Opinion-Columns.com

FRYING PAN TO FIRE, OIL TO NUCLEAR

No matter that three out of five past presidents are unable to properly pronounce nuclear, they keep making nuclear noise, nuclear threats and (with the current president) seem hell bent upon their own unique brand of nuclear proliferation. The irony is without end; nuclear Pakistan is OK, but a nuclear ambition on the part of Iran is beyond the pale. A nuclear powered North Korea is a precursor to war, but nuclear powered India is just good sense and good business.

The bomb is inseparable in the minds of Americans from the energy technology. Or perhaps not. Or, who knows? Or, it’s all just too complicated.

Mira Kamdar, of the Asia Society, writes in today’s Washington Post that we are “Risking Armageddon for Cold, Hard Cash.”

While everyone has been abuzz about Georgia, the Beijing Olympics and Sarah Palin, perhaps the most important development in the world has been unfolding with almost no attention. India and the United States, along with deep-pocketed corporations, have been steadily pushing along a lucrative and dangerous new nuclear pact, the U.S.-India Civil Nuclear Agreement. Both governments have been working at a fever pitch to get the pact approved by the 45-country Nuclear Suppliers Group, which governs the world's trade in nuclear materials, and before Congress for a final vote before it adjourns this month.

India, huh? The last time I was abuzz, it wasn’t about Georgia, Beijing or Palin. I personally abuzzed wondering if Dick would bomb Iran on his way home from Azerbaijan and Ukraine.

As almost any neocon can tell you, Iran is a terrorist state. Actually, Iran fashions itself a sort of religious democracy, but the point is hotly debated even within Iran. It is however, a nation of 70 million, with the youngest and most pro-American population in the Muslim world. Meanwhile;

Indian Prime Minister Manmohan Singh says the deal will let his country, which refuses to sign either the nuclear Non-Proliferation Treaty (NPT) or the Comprehensive Test Ban Treaty, take "its rightful place among the comity of nations."

Singh has an interesting take on comity (an atmosphere of harmony, mutual civility and respect). Sign the treaties, Manmohan.

The historic deal will allow U.S. nuclear companies to again do business in India, something that has been barred since 1974, when New Delhi tested its first atomic bomb. (India tested nuclear bombs again in 1998, spurring Pakistan to follow suit with its own tests days later.) The pact will also lift restrictions on other countries' sales of nuclear technology and fuel to India, while asking virtually nothing from India in return. All of that will undermine the very international system that India so ardently seeks to join.

If I have it right, that would be the system that has thus far kept no one from surprising the world with those little unexpected explosions that preface an announcement of parity. No one was turned away who could access Dr. Abdul (Strangelove) Kahn in Pakistan and pay the price. We winked at that one because we needed Pakistan and temporary need redefines dictators on a depressingly regular basis over at the State Department.

But Bush is in a fury to set off strategic imbalances in Asia before January 20th, so that the neocons can profit both politically and economically from another arms race. The administration is frantic to come in on the India side against China (while there still is an India side). Mira concurs;

The deal risks triggering a new arms race in Asia: If it passes, a miffed and unstable Pakistan will seek nuclear parity with India, and China will fume at a transparent U.S. ploy to balance Beijing's rise by building up India as a counterweight next door. The pact will gut global efforts to contain the spread of nuclear materials and encourage other countries to flout the NPT that India is now being rewarded for failing to sign. The U.S.-India deal will divert billions of dollars away from India's real development needs in sustainable agriculture, education, health care, housing, sanitation and roads. It will also distract India from developing clean energy sources, such as wind and solar power, and from reducing emissions from its many coal plants. Instead, the pact will focus the nation's efforts on an energy source that will, under the rosiest of projections, contribute a mere 8 percent of India's total energy needs -- and won't even do that until 2030.

We have, in our ultimate burst of creative reason, elected to begin replacing the planets reliance on oil as a power source. It’s getting just too damned expensive and politically sensitive now that Texas has run dry. The prevailing administration view is that, rather than developing cheap and effective alternatives to fossil fuel, the dangerous, expensive and more politically sensitive resurgence of nuclear power is the answer.

Nuclear fuel, rather than being merely expensive and dwindling, is fatal to mine, dangerous as hell to ship, horrendously expensive to store and impossible to get rid of, once used. What a breakthrough technology. Instead of tapping the earth’s molten core, developing wind or solar power, we seek to proliferate the planets most life-threatening method of boiling water.

Kurt Vonnegut was right—our big brain is trying (with great success) to kill us.

So what will the deal accomplish? It will generate billions of dollars in lucrative contracts for the corporate members of the U.S.-India Business Council and the Confederation of Indian Industry. The Bush administration hopes that it will help resuscitate the moribund U.S. nuclear power industry and expand the use of this "non-polluting" source of energy, one of the pillars of the Bush team's energy policy. The deal will let the real leaders of the global nuclear-power business -- France and Russia, both of which eagerly support the deal -- reap huge profits in India. And the pact will provide spectacularly profitable opportunities to India's leading corporations, which are slavering to get their hands on a share of the booty. How much booty? This newspaper estimates more than $100 billion in business over the next 20 years, as well as perhaps tens of thousands of jobs in India and the United States.

Bush’s solution is so ‘non polluting’ that we have yet to find a state or a mountain within a state, willing to serve as a repository for spent fuel in America. It is so ‘non polluting’ that we expect to offload it to the poorest countries on earth.

In any case, the nuclear deal will not magically transform India into China's economic or military equal. A shocking 42 percent of Indians live below the World Bank's new poverty threshold of $1.25 per day. Even if India managed to match China reactor for reactor and missile for missile -- a long shot at best -- Delhi could do so only at the expense of precisely the investments in human and physical infrastructure that could make India into a truly great power, prosperous and secure. This is the real tragedy of the U.S.-India nuclear deal. It's not too late to stop it.

So,

• the politics are flawed,
• the science is opposed,
• the next Cold War is a likely result,
• India will remain a beggar state,
• China is disturbed
• and Russia (who we claim to be mad at over Georgia) will profit.

All in favor, signify by saying ‘aye.’

The ‘ayes’ will have it, unless the clock runs out.

HOLD THE PRESSES!!! This just in from the NYTimes;

The worldwide body that regulates the sale of nuclear fuel and technology approved a landmark deal on Saturday to allow India to engage in nuclear trade for the first time in three decades, after a pressure campaign by the Bush administration and despite concerns about setting off an arms race in Asia.

Approved, apparently, while I was busy parsing a paragraph. Timing is everything.

Only one hurdle now remains for the deal: final approval by the United States Congress. But passage is likely to be difficult, considering both political opposition and dwindling time in the Congressional calendar before November’s elections.

And therein lies the hope. Congress will absolutely not touch this hot-potato until a new Congress convenes.

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Media comment:

• Financial Times-UK-US races to approve India nuclear deal
• Daily Times-Pakistan-US-India nuclear deal called “foolish and risky”
• Christian Science Monitor-India a step closer to nuclear trade
• Associated Press-Delegates: US-India nuclear deal talks in disarray
• Hindustan Times-India-India waltzes past Vienna, Bush wielded the baton

 

THE NEXT GREAT IDEA IN THE BUSH DOCTRINE OF PREEMPTIVE WAR

Along comes Walter Pincus, an able enough Washington Post staff writer to disabuse us of any intention by incumbent George Bush to release his death-grip on America’s substitution for preemption over diplomacy. If you thought (or hoped) his eye was on getting back to his cats and favorite pillow down on the ranch, you never counted on Dick Cheney, or Cheney’s attack dog, David Addington.

If one were of a more conspiracy attuned mind than I happen to be, I might would feel the rising hairs at the back of my neck, the hot breath of military coups. An election, a preemptive strike before January 20th and extraordinary measures taken temporarily on a war-footing.

Nah. Couldn’t happen. Troops in the streets? Kent State? Nah.

(Non-Nuclear Warhead Urged for Trident Missile, by Walter Pincus, Washington Post Staff Writer, Saturday, August 16, 2008)

A National Research Council blue-ribbon panel of defense experts is recommending development and testing of a conventional warhead for submarine-launched intercontinental Trident missiles to give the president an alternative to using nuclear weapons for a prompt strike anywhere in the world.

In critical situations, such an immediate global strike weapon "would eliminate the dilemma of having to choose between responding to a sudden threat either by using nuclear weapons or by not responding at all," the panel said in a final report requested by Congress in early 2007 and released yesterday.

. . . The panel also said that few countries, other than Russia and perhaps China, would be able to detect a sub-launched missile "in the next five years," and that because of the few warheads that would be involved, "the risk of the observing nation's launching a nuclear retaliatory attack is very low."

In its study, the panel focused on scenarios in which it said the Defense Department in the past "seriously contemplated strikes." These involved the need for an immediate conventional strike to preempt an adversary whose missile system was poised to launch a nuclear weapon at the United States or an ally...

. . . The panel also included John S. Foster Jr., a former director of the Lawrence Livermore National Laboratory, Defense Department director of research and development and chairman of the Committee on the Present Danger;

Ah yes, and our man Foster has been quoted elsewhere as saying "National defense with maximum precision and minimum unintended damage should be an attractive challenge for scientists seeking to improve the human condition.”  Dr. Strangelove rides again.

One can hardly contemplate a more improving influence on the human condition than America's current (Bush declared) Doctrine of Preemptive War, enhanced by maximum precision and minimum collateral damage. Improving the Rumsfeld scorecard. Death to the countries and regimes of choice without killing absolutely everyone. A man who identifies that as an attractive challenge is long past the childhood habits of pulling wings off insects.

If anything might chill the reader's blood, then giving this particular president another, easier, less confrontational, less ambiguous way to attack the world, certainly fills the bill.

Promising a 'new direction for America,' Pelosi flim-flammed us into giving her the keys to the Congress. Her obscure, misunderstood and unconstitutionally ‘off the table’ argument for impeachment and against this kind of clap-trap weaponization, is that this president is on his way out. "Oh, he'll be gone in a few months, what’s the point?" The point is preserving our republic as a nation of laws. What we give or allow this president, we give or allow all presidents to come, by precedent.

Remember, without the impeachment of Bill Clinton, all presidents would have been encouraged to solicit oral sex in the halls of the White House.

The claim that in critical situations, this newest weapon of choice in the Pandora Box "would eliminate the dilemma of having to choose between responding to a sudden threat either by using nuclear weapons or by not responding at all," is bogus on its face. It tempts presidents to respond by poll (something they do entirely too much already), promotes reckless and ill-advised presidential shots from the hip to juice their numbers and discourages the hard, slogging, necessary work of diplomacy.

Presidents, due to their four-year report cards, are as short-sighted as business executives in pursuit of the ever-elusive quarterly earnings statement. The difference is that presidents cook the nation’s books, often with horrendous consequences.

This administration in particular, but perhaps all modern administrations, have apparently thrown diplomacy (and the Department of State that administers it) into the dustbin of history. I argue that such successive presidential policy has pretty much destroyed American influence on the international stage. It has been recently claimed that we have more members of military bands than total employees in the State Department.

Ruffles and flourishes, the substitute diplomacy of the new century.

That shortfall in expertise is what ties the hands of Secretaries like the thoroughly beaten Colin Powell and the current abuse victim, Condoleeza Rice. They become mere firemen, dashing around the planet, stamping down insurgencies and smoldering paper bags on the porch in Darfur, Georgia, China, Israel, Palestine--and elsewhere--too many elsewheres to list.

We don't need a quicker way to strike, we need less tendency to strike and a calmer, more resolute method by which to negotiate. In a properly run government (let alone an administration) the situation in Georgia would never have been allowed to fester. GWB found himself surprised by what everyone else saw coming, but had no mechanism to prevent. Echoes of 9-11 and Condi Rice thrown to another lion.

A well organized Department of State would have (and once had) 'sections' devoted to every nation and region of the world--long term departments devoted to in-depth knowledge of an area's history, economics, world view and political persuasion. That legacy was available from secretary to secretary, president to president. A proper Department of State would have more than ten Arab-speakers in a workforce of 34,000.

Ten Arab speakers. Can you believe it? We have plunged ourselves into the darkness and expected, demanded, smashed all the furniture seeking illumination. The Middle East is in flames and America has ten people who can speak Arabic in their diplomatic service and probably fewer qualified in Farsi (the language of Iran).

How 'bout packing in the missiles, John Foster (all that's missing is the Dulles) and beating the drum for a diplomatic service fluent in Arabic, Persian, Pashtu, Albanian, Azerbiajani, Cantonese and Mandarin? You are the living embodiment of Martin Luther King’s prescient statement that ‘we have guided missiles and misguided men.’ Spending mercilessly on weaponry, we don't have the money to speak the language of our adversaries.

We can kill, but we can't communicate.

Instead of more thoughtful approaches to getting what we want politically and economically (the goals of all diplomacy), we have presented to us on behalf of the current crew of war-profiteers, yet another study that recommends an increase in weapons. The signatories to that study are (no surprise) heavily into the weapons promotion business.

Witness The Committee for Present Danger (nearing its 60th anniversary of perceived and ever-present dangers) as an example.

After sixty years of looking for present dangers, what the hell did we expect these nit-wits would find? Peace? Look a some of the signatory members:

They include, in addition to the aforementioned John Foster, we have Norman Podhoretz (advocate of attacking Iran) and associates of the American Enterprise Institute (Richard Perle), Heritage Foundation (Richard Mellon Scaife), AIPAC (a shadow American government) and Boeing.

Boeing? Yeah, Boeing, the ‘we know why we’re here’ people. As for the rest of the weapons contractors, McCain advisor Joe Lieberman is available to haul their water.

Being the last of the major powers still standing is tough work. So is policing the world. And for those who think we shouldn't be policing the world, I would suggest it has always fallen to the powerful--Rome, England, France, Spain, now us. The Pax Americana.

That difficult work should never depend upon a single president's perceptions, because no single man or woman is up to a detailed, up to date and unbiased world-view. Condi Rice is a Russia expert and yet she screwed up the presidential advice leading to the Georgia conflict, because she had no depth on the bench to assist her diplomacy.

As a nation, we are increasingly shying away from the hard work in favor of the easier (quicker, quarterly maximization of profit) route of intimidation, conflict and bipartisanship. It's not working. That's the conclusion of the 'Freeman Study,' for which no professionals were engaged and no cost incurred.

Having said that, the smart money is on new submarine armaments.

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Media comment:

• Washington Post-Non-Nuclear Warhead Urged for Trident Missile

Born in Blood, Founded by Terrorists, Israel Confronts Iran on Morality

Louis Rene Beres is, in my opinion, a wild-eyed and war-mongering Jew, who shoots off his mouth incessantly on behalf of his unyielding opinion that Iran is about to erase Israel from the face of the earth. He bases that (apparently) solely on the statements of Iran’s current president, a wing-nut by the name of Mahmoud Ahmadinejad.

Wing-nut presidents are not the exclusive province of Iranians. We happen to have one ourselves, who has single-handedly frightened and estranged a larger portion of the world than Iran by at least a power of ten. Home to one of the world's oldest continuous major civilizations, with historical and urban settlements dating back to 4000 BC (Wikipedia), what Iran has not done is attack, preemptively or otherwise, another nation. Would that Israel could say the same.

(The Jewish Press, The True Human Meanings Of A Nuclear Iran, Louis Rene Beres, 8-13-08)

For many years, any talk of preemption against a nuclearizing Iran was certain to elicit primarily harsh and uniform condemnation. In some circles, such talk amounted to nothing less than a shamelessly proposed "aggression.” Other critics, although somewhat more charitable in their particular denunciations, still expressed guarded sentiments that any Israeli or American defensive first-strikes against Iran would be "premature.”

Well yes, that’s true. Until George W. Bush made preemption a method by which he personally saw fit to solve the problems of the world, it was universally abhorred. In the place of preemption, the United States has itself taken the gold medal of abhorrence out of the hands of preemption and hung it around its national neck.

Now, finally, several authoritative figures are speaking plainly about the stark choices still open to Israel: preemption or apocalypse. Early in July, Meir Amit, a former director of Mossad, spoke unambiguously of Israel's imperative to use military force against Iran. Nothing else, said Amit, could any longer stop Iran from obtaining nuclear weapons. In the best of all possible worlds, the United States would already have stepped up to the plate in the matter of Iran, but - for a variety of both political and geostrategic reasons - this did not happen.

Sorry ‘bout that Louie, I know you’re disappointed. Your definition of ‘the best of all possible worlds’ no doubt comes closer to that of the former director of Mossad. You neglect to mention that Amit held that esteemed position for a mere five years (63-68) and that was forty years ago. Eighty-seven now, Amit was a member of Haganah, a terrorist organization in its own right.

A Haganah specialty was the Special Night Squads. Now there’s a name that ought to chill your blood. According to Israeli military historian Martin van Creveld their training included "... how to kill without compunction, how to interrogate prisoners by shooting every tenth man to make the rest talk; and how to deter future terrorists by pushing the heads of captured ones into pools of oil and then freeing them to tell the story." This guy is one of your ‘authoritative figures?’ Amit’s precursor to waterboarding—oilboarding.

(Wikipedia) Prior to the Iranian Revolution of 1978–79 in Iran, SAVAK (Organization of National Security and Information), the Iranian secret police and intelligence service was created under the guidance of United States and Israeli intelligence officers in 1957 to protect the regime of the shah by arresting, torturing, and executing the dissidents (especially Leftists). After security relations between the United States and Iran grew more distant in the early 1960s which led the CIA training team to leave persia, Mossad became increasingly active in Iran, training SAVAK personnel and carry­ing out a broad variety of joint operations with SAVAK.

SAVAK--Shah of Iran--Mossad increasingly active in Amit’s 60s directorship--coincidence after coincidence. Meir Amit maybe have a few old scores to settle from those days or does he, as one of several authoritative sources have (in this case) clean hands?

Iran has been around this particular neighborhood in the Middle East for over 6,000 years. Jews trace their ancestral claim to the area on the Old Testament. The ancestry of ancient Persia had already been there for forty centuries. Forty centuries, Louie.

(Beres) Once again, Israel stands alone in the world.

That’s a bit melodramatic, Louie. If ever there was a nation that stood on other nations’ legs, it is modern Israel. This America that you would so quickly engulf in nuclear war, this nation that you would so easily throw away in your petulant, foot-stamping tantrum, has done more to sustain Israel than any other nation on earth. Stand alone. That’s a childish statement on the face of it.

Israel has sown, for eight decades, the seeds of misery, intransigence, terrorism, selfishness and an utter disregard for the people upon whose land it exists. Palestine, had Israel not made of it the scullery-maid for its kitchens, might today find itself proud, wealthy and an accepting neighbor to those who took its lands.

Just as America has destroyed and held hostage its native population, so has Israel fallen short of humanity. With no more excuse.

(Beres) The matter of Iranian nuclear weapons is not a matter of international "equity.” Israel is not Iran. Israel does not declare itself at war with Iran, or even with any Arab state. From the beginning, Israel has sought only peace.

Israel holds nuclear weapons quietly, unthreateningly, without bravado - and then only to prevent its own catastrophic destruction by altogether likely enemy state aggressions. It is entirely unimaginable that Israel would ever resort to such weapons as an initial move of war. A nuclear Iran, however, would at some point consider atomic first-strike attacks upon Israel with expressly genocidal intent.

Peaceful little move into Lebanon, I guess. Peaceful bulldozing and bombing of Palestinian targets—so peaceful that Israel had on its hands a refusal of duty by Israeli pilots, unwilling to further destroy civilian targets. How do you possibly know (and state as fact) Iran’s at-some-point considerations?

You are a selective historian, Louie, a cherry-picker of fact (and fiction) as well as an extremely dangerous loose-cannon of self serving opinion at a time when the world is stretched to its breaking point.

(Beres) We Jews are a covenant people, and also an eternal people. We cannot be destroyed, but the Jewish State does have existential vulnerabilities, and we do have an unending obligation to do whatever is necessary to stay alive. The Jewish State must provide the already-ingathered portion of Jews with both ordinary and extraordinary protections. This is not a negotiable expectation.

Striding across the world stage as those holding a covenant with God, claiming the inevitability of your victory over neighbors and taking to yourselves both ordinary and extraordinary protections that are not negotiable, is a poor way to negotiate. You have outlined your madman best of all possible worlds and it includes the destruction of a society twice the age of your own, killing countless thousands of peaceful Iranians and subjugating the rest to an as yet unknown type of Israeli servitude.

All this from a nation founded on ‘never again.’ I include a link to the full text of your demagogy in The Jewish Press, in order that I not stand accused of quoting you falsely or out of context. But I digress . . .

. . . there is no appropriate context for your blood thirst.

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Media comment:

• Haaretz-Israel-Israel source denies U.S. curbing arms sales to deter Iran strike
• Guardian-UK-Sticks, carrots and nukes
• Jerusalem Post-Israel-Israel fears war could hurt Iran effort
• Gulf News-Iran needs to be more transparent
• Persian Journal-Iran: Consider oil tensions before a strike

Conversations With the Clueless; (a discouraging look at where the Fed is taking us)

The Washington Post headline is Stocks Surge as Fed Offers A Boost and it’s written by T. M. Tse and Neil Irwin, who are staff writers and may be forgiven their sins. Certainly they are not Steven Pearstein (probably one of the finest business-writers extant today) even though he too is beginning to waver on Fed actions that ‘may prevent a serious meltdown.’

Serious meltdown is what we need, Steve. It may in fact be our only hope.

Unfortunately, no politician likes to see SM (sado-masochism or serious meltdown, take your pick) on his or her watch, and so we’ve had a half century of transgressions patched over and forwarded to the next bunch coming in. Getting down to the nitty and the gritty;

NEW YORK, March 11 -- The Federal Reserve took bold action Tuesday to revive the economy's ossified credit markets by offering to take over the risk of spurned mortgage securities, igniting a rally on Wall Street that sent stocks to their best performance in five years.

It annoys me when a national newspaper, ostensibly of some repute, characterizes an inflationary printing of money as bold action. It’s not. Bold action would be letting the fraudulently inflated markets take their well-deserved bath, while still preserving the value of the dollar. That's the job of the Fed, defending against inflation and supporting the dollar.

Ben Bernanke has failed miserably at both. I don’t damned doubt a rally was ignited, as Wall Street dodged another bullet and went out to celebrate.

When your securities stink so badly that no one will touch them, it’s a relief to have the Fed come along and haul your ashes. Ossified indeed. The credit market is road-kill, lying there with all four legs in the air, body swelling with the rot of gigantic fraud.

Setting aside earlier reservations, the Fed essentially made itself the lender of last resort to investment banks squeezed for cash by offering them up to $200 billion in new credit against their holdings of highly rated mortgage securities that no one else is eager to buy. This move, coordinated with four other central banks, was the most aggressive step the Fed has taken to address the spreading credit crisis.

Nice try, Tse and Irwin, but no home run there either. The Fed has not made itself lender of last resort, it has made the American taxpayer lender of last resort, without ever checking in to see if it was OK. The Revolutionary War was begun over just such an issue. Christ, that argument was over tea.

The Federal Reserve doesn’t have $200 billion, nor does it have the additional $100 billion it has promised each and every month until the cows come home (or don’t, in which case they become someone else’s cows) The Fed is

• watering your currency,
• destroying what little credibility the dollar has left,
• making every single thing you own worth less,
• shooing off any foreign interest in financing our astounding national debt
• and getting the Washington Post to present it to you as an aggressive step to address the crisis.

Does anyone ask any questions, or do Tse and Irwin just jot it all down in their notebooks?

Bernanke and Co. are doing this treasonous damage to the American economy in order to keep the Dow Jones Industrial Average up in the vicinity of 12,000. Their reasons have nothing at all to do with the integrity of markets. That went down the drain decades ago.

They are doing it to protect the assets of the CEOs on top, keep the hedge-fund shenanigans in play and let President Bush flee his office with the myth intact that he is not actually President Hoover reincarnated.

The Dow Jones industrial average of 30 blue-chip stocks responded to the morning announcement by jumping 250 points within the first moments of trading and ended the day up 416.66 points, or 3.5 percent, to 12,156.81. 

Another rabbit will have to be dragged out from yet another hat. At $100 billion a month, rabbits are easily come by.

But while the Dow's percentage gain was its steepest since 2003, the rebound in trading still left markets below where they'd been just a week ago. Nor did the move by the central bank address the underlying weakness of the economy triggered by widespread exposure to failing subprime mortgage loans, though the initiative did blunt the immediate threat: a run from even the safest high-grade bonds.

Underlying weakness. There you have it, you intrepid reporters. Even a blind pig occasionally finds a peanut and Tse and Irwin have found theirs, but misnamed it. Failing sub-prime mortgage loans should more properly and accurately read 'fraudulently packaged and mis-represented hedge-fund derivatives.' These bonds have already been declared AAA. The so-called (by crooked bond rating companies) safest have failed.

Now it gets complicated, but only slightly. In the rest of the world—that strange and romantic, dangerous and chaotic place outside America—the value of the dollar has dropped by half during this administration. Your
house, car, savings and hopes are all worth half what they were six years ago . . . and no one told you.

The Cliff Notes are that galloping federal debt ($3 trillion increased to $9 trillion), a savings rate that is less than zero, a huge buildup of personal debt, tax giveaways to the rich, an unfunded war and oil prices goosed by that war ($31 suddenly up to $104 a barrel) have made us a bad bet for the loaning of money.

Unfortunately, our thirst for debt is $1.5 billion a day. Uncle Sam has become a profligate uncle. Somebody has to come up with the dough or else the world is going to make us turn in our credit card.

Mostly, it’s been the Chinese. But understand this. A $100 Chinese investment in ten-year U.S. Debt, paid into our Treasury in 2000, is now only worth $50 and there are still two years to go on the loan. Foreign investors are less and less willing to fund us at that kind of loss, especially when they can buy us up at bargain-basement prices—as the Chinese and Dubai princes have been doing.

So much for blind pigs and peanuts, at least for the moment.

Until Tuesday, the central bank had been unable to reverse the downward slide of the U.S. economy despite a series of interest rate cuts and other steps to introduce liquidity into the system. The series of cuts to the federal funds rate had threatened to stoke inflation and, by driving down the value of the dollar, contributed to price rises in oil and other imported commodities. But these moves had done little to restore the confidence of banks, which have increasingly tightened the credit they offer to businesses and home buyers, even those with excellent credit.

Bingo. What might have restored confidence would be federal indictments, lengthy trials into the lending conspiracy and prison terms for some $100 million executives. Unfortunately for them, the prison terms would have been fairly evenly distributed among the CEOs of mortgage banks, investment banks, bond rating firms and hedge funds. Thanks to Bernanke, those are the very co-conspirators who are celebrating having just dodged the bullet of accountability.

The peanut again. This time under a shell in an economic shell-game (noun; A swindling sleight-of-hand game; victim guesses which of three shells a peanut is under).

All this was choking off already anemic economic activity. The government reported last week that the economy shed jobs for the second consecutive month. Consumer spending has softened, corporate profits have flagged, and both residential and commercial real estate have displayed new signs of stress.

In the past week, the vicious cycle accelerated. Bankers demanded that hedge funds and other investors holding troubled securities put up more cash to back them, prompting a sell-off of high-grade securities such as those issued by the mortgage giants Fannie Mae and Freddie Mac, to raise the money. Some investment funds, like one run by Carlyle Group of the District, could not meet these margin calls, and they defaulted. Rumors of trouble at one of the largest Wall Street banks, Bear Stearns, and speculation that other banks would soon disclose new, staggering losses, added to the mounting panic.

Some call it a vicious cycle, others characterize it as chickens home to roost or the horse gone after the barn door is closed. We have destroyed American agriculture by abandoning it to corporate interests, but the metaphor of the barnyard has not yet left us.

So the Fed moved Tuesday to auction up to $200 billion in Treasury securities, which will be available to large financial institutions if they put up collateral including highly rated mortgage-backed securities. The aim was to make Wall Street firms more confident about buying and holding these mortgage investments and provide an outlet for them. This could free up money for banks to lend.

Choke that one down, if you are able. Here you are (pretending to be an investor), holding junk bonds that were presented to you as AAA bonds. It said so right on the investment documents (a fraud by the bond raters) and here they are today, not worth a fart in a whirlwind (a compounded fraud, perpetrated across state boundaries, making it a RICO offense).

The Fed Chairman, Ben Bernanke, is going to take them off your hands--as collateral--for billions of dollars. You laugh hysterically and put the money under the mattress. This is supposed to make you more confident about buying and holding these mortgage investments, but you’re not fool enough for that, thank you very much. As for freeing up money, that’s safely under your mattress until your heart rate slows down and you venture forth yet again.

Helping liquidity? Forget about it, this shell game is about helping greedy investors who have done exactly as greedy investors are supposed to do—lost their investment.

After the announcement, the market for these highly rated mortgage securities showed signs of improvement.

I’ll just bet it did.

Economists and analysts largely praised the move, saying it goes further in directly addressing current problems than simply cutting a short-term interest rate, which adds to inflationary fears.

"They may have hit the right spot in the marketplace where the help was needed," said Bill Tedford, fixed-income strategist at Stephens Capital Management.

Cutting short-term interest rates is inflationary, but somehow printing $1 trillion a year is not. And Bill is right. They hit Bear Stearns exactly in the right spot, that spot that keeps them from going bankrupt as they deserve to do.

"The mortgage market has just been locked up," said Craig Elder, fixed-income senior analyst at Robert W. Baird & Co. "I'm not sure if it solves all of the problems, but I think it should free up a considerable amount of liquidity."

What we have (thus far) failed to lock up is the crooks and liars who created this mortgage market.

In announcing the program, the Fed also extended agreements with central banks in Switzerland and the European Union that allow them to borrow billions of more dollars from the Fed and inject this money into their financial systems.

What, me worry? Hey--it’s party time. Does the NATO Alliance extend to bailing out millionaires and billionaires? Unfortunately, Tse and Irwin had only analysts and strategists available for interview. Their analysis was understandably a little on the ‘wasn’t our fault’ side and their strategy leaned heavily on the ‘money under the mattress solution’ before the pension trusts find out their money is under that other shell.

Do not leave this Conversation With the Clueless without watchingThe Last Laugh--George Parr—Subprime on YouTube. It is not to be missed and explains the whole sorry mess in a mere nine minutes.

Enjoy.

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Media comment;

• Guardian-UK-Federal Reserve leads world central bank move by injecting $200bn
• Reuters-Economy.com says Fed action helps but not enough
• Wall Street Journal-Euro Hits Another New High As ECB Hints at Holding Rates
• Reuters-US STOCKS-Wall St slips on rethink of Fed plan, oil over $110
• The Age-Australia-Did Bernanke do it for Fannie Mae?

The End of War

Not the end of conflict, certainly not the end of fighting . . . but it is worth considering that as we blindly multiply our efforts toward a supremacy-gap between ourselves and the rest of the world in military hardware, the enemy is dissolving before our eyes. What can we possibly be thinking? More to the point, what can the rest of the world possibly think we are thinking?

Seven Billion Reasons for a Fisheries Collapse

Sharon LaFraniere’s article for the New York Times, Empty Seas, is subtitled Europe Takes Africa’s Fish, and Boatloads of Migrants Follow. It’s another well documented piece about world fisheries collapsing and the roundup of suspects is (as usual) greed, politics (greed in another form) and overfishing.

ING Bank Totally Screws NetBank Customers in Takeover

A cautionary tale on December 7, 2007 (Pearl Harbor Day)

The White Horse that is ING Bank, galloping valiantly in to save what’s left of the sub-prime-mortgage-defunct NetBank, has mud all over it.

750,000 Americans Take 50% Drop in Social Security

Don’t worry about losing your Social Security benefits in 2040 or 2050. Three quarters of a million American citizens are already losing theirs.

Jim Moran, the Courtesy Man

But the Jim Moran who’s getting fried by the Washington Post is a different guy. This Moran is a congressman from Virginia and Amy Gardner’s headline, Moran Upsets Jewish Groups Again sounds like upsetting Jewish groups was Jim’s main stock in trade.

The Terrorist State We Dare Not Name

The nation we dare not name is the largest country on the Arabian Peninsula. Bordered by Jordan on the northwest, Iraq on the north and northeast, Kuwait, Qatar, Bahrain, and the United Arab Emirates on the east, Oman on the southeast, and Yemen on the south, with the Persian Gulf to its northeast and the Red Sea to its west. One could hardly find a more pivotal entity.