Ashes of Empire: Philip Giraldi

Whose Iraq Predictions Have Come True?: Ron Paul

Calling Gitmo What It Is: Aaron Glantz

Downhill in Afghanistan: Jonathan Power

The Left, Too, Belongs to AIPAC: Philip Weiss

The gloves are off in Pakistan
Hundreds of American "training officials", with 20 large containers of "equipment", have taken over a large chunk of land at a base for Pakistani special forces. Their unstated targets are al-Qaeda leaders and Taliban militants. The militants have already responded to this new phase of the "war on terror" with the weekend suicide truck bombing at the Marriott Hotel in Islamabad. - Syed Saleem Shahzad (Sep 22, '08)

CAMPAIGN OUTSIDER
It's the economy, McCain!
The Wall Street crisis demonstrates Republican presidential candidate Senator John McCain either truly doesn't know what he's talking about on the US economy, or he's utterly hypocritical. Or both. - Muhammad Cohen (Sep 22, '08)

COMMENT
Ululations for Obama across the globe
Traditionally, men don't ululate - as in emit long and loud emotional wailing. But then again, most guys don't have a Kenyan wife from the same tribe as United States presidential hopeful Barack Obama's father. Even without such strong connections, most of the world is singing the praises of a potential Obama presidency. - Kent Ewing (Sep 22, '08)

A Cautionary Tale About Politicos and Financiers

[b]Henry Paulson and the New Yazoo Land Scandal [/b]
By MICHAEL HUDSON

Present discussions of the mortgage mess are lapsing into an unreal world. Advocates of the $700 bailout are now rounding up a choir of voices to proclaim that the problem is simply a lack of liquidity. This kind of problem, we are told, can be solved “cleanly” (that is, with no Congressional add-ons to protect anyone except the major Bush Administration campaign contributors) by the Federal reserve “pumping credit” into the system by buying securities that have no market when “liquidity dries up.”

What is wrong with this picture? The reality is that there is much too much liquidity in the system. That is why the yield on U.S. Treasury bills has fallen to just 0.16 percent – just one sixth of one percent! This is what happens when there is a flight to safety. By liquid investors. Many of which are now fleeing abroad, as shown by the dollar’s 3% plunge against the euro yesterday (Monday, Sept. 22).

The question that the media avoid asking is what people are trying to be safe from? The answer should be obvious to anyone who has been reading about the junk mortgage problem. Investors – especially in Germany, whose banks have been badly burned – are seeking to be safe from fraud and misrepresentation. U.S. banks and firms have lost the trust of large institutional investors here and abroad, because of year after year of misrepresentation as to the quality of the mortgages and other debts they were selling. This is Enron-style accounting with an exclamation point – fraud on an unparalleled scale.

How many tears should we shed for the victims? The Wall Street firms and banks stuck with junk mortgages are in the position of fences who believed that they had bought bona fide stolen money (“fallen off a truck”) from a bank-robbing gang, only to find that the bills they bought are counterfeit – with their serial numbers registered with the T-men to make spending the loot difficult. Their problem now is how to get this junk off their hands. The answer is to strike a deal with the T-men themselves, who helped them rob the bank in the first place.

There is a long pedigree for this kind of behavior. And it always seems to involve a partnership between kleptocratic insiders and the Treasury. Today’s twist is that the banksters have lined up complicit accomplices from the accounting industry and bond-rating companies as well. The gang’s all here.

In view of the mass media these days calling Henry Paulson the most powerful Treasury Secretary since Alexander Hamilton, I think it is relevant to look at two leading acts of Mr. Hamilton that represent remarkable precursors of Mr. Paulson’s present $800 billion “cash for trash” deal with the Bush Administration’s major Wall Street campaign contributors.

The two most appropriate parallels are the government’s redemption of “continentals” – paper money issued by the colonies during the Revolutionary War – and the Yazoo land grants. During the Revolution, states had issued paper currency to pay the troops and meet other basic expenses. These paper notes had depreciated, hence the term “not worth a continental” (not least because of large-scale counterfeiting by the British to cause economic disruption here). In the crisis, men with hard cash went around buying continentals at a great discount. In one of the most notorious and debated acts of the Constitutional Convention, the new United States Government redeemed this depreciated paper currency at par.

It was like the Treasury today buying junk mortgages at face value. But it is in the ensuing Yazoo scandal that we find a perfect combination of financial and real estate fraud on a magnitude that helped establish some of America’s great founding fortunes, creating dynastic wealth that has survived down to the present day.

The Yazoo land fraud in Bourbon County, Georgia is one of the most notorious incidents of our early Republic. In January 1795 the state sold 35 million acres to four land companies for less than 1½¢ an acre. This was the result of bribery arranged by James Wilson – whom George Washington subsequently rewarded by naming him to the Supreme Court. (Moral: Crime pays.) To add insult to injury, the state was paid in depreciated currency, the “continentals.” So great was the outcry that a new state legislature was elected, and revoked the sale in February 1796, accusing its beneficiaries of “improper influence.”

But a month before this new legislature was convened, one of the companies (the Georgia Mississippi Land Company) sold over 10 million acres, nominally at 10¢ cents an acre, to the New England Mississippi Land Company, which was quickly organized for just this purpose by some eminent Bostonian speculators, headed by William Wetmore. Only part of the money actually was paid in cash, and the transaction was largely a paper one. The company quickly hired agents to began selling shares to the public. Widespread speculation ensued in many states, each new investor becoming a partisan urging the national and state governments go along with the original fraud.

New fraudsters jumped on board. Patrick Henry (“Give me liberty, or give me death”) headed up the Virginia Yazoo Company, which made a deal with Virginia Governor Telfair to buy twenty million acres of land at a penny an acre – paid for with the worthless continentals. The public was furious, but the “free marketers” of the day asked, what was wealth, anyway, but a reward for risk-taking.

After the Yazoo land was turned over to the federal government in 1803, a series of Congressional investigations reported that the Boston company actually had paid little if any of the purchase price. (This is now called debt leveraging.) But the company sued, and lobbied Congress for over a decade to get compensation for its paper losses – that is, its lost opportunity to profit from the transaction. In 1814, in the turbulent aftermath of the War of 1812, Congress passed an indemnification act compensating them and other Yazoo investors with $8 million of public funds.

This settlement helped establish a fateful legal precedent known as the doctrine of innocent purchasers possessing certain vested rights. The ruling was steered through the Supreme Court by James Wilson, who in 1782 (along with Robert Morris as the bank’s president, and Gouverneur Morris) had obtained from Pennsylvania’s legislature a charter for the Bank of North America on terms similar to those of the Yazoo land claim.

As Charles Beard has pointed out in his classic Economic Interpretation of the Constitution, James Wilson, the two Morrises, and two other bank directors (Thomas Fitzsimmons and George Clymer) acted as delegates to the Constitutional Convention, where they shaped America's laws so as to facilitate their de-accessioning of public property and obtained special rights and charters for banks and other monopolies. (The word “privatization” would take nearly two centuries to enter the lexicon.) After the Bank of North America was so mismanaged that a money panic ensued, Pennsylvania revoked it's charter. Wilson sued, arguing “that the original act was a grant of a VESTED RIGHT. That the charter could not be repealed without ‘IMPAIRING VESTED RIGHTS, and the rights of innocent parties.’ The legislature yielded, and in 1787 it reincorporated the bank. Thus originated the clause that Wilson had inserted in the present constitution forbidding any state to pass legislation impairing the obligation of a contract. And out of it has come Supreme Court decisions that have given this country the blackest record of validated land frauds and bribery known in history,” for it blocked state legislatures and Congress from undoing the results of overt bribery. (The story is told in Thomas L. Brunk, American Lordships, or A Brief Insight into the Suppressed History of Land Sharks and Their Control Over Government and Industry (Sioux City, Iowa, 1927, p. 84).

The Supreme Court had ruled (in response to John Marshall’s pleading the Fairfax land-fraud case in Virginia) that what mattered was not the methods used to obtain a grant or contract, but the fact that innocent purchasers would be injured by repealing such contracts once they had been entered into (Chandler 1945:74,390). Even outright frauds were held irrevocable by subsequent legislation, on the ground that once a business claim was sold to an innocent purchaser, undoing the deal would be unfair. The unwitting buyer would be left holding the proverbial bag. Myers (1936:217) finds this to be “the first of a long line of court decisions validating grants and franchises of all kinds secured by bribery and fraud.”

The new doctrine provided a motive for privatizers to cash in quickly by selling out shares of fraudulent transactions to speculators and other buyers, who could then ask the state to “make them whole” for having injured them in revoking their wrongful purchase! Likewise today, polluters and real-estate holders are suing the government to be compensated for public laws that prevent them from making money by violating ecological and other real-estate regulations. Their demand is to be made whole for gains they allegedly would have been able to make had such public laws not been passed!

The “innocent purchaser” and “vested interest” doctrines made it hard to undo fraud, if only because the alternative was to restore the misappropriated asset from the stock-buying public to the state. The Supreme Court ruled it preferable to let the first thief legitimize his fraud, leaving the “innocent buyers” in possession of the stolen property. Possession became, ipso facto, nine-tenths of the law. The moral of this story was that once you obtain public assets, even through bribery, it is yours, at least if you make the transaction complicated enough and involve enough “innocent parties” to make any restoration of the status quo ante hopelessly complicated.

The Yazoo incident is only exceptional for its size and the fact that it became a precedent for future practices. In 1835 the Senate Committee on Lands reported: “The first step necessary to the success of every scheme of speculation in the public lands, is to corrupt the land officers, by a secret understanding between the parties that they are to receive a certain portion of the profits.” Sixty years later, in 1895, Iowa's Governor William Larrabee wrote on how the system had been perfected (largely by the railroad robber barons): “Outright bribery is probably the means least often employed by corporations to carry their measures. ... It is the policy of the political corruption committees of corporations to ascertain the weakness and wants of every man whose services they are likely to need, and to attack him, if his surrender should be essential to their victory, at his weakest point. Men with political ambition are encouraged to aspire to preferment, and are assured of corporate support to bring it about. Briefless lawyers are promised corporate business or salaried attorneyships. Those in financial straits are accommodated with loans. Vain men are flattered and given newspaper notoriety. Others are given passes for their families and their friends. Shippers are given advantage in rates over their competitors. The idea is that every legislator shall receive for is vote and influence some compensation which combines the maximum of desirability to him with the minimum of violence to his self-respect. … The lobby which represents the railroad companies at legislative sessions is usually the largest, the most sagacious and the most unscrupulous of all. … Telegrams pour in upon the unsuspecting members. … Another powerful reinforcement of the railroad lobby is not infrequently a subsidized press and its correspondents.”

Gustavus Myers’ History of the Great American Fortunes (1936, pp. 218ff.) gives the details of this and other frauds that have shaped American history. The moral is that great gifts to insiders have effects that will last centuries. That is what is being threatened today with Mr. Paulson’s “clean” giveaway to his Wall Street clients.

The moral is that there is a great danger in having a Treasury Secretary represent insider financial interests rather than the national interest.

Michael Hudson is a former Wall Street economist specializing in the balance of payments and real estate at the Chase Manhattan Bank (now JPMorgan Chase & Co.), Arthur Anderson, and later at the Hudson Institute (no relation). In 1990 he helped established the world’s first sovereign debt fund for Scudder Stevens & Clark. Dr. Hudson was Dennis Kucinich’s Chief Economic Advisor in the recent Democratic primary presidential campaign, and has advised the U.S., Canadian, Mexican and Latvian governments, as well as the United Nations Institute for Training and Research (UNITAR). A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) He can be reached via his website, mh@michael-hudson.com





Myers History of the Great American Fortunes (New York 1936):216ff. and 1912:181-84, 258-64, Brunk 1927:147f., and Chandler 1945:388f., drawing on Senate Docs., 18th Cong., 2nd Sess., Vol. II, Doc. No. 14, and Sen. Docs., 24th Cong., 1836-37, Vol. II, Doc. No. 212, and Wheaton’s Reports, Supreme Court, IV, 255). See also Albert James Pickett, History of Alabama (to 1851), (Sheffield: 1896).

Senate Docs., 23rd Cong., 2nd Sess. IV, Doc. No. 151 (March 3, 1835), cited in Myers 1936:218.

The $700 Billion Questions

by: David Sirota, In These Times

OPINION



Blocking Care for Women

by: Hillary Rodham Clinton and Cecile Richards, The New York Times

OPINION



Bush Brings WMD Line to Wall Street

by: Dean Baker, t r u t h o u t | Perspective

OPINION



Cash for Trash

by: Paul Krugman, The New York Times

OPINION



No Recession for Arms Sales

by: Frida Berrigan, Foreign Policy in Focus

OPINION



The Evolution of John McCain

by: Chip Ward, TomDispatch.com

OPINION



Roll Back the Interest Rates

by: Marc Ash, t r u t h o u t | Perspective

OPINION



Paulson Bailout Plan a Historic Swindle

by: William Greider, The Nation

OPINION



The Assault on Freedom

by: Molly Ivins and Louis Dubose, The Texas Observer

OPINION



When Refusing to Kill Has a Higher Sentence Than Murder

by: Ann Wright, t r u t h o u t | Perspective

ECONOMY
An Unfair And Ineffective Bailout
The Bush administration's initial plan to bail out Wall Street's ailing financial markets was just three pages long. It called for Treasury Secretary Henry Paulson to be given unprecedented and unilateral authority to buy up $700 billion in souring mortgage assets from the very financial institutions that "engineered the current crisis." Section 8 of the proposed legislation ensured that none of Paulson's actions could be challenged by any court or federal agency. The section read: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Across the political spectrum, economic and financial analysts immediately questioned the fairness and effectiveness of the plan. Indeed, economist Paul Krugman wrote yesterday in the New York Times, "If this plan goes through in anything like its current form, we'll all be very sorry in the not-too-distant future." In a rare moment of agreement, New York Times columnist Bill Kristol wrote similarly that he is "not convinced" that the Bush administration "has even the basics right." In addition to offering nothing in the way of oversight, the Paulson plan provided no relief for struggling homeowners and gave tax payers nothing in return for taking on the bad debts of Wall Street. While congressional negotiators made significant headway yesterday toward a progressive version of the Paulson plan, it is not there yet.

BUSINESS AS USUAL: The Bush administration's initial attempt to railroad anyone skeptical of the Paulson plan is reminiscent of some of its previous legislative initiatives. The Bush administration has a long track record of using times of crisis to demand -- and then mismanage -- unprecedented amounts of power and money. Just as troubling, the Wall Street Journal reported yesterday that lobbyists for Wall Street firms have launched an aggressive campaign to ensure that the terms of the Treasury's proposed bailout are as favorable to the finance industry as possible. A major player in this effort is the Financial Services Roundtable, a "lobbying group representing the nation's banks." Over the weekend, the Roundtable successfully lobbied the Treasury to make the proposed bailout "broad enough to include different types of assets" -- possibly including assets held by foreign banks. Further, the Roundtable said yesterday that including relief for struggling homeowners in the bill would be a "deal breaker." The Los Angeles Times notes that finance sector is well-positioned to shape the legislation because it has "given lavishly to both parties in Congress."

CONGRESSIONAL PUSH BACK: Yesterday, members of Congress pushed back against the Paulson plan, successfully securing key concessions from the Bush administration. The Wall Street Journal reports this morning that Rep. Barney Frank (D-MA) and the Bush administration agreed on a plan to appoint an "independent board to monitor the bailout and report on its progress to Congress and the public." The board, however, "wouldn't have authority to veto Treasury investment decisions, and the bailout's launch wouldn't be delayed while a board was being put in place." In addition, "both sides have also agreed to a measure that would allow -- but not require -- the Treasury to take an equity stake in a financial institution that sells assets to the government." Such an equity stake could allow taxpayers to eventually realize some profit in exchange for taking on a given institution's bad assets. Further, Krugman notes that the equity stake provision allows the government to, if necessary, infuse struggling institutions with capital. Finally, the Treasury agreed to cursory support for struggling homeowners, promising to deploy officials from the FDIC, Fannie Mae, and Freddie Mac to "help adjust the loans of borrowers who were behind on payments but deemed credit-worthy" and ensure that "renters in homes headed for foreclosure aren't evicted." Restructuring the mortgages that Treasury will control is crucial not only for helping the homeowners but for wiping out the risk in the securities that are linked to those mortgages. As David M. Abromowitz and Andrew Jakabovics write for the Center for American Progress, without such a provision, "taxpayers will be saddled with increasingly worthless [assets] as many of the underlying mortgages fail."

BUT STILL NOT THERE: Early yesterday, Sen. Chris Dodd (D-CT) released his own plan for the proposed bailout. Some of the provisions proposed by Dodd have been accepted by the Bush administration, but several of the most promising aspects of Dodd's plan have yet to appear in the negotiated agreement between Congress and the Treasury. A significant aspect of the Dodd proposal is to allow bankruptcy judges "to restructure mortgages for homeowners facing foreclosure." The Center for Responsible Lending explains that "current law makes a mortgage on a primary residence the only debt that bankruptcy courts are not permitted to modify in chapter 13 payment plans." This means that struggling homeowners are excluded from debt relief that is available to "yacht owners," "subprime lenders," and even individuals with mortgages on second and third homes. Dodd's plan would also "give the Treasury secretary the power to prevent payment of bonuses if executives took excessive risk or if they were predicated on earnings targets that weren't met." Members of Congress will have an opportunity to push for modifications to the current plan when when Paulson and Federal Reserve Chairman Ben Bernake testify before Congress today and tomorrow.

IRAQ -- EX-IRAQI INVESTIGATOR REPORTS $13 BILLIION IN U.S. TAXPAYER MONEY WASTED OR STOLEN: The Washington Post reports that yesterday, a former Iraqi official estimated yesterday that "more than $13 billion meant for reconstruction projects in Iraq was wasted or stolen through elaborate fraud schemes." Salam Adhoob, a former chief investigator for Iraq's Commission on Public Integrity, told the Senate that an Iraqi auditing bureau "could not properly account for" the money. In one example, "Iraqi Defense Ministry officials helped set up two front companies that were to buy airplanes, armored vehicles, guns and other equipment with $1.7 billion in U.S. funds. The companies were paid, but in some cases they delivered only 'a small percentage' of the equipment that had been ordered." Sen. Byron Dorgan (D-ND), who has led the charge in uncovering waste, fraud, and abuse in Iraq, said that "taxpayers have been bled dry with massive misuse of public dollars." The Progress Report has rounded up examples of wasted U.S. taxpayer money in Iraq here.

ENERGY -- T. BOONE PICKENS: I'M HAVING MORE PROBLEMS WORKING WITH DRILL-ONLY REPUBLICANS THAN DEMOCRATS: Yesterday, while speaking at the National Press Club about his "Pickens Plan," Texas oil-tycoon and alternative energy spokesman T. Boone Pickens was asked if he's having http://app.mx3.americanprogressaction.org/...53BEE831FD6C1CE" with Democrats to promote his plan, given his past opposition to progressives. He replied that he is actually having trouble working with conservatives, because his plan involves more than offshore oil drilling. "So I am having no problem working with the Democrats," he said. "Having a little problem working with the Republicans. They don't like it because I want to do more than just drill." Pickens added that conservatives "somehow have gotten it - a lot of them have -- that you can drill your way out of this. But you can't do it. There's not enough oil there to do it." Pickens made it clear that, despite five straight weeks of calls for an "all of the above" energy strategy, congressional conservatives are interested in little besides drilling. In fact, last week, when the House passed an energy bill that included conservatives’ demand for offshore drilling, House conservatives opposed it because it would have repealed Big Oil tax breaks to invest in renewable energy.

JUSTICE -- COURTS DELIVER SETBACKS FOR BUSH AND CHENEY: Yesterday, an appeals court ruled that the Bush administration "must release 20 photographs of U.S. soldiers and detainees in Iraq and Afghanistan," rejecting "the government's claim that releasing the photos would endanger the lives or physical safety of U.S. troops and civilians in Iraq and Afghanistan." "The 2nd U.S. Circuit Court of Appeals agreed with a 2006 ruling by Judge Alvin K. Hellerstein ordering the release of the pictures to the American Civil Liberties Union," which is seeking information on prisoner abuse. Additionally, last week, U.S. District Judge Colleen Kollar-Kotelly dealt a "setback for the Bush administration in its effort to promote a narrow definition of materials that must be safeguarded under by the Presidential Records Act" by ruling that Vice President Dick Cheney must preserve his records. Kollar-Kotelly said that the Bush administration's legal position "heightens the court's concern" that some records may not be preserved. The lawsuit, brought by CREW and several historian organizations, was prompted in part by Cheney’s claim that he is not part of the executive branch.

Lobbyists are rallying to defeat Sen. Chris Dodd’s (D-CT) alternative bailout proposal, with the banking industry particularly up in arms about a provision allowing bankruptcy judges to lower mortgages for distressed homeowners. "We are vigorously opposing that," said Steve Verdier, a lobbyist for the Independent Community Bankers Association (ICBA).

The lobbying firm of William Timmons Sr., who John McCain tapped to run his presidential transition team, "earned more than a quarter of a million dollars this year representing Freddie Mac, one of the companies McCain blames for the nation’s financial crisis." Timmons himself has been personally "registered to lobby for Freddie Mac from 2000 through this month."

According to 2007 data released by the U.S. Census Bureau today, more than 7.5 million people "are spending half of their income or more on housing costs." The government considers "a homeowner spending 30 percent or more of their income on housing costs to be financially burdened," a definition that now covers almost 38 percent of U.S. homeowners with a mortgage.

The White House said yesterday that it opposed the Credit Card Bill of Rights, a bill currently being debated in the House, "saying it would constrain banks' ability to price risk." The proposal would end double-billing and would force companies to mail bills 25 days before payment is due, rather than the current 14 days. Read more about why the bill is so important here.

Last week, The Rachel Maddow Show was the No. 2 program in cable news in the age 25-54 demographic and in total viewers at 9 p.m. ET, beating CNN's Larry King Live. "On Friday, Maddow's was the #1 show in the demo at 9 p.m. ET topping a 'Hannity-less' Hannity and Colmes."

With two more months to go in the presidential election season, "women have given $109 million to presidential candidates in checks of $200 or more -- triple the amount female donors delivered in 2000." Overall, the new study released today by the Women's Campaign Forum Foundation finds that women still comprise just 27 percent of all donors.

And finally: Comedian Tiny Fey is not happy over Carly Fiorina's allegations that her Saturday Night Live skit portraying Gov. Sarah Palin (R-AK) was "sexist." "I saw one lady trying to form a thought that it was sexist on the news," Fey said of Fiorina. "But she didn’t really get it together. Probably because she was a lady and she was dumb. [pause] Wait. Is that sexist?" Watc

TOM SULLIVAN
Coarser Realities ourfuture.org — After a string of elections characterized by "the politics of personal destruction," what progressives have yet to come to terms with is that for conservative leaders elections are not about issues or ideas or what is best for the country. They are about establishing dominance, baser instincts. They are about which dog can pee highest on the tree.

ALAN JENKINS
Walking and Chewing Gum ourfuture.org — The challenges facing Americans today tend to be framed in the media and on the campaign trail as a daunting and often depressing laundry list of economic and social woes: home foreclosures and bank failures, rising health care costs and falling wages, underfunded schools and unaffordable colleges.

THOMAS FERGUSON & ROBERT JOHNSON
Bridge Loan to Nowhere thenation.com — There is more than one way to restore trust and restart markets. Alas, not only is the plan Paulson and Bernanke are pushing the most expensive and likely to soak average Americans the most, but it is also the most likely to fail.

PAUL KRUGMAN
Cash for Trash iht.com — Paulson insists that he wants a "clean" plan. "Clean," in this context, means a taxpayer-financed bailout with no strings attached - no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Paulson is also demanding dictatorial authority, plus immunity from review "by any court of law or any administrative agency," and this adds up to an unacceptable proposal.

KATRINA VANDEN HEUVEL
Give Main Street a Fair Shake thenation.com — This bailout should be seized as an opportunity to start addressing the real economic crisis — the one on Main Street — where the struggle to make ends meet is increasingly more dire in an economy marked by job losses, crumbling infrastructure, the lowest levels of personal savings since the 1920s, Gilded Age inequality and the highest level of foreclosed homes since the Great Depression.

PAUL WILMOTT
For Wall Street, Greed Was Not Good Enough nyt.com — As long as people are compensated hugely for taking risks with other people's money, and do not suffer equally on the downside, then those risks will inevitably become outrageous. If there's a way for someone to make money at another's expense, he will. In spades. So where next? And, most important, what should be done? To get to the root of the matter, we have to address the bad side of greed. We know from Ivan Boesky and Gordon Gecko that greed can be good. Greed makes the world go around; it makes people take risks that ultimately lead to economic or scientific advances. But the greedy must also face the consequences of taking those risks.

ROBERT H. DUGGER
A Prescription for Recovery washingtonpost.com — If Congress commits money without firm principles to guide its use, the cost to taxpayers will be far higher and the economy will remain weaker longer. Here are five principles Congress needs to impose now.

MARIE COCCO
Socialism for Dummies truthdig.com — So this is how the "ownership society" works. We own all the bad stuff. What we will own are potentially worthless assets for which there are currently no private buyers. After more than three decades of being told we can't afford to keep a modest safety net beneath the people on Main Street, we have thrown the mother of all lifelines to Wall Street. This is the conservative dogma that has constrained our politics for a generation.

EUGENE ROBINSON
So Much for the 'Masters of the Universe' truthdig.com — The über-capitalists of Wall Street are all socialists now. Free-market ideology, it turns out, doesn't pay the mortgage. That appears to be a job for, ahem, Big Government.

When given a choice about how government should address the numerous economic difficulties facing today's consumer, Americans overwhelmingly — by 84% to 13% — prefer that the government focus on improving overall economic conditions and the jobs situation in the United States as opposed to taking steps to distribute wealth more evenly among Americans. ... [F]ree-market advocates can take considerable solace in Americans' overwhelming belief that the government should not focus on redistributing income and wealth, but on improving the overall economy.


Conservatives often focus on the wrong questions, and this poll, which plays into the caricature of "tax-and-spend" liberalism and the specter of government taking money from hard-working people and giving it to people who are less deserving, is a prime example. Ask people about the direction that progressives actually embrace as opposed to the stereotype presented by conservatives, and they will side with progressives. For example, a February 2008 Associated Press/Ipsos poll found that 70 percent of respondents thought that "increasing spending on domestic programs like health care, education, and housing" would help fix the country's economic problems. A January 2008 Fortune Magazine poll found that 67 percent would support "increasing government spending on things like public-works projects to help create jobs." Bush administration economic policies, if anything, have fostered a redistribution of wealth upward, creating an unprecedented economic gap between the very wealthy and the rest of the country. Progressives believe this is wrong, and most of the country agrees.

more pro vs con >>

Wall Street Compensation Will Have to Change - Andy Zelleke, CS Monitorhttp://comments.realclearpolitics.com/read/42323/204425.html

False Debate Over Government vs. Markets - Fareed Zakaria, Newsweek1

Of Interventions & Conservative Principles - Don Luskin, National Reviewhttp://comments.realclearpolitics.com/read/42323/204461.html

Paulson, Congress Assume Crisis Position - Charlie Cook, National Journalhttp://comments.realclearpolitics.com/read/42323/204427.html

A Free-Market Fix - Edwin Feulner, Heritage Foundation25

Debates Will Create Lingering Impressions - Dick Polman, Philly Inquirerhttp://comments.realclearpolitics.com/read/42323/204428.html

Is the 'Wilder Effect' the Result of Pro-Black Bias? - James Taranto, WSJ1

Salon's David Talbot is Clueless About Palin - William Dyer, Beldar1

The Problem with Palin-Bashing - Andrew Breitbart, Washington Times200

What's Wrong with U.S. Strategy in Afghanistan - Dan Ephron, Newsweekhttp://comments.realclearpolitics.com/read/42323/204509.html

The Problem of Pakistan - Steve Coll, The New Yorkerhttp://comments.realclearpolitics.com/read/42323/204430.html

Goldman Sachs Socialism - William Greider, The Nation

Andrew Cuomo and John McCain
Patrick J. Casey
Why in heaven's name did Senator McCain tell 60 Minutes that he thinks that Cuomo would make a good SEC Chairman in a McCain Administration? More

Obama, Hillary and Palin's Disinvite
Pamela Geller
The notorious disinviting of Sarah Palin from an anti-Ahmedinejad rally in New York is a product of the secret war Hillary Clinton is waging against the Obama presidential campaign. More

Obama's Faith, Family and Variable Values Tour
Jan LaRue
Senator Obama apparently is beaming a guiding light for the faithful ones seeking the "epiphany" he promised his followers at Dartmouth College last January More

VodkaPundit's Stephen Green on The Rick Moran Show'
September 23, 2008
Famous for his "drunkblogging" the political debates, VodkaPundit's Stephen Green will appear tonight on The Rick Moran Show. More

Has George Will Gone Native?
September 23, 2008
When conservative pundits go native in DC, the results aren't pretty. More

NYT Mocks Anti-Iran Protesters
September 23, 2008
The Grey Lady has no shame. More

Jewish organizations choosing abortion over Israel
September 23, 2008
Caroline Glick has an outstanding piece in today's Jerusalem Post excoriating those Jewish organizations which chose abortion over Israel in demanding that Palin not be allowed to address the anti-Iran rally. More

Leftist watch
September 23, 2008
Independent Sector, a supposedly nonpartisan nonprofit organization helping other nonprofits be ethical, has been on the Fannie Mae take. More

Obama making no headway convincing Hillary voters
September 23, 2008
This could be a significant development in a very close race. More

More lies from the Obama Camp on McCain's health insurance proposals
September 23, 2008
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If you want to reform DC...
September 23, 2008
Straight from Barack Obama, a recommendation about who has been consistent on reform: John McCain. More

Anti-Iran Rally a Flop
September 23, 2008
There's no other way to describe a rally where 2-4,000 people show up when in past years, the numbers exceeded 25,000. More

Berkeley tree sitters face fines
September 23, 2008
Accountability is a difficult concept for some. The Berkeley tree sitters who have no respect for property rights seem to think that free speech means no consequences. More

Kurtz: Obama-Ayers Partnership tried to radicalize Chicago Public Schools
September 23, 2008
Are we really going to do it - elect someone who views our children as soldiers in a revolution? More

Will early voting hurt McCain?
September 23, 2008
Obama has many advantages that might give him a decided advantage in early voting states. More

Congress Is Resisting the Bailout Plan Now, But Wall Street Will Do Anything to Get Its Way

Nomi Prins, Newsday

Corporate Accountability and WorkPlace: The Bush-Paulson trillion-dollar payoff scheme won't save Wall Street from the mess it created.


Five Dangerous, Disastrous Things About the Proposed Bailout and What You Can Do to Help Stop It

AlterNet Staff, AlterNet

You can help stop the economic hijacking before it's too late.

Has Sarah Palin Been Picked as the Titular Head of the Coming Police State?

Naomi Wolf, Huffington Post

Palin will help to establish a true and irreversible 'fear society' in this once free once proud nation.

Melting Arctic Permafrost Is Releasing a Global Warming Timebomb

Steve Connor, The Independent UK

Environment: Melting in the Arctic has caused the release of millions of tons of methane -- a gas 20 times more damaging than carbon dioxide.

McCain and Palin Want Women's Votes But Do Women Want Them?

Amie Newman, RH Reality Check

Reproductive Justice and Gender: Ultimately, women have the power to decide this election. And unmarried women, the largest voting bloc, tend to lean left.

If Congress Agrees to This Rip-off Bailout, We'll Be Handing the Money to the People Who Got Us in This Mess

Phil Mattera, AlterNet

Corporate Accountability and WorkPlace: The "Paulson Plan" would outsource the handling of hundreds of billions of dollars worth of assets to those who got us into this mess.


What Makes Obama and McCain Think They Can "Win" Afghanistan?

Robert Fisk, Independent UK

War on Iraq: To claim the U.S. can achieve now what the British couldn't in the 19th century and the Russians couldn't at the end of the 20th is pure fantasy.


Palin's Political Payback To Her Black-Helicopter Buddies

David Neiwert, Firedoglake

PEEK: Sarah Palin has some far-right fringe friends back in Wasilla, Alaska.

Let's Stop the Greatest Theft in the History of Humankind

Otto Spengler, Asia Times

Corporate Accountability and WorkPlace: We can't let them get away with it.


Five Dangerous, Disastrous Things About the Proposed Bailout and What You Can Do to Help Stop It

AlterNet Staff, AlterNet

You can help stop the economic hijacking before it's too late.


10 Things You Should Know About Bush's Trillion Dollar Fleecing Plan

AlterNet Staff, AlterNet

Corporate Accountability and WorkPlace: Here's a roundup of what opponents of the Bush-Paulson plan are saying.


Lies, Damned Lies, and How Much Should Obama Lie?

Don Hazen, AlterNet

A special message from AlterNet’s executive editor about AlterNet's approach to lies in the campaign.


Very Bizarre 'Holy Laughter Annointing' Theology at Sarah Palin's Juneau Church

Bruce Wilson, Talk To Action

Election 2008: 'Third wave' sermons supported by religious leaders at Juneau Christian Church, include "uncontrollable laughter, weeping, shrieking."


Four Simple Things to Look for in a Bailout Plan That Isn't a Taxpayer Rip-off

Hillary Rosen, Huffington Post

Corporate Accountability and WorkPlace: A quick take on the bailout if you don't have time to read what all the economic experts are saying about the financial crisis.


Major Anti-Immigrant Figure Can't Pretend He's Not a Racist Anymore

Heidi Beirich, Hate Watch

Immigration: Exposed: FAIR founder John Tanton's 20 years of correspondence with racists and white supremacists.


We Can't Afford McCain and Palin's Anti-Science Beliefs

John Tirman, AlterNet

Election 2008: Their combined anti-science positions may be devastating for the economy, the environment and our health.


Is a U.S.-Approved Coup Under Way in Bolivia?

Benjamin Dangl, AlterNet

ForeignPolicy: Bolivian President Evo Morales announces that a coup d'etat by right-wing regional governors is under way.

How Main Street Profits From Treasury Plan - Bill Gross, Washington Post
'Moral Hazard' Preening Is Hazardous - David Wighton, Times of London
More Government Intervention is Not the Answer - Rep. Ron Paul, CNN
America's Delusional Optimism - Barbara Ehrenreich, New York Times
More on The Financial Crisis, Mortgage Mess - RealClearMarkets
Obama vs.'Bubba' Vote - Clarence Page, Chicago Tribune
Media Play the Race Card on Obama - Jonah Goldberg, Los Angeles Times
Park Avenue Diplomacy - Maureen Dowd, New York Times
Media Campaigns Hard for Obama - Tony Blankley, Washington Times
McCain Tells Lies Every Day - Jonathan Chait, The New Republic
Obama is Most Left Wing Nominee, Ever - Joshua Muravchik, Commentary
Our Federal Economy - George Will, Washington Post
Reason for Financial Meltdown is Greed - Bruce Marks, Boston Globe
Congress Should Pass The Paulson Plan - Larry Kudlow, RealClearPolitics
Candidates Should Listen to Bob Gates - Trudy Rubin, Philadelphia Inquirer
Our Generals Almost Cost Us Iraq - Mackubin Owens, Wall Street Journal
Putin, Not Just Paulson, Sets Decade's Course - Amity Shlaes, Bloomberg
The RCP Blog: ABC/WaPo: Obama +9 | VA Poll: McCain +3 | AM Report

Editorials
It's Time To Act: This is a Rescue, Not a Bailout - Investor's Business Daily
An Inadequate Case for the Bailout - New York Times
The Other Bailout: Main Street - Christian Science Monitor
Ahmadinejad in New York - New York Sun

Political News & Analysis
Bailout Met with Mixed Reviews - The Politico
Candidates Push for Bailout Legislation - Wall Street Journal
Palin Meets with Foreign Leaders - Washington Post
Obama Begins Three Days of Debate Prep - Associated Press

Transcripts & Speeches


President Bush's Address to the General Assembly - George W. Bush
Paulson's Testimony to the Senate Banking Committee - Henry Paulson
Roundtable on the Senate Banking Hearing - Special Report w/Brit Hume
Interview with Ahmadinejad - Larry King Live
John Bolton on Iran and the United Nations - Hannity & Colmes

Best of the Blogs
Count Me Out of the Bailout - Jonah Goldberg, The Corner
Paulson's Lack of Urgency - Brian Beutler
Credit Is Not a "Civil Right" - McQ, QandO
The McCain Who Cried Wolf - Patrick Barry, Democracy Arsenal
The Press vs McCain - Andrew Sullivan, Daily Dish

Weak Institutions Must Be Allowed To Fail - Kenneth Rogoff, Guardian
The Fannie/Freddie Bailout's Good News - Jim Cramer, TheStreet.com
Paulson Propping Up The Living Dead - Editorial, Wall Street Journal
Paulson Changes Rules of the Capital Game - Colin Barr, Fortune
Beginning of the Financial 'Surge' - Randall Forsyth, Barron's

Liberals Warn About Obama Loss
- Dennis Prager, Human Events
Sarah Palin: Mean Girl
- David Talbot, Salon
McCain's Queen of Hearts Intervention
- George Will, Indianapolis Star
Is the 'Wilder Effect' the Result of Pro-Black Bias?
- James Taranto, WSJ

HEALTH CARE
Deregulating The Health Insurance Industry
In the latest edition of Contingencies, a journal of the American Academy of Actuaries, Sen. John McCain (R-AZ) makes his case for deregulating the health insurance industry by extolling the benefits of the last decade of deregulation in the banking sector. "Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation," McCain writes. Since the banking industry's collapse this week, the McCain campaign has tried to distance itself from the senator's remarks, claiming that McCain was referring to "policies which allowed Americans to use an ATM anywhere in this country." But McCain's proposal to allow health insurance companies to sell policies across state lines is evidence that the senator supports the same kind of deregulatory polices that created the economic crisis. The latest financial meltdown highlights the dangers of deregulating the health insurance industry and only underscores the sheer impracticality of McCain's proposal.

STATES FILL REGULATORY VOID: In 2002, to combat predatory lending and protect its citizens from "the wrenching costs associated with overpayment and eventual foreclosure," several state legislatures "decided to stanch the flow of easy credit to subprime lenders." The Georgia Fair Lending Act, for instance, imposed liabilities on lenders in the secondary mortgage market who engaged in predatory lending. "New York, New Jersey, and New Mexico made the same judgment and within two years had enacted their own versions of laws exposing downstream owners of loans to fines if they bought predatory loans," Slate reported. But in 2003, the federal government overruled the states and exempted national banks from the new regulations. John D. Hawke Jr., the comptroller of The Office of the Comptroller of the Currency said, "We have no evidence that national banks are engaged in predatory lending practices."

MCCAIN'S PLAN TO DEREGULATE HEALTH CARE: McCain's proposal to allow health insurance companies to sell policies across state lines would allow insurers, like the banks before them, to ignore consumer protections and sell bare-bones policies with high out-of-pocket expenses. In fact, by creating a deregulated national marketplace in which insurers no longer have to comply with rules that require they provide cancer screenings, maternity care, mammograms, and emergency services, or abide by rules that "limit the rates that can be charged to higher-cost consumers and that limit who can be excluded for a health plan," insurance companies could sell plans across the country that lack even the most basic consumer protections. Fewer requirements would translate into cheaper but less comprehensive policies which would pull heathier individuals out of larger insurance pools. A recent analysis of McCain's health care proposal from the Center for American Progress Action Fund points out that as healthy individuals vie for cheaper policies across state lines, states with more stringent consumer protections would be left with sicker and more expensive patients, increasing health care costs across the board. A study published in Health Affairs predicts that in McCain's deregulated insurance marketplace, insurance providers would have an incentive to "develop 'bare-bones' insurance policies…however, for most uninsured families, the benefits of such policies in terms of protection from financial risk and access to medical care would likely be very small and take-up would be much lower than if plans were more generous." More alarmingly, the McCain plan could potentially erode solvency requirements -- which vary between states -- that ensure that insurance companies will be able to meet all of their promises to pay medical bills. As the Washington Post's Bob Herbert observed, "you would think that with some of the most venerable houses on Wall Street crumbling like sand castles right before our eyes, we'd be a little wary about spreading this toxic formula even further into the health care system."

MCCAIN'S DEREGULATION HYPOCRISY: On some level, McCain recognizes the consequences of deregulation and limited oversight. In fact, the senator has attributed the current financial crisis to "failed regulation, reckless management, and a casino culture on Wall Street," blaming regulators for "falling asleep at the switch" and proposing greater government regulation and more oversight of the Bush administration's $700 billion bail-out plan." Under my reforms, the American people will be protected by comprehensive regulations that will apply the rules and enforce them in full,'' McCain promised. Unfortunately, the senator is not applying the same standards to his health care plan. According to CQ HealthBeat, McCain campaign will not "make changes to their health care proposals in response to the current economic downturn." Without changes, American families can expect to face the same financial crisis America's biggest investment firms. But unfortunately, when American families fall into financial crisis, the American government won't be there to ba

AFGHANISTAN -- BUSH WON'T DECLASSIFY 'GRIM' AFGHANISTAN REPORT BEFORE ELECTION: ABC News reports that President Bush has "no plans to declassify" a new National Intelligence Estimate (NIE) on Afghanistan before the upcoming presidential election. According to people who have been briefed on the NIE, ABC reports, it "will paint a 'grim' picture of the situation in Afghanistan, seven years after the US invaded in an effort to dismantle the al Qaeda network and its Taliban protectors." Last week, Chairman of the Joint Chiefs Adm. Mike Mullen said the United States is "running out of time" in Afghanistan, adding, "I'm not convinced we are winning in Afghanistan." Director of National Intelligence Mike McConnell "has made it his policy that such key judgments 'should not be declassified,'" though the Bush administration in the past has selectively declassified reports when doing so is to Bush's political advantage. Last week, Defense Secretary Robert Gates suggested the United States would review its strategy in Afghanistan, similar to its reassessment of the Iraq war that led to the surge strategy. "We did it in Iraq," Gates said. "We made a change of strategy in Iraq and we are going to continue to look at the situation in Afghanistan."

CIVIL RIGHTS -- REP. FRANK ASKS LIBRARY OF CONGRESS NOT TO APPEAL DISCRIMINATION RULING: Last week, a federal district judge in Washington, D.C. ruled that "the Library of Congress discriminated against Diane Schroer when it offered her a job and then rescinded it after learning she was transgendered." This ruling was the first to hold that "the federal sex discrimination statute, Title VII of the 1964 Civil Rights Act, applies to transgendered people." The Hill reports today that Rep. Barney Frank (D-MA) "denounced the Library of Congress (LOC)" in a letter yesterday and asked it not to appeal the court decision. Frank wrote in his letter, "I strongly urge you not to appeal. I will be working with my congressional colleagues because it would be a great source of stress to us if you were to as an institution that bears our name appeal a decision that is plainly in the interest of fairness." Schroer, a 52-year-old former Army Special Forces commander, recounted the discrimination she experienced in her court testimony. After telling her interviewer that "she was undergoing the medical transition to become a woman," the interviewer said, "[Y]ou have given me a lot to think about." The next day, Schroer received a phone call in which the interviewer rescinded her job offer saying, "[A]fter a long and sleepless night, I have determined you are not a good fit and not what we want."

ENERGY -- BACHMANN AND BARTON EXPLOIT THE FINANCIAL CRISIS TO PUSH FOR MORE OIL DRILLING: While the White House and Congress are haggling over how to best bail out Wall Street's ailing financial markets, at least two conservative House members are using the moment of crisis to push their pet issue. In a Monday blog post, Rep. Michele Bachmann (R-MN) announced that she was joining Rep. Joe Barton's (R-TX) call for the bailout package to be accompanied by legislation that would "open up" the Arctic National Wildlife Reserve and Outer Continental Shelf to new oil drilling. In a letter to President Bush, Barton and Bachmann argued that increased drilling would "offset some of the liability" of the eventual bailout of Wall Street. "We therefore encourage you to include legislative language that would open up ANWR to leasing, along with the Outer Continental Shelf of the Eastern Gulf," wrote the lawmakers.Bachmann called her drilling push an "innovative" solution "to help us navigate through our current financial crisis." Bachmann and Barton's effort to use the financial crisis to push the unrelated issue of drilling is reminiscent of President Bush's exploitation of Hurricane Gustav to argue for more drilling. Earlier this month, Bush used a press briefing on the "follow-up efforts" to Hurricane Gustav to attack Congress about lifting the offshore drilling moratorium.

The FBI has opened investigations into Fannie Mae, Freddie Mac, Lehman Brothers, and AIG, looking into whether "fraud helped cause some of the troubles" at these financial institutions. According to the FBI, these probes “are part of an effort to pursue allegations of higher-level fraud more sweeping than the retail-level infractions that have been at the center of most cases brought so far."

91: Percentage of likely voters who say that the economy is "in bad shape," according to a new Washington Post/ABC News poll. Fifty-eight percent of those polled described the economy as "poor" while 33 percent deemed it "not so good." At the same time, "51 percent of registered voters say the economy’s in a serious long-term decline.”

The Senate approved billions of dollars in tax credits for renewable energy yesterday, in a package that will spare "more than 20 million taxpayers who would get hit by" the alternative minimum tax. The package also extended tax deductions for higher education costs and the child tax credit. The House could take up consideration of the bill today.

Caving to political pressure, Democrats in Congress "decided to allow a quarter-century ban on drilling for oil off the Atlantic and Pacific coasts to expire next week." House Minority Leader John Boehner (R-OH) called it "a big victory for Americans."

Sen. Tom Coburn (R-OK) is the target of a YouTube video made by Senate Democrats, calling him out for objecting to a package of popular legislative items known as the "Coburn Omnibus." In the video, Majority Leader Harry Reid (D-NV) brings up popular legislation as Coburn repeatedly objects. Watch it here.

An alliance of "seven Western states and four Canadian provinces unveiled a blueprint" yesterday for "the most far-reaching effort in North America to curb emissions linked to climate change." The Western Climate Initiative "is intended to achieve a 15 percent cut in greenhouse-gas emissions by 2020."

Yesterday, Congress approved legislation that would "require private insurers to provide the same level of benefits for mental illness as they do for physical maladies, a change lauded by advocates as a great shift in the nation’s understanding of mental health." The bill has strong bipartisan backing but the measure’s cost is the only "remaining obstacle."

And finally: On Tuesday, Sen. Charles Grassley (R-IA) was on the Senate floor and "went on at length about the artwork on the cover of the trippy Pink Floyd album 'Dark Side of the Moon' and then quoted from popular stoner movie ‘Dude, Where's My Car?'" Grassley stood before a "blown-up poster of the Pink Floyd album cover," comparing the prism to compromise on tax legislation. Grassley then talked about energy conservation, stating, "I'd like to refer to Ashton Kutcher here, from Cedar Rapids, Iowa, saying 'dude, where's my car?'"

A Frightened President Tries to Scare American Public on Bailout

By Huffington Post, TheNation.com

Bush seeks photo opportunities with Obama and McCain; McCain's bait and switch falls flat; Letterman mocks McCain's cancellation.

• September 25, 2008
• More »

10 Ways to Bail Out Wall Street (and Main Street) Without Soaking Taxpayers in Debt

Chuck Collins, Dedrick Muhammad, AlterNet