a small percentage of their income are used in this way. Typically, 30 percent of their income (tax deductible write offs from corporations and individuals, and government giveaways) are spent on salary and payroll taxes to top employees and their generous “business expenses” (5-star hotel accommodations, chic restaurant and 1st class air travel costs). The remaining 70 percent can be used for “public relation fees” (to supporters) and some is even spent on legitimate promotion programs. What is left, perhaps 50 percent, can, by the “50 percent rule” be passed on to another tax-exempt having similar expenses, with the result that the claimed public-service, used to obtain tax-exempt status, can end up with practically nothing. Certain charities are particularly offensive perpetrators of this same scheme, disbursing for political purposes the monies donated for the most-needy individuals of all, the poor and defenseless, mostly children. Principles of those organizations practicing this blatant “welfare to the rich” scheme should be, but seldom are, prosecuted.

All in all, most of the American populace's problems derive from a lack of understanding of how their job opportunities and financial success are being jeopardized by these practices. A great deal of the blame for these scam's success can be attributed to the establishment media's self-censorship on these important issues, with a consequent inability of the public to correctly determine what is going on. Thankfully, there is now a self-appointed group who are now providing the news so instrumental in allowing the public to make necessary political decisions. They are called "blog sites" and are America's version of the old soviet "samizdat". Hopefully the government can be prevented from meddling with them.

In Hard Times, Tent Cities Rise Across the Country

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Since foreclosure mess, homeless advocates report rise in encampments

A few tents cropped up hard by the railroad tracks, pitched by men left with nowhere to go once the emergency winter shelter closed for the summer.

Then others appeared — people who had lost their jobs to the ailing economy, or newcomers who had moved to Reno for work and discovered no one was hiring.

Within weeks, more than 150 people were living in tents big and small, barely a foot apart in a patch of dirt slated to be a parking lot for a campus of shelters Reno is building for its homeless population. Like many other cities, Reno has found itself with a "tent city" — an encampment of people who had nowhere else to go.

Nearly 61 percent of local and state homeless coalitions say they've experienced a rise in homelessness since the foreclosure crisis began in 2007, according to a report by the National Coalition for the Homeless. The group says the problem has worsened since the report's release in April, with foreclosures mounting, gas and food prices rising and the job market tightening.

"It's clear that poverty and homelessness have increased," said Michael Stoops, acting executive director of the coalition. "The economy is in chaos, we're in an unofficial recession and Americans are worried, from the homeless to the middle class, about their future."

Caught by surprise
The phenomenon of encampments has caught advocacy groups somewhat by surprise, largely because of how quickly they have sprung up.

"What you're seeing is encampments that I haven't seen since the 80s," said Paul Boden, executive director of the Western Regional Advocacy Project, an umbrella group for homeless advocacy organizations in Los Angeles, San Francisco, Oakland, Calif., Portland, Ore. and Seattle.

The relatively tony city of Santa Barbara has given over a parking lot to people who sleep in cars and vans.

The city of Fresno, Calif., is trying to manage several proliferating tent cities, including an encampment where people have made shelters out of scrap wood.

In Portland, Ore., and Seattle, homeless advocacy groups have paired with nonprofits or faith-based groups to manage tent cities as outdoor shelters.

Other cities where tent cities have either appeared or expanded include include Chattanooga, Tenn., San Diego, and Columbus, Ohio.

The Department of Housing and Urban Development recently reported a 12 percent drop in homelessness nationally in two years, from about 754,000 in January 2005 to 666,000 in January 2007. But the 2007 numbers omitted people who previously had been considered homeless — such as those staying with relatives or friends or living in campgrounds or motel rooms for more than a week.

In addition, the housing and economic crisis began soon after HUD's most recent data was compiled.

"The data predates the housing crisis," said Brian Sullivan, a spokesman for HUD. "From the headlines, it might appear that the report is about yesterday. How is the housing situation affecting homelessness? That's a great question. We're still trying to get to that."

In Seattle, which is experiencing a building boom and an influx of affluent professionals in neighborhoods the working class once owned, homeless encampments have been springing up — in remote places to avoid police sweeps.

The Wall Street Model: Unintelligent Design

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By PAM MARTENS

Wall Street is collapsing not because of bad mortgage debt or lack of capital or over-leverage. Those are merely symptoms. Wall Street is collapsing because it deserves to collapse; it needs to collapse in order for America to survive. The economist Joseph Schumpeter called it creative destruction, a system where outdated models collapse to make room for new innovation.

Wall Street of the past decade never really had a business model as much as it had a business creed: greed is good; leveraged greed is even better.

The fact that Wall Street is collapsing is a given. How it survived as long as it did under its corrupted model is the question that will be debated in history books for the next generation.

For example, imagine a business model that bases remuneration to brokers on how much money they make for their Wall Street employer and not one dime for how well their customers’ portfolios perform. A Wall Street broker receives remuneration that rises from approximately 30 to 50 per cent of the gross commission based on their cumulative trading commissions with zero regard to how well the clients’ accounts have done. There is no acknowledged internal mechanism in any of the major Wall Street firms to gauge the overall success of the accounts the broker is managing.

The industry has been irreconcilably incentivized to corruption just as brokers have been socialized to silence. The reason we are seeing a stampede this week into U.S. Treasury securities is that much of this money belonged there in the first place, not in esoteric mortgage backed securities, junk bonds, commodity funds or annuities backed by AIG. Brokers put their clients “safe money” in these unsuitable investments because their Wall Street employer dangled a seductive financial inducement. A broker receives less than $1,000 in gross commissions (“gross” meaning before their firm takes their 50 to 70 per cent cut) on $100,000 of longer dated Treasuries. Putting that same $100,000 in a junk bond or mortgage-backed security or annuity could generate $3,000 or more. In other words, the financial incentive has created an artificial demand. And, as must inevitably happen, the true state of that demand is just now catching up with the true glut of supply.

What would be the incentive for Wall Street firms to offer higher commissions for some products over others? Because on top of their cut of the brokers commissions, they receive origination and syndication fees for the more esoteric investment products. These firms so despised the low-paying Treasuries that they replaced Treasuries with Freddie Mac and Fannie Mae paper in mutual funds bearing the name “U.S. Government Fund.” (This misleading practice and the fact that billions of dollars of public money resided in these misnamed funds has certainly played a role in the government’s decision to nationalize Freddie Mac and Fannie Mae.)

Then there is the insane model of bringing flim-flam new businesses to market. If we look at the people who are at the helm of today’s collapsing Wall Street, they have shifted in their chairs, but they are mostly the same conflicted individuals who brought America the NASDAQ bust that began in March 2000 and evaporated $7 trillion of American wealth. There is no longer any incentive on Wall Street to bring about initial public offerings of only companies that will stand the test of time and create new jobs and new markets to make America strong and globally competitive. There is only an incentive to collect the underwriting fee and cash out quickly on private equity stakes.

Next is the corrupted model of housing a trading desk for the firm inside the same company that is supposed to issue unbiased research to the public. For example, let’s say that XYZ Brokerage buys a big stake in ABC Company on its proprietary trading desk (the desk that trades for profits for the firm) on Wednesday afternoon. On Thursday afternoon, it could almost guarantee profits for itself by issuing a research report upgrading the stock. Conversely, it could short the stock on Wednesday and issue a negative report to drive down the price on Thursday, also guaranteeing itself a profit. Other than a fictional Chinese Wall, there is absolutely nothing to stop this type of public looting.

Now, ask yourself this. With the multitude of other ways that Wall Street has to make money, why are they allowed to have their own trading desk while simultaneously issuing conflicted research to the public. After the NASDAQ scandals that revealed Wall Street issuing biased research for personal profit, why weren’t proprietary trading desks and public research issuance shut down at these firms. There are plenty of boutique research firms to fill the void. The only conclusion to be drawn is what Europe is calling “regulatory capture” here in the U.S. That’s a phrase similar to what Nancy Pelosi was calling “crony capitalism” on Wednesday, September 17 before she decided to join the crony capitalists at a microphone on Thursday, September 18 to promise bipartisanship on the mother of all bailouts to Wall Street.

This unintelligent design business model would have cracked and imploded long ago but for one saving grace: it came with its own unintelligent design justice system called mandatory arbitration. Gloria Steinem once called mandatory arbitration “McJustice.” It’s really more like Burger King; Wall Street can have it their way. In a system designed by Wall Street’s own attorneys, arbitrators do not have to follow the law, or legal precedent, or write a reasoned decision, or pull arbitrators from a large unbiased pool as is done in jury selection. Industry insiders routinely serve over and over again. Had there been ongoing trials in open, public courtrooms, the magnitude of the leverage, worthless securities, and corrupted business model would have been exposed before it brought America to the financial brink.

That Wall Street and its Washington coterie are stilled embraced in regulatory capture and unintelligent design is most keenly evidenced by the recent merger of Merrill Lynch, the brokerage/investment firm, with Bank of America, the commercial bank and ongoing discussions to merge Morgan Stanley, the brokerage/investment firm with a commercial bank. (Memo to Enemy Combatants Against Taxpayers a/k/a Wall Street/Washington: this new model is the failed model of Citigroup. Why do you hate America?)

Make no mistake that what ever the dollar amount announced next week to funnel into an entity to buy bad debts from banks and Wall Street firms, it won’t be enough. It’s a Band-Aid on a malignant tumor. That tumor is Credit Default Swaps (CDS) with over $60 trillion now owed through secret contracts in an unregulated market created, financed and owned by the unintelligent design masters, Wall Street firms themselves. (See “How Wall Street Blew Itself Up,” CounterPunch, January 21, 2008.)

There is no sincere plan by this administration to help America or Americans. There is only a plan to slow the financial collapse until after the November elections by throwing a politically palatable amount of money at it and a plan to continue to blame it on a housing bust.

If we, the American people, allow this to happen, we’re enablers to the unintelligent design model. Before one more penny of our taxes are spent on this ruse, we must demand a seat at the table (I think Ralph Nader should occupy that seat) to discuss breaking up Wall Street, crushing this model, innovating a sensible model that serves the individual investor and deserving businesses, and promises our children a future of more than a banana republic.

Paulson Bailout Plan a Historic Swindle

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By William Greider

Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting the Wall Street Journal solution to the crisis: dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses--many hundreds of billions, maybe much more. What's not to like if you are a financial titan threatened with extinction?

If Wall Street gets away with this, it will represent an historic swindle of the American public--all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called "responsible opinion." If this deal succeeds, I predict it will become a transforming event in American politics--exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice.

Christopher Whalen of Institutional Risk Analytics, a brave conservative critic, put it plainly: "The joyous reception from Congressional Democrats to Paulson's latest massive bailout proposal smells an awful lot like yet another corporatist lovefest between Washington's one-party government and the Sell Side investment banks."

A kindred critic, Josh Rosner of Graham Fisher in New York, defined the sponsors of this stampede to action: "Let us be clear, it is not citizen groups, private investors, equity investors or institutional investors broadly who are calling for this government purchase fund. It is almost exclusively being lobbied for by precisely those institutions that believed they were 'smarter than the rest of us,' institutions who need to get those assets off their balance sheet at an inflated value lest they be at risk of large losses or worse."

Let me be clear. The scandal is not that government is acting. The scandal is that government is not acting forcefully enough--using its ultimate emergency powers to take full control of the financial system and impose order on banks, firms and markets. Stop the music, so to speak, instead of allowing individual financiers and traders to take opportunistic moves to save themselves at the expense of the system. The step-by-step rescues that the Federal Reserve and Treasury have executed to date have failed utterly to reverse the flight of investors and banks worldwide from lending or buying in doubtful times. There is no obvious reason to assume this bailout proposal will change their minds, though it will certainly feel good to the financial houses that get to dump their bad paper on the government.

A serious intervention in which Washington takes charge would, first, require a new central authority to supervise the financial institutions and compel them to support the government's actions to stabilize the system. Government can apply killer leverage to the financial players: accept our objectives and follow our instructions or you are left on your own--cut off from government lending spigots and ineligible for any direct assistance. If they decline to cooperate, the money guys are stuck with their own mess. If they resist the government's orders to keep lending to the real economy of producers and consumers, banks and brokers will be effectively isolated, therefore doomed.

Only with these conditions, and some others, should the federal government be willing to take ownership--temporarily--of the rotten financial assets that are dragging down funds, banks and brokerages. Paulson and the Federal Reserve are trying to replay the bailout approach used in the 1980s for the savings and loan crisis, but this situation is utterly different. The failed S&Ls held real assets--property, houses, shopping centers--that could be readily resold by the Resolution Trust Corporation at bargain prices. This crisis involves ethereal financial instruments of unknowable value--not just the notorious mortgage securities but various derivative contracts and other esoteric deals that may be virtually worthless.

Despite what the pols in Washington think, the RTC bailout was also a Wall Street scandal. Many of the financial firms that had financed the S&L industry's reckless lending got to buy back the same properties for pennies from the RTC--profiting on the upside, then again on the downside. Guess who picked up the tab? I suspect Wall Street is envisioning a similar bonanza--the chance to harvest new profit from their own fraud and criminal irresponsibility.

If government acts responsibly, it will impose some other conditions on any broad rescue for the bankers. First, take due bills from any financial firms that get to hand off their spoiled assets, that is, a hard contract that repays government from any future profits once the crisis is over. Second, when the politicians get around to reforming financial regulations and dismantling the gimmicks and "too big to fail" institutions, Wall Street firms must be prohibited from exercising their usual manipulations of the political system. Call off their lobbyists, bar them from the bribery disguised as campaign contributions. Any contact or conversations between the assisted bankers and financial houses with government agencies or elected politicians must be promptly reported to the public, just as regulated industries are required to do when they call on government regulars.

More important, if the taxpayers are compelled to refinance the villains in this drama, then Americans at large are entitled to equivalent treatment in their crisis. That means the suspension of home foreclosures and personal bankruptcies for debt-soaked families during the duration of this crisis. The debtors will not escape injury and loss--their situation is too dire--but they deserve equal protection from government, the chance to work out things gradually over some years on reasonable terms.

The government, meanwhile, may have to create another emergency agency, something like the New Deal, that lends directly to the real economy--businesses, solvent banks, buyers and sellers in consumer markets. We don't know how much damage has been done to economic growth or how long the cold spell will last, but I don't trust the bankers in the meantime to provide investment capital and credit. If necessary, Washington has to fill that role, too.

Finally, the crisis is global, obviously, and requires concerted global action. Robert A. Johnson, a veteran of global finance now working with the Campaign for America's Future, suggests that our global trading partners may recognize the need for self-interested cooperation and can negotiate temporary--maybe permanent--reforms to balance the trading system and keep it functioning, while leading nations work to put the global financial system back in business.

The agenda is staggering. The United States is ill equipped to deal with it smartly, not to mention wisely. We have a brain-dead lame duck in the White House. The two presidential candidates are trapped by events, trying to say something relevant without getting blamed for the disaster. The people should make themselves heard in Washington, even if only to share their outrage.

Why does the US think it can win in Afghanistan?

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By Robert Fisk

The Taliban are better trained, and – sad to say – increasingly tolerated by the local civilian population

Poor old Algerians. They are being served the same old pap from their cruel government. In 1997, the Pouvoir announced a "final victory" over their vicious Islamist enemies. On at least three occasions, I reported – not, of course, without appropriate cynicism – that the Algerian authorities believed their enemies were finally beaten because the "terrorists" were so desperate that they were beheading every man, woman and child in the villages they captured in the mountains around Algiers and Oran.


And now they're at it again. After a ferocious resurgence of car bombing by their newly merged "al-Qa'ida in the Maghreb" antagonists, the decrepit old FLN government in Algiers has announced the "terminal phase" in its battle against armed Islamists. As the Algerian journalist Hocine Belaffoufi said with consummate wit the other day, "According to this political discourse ... the increase in attacks represents undeniable proof of the defeat of terrorism. The more terrorism collapsed, the more the attacks increased ... so the stronger (terrorism) becomes, the fewer attacks there will be."

We, of course, have been peddling this crackpot nonsense for years in south-west Asia. First of all, back in 2001, we won the war in Afghanistan by overthrowing the Taliban. Then we marched off to win the war in Iraq. Now – with at least one suicide bombing a day and the nation carved up into mutually antagonistic sectarian enclaves – we have won the war in Iraq and are heading back to re-win the war in Afghanistan where the Taliban, so thoroughly trounced by our chaps seven years ago, have proved their moral and political bankruptcy by recapturing half the country.

It seems an age since Donald "Stuff Happens" Rumsfeld declared,"A government has been put in place (in Afghanistan), and the Islamists are no more the law in Kabul. Of course, from time to time a hand grenade, a mortar explodes – but in New York and in San Francisco, victims also fall. As for me, I'm full of hope." Oddly, back in the Eighties, I heard exactly the same from a Soviet general at the Bagram airbase in Afghanistan – yes, the very same Bagram airbase where the CIA lads tortured to death a few of the Afghans who escaped the earlier Russian massacres. Only "terrorist remnants" remained in the Afghan mountains, the jolly Russian general assured us. Afghan troops, along with the limited Soviet "intervention" forces, were restoring peace to democratic Afghanistan.

And now? After the "unimaginable" progress in Iraq – I am quoting the fantasist who still occupies the White House – the Americans are going to hip-hop 8,000 soldiers out of Mesopotamia and dump another 4,700 into the hellfire of Afghanistan. Too few, too late, too slow, as one of my French colleagues commented acidly. It would need at least another 10,000 troops to hope to put an end to these Taliban devils who are now equipped with more sophisticated weapons, better trained and increasingly – sad to say – tolerated by the local civilian population. For Afghanistan, read Irakistan.

Back in the late 19th century, the Taliban – yes, the British actually called their black-turbaned enemies "Talibs" – would cut the throats of captured British soldiers. Now this unhappy tradition is repeated – and we are surprised! Two of the American soldiers seized when the Taliban stormed into their mountain base on 13 July this year were executed by their captors.

And now it turns out that four of the 10 French troops killed in Afghanistan on 18 August surrendered to the Taliban, and were almost immediately executed. Their interpreter had apparently disappeared shortly before their mission began – no prizes for what this might mean – and the two French helicopters which might have helped to save the day were too busy guarding the hopeless and impotent Afghan President Hamid Karzai to intervene on behalf of their own troops. A French soldier described the Taliban with brutal frankness. "They are good soldiers but pitiless enemies."

The Soviet general at Bagram now has his amanuensis in General David McKiernan, the senior US officer in Afghanistan, who proudly announced last month that US forces had killed "between 30 and 35 Taliban" in a raid on Azizabad near Herat. "In the light of emerging evidence pertaining (sic) to civilian casualties in the ... counter-insurgency operation," the luckless general now says, he feels it "prudent" – another big sic here – to review his original investigation. The evidence "pertaining", of course, is that the Americans probably killed 90 people in Azizabad, most of them women and children. We – let us be frank and own up to our role in the hapless Nato alliance in Afghanistan – have now slaughtered more than 500 Afghan civilians this year alone. These include a Nato missile attack on a wedding party in July when we splattered 47 of the guests all over the village of Deh Bala.

And Obama and McCain really think they're going to win in Afghanistan – before, I suppose, rushing their soldiers back to Iraq when the Baghdad government collapses. What the British couldn't do in the 19th century and what the Russians couldn't do at the end of the 20th century, we're going to achieve at the start of the 21 century, taking our terrible war into nuclear-armed Pakistan just for good measure. Fantasy again.

Joseph Conrad, who understood the powerlessness of powerful nations, would surely have made something of this. Yes, we have lost after we won in Afghanistan and now we will lose as we try to win again. Stuff happens.