Mercury Rising

1. Headline exactly backward. Simon Tisdall of The Gruadnia has an article titled "Rice calls Iran's bluff." Only, of course, it's the US that has been threatening to bomb Iran while refusing to talk. As Tisdall says, "While hedged in with caveats and conditions, it represents a significant shift in the US position after a quarter of a century of undeclared warfare with Tehran's post-revolutionary leadership." You do not call a bluff by doing a 180. In this case, Iran will happily accept and then spend the entire term of the talks discussing why the US has been reneging on its commitment to permitting countries to develop nuclear energy. Wonder why the Gruadnia hired a headline writer from The New York Times. UPDATE: Bushco: "HaHa! We were just foolin'!" That's a paraphrase of a report by Tom Oliphant on Franken's show. Apparently Bushco delivered the same old ultimatum and cast it as a fresh new approach. Shame on Tisdall and the Nuargia for biting. Meanwhile: Missing link to Republican ancestors discovered

Somehow I have the distinct feeling that no major nationally-read US newspaper, nationally-heard US radio news program, or nationally-viewed US TV news program, will be mentioning this story during the runup to Paulson's confirmation hearings:

IT'S ONE THING TO have the chairman of Goldman Sachs on the witness stand during what promises to be one of the highest-profile and bruising courtroom battles Wall Street has seen in years. It's quite another to have the treasury secretary up there. That's the scenario President Bush has now set up.

How so, you ask? This is how so:

Paulson is central in the ongoing, $140 million case that New York Attorney General Eliot Spitzer filed in May 2004 against former New York Stock Exchange chairman Dick Grasso over his pay package. For those with short attention spans, Grasso was ousted a couple of years back after he essentially backed his limo up to the Exchange doors and the board of directors filled the trunk with $140 million in compensation. It wasn't theft, mind you. Rather, his contract, approved by the board, made him entitled to it. But folks got a bit squeamish when the details came out and the board ousted Grasso. Spitzer, who never met a Wall Street scandal he didn't want to capitalize on, subsequently filed a lawsuit, claiming the pay package given by one of America's premier symbols of capitalism and profit violated the state's not-for-profit laws. Grasso and longtime friend and NYSE director Ken Langone, though, fought back, and both have shown few signs of settling. What does this have to do with Paulson? Well, he's widely credited for leading the boardroom coup that pushed out Grasso. If it were a simple story of a man of good conscience seeing a wrong and working against all odds to right it, Bush would have no problem with the latest pick. But Paulson's role is murkier. He was no average board member, but rather a member of the very compensation committee that approved the Grasso pay package in the first place. Paulson has contended he wasn't aware of the full details. In fact, as part of the investigation into the pay package, Paulson said he didn't attend a large chunk of the committee meetings and wasn't sure how much Grasso was paid. If the NYSE had been a public company at the time, shareholders would have shown up at Paulson's door with torches and pitchforks. In this era of supposedly better governance, directors are, after all, expected to show up rather than go bird watching. And, when you do warm your board seat, you should at least stay awake.

In fact, the article goes on to note that some think Paulson may have engineered the whole thing so that in the ensuing fracas, he'd have the chance to install a fellow Goldman Sachser in Grasso's place -- which is exactly what happened. The hullaballoo didn't hurt Goldman's earnings, either.

I guess seven months in the pen amounts to teaching certification: GOP Official Involved in Phone-Jamming Scandal Released From Jail In New Hampshire, the former executive director of the state Republican Party has been released from jail after serving seven months for his role in an Election Day phone-jamming scandal. In November 2002, the official – Charles McGee – helped jam the phones of Democrats and labor groups making get-out-the-vote calls. Now McGee is back at his old job and next weekend he will be speaking at a two-day event to teach Republicans how to run for office at a so-called GOP campaign school. The state’s Democratic party has criticized the Republican party for continuing to associate with McGee. Maybe the national Democratic Party will get around to mentioning the numerous phone calls made from the phone jammers to the White House on Election Day 2002.

Paul Kiel of TPM Muckraker: Two weeks ago, Amir Taheri published an op-ed in Canada's National Post about an Iranian law that forced Jews to wear a yellow stripe. The story, reminiscent of Nazi Germany, quickly provoked outrage, but was just as quickly revealed to be a total fabrication. It also ran in the New York Post. Apparently this is just the sort of reliable advice that President Bush needs. Yesterday, Taheri had a face-to-face with the President as one of a small group of "experts" on Iraq that visited the White House. According to Press Secretary Tony Snow, the experts were invited to the White House for their "honest opinions" on Iraq.

Did you know that the nasty, ego-poisoned scorpions of the religio-racist right are on the verge of stinging each other to death? I didn't, until I saw this. Get a load of the opening passage:

In his consulting room in a suburb of Montgomery, Alabama, gastrologist Randy Brinson is a worried man. A staunch Republican and devout Baptist, Dr Brinson can claim substantial credit for getting George Bush re-elected in 2004. It was his Redeem the Vote initiative that may have persuaded up to 25 million people to turn out for President Bush. Yet his wife is receiving threats from anonymous conservative activists warning her husband to stay away from politics. "They've been calling my house, threatening my wife," said Dr Brinson. "The first time was on a day when I was going up to Washington to speak to Republicans in Congress. Only they knew I'd be away from home. The Republicans were advised not to turn up to listen to me, so only three did so." The reason he has fallen foul of men whose candidate he helped re-elect is that he has dared to question the partisan tactics of the religious right. "Conservatives speak in tones that they have got power and they can do what they want. Only 23% of the population embraces those positions but if someone questions their mandate or wants to articulate a different case, for the moderate right, they are totally ridiculed."

Did you note the part that I bolded? A leading conservative admits that less than a quarter of Americans back conservative positions. Yet to judge from the US media coverage, you'd think that we all were conservatives. But wait! There's MORE!

In his office in Washington DC, Rich Cizik, vice-president of the National Association of Evangelicals, the largest such umbrella group in the US, is also feeling battered. His mistake has been to become interested in the environment, and he has been told that is not on the religious right's agenda.

Because, of course, the religious right in the US is allied with Bush's big-business, big-polluter backers. But I digress.

Mr Cizik, an ordained minister of the Evangelical Presbyterian church and otherwise impeccably conservative on social issues such as abortion, stem-cell research and homosexuality, believes concern for the environment arises from Biblical injunctions about the stewardship of the Earth. The movement's political leadership, however, sees the issue as a distraction from its main tactical priorities: getting more conservatives on the supreme court, banning gay marriages and overturning Roe v Wade, the 1973 abortion ruling. "It is supposed to be counterproductive even to consider this. I guess they do not want to part company with the president. This is nothing more than political assassination. I may lose my job. Twenty-five church leaders asked me not to take a political position on this issue but I am a fighter," he said. Another Washington lobbyist on the religious right told the Guardian: "Rich is just being stupid on this issue. There may be a debate to be had but ... people can only sustain so many moral movements in their lifetime. Is God really going to let the Earth burn up?"

No, Rich isn't the one being stupid on this issue. And as for whether or not God really would let the Earth burn up, I suggest that the lobbyist needs to re-read 2 Peter 3 in his or her Bible.

Steve Bell in The Guardian Also in The Guardian, Oliver Burkeman and Jonathan Freedland: Al Gore has made his sharpest attack yet on the George Bush presidency, describing the current US administration as "a renegade band of rightwing extremists". The bad news: it sounds as if he isn't running.

Kung Fu Monkey says what needs to be said to the 101st Fighting Keyboarders, and says it brilliantly.

Our relationship with the troops is based on the idea that we are asking them to risk their life. Implicit in "risk" is a ratio of threat to preparation, a judgement of danger to the possibility of a positive outcome.... It is only a risk, however, as long as there is support. I call bullshit if one refuses to pay for bullets, refuses to pay for bullet-proof vests, and then asks a patrolman to run into a blind alley filled with heavily armed bank robbers. The risk changes into something else when we ask others to face danger with nothing from us in return. Then risk becomes blatant sacrifice, sacrifice on an altar of our comfort. [...] If you fail to even make that tiny effort -- hold the Bastards accountable -- to insure the troops the material, planning and care they need, then no matter what you say, what you write, or how many flags you wave, you are not supporting the troops.... You have broken the covenant. With this relationship broken, the soldiers are no longer your proxies, they are your instruments. You are treating them as tools. You may not feel that way, that characterization may fill you with rage, but how else to characterize such one-sided relationship? There is a goddam world of difference between asking a man to risk his life to defend the nation and waste his life proving a point. That these unquestioning war devotees will not sacrifice their lives, their comfort, their safety: that's hardly a sin in modern society. But they are not even willing to risk emotional discomfort by admitting their faith has been misplaced. That they will not even risk this, this tiny, tiny thing ... that is the sin. It is not that that you're not risking your life. It's that you are risking nothing.

Unfortunately, it's almost certain that even if those "unquestioning war devotees" read the essay, they'll much likelier nitpick it apart than recognize the truth of it. But maybe a few people who've been inclined to make excuses for the chickenhawks will see their way to rejecting them.

The League of Women Voters is on the case.

I wanted to get to looking at whether corporate political friends of Bush have been more deeply affected by the market turndown than others, which might provide a political explanation for events, but have been unavoidably detained by a nasty data ex-im glitch that will turn what should be a simple task into a much more complicated one. Looks like it could be a while, by which time the answer may well be obvious.

It's an article of faith among the right that the "war on terror" is going wonderfully, that it's all smiling brown faces among the people whose lands we occupy, marred only by a few psychotic "dead enders." Our media doesn't do much to contradict that perception, reporting the bombings and assassinations much like the evening news reports liquor store robberies. Occasionally, the reality peeks through, as today, when a CBS correspondent whose face viewers are familiar with is gravely wounded. But for most Americans, it's all very far away. A few very brave correspondents go in without the protection of the US military and report what things look like from outside the Green Zone of Iraq, and they tell a different story. It's not a story of the bad Americans vs. the good resistance. It's just... a more complicated story than most Americans want to hear. And so they don't. CNN did cover the riot that occurred in Kabul: The unrest started after three U.S. Humvees coming into the city from the outskirts rammed into a rush-hour traffic jam, hitting several civilian cars, witnesses said. The coalition said at least one person was killed and six injured in the crash, but police said at least three people were killed and 16 injured. A Kabul police chief, Sher Shah Usafi, said another person was killed when U.S. troops fired into a crowd of stone-throwing protesters soon after the crash. More ominous: Hundreds of Afghan army troops and NATO peacekeepers in tanks deployed around the city, as protesters chanting "Death to America" marched on the presidential palace and rioters smashed police guard boxes and set fire to police cars. Rioters ransacked several buildings, including a compound belonging to the aid group CARE International. This is in the heart of "liberated" Afghanistan. And here is what CNN won't tell you, from freelancer Stewart Nusbaumer on why this isn't a riot, but the early stages of an insurrection: Increasingly, there is the perception in Afghanistan that the US military is out of control. That it shoots first and cares little about the Afghani people. A teenager who works in a copy store told me, "We want your help, we need your money and knowledge to remake Afghanistan, but we don't want your military." An Afghani who just came back from the streets tells me that hundreds of protesters marched on the palace of US-backed President Hamid Karzai, shouting "Death to Karzai! Death to America!" That reminds me that several weeks ago, one Afghani told me: "Karzai is not our president, he is your puppet." More sparked this violent riot, however, than just the growing negative perception of US troops. Afghanis are losing faith that the West will make their lives better. Many of them complain that Kabul is a "toilet." The city has foul open severs, poverty remains gross and shocking, unemployment is sky-high with at least half of working-age adults unable to find a real job, and supposedly 40 percent of the people don't even have enough food. So after four and a half years, many feel their lives are not improving, and they are losing hope that they will improve. That can become a dangerous spark. Please tell me why, almost five years after the invasion, in the one part of Afghanistan that Americans really control, life is not getting better.

Paul Krugman got to see Al Gore's An Inconvenient Truth the other day. He notes the importance played by a certain NASA scientist, Dr. James Hansen, in the global warming debate -- and the lengths to which certain parts of corporate America (and their handmaidens in the Republican Party) went in order to smear and lie about him:

Dr. Hansen was one of the first climate scientists to say publicly that global warming was under way. In 1988, he made headlines with Senate testimony in which he declared that "the greenhouse effect has been detected, and it is changing our climate now." When he testified again the following year, officials in the first Bush administration altered his prepared statement to downplay the threat. Mr. Gore's movie shows the moment when the administration's tampering was revealed. In 1988, Dr. Hansen was well out in front of his scientific colleagues, but over the years that followed he was vindicated by a growing body of evidence. By rights, Dr. Hansen should have been universally acclaimed for both his prescience and his courage. But soon after Dr. Hansen's 1988 testimony, energy companies began a campaign to create doubt about global warming, in spite of the increasingly overwhelming evidence. And in the late 1990's, climate skeptics began a smear campaign against Dr. Hansen himself. Leading the charge was Patrick Michaels, a professor at the University of Virginia who has received substantial financial support from the energy industry. In Senate testimony, and then in numerous presentations, Dr. Michaels claimed that the actual pace of global warming was falling far short of Dr. Hansen's predictions. As evidence, he presented a chart supposedly taken from a 1988 paper written by Dr. Hansen and others, which showed a curve of rising temperatures considerably steeper than the trend that has actually taken place. In fact, the chart Dr. Michaels showed was a fraud — that is, it wasn't what Dr. Hansen actually predicted. The original paper showed a range of possibilities, and the actual rise in temperature has fallen squarely in the middle of that range. So how did Dr. Michaels make it seem as if Dr. Hansen's prediction was wildly off? Why, he erased all the lower curves, leaving only the curve that the original paper described as being "on the high side of reality." The experts at www.realclimate.org, the go-to site for climate science, suggest that the smears against Dr. Hansen "might be viewed by some as a positive sign, indicative of just how intellectually bankrupt the contrarian movement has become." But I think they're misreading the situation. In fact, the smears have been around for a long time, and Dr. Hansen has been trying to correct the record for years. Yet the claim that Dr. Hansen vastly overpredicted global warming has remained in circulation, and has become a staple of climate change skeptics, from Michael Crichton to Robert Novak. There's a concise way to describe what happened to Dr. Hansen: he was Swift-boated.

Krugman goes on to warn Dr. Hansen, Al Gore, and the other folks on the side of the good guys that they'd better be prepared to hit hard and to call a liar a liar, because the other side doesn't play by nice-guy rules -- as John Kerry found out in 2004 when he was Swift-boated.

HR 4681, the "starve the Palestinans" bill that was recently passed in Congress, was strongly opposed by the mainstream and progressive parts of the Jewish community, both here and in Israel, for the very sensible reason that it empowers and radicalizes the backers of the very group (Hamas) it is supposed to kill off. (Examples of Jewish groups opposed to the billl include Americans for Peace Now, Meretz USA, Bri Tzedek v'Shalom, and Tikkun.) It was, however, supported by AIPAC, which has ties to both the Bush Administration neocons and the Sharonistas and Likudniks in Israel -- all of whom do not hesitate to hurl accusations of anti-Semitism, treason, and what not against anyone who dares get in their way, or even look like they might be getting in their way. Because of their ties to Bush and his neocon pals like Cheney and Rumsfeld, they wield a lot of power, or at least act like they do. (This despite AIPAC's being under investigation for actions that go beyond mere thuggishness.) Which is why I'm glad to see my Congresswoman, Betty McCollum, not only voting against this horrible bill, but putting AIPAC in their place when they tried their standard thuggish bullying tricks against her. They eventually backed down and claimed it was all a misunderstanding.

There are three commodity industries that are disproportionately responsible for human misery: oil, gold, and chocolate. Consider Samlanchith Chanthavong's description: Slave traders are trafficking boys ranging from the age of 12 to 16 from their home countries and are selling them to cocoa farmers in Cote d'Ivoire. They work on small farms across the country, harvesting the cocoa beans day and night, under inhumane conditions...A UNICEF study reports that 200,000 children are trafficked yearly in West and Central Africa. .... [T]wo countries that are especially implicated in child trafficking in the cocoa trade are Cote d'Ivoire which is the receiving country, and Mali which serves as the supplier....Estimates of the number of children forced to work as slaves on these farms are as high as 15,000.... The effect of being sold into slave labor has the obvious physical scars from the constant beatings the children receive, their inhumane living conditions, and the practical starvation that the farmers impose on them. However, the effects of slavery do not merely affect the physical well-being of the children. They also suffer from emotional scars. Psychologists say that children subjected to slave labor are irrevocably changed....Cote d'Ivoire exports 43% of the cocoa beans used to make the world's chocolate. Now, an agreement was reached to help end these abusive practices. But consider the following piece by Andrew Purvis Belize chocolate growers were faced with a disastrous situation created by top-down do-gooderism: [T]he price meltdown - and the landowner's fate - had been precipitated by the British government and USAID (the United States Agency for International Development), which in the 1980s hatched a plan to boost the fortunes of Toledo's cacao growers by providing bank loans for seed and agrochemicals. Communal reservation land was broken up so the deeds for plots could be used as collateral; forest was cleared and saplings planted less than 10ft apart - too narrow for shade trees to grow. The resulting diseases could be controlled only with fungicides, sold to farmers at a price. Instead of providing cacao varieties familiar to these subsistence farmers for centuries, the aid workers gave them alien hybrid seed. Meanwhile, Hershey - the US confectionery giant - pledged to buy all the cacao 'at a fair price'. In 1992, the aid workers left and Hershey's agent progressively lowered the price, leaving farmers struggling to pay off huge debts. Many abandoned their farms to work as migrant orange pickers, sugar-cane cutters and shrimp farmers in the north, simply to service their loans and support their poverty-stricken families back home. This part of the right's critique is correct. Top down aid often creates disastrous effects. But consider what happens when someone who is genuinely interested in the local community, in this case Craig Sams of Green & Blacks chocolate: These days, 70 per cent of children in the outlying Maya villages benefit from secondary education in Punta Gorda, compared to 10 per cent before Green & Black's. Women, who are expert at fermenting and drying beans, have been empowered; villagers who used to live in rudimentary huts now have wooden bungalows with concrete floors; and the Maya - who comprise many, but not all, of the TCGA's members - find themselves with a new status and a new voice. And it's not some hippie dream. Green & Blacks was acquired by Cadbury's. I somehow think they not only intend to make, but are already making money off of this. Bill Clinton talked of the virtuous circle, in which doing good goes around to do more good. Green & Black's has created one that brings in Mayan Indians and American chocolate lovers. Next, may we hope for oil that doesn't smell of Haditha.

Read this. And then check out Atrios' recommended reading list. Of course, the motivations for our modern-day press are encapsulated here.

Former CIA and State Department official Larry Johnson: Friends who have recently returned from Iraq tell me that much of the disruption in the electricity and oil pipelines is actually caused by the Iraqis assigned to repair these systems. ... [A military friend of Johnson's says] "Through the scuttlebutt of my buddies in the community, a military intelligence unit alone hemorrhaged 27 out of 35 O-3's. The community is not large enough for losses like that..." ... The United States' ability to stay the course in Iraq is threatened by a fragile re-supply line, which runs from Kuwait north to Baghdad. This road runs through the heart of Shia-controlled territory. Everything we need to keep our Army fed and fueled comes up that road. We face a dilemma if we decide to attack the neighboring country of Iran... namely that the American army could be caught without resupply. But Our Dear Leader is a military genius whose word must not be challenged.

Conversations of Enron employees among themselves make it clear how fully criminal the right has become. For example: AMY GOODMAN: In this phone call, an Enron employee talked about how the company had ripped off poor grandmothers in California. Listen carefully. ENRON EMPLOYEE 1: So the rumor is true? They're f---ing taking all the money back from you guys? All that money you guys stole from those poor grandmothers in California? ENRON EMPLOYEE 2: Yeah, Grandma Millie, man. So she’s the one who couldn't figure out how to f---ing vote on the butterfly ballot, but yeah, now she wants her f---ing money back for all the power you've charged right up her -- jammed right up her a-- for f---ing $250 a megawatt hour. Yeah, you know. You know Grandma Millie. She's the one that Al Gore is fighting for. Here's a classic: AMY GOODMAN: Enron employees also discussed the possibility of Ken Lay becoming Secretary of Energy if George W. Bush won the 2000 election. ENRON EMPLOYEE 1: Tell you what, you heard this here first. When Bush wins, that f---ing Bill Richardson, he's gone, that f---ing Clinton, all these f---ing socialists are gone. ENRON EMPLOYEE 2: Yeah. ENRON EMPLOYEE 1: You know who the biggest single contributor to the Bush campaign is? ENRON EMPLOYEE 2: You. ENRON EMPLOYEE 1: Enron. ... ENRON EMPLOYEE 1: Ken Lay is going to be Secretary of Energy. ENRON EMPLOYEE 2: Get out of here! Can you imagine that? ...That would be awesome, actually. ENRON EMPLOYEE 1: That would be -- how great would that be for all the players in the market? ENRON EMPLOYEE 2: It would be great. I'd love to see Ken Lay be Secretary of Energy. ENRON EMPLOYEE 1: We'd open these markets up. It's out of Orwell. Call someone a "socialist" when what you mean is they aren't a crook like you. Talk about "open markets" like the mob means that a city is "wide open." According to Palast, it wasnt't just Enron, but Duke, San Diego Gas and Electric, Reliant, Dynergy, El Paso, Duke, Entergy, Public Service of New Mexico. So, the Bush Justice Department did its very, very best to keep the real crimes and the whole mob out of the courtroom, because it would have brought it right back, of course, to the Bush administration itself. That's certainly the way it looks. It took five years to convict a few guys for wiping out billions in pensions and investments. And President Capone may very well pardon them as he's stepping down.

This is a general post, but I hope to have a more detailed analysis ready at the end of the holiday weekend. Still, there should be some helpful ideas here. Finance is a kind of hydraulics. Asset prices are a restless ocean, rising here and falling there. Over the long arc of human history, the ocean has risen, reflecting the capacity of the creative mind to generate wealth, whether it be in the form of transistors or improved methods of child rearing. Over shorter intervals, asset prices have fallen or even vaporized. Wealth is the reality, and money merely its measure. Gaps between wealth and money represent speculation. Understanding the size and direction of the gap is how one makes money through investment. Successful investing is a matter of predicting the flows of capital. While timing markets is essentially impossible, it is possible to predict with reasonable certainty when markets have passed tops or bottoms. Not always. Alan Greenspan was right that the market was irrationally exuberant (i.e., overpriced) in 1996, but if one sold US equities then, one missed out on the best days of the Clinton stock boom. And there are surprising gaps in knowledge that can be exploited. Everyone knows about small-caps. The big investment houses don't follow them. Suppose a company starts up in your area. You like the service and know some of the people who work there. They tell you that things are on the up-and-up. You have inside information that can make you money. But there are other areas that can be exploited. One of my favorite is making money off of hissy fits pitched by the Rattlesnake Republicans. People of any political bent who let ideology-- as opposed to moral principle-- interfere with making money are asking to be made poorer, and should be obliged. As noted below, S&P apparently discounts markets in developing countries with a significant bias against left-wing governments. Yet it's well known from the US experience that moderate to left-of-center governments tend produce strong economic growth. That growth leads to demand-led rising markets that outperform those produced by right-wing governments, which usually follow the loot-and-scoot model of the Dubyans. So, S&P's self-imposed stupidity, i.e. its ideological bias, creates an information gap to be exploited. So, what is going on in the market now? Where is the money moving? And most important, where will it move? A good summary is this: In short, prices have gone up for several key items: credit, foreign currency, housing, and the fossil fuels that are a basic cost for virtually every home and business. Now, often times high prices can mean high short-term profits. It certainly works that way in the oil industry. But high prices also dampen consumer demand, often leading to recession. Furthermore, as Brad Setser says, "the fall in US [Foreign Direct Investment] stemmed from the Homeland Investment Act, a one-off tax break that encouraged US firms to bring funds home, not a sustained reduction in the desire of US firms to invest abroad. The implication: the US will need to place a lot more debt abroad in 2006 than in 2005." Also: [P]rivate flows from emerging economies are NOT financing the US deficit So: a weak dollar should be a given. 1. The flow into US housing is slowing, with home prices due for a correction, perhaps by as much as 40-50% in frothy markets. One can predict that stocks that depend on new housing construction and furnishing will weaken and that growth will decline as a result of less construction. 2. Stock prices for commodities of all kinds, even gold, have been hammered. This contradicts the inflation story (although gold stocks may decline somewhat in a bear market, even if their profits are rising). 3. Foreign stocks have been hammered, so gravely that Indian companies faced a liquidity crisis, resolved at least temporarily. This contradicts the weak dollar story. 4. Are interest rates headed sharply up, as one would expect in the case of inflation? 5. Are countries (other than the US) cooking the books? How bad is US book cooking? 6. How do calculations about vulnerabilities to natural disaster or war enter into this? One reason the US is a preferred investment destination is because it is less vulnerable to earthquakes than crowded Japan, less vulnerable to storms than Hong Kong or Singapore, less likely to be invaded than Taiwan. 7. To what extent do domestic political considerations play into this? There has been speculation that the departure of John Snow from Treasury could also be a cause of the recent market turbulence. Personally, I doubt anyone will notice when he's gone. I have suggested that the recent selloff might be related to a sense that the Bush presidency is ending, perhaps triggered by news of a (so far unannounced) Rove indictment. 8. Most important, what will the pathway of crisis/recovery be? The investor who guesses the path by which crisis will occur and by which recovery will happen will make money all the way, while if one guesses the path wrong, one will lose money all the way, even if they know the outcome. There is a lot of interesting reading to do, much assigned by Brad Setser: Bill Gross of Pimco: Higher inflation, higher personal and corporate taxes, and a lower dollar point U.S. and global investors away from U.S. assets and toward more competitive economies less burdened by health and pension liabilities – those personified by higher savings rates and investment as a percentage of GDP. Need I say more than to sell U.S. assets and buy Asian ones denominated in their local currencies Jean-Philippe Cotis of OECD[Assuming no further oil shocks,] the risks surrounding this scenario have increased as regards current account imbalances, long-term interest rates and house prices, while the inflation and activity outlook could be significantly affected by abrupt changes in oil and commodity prices. ... in 2007, Germany’s surplus would approach 4½ per cent of GDP and Spain’s deficit 10%. ...current account surpluses in China and Japan headed for 5½ to 6% of GDP in 2007, while the US deficit would exceed 7½ per cent. Think of two families, each earning $50,000. One of them is putting $3,500 per year into an IRA. The other is charging $3,500 per year on the credit card and saving nothing. That's a fair comparison of the US vs. Japan. Brad Setser: makes an interesting point: do purchasers generally stay in equities denominated in their own currency, or do they actually hedge for currency based on their choice of investments? He says: Best I can tell, though, those fleeing emerging economies for the safety of the US are largely US and other dollar based investors – not the citizens of emerging economies. Those who borrowed dollars to buy emerging market risk have a particular need for dollars. They are in a slightly different position that say investors in emerging economies who have in the past looked to the dollar as an alternative to their own shaky currencies. Like some others, I doubt that the unwinding of positions in emerging economies that originated in the US can provide an enduring base of support for the dollar...The interesting question – at least for me – is what happens once the dash for safety ends. Where does the money that got out go? And where does the oil money that was chasing yield in emerging economies go? Home? To the US? Or to the Euro? There are two basic storylines here: either Wile E. (for Economy) Coyote crashes into the canyon below, or he makes it successfully in his mad dash from mesa top to mesa top. Which is right depends on whether one believes that asset values are rising, despite war, deficits, and so on or that the books are being cooked. But within these larger stories, there are subplots. I think it may be possible to disentangle which of these subplots explains recent market moves, and that will be the topic of the next post.

It turns out that at least one Bush Administration official gave NYT reporter and BushCo/PNAC watercarrier Judith Miller NSA information in July 2001 showing that a terrorist attack on the US was known to be imminent. But the GOP/Media Complex would rather talk about Hillary's pantsuits.

"Is it Friday already?"

1) Gene Lyons tells how to defuse the "gay marriage" issue among others:

Amending the Constitution to forbid gay marriage is another election-year shell game. Finessing it shouldn’t be too hard for Democrats. If your church refuses to solemnize same-sex marriages, that’s its undeniable First Amendment right. Forbidding people to enter into domestic partnership contracts due to sexual orientation, however, would be un-American. No, that won’t persuade obsessive homophobes, but they’re fewer all the time.

Sounds good to me! 2) BuzzFlash on how Dennis Hastert just gave the Democrats the tools they can use to win in November:

In a debate over extending tax cuts for the wealthy and corporations, Hastert justified the rip-off of the middle class and poor with these words: "well, folks, if you earn $40,000 a year and have a family of two, you don't pay any taxes. So you probably if you don't pay any taxes, you are not going to get a big tax cut. Now, if you earn $1 million a year, you are going to pay about $400,000 of taxes. Maybe you'll get a $40,000 tax cut ..." Message to Dems: Take this quote and run on it until the last vote is counted. You've been looking for an opening to the working families who can swing enough districts to retake the House, and Hastert just gave it to you. "The Republican Speaker of the House Says Working Families Don't Pay Taxes. Janice Coleman Doesn't Agree With Him, Do You?" Of course, in this case the name "Janice Coleman" represents the name of any Democratic Congressional candidate in the United States. The mid-terms have to be a national referendum on one-party Republican power distilled down to a simple message or two. Hastert -- who the Capital Times of Madison, Wisconsin calls "the Marie Antoinette of American politics" -- is leading an anti-working class economic policy. It's time the Democrats countered the Republican demagogic wedge issues like gay marriage, immigration, and flag burning with the economic wollop of the GOP on America's working people. "Bob Williams, gas station attendant, the Republican Speaker of the House of Representatives says that you don't pay taxes. Had enough? Vote Democratic."

That works for me, too.

They "have a reputation for stealing, often from each other or from campus buildings. Society members reportedly call the practice 'crooking' and strive to outdo each others 'crooks.' And the club is also thought to use human remains in its rituals." In common with their other classmates, "'there was a racial consciousness and a sense of Anglo Saxon superiority.'" Image from Dartmouth collection I would never have believed it. The quote above is Kathrin Day Lassila and Mark Alden Branch, alumni both, writing in Yale Alumni magazine (May/June 2006) on Yale fraternities such as the one in which our Dear Leader partook. In particular, the magazine's former senior editor has a letter from Winter Mead (class of 1919) to F. Trubee Davidson (class of 1918) describing a particularly despicable act of grave robbery and by Charles C. Haffner (class of 1919)... in concert with Prescott Bush (class of 1917), who was the father of George H. W. Bush and the grandfather of George W. Bush. However, they were so clueless that it's highly unlikely that they actually took the bones of the Apache leader, Geronimo for their ungodly rituals. Stealing and abuse of the dead. What perfectly appropriate training for later life. Why people calling themselves "Christians" support these vampires is beyond me. And why Yale seems to be such a center of white (delusions of) supremacy and the covering up of the misdeeds of the sons of the powerful is beyond me. At any rate, it's now official. And kudos to the alumni magazine for taking on what can't be a very comfortable topic.

In case anyone thought that Dennis Hastert's objections to the FBI's warrantless raid of William Jefferson's office were based on principle -- Um, maybe not.

The Speaker of the House of Representatives, Dennis Hastert, is under investigation by the FBI, which is seeking to determine his role in an ongoing public corruption probe into members of Congress, ABC News has learned from high level official sources. Federal officials say the information implicating Hastert was developed from convicted lobbyists who are now cooperating with the government. Part of the investigation involves a letter Hastert wrote three years ago, urging the Secretary of the Interior to block a casino on an Indian reservation that would have competed with other tribes. The other tribes were represented by convicted lobbyist Jack Abramoff who reportedly has provided details of his dealings with Hastert as part of his plea agreement with the government. The letter was written shortly after a fund-raiser for Hastert at a restaurant owned by Abramoff. Abramoff and his clients contributed more than $26,000 at the time.

There is a great Fighting Dem, John Laesch, running in Hastert's district. Send him some love and help push Hastert out the door: http://www.john06.com/

"My friends, no matter how rough the road may be, we can and we will, never, never surrender to what is right." -J. Danford Quayle to the Christian Coalition For example: Writing in this weekend’s Washington Post, prominent conservative fundraiser Richard Viguerie criticized “Bush’s base betrayal.” Yesterday, the White House responded by emailing around previous quotes of Viguerie’s criticisms of Ronald Reagan. Viguerie responds, “That is standard operating procedure for this White House: Put the spotlight on the president’s critic, rather than respond to the critic’s arguments.” For example: This morning, DeLay’s legal defense fund sent out a mass email criticizing the movie “The Big Buy: Tom DeLay’s Stolen Congress,” by “Outfoxed” creator Robert Greenwald. The email features a “one-pager on the truth behind Liberal Hollywood’s the Big Buy,” and the lead item is Colbert’s interview with Greenwald on Comedy Central ... The email features a “one-pager on the truth behind Liberal Hollywood’s the Big Buy,” and the lead item is Colbert’s interview with Greenwald on Comedy Central (where Colbert plays a faux-conservative, O’Reilly-esque character). The headline of the “fact sheet”: DeLay thinks Colbert is so persuasive, he’s now featuring the full video of the interview at the top of the legal fund’s website. And why not? According to the email, Greenwald “crashed and burned” under the pressure of Colbert’s hard-hitting questions, like “Who hates America more, you or Michael Moore?” The one way we can be certain life is real is that no one except God Himself could make up such people. (Hat tips: Avedon Carol's most entertaining Sideshow and Atrios.)

Reuters has revived the story of Katrina Leung, the FBI informant who, evidence strongly suggests, was also a Chinese spy. You get one guess which fact about Leung is not included in the article. ... What the article doesn't mention is that Leung was a money-raiser for the Republican Party. It does, however, mention in the third paragraph that she is "well known in the Southern California Chinese-American community". If that emphasis on her ties with an "immigrant" community has nothing to do with the anti-immigrant frenzy, then I am Marie of Rumania.

I noticed some interesting Iran reporting this morning on NPR -- namely, reporting that acknowledged the following facts: -- Iran's hard-line president is not the only, or even the most powerful, voice in Iran. Khameinei is as important (actually more important), and he's much more pragmatic. -- Even Iran's president has been, along with the clerics that hold the actual power, spending the past few months making overtures to the US. This is in striking contrast to the usual inflexible-madman image of him in the US media. -- The Bush Administration's response to these overtures has been a joke. Matt Yglesias, subbing for Josh Marshall this week over at TPM, has also noted how the US media is suddenly giving fuller voice to what its most frequently-viewed/heard outlets have for months been unwilling to mention:

It seems to me that this has been pretty clear for a while, but now it's explicit -- the Iranian government wants to engage in talks about the various US-Iranian issues, including Teheran's nuclear program. If you're concerned with things like America's interests, not getting lots of people killed, and preventing Iran from going nuclear you'd take them up on the offer. I honestly don't think this is even remotely a hard question. It might not work, of course, but even that would leave us better off than we are now as the weird kid sulking in the corner refusing to talk to Billy. Nevertheless, there's no mistaking the fact that just as Iran has been trying to at least set the stage for possibly ratcheting tensions with the United States down, there's been a fairly concerted effort in the American press to ratchet things up. The folks doing the ratcheting have, it's clear, some friends and some influence inside the administration. People need to understand this and be clear with themselves. This is not a group of people primarily concerned with Iran's nuclear program -- anyone who thought that would be open to some negotiating. This is a group of people primarily concerned -- for whatever reason, no doubt the reasons are mixed and vary somewhat -- with continuing and intensifying US-Iranian conflict. It's not clear how influential this faction is or will be in the president's decision-making, but those of us on the outside are either with them or against them. As recent posts from Ivo Daalder and Michael Levi indicate, there's no reason to think Democrats have anything to fear from standing up for engagement rather than war. The real political risk is that staying silent lets the other side shape people's understand of what's happening so deeply that it becomes harder to speak up later. The odds that this whole situation somehow won't come up in the midterms are low. Democrats are going to have to deal with it, and it's better to start sooner than later.

It's really very simple. All any Democrat addressing this -- or ANY -- issue need say, is the following: "Bush has screwed up everything he's touched for the past five years. What makes you think he'll do any better here?"

When Dennis Hastert becomes Mr. Civil Liberties, you know we're not in Kansas anymore. A Congresswoman is accosted in the hallways of Congress. A Congressman's offices are searched. Two incidents aren't quite a pattern. But add just one more intrusion into Congressional space, and I think we should conclude that there is an attempt to intimidate members of Congress. The fact that both targeted Congressmen are African American Democrats seems like one h--l of a coincidence. Remember: there are plenty of accusations against Congressmen. A lot of them are eventually proven true. But Congressmen have a job to do. In addition to setting the laws, they are our primary defense against an out-of-control executive. (And Coach Hastert is in charge? Oy.) One way in which tyrants can seize power is by making the lawmakers fearful. Check Roman history if you need an example. Here's the pushback: Eggan and Murray, writing from the journalistic remnants of the WaPo An unusual FBI raid of a Democratic congressman's office over the weekend prompted complaints yesterday from leaders in both parties, who said the tactic was unduly aggressive and may have breached the constitutional separation of powers between the executive and legislative branches of government.... When Dennis Hastert is alarmed by an intrusion into civil liberties, so should we all be. "Insofar as I am aware, since the founding of our Republic 219 years ago, the Justice Department has never found it necessary to do what it did Saturday night, crossing this Separation of Powers line, in order to successfully prosecute corruption by Members of Congress," he said. "Nothing I have learned in the last 48 hours leads me to believe that there was any necessity to change the precedent established over those 219 years." Here's the background history for our right-wing readers, who don't seem to know what country thgey live in: Article I, Section 6 of the US Constitution establishes legal privilege for congressmen: Section 6. The Senators and Representatives ...shall in all cases, except treason, felony and breach of the peace, be privileged from arrest during their attendance at the session of their respective Houses, and in going to and returning from the same; and for any speech or debate in either House, they shall not be questioned in any other place. Furthermore, the Fourth Amendment, which the guy about to be installed as head of the CIA could stand reading defends our right to keep our papers private. Why? Because people who live in fear of being searched cannot do the duties that a free people have to speak against wrong: The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized. We have constitutional rights because (1) God-- not King George nor George W. Bush-- gave them to us, and (2) a free people needs to exercise those rights to remain free.

Bush Warns of "Erosion of Democracy" in Venezuela, Bolivia

"Let me just put it bluntly - I'm concerned about the erosion of democracy in the countries you mentioned," Bush said today in response to a question about Venezuela and Bolivia while addressing the National Restaurant Association in Chicago. "I am going to continue to remind our hemisphere that respect for property rights and human rights is essential for all countries in order for there to be prosperity and peace."

You may be asking yourself, "What erosion of democracy?" Remember that when Bush uses a word, it means what he chooses it to mean. For Bush, "democracy" means "the interests of the United States government". As long as Bush holds the White House, "government" means the oil companies and his other cronies. So what Bush is saying, translated to concensus English, is "I'm concerned about the erosion of the oil companies' profits." When he's talking about Bolivia and Venezuela, "democracy" means the same as when he's talking about Iraq. Or the United States.

You can't make these people up. Nancy Pelosi has asked Jane Harman to step down as ranking member of the House Intelligence Committee because Lady Deathstar has been so tight with the GOP that's she's drawn a real Democrat, Marcy Winograd, to challenge her. So, where is Jane Harman spending her Monday? At the Brookings Institute, on a panel of people like: * George Terwilliger (Federalist, Tyco lawyer, GOP Florida Class of 2000 * Former Acting Director of the CIA John McLaughlin (not the loud ex-Jesuit TV guy), and * ::sigh:: John Podesta, and * Neocon Richard Falkenrath, in which they tell us: * The reason that people oppose NSA's mass surveillance of Americans is because they don't understand who the terrorists are. * 9/11 happened because we gutted the intelligence budgets (and please don't bother us with the facts). * Rooting through the phone records of every American is legal * The reason they have to do it this way is because they can't wait for the end of the month when the phone companies issue their bills. * Hayden is a wonderful guy, who understands that Fourth Amendment sets the legal threshhold for wiretapping as reasonable doubt. Here's the classical Falkenrath argument: Suppose a telephone associated with Mohammed Atta had called a domestic telephone number A. And then suppose that A had called domestic telephone number B. And then suppose that B had called C. And then supposed that domestic telephone number C had called a telephone number associated with Khalid Sheik Mohammed, the Pakistan-based architect of the 9/11 attacks. Right. And suppose that the CIA had told the FBI that two known terrorists had entered the country or that the FBI informant with whom they were living had told his paymasters. Or that the Washington FBI hadn't squelched Coleen Rowley. Or that the airline industry hadn't squelched the Gore Commission report. Or that the Washington FBI hadn't told the Phoenix branch to shut up about the guys learning to fly. Or that the American intelligence community had picked up the phone when everyone from the Israelis and French to the Russians and even the Taliban was warning them of an imminent strike. Or that George Bush had read the &^%$$ August 6th PDB. We're supposed to abandon our civil liberties because idiots armed with computers would be so much better at fighting terrorism than idiots armed with just the brains God gave them. Memo to Falkenrath and the rest of the neo-nuts: Don't bill me for a Mercedes if you haven't got your skateboard license yet. Memo to Harman: If your voters haven't turned against you yet, tell them to watch C-Span, especially the part when the panel tells them that only ignorant people would quibble over civil liberties. And Brookings... cripes. If this is what the Institute is becoming, then the end is in sight for what used to be one of America's finest think tanks.

My jaw dropped when I read this bit from a report on Condoleezza Rice's commencement address at Boston College.

She drew scattered applause when she discussed what she called a "commitment to reason," or an obligation to test and challenge their own views. "There is nothing wrong with holding an opinion and holding it passionately," Rice said, "but at those times when you are absolutely sure you're right, go find someone who disagrees."

"And then destroy his wife's career as a deep-cover CIA agent as a side effect of trying to discredit him," she did not add.

Hat tips to many, especially to Juan Cole, Antonia Zerbisias, and Josh Micah Marshall, but also to lesser known bloggers who winkled out the facts to counter this Big Lie. In trying to herd the American people into a war with Iran, the war party produced the Big Lie that the Iranian government is making Jews wear yellow stars of David. . The Australian: IRAN'S only Jewish MP strongly denied reports in a Canadian newspaper overnight that Iran may force non-Muslims to wear coloured badges in public so they can be identified."This report is a complete fabrication and is totally false," Maurice Motammed said in Tehran. "It is a lie, and the people who invented it wanted to make political gain" by doing so.The National Post newspaper quoted human rights groups as saying that Iran's parliament passed a law this week setting a public dress code and requiring non-Muslims to wear special insignia To synopsize Paleo at Daily Kos, this Big Lie was concocted and spread in part by an employee of Benador Associates, Amir Taheri (National Review, JPost, NYPost, Weekly Standard). The Benador client list includes Richard Perle, James Woolsey, Michael Ledeen, Frank Gaffney, A. M. Rosenthal, Charles Krauthammer, Max Boot, and Victor Davis Hanson, as well as "Khidhir Hamza, an Iraqi nuclear scientist who fled several years ago to the United States, where he wrote a book claiming that former Iraqi President Saddam Hussein had a nuclear bomb." So, what actually happened? Legislator Emad Afroogh said the Post story distorts a bill he presented to parliament calling for Muslims to dress conservatively. It seeks to have women avoid Western fashions, he said. So, as best as one can tell, it's on a par with the school uniforms debate in the US. Not on a par with the concentration camp debate in Nazi Germany. But to the people who want more war, death, and destruction, more orphans and widows and suicidally-angry people, there's nothing wrong with trying to make white seem black or vice versa, according to expediency's demands.

Per the latest ARG poll, courtesy of Atrios. Wow, all that banging the invade-Iran drum's just done WONDERS for Bush's popularity, hasn't it? The going will be a bit slower now; he's down to the bedrock Fox News viewers now, and they won't turn on him unless he's caught raising their taxes. Oh, wait...

Atrios noted this, um, interesting news item:

NEW YORK -- Little known to the American public, there are some 50,000 private contractors in Iraq, providing support for the U.S. military, amongs other activities. So why not go all the way, argues Ted Koppel in a New York Times op-ed on Monday, and form a real "mercenary army"? Such a move involving what he calls "latter-day Hessians" would represent, he writes, "the inevitable response of a market economy to a host of seemingly intractable public policy and security problems." It is make necessary by our "over-extended military" and inability of the United Nations to form adequate peace forces. Meanwhile, Americans business interests grow ever more active abroad in dangerous spots. "Just as the all-volunteer military relieved the government of much of the political pressure that had accompanied the draft, so a rent-a-force, harnessing the privilege of every putative warrior to hire himself out for more than he could ever make in the direct service of Uncle Sam, might relieve us of an array of current political pressures," Koppel explains.

Remember when the Cons attacked Markos Moulitsas Zuniga over at DailyKos for daring to call the contractors "mercenaries"? (And for noting that they were generally a) much better paid than our grunts, b) much less skilled than our grunts, and c) constantly getting themselves into trouble, and needing grunts to come extricate them from it?) Koppel's inadvertently (?) going one better -- he's calling 'em HESSIANS. You know -- the BAD guys who fought for the British in the Revolutionary War. Not for Honor and Duty and Country, but for pay, and promises of land. The guys whose names are mud in our high-school history textbooks. Thanks for giving the game away, Ted!

Official story: Guantanamo inmates riot, staging suicide attempts to draw in guards, then attacking them in a well-coordinated uprising bridging completely isolated cell blocks by committed jihadis and employing carefully hoarded weapons improvised from fan blades and the like. Goal: to have Guantanamo shut down. Moazzam Begg, formerly an inmate, points out the obvious: Mr Begg, who was seized by the CIA in Pakistan in 2002, said he was sceptical that inmates would be able to avoid the round-the-clock surveillance by CCTV cameras, foot patrols and watchtowers to make and hide weapons. Medical staff were also scrupulous about ensuring detainees swallowed their medication. He added that electrical equipment such as fans and cameras were normally out of reach. "It's not like a Second World War prisoner of war camp where you can dig tunnels. There's so much security, day in, day out. Everything is logged, everything is watched, everything is scheduled," he said. So, I dunno. But Mr. Begg's point seems pretty well taken. Maybe there's widespread corruption that would permit coordination and sophisticated, well-planned attacks. Maybe the guards just don't watch the security cams the way they're supposed to and evidence will emerge from a review of the archives. Or maybe it's all just one more pile of manure from the fertilizer factory. (Hat tip: angryarab.blogspot.com, a useful site to hear about the arcana of the Middle East from an American Arab's viewpoint)

(Image from Amnesty International. Much like Catholics, Muslims use prayer beads, the tasbih, to give thanksgiving to the Lord) Bill Fisher, formerly an journalist for AP and elsewhere, who went on to serve in the State Department and USAID describes life in a key US ally as follows: [The report of the] Egyptian Supreme Council for Human Rights... gave credence to widespread allegations of torture by Egyptian police and security forces. It called for an end to the state of emergency that has been in force since 1981....It charged that 2,000 people were being detained without charge. It alleged torture of detainees. It said that thousands of members of Islamist groups had been in jail since the 1990s, even after they completed their sentences. It described in detail the deaths in detention of nine Egyptians during the year .... It also corroborated reports that the authorities ... tortured many [detainees in Sinai] after the bombings in Sinai resorts. And it said that in Egyptian police stations, suspects were given electric shocks, hung by their arms or legs from the ceiling or from doors, sprayed with cold water, made to stand naked in cold weather for many hours, or beaten with sticks, belts, electric cables, whips or rifle butts. It reported that it was normal investigative practice to arrest everyone around the scene of a crime and torture them to obtain information. But no matter how bad things are, they can always get worse: Since that report was completed, human rights in Egypt are arguably in worse shape than they were before it was written - or the Council was created....Mubarak caved to US and international pressure to hold the first multi-party presidential elections in the country's history, then rigged the process.... He threw his principal opponent, Ayman Nour, in jail for five years on trumped-up charges .... The subsequent Parliamentary elections were arguably worse. Heavily armed police intimidated prospective voters, closed polling places, and attacked peaceful demonstrators. When judges demanded they be allowed to examine the election results, two were stripped of their judicial immunity and charged. But in spite of widespread abuses, the banned Muslim Brotherhood won a record number of seats in Parliament. So, what or who is to blame? Here's a comment from another key American ally, who heads the new Commission on Human Rights: He is Turki Ibn Khaled Al-Sudairi, who previously worked as a state minister and Cabinet member. [L]amenting the negligence of many Muslims in upholding the principles of human rights, the Minister reportedly said, "I have found that 85 percent of the rights outlined by human rights organizations are advocated by Islam." ...The most recent State Department report on Human Rights report in Saudi Arabia declared, " The government's human rights record remained poor overall with continuing serious problems, despite some progress." It reported human rights violations including "no right to change the government, infliction of severe pain by judicially sanctioned corporal punishments, beatings and other abuses, arbitrary arrests, incommunicado detention, denial of fair public trials, exemption from the rule of law for some individuals and lack of judicial independence, political prisoners, infringement of privacy rights, significant restriction of civil liberties - freedoms of speech and press, assembly, association, and movement, no religious freedom, widespread perception of corruption, lack of government transparency, legal and societal discrimination against women, religious and other minorities, and strict limitations on worker rights. " But Human Rights watch found far worse problems, including Saudi prosecution of thought crimes, homosexuals, people who discussed religions other than Islam, and people who protested the government's abuses. There are also 126 kids on death row, including one who committed a crime when he was 13 years old. Fisher's point is, these are not random events nor are they the result of some backwardness inherent in Arabs . They are the manifestation of a conscious US policy to support-- indeed, to sustain-- brutal regimes because they are convenient to us. Brutality: the new Brand America.

(Image used by a member of the US occupation in Iraq in e-mail) There are proposals to illegalize the use of languages other than English. These are based on Republican talking points that are even more feeble-minded than usual. More important, they represent a kind of hubris that is directly responsible for the post-war disaster in Iraq. Yes, the failure to plan for the occupation was disastrous. But as an important column at TomDispatch illustrates, there was a chance for success even after. That chance was squandered through American hubris. Even the good guys among our military suffer from it. Let's start with the easy stuff: disposing of English Only. Here are some of the Republican talking points (as presented by, say, David Limbaigh) and a simple response, which you can imagine emanating from Sparky the Penguin. 1. Talking point: A failure to enforce a common language leads inevitably to national suicide. Sparky: Yes, I can see that. Switzerland, with its three national languages, committed suicide in, when was it? Oh, that's right. It hasn't. But it will! 2. Talking point: Americans should speak only English, so that we'll all understand one another. Why, you go to McDonald's and you can barely order a hamburger, the accents are so thick! Sparky: Yes, I know what you mean about Southern accents. And of course, tourists from Paris and businessmen from Shanghai will oblige us by speaking English, rather than taking their money and their business elsewhere. 3. Talking Point: What's the point of having all these languages anyway? One language makes everything so much simpler. Sparky: Yes, I understand that Al Qaida is terrified by the idea that a bill to make Americans even more culturally/linguistically illiterate is racing through Congress. Language is part of what's called soft power. If you can persuade people to speak your language, you have an opportunity to capture them culturally, since they start reading your newspapers and listening to your TV shows. But it is pretty much a one-way street. People are attracted to wealth and success, not to poverty and stagnation. The English Only crowd is apparently afraid that Americans might be entranced by the lifestyle of the average Mexican. You know, wages a tenth those of the US, extensive opportunities for entrepreneurs in recycling, foreigners demanding you speak their language, and so on. As Sparky might say, "What's not to like?" My solution: free language tapes to help every person who wants to improve their English pronunciation. The arrogance of monoculturalism led us into Iraq, where we are dissipating every advantage that past generations labored to give us. Even the very best members of the armed forces seem to suffer from this hubris. I had an exchange with Major (now Lieutenant Colonel) Robert Bateman, familiar to Altercation readers. He told me that there are no good Iraqi engineers, that the US occupation played along with them, but that they did stupid, destructive things. I always wondered whether they weren't one step smarter than Major Bob and were acting on behalf of the insurgency. Reading Michael Schwartz on TomGram, that's very easy to believe: This rather comfortable portrait of the U.S. as a bumbling, even thoroughly incompetent giant overwhelmed by unexpected forces tearing Iraqi society apart is strikingly inaccurate: Most of the death, destruction, and disorganization in the country has, at least in its origins, been a direct consequence of U.S. efforts to forcibly institute an economic and social revolution, while using overwhelming force to suppress resistance to this project. Certainly, the insurgency, the ethno-religious jihadists, and the criminal gangs have all contributed to the descent of Iraqi cities and towns into chaos, but their roles have been secondary and in many cases reactive. The engine of deconstruction was -- and remains -- the U.S.-led occupation. He then cites a NYT article by James Glantz on repairing the Al Fatah pipeline: 1. The pipeline ran along a bridge, which was destroyed by American bombing. 2. The US decided not to rebuild the bridge, so the pipeline had to be put along an alternate route, costing much more. 3. The contractor, KBR, was warned that horizontal drilling in the unstable terrain would end in failure, but persisted. Separately, we can be reasonably certain that KBR refused to employ Iraqi labor, creating resentment and thereby making any pipeline an insurgent target. As Schwartz says: First, the American military fatally damaged existing, already weakened facilities and support systems. Second, inadequate reconstruction was proposed, and given to large, foreign (usually American) corporations that knew next to nothing about local conditions (and generally cared less). Third, reconstruction itself was sabotaged by the contractors' programmatic inefficiency and corruption, compounded by damage from the ongoing guerrilla war. Fourth, the money ran out, while the cost of finishing projects escalated well beyond original projections. Finally, ongoing destruction promises to erode further an already hopelessly compromised system. This is why clean water, electricity, and even gasoline are in such short supply in Iraq: because we Americans are so d--n smart. We are caught in the dinosaur trap called hubris. The way out is a little thing called humility.

University of Georgia professor James Cobb shares with us a freshman's perspective on history:

After 34 years of college teaching, I thought I had heard just about every imaginable student complaint. Last week, however, a freshman in my 300-seat US History Since 1865 course came in to discuss her exam with one of the graders and proceeded to work herself into a semi-hissy over the fact that we had spent four class periods (one of them consisting of a visit from Taylor Branch) discussing the civil rights movement. "I don't know where he's getting all of this," she complained,"we never discussed any of this in high school." One might have let the matter rest here as simply an example of a high school history teacher's sins of omission being visited on the hapless old history prof. had the student not informed the TA in an indignant postcript, " I'm not a Democrat! I don't think I should have to listen to this stuff!"

"Reality has a well-known liberal bias."

A clean cat is a happy cat. And Alex is a cat with a clean, clean, very clean tail!

In which the Cato Institute joins the ACLU in saying that Bush's plans for putting troops on our borders is a violation of posse comitatus.

As noted here, his way of "apologizing" for calling DNC field operatives in Mississippi "nosepickers" is to turn around and slimily hint without proof that Howard Dean took $45 million from the DNC and is now partying with it. Goodbye, Paul. It wasn't nice knowing you.

Truthout stands by its story of an imminent Rove indictment On the other hand, the 24 business hours passed as of Wednesday night. If Rove isn't in trouble, Jason Leopold sure is. Afterthought: Selling off Rove. In an AOL column on equities, Peter Cohan lists a varieties of reasons for the market selloff, most of which trip the BS meter: 1. Inflation 2. Weak dollar/capital flight [Probable BS: much of it is an old story] 3. Government and consumer debt [BS: old story] 4. Weakening of housing market due to interest rates. 5. Political uncertainty due to Iran, Republican rout in November, and Bernanke [BS: all old stories.] Inflation...interest rates...housing Well, sure. Maybe. But knowing how Washington works, if Rove were facing indictment, it would likely trigger a market selloff. That selloff would probably be concentrated in companies who have relied on Bush for their profits, notably oil and defense. It's a testable hypothesis. The market sell-off began on the 11th, while the Truthout story was published on the 13th, so that more or less meshes. Halliburton is down 10%, while GE is essentially unchanged. Exxon Mobil is down roughly 5%, but that parallels the drop in BP. So, the hypothesis that the selloff is Rove-related is not refuted. It would take a lot more work to confirm it (or refute it), but put it in the "maybe" bin. Jason Leopold is either a genius or likely to be looking for a new career.

Randall Holhut The North American Free Trade Agreement (NAFTA), enacted in 1994, was supposed to bring prosperity to Mexico, as well as the United States. The prosperity that was promised did not come to either nation. What NAFTA did to the American economy is well documented [Charles: modest gains at the cost of many blue collar jobs]. What it did to Mexico has received much less media attention, but if you want to know why so many people are risking their lives to come to the United States, these statistics offer an explanation. - NAFTA permitted U.S. agribusinesses to undercut Mexican farmers by allowing the United States to sell corn and other agricultural products at a lower cost than Mexican farms can produce them. As a result, more than 2 million Mexican farmers have been forced out of agriculture in the past decade, and the ones that still farm live in desperate poverty. - NAFTA allowed the big box stores such as Wal-Mart to enter the Mexican market. Wal-Mart, which mostly sells goods made by low-wage workers in China, put more than 28,000 small and medium-sized Mexican businesses out of business over the past decade. - Wages for Mexican workers have fallen by about 25 percent in the past decade. In the "maquiladoras," the American-owned sweatshops, the hourly pay runs between 60 cents and $1 an hour, a salary that is not enough to live on even at a subsistence level. ... Compare this approach to what happened in the European Union. Before it admitted then-poorer nations, such as Spain, Portugal and Greece, to the EU, they received massive investments in health care, education and public infrastructure. Democratic reforms and worker rights were also preconditions to entry. Now, it's not all NAFTA's fault. If the Catholic Church had not threatened Mexican Catholics with excommunication for using contraceptives, population growth might have come at a manageable rate. If the Mexican government hadn't gotten screwed on oil development in the 1970s, there might have been the money to rapidly raise educational standards. But the combination of devastation of farming/small business, unfair oil deals, and a population explosion made Mexico's situation untenable.

OUR FOUNDER (image from a classic Nation cover, reproduced without credit and presumably without compensation at the site of that defender of property rights,Neil Boortz under the very classy title "SHRILLARY'S LACK OF CLASS") I get frustrated when people make grand pronouncements based on minor movements of the financial markets. This goes just as much for the newsie who tells us that the Dow ended up three points because Americans haven't been getting raises as it does to this one-liner from the definitely-knows-better Atrios: Well, it was just recently that conservatives were crowing that the great and wonderful Bush boom was, 6 years later, leading the stock market to a "new record" as if that was an achievement to be proud of. Na. Ga. Ha. Pen. If he had linked to a 5 or ten year graph of the Dow, that would have been fine. That graph would have shown a basically flat market for Bush's tenure and would prove his point. Adjust for inflation and denominate it in a weighted basket of world currencies, and the Republican talking point is exposed as total manure. It has achieved a new record high-- but with a dollar worth something like --finger in wind-- 40% less in constant currency terms.That's very roughly 20% inflation and 20% currency shift; you want a better estimate, pay me for it Instead, Atrios linked to a five-day graph, showing a 500 point drop. It's a bit of demagogy. Markets go up. They go down. If you sell when they are up, you are happy. If you sell when they are down, you are sad. Now, Atrios knows that there's a bigger story here, but it's richer and more complex. There are two basic narratives. The first-- call it "US as Argentina"-- is that the US is burdened by debt and unable to export anything but printing money as fast as it can. Therefore, either: I. 1. The dollar falls, immediately raising import prices on clothes and the like, and eventually sending oil prices up. As costs skyrocket, consumer-led demand falters. I. 2. Interest rates rise, reducing the money supply and stabilizing the dollar, but sending growth into the tank. I. 3. Taxes rise, reducing the money supply and stabilizing the dollar. Whoever gets taxed will spend less, so if it's the poor and middle class who get taxed, there will be less consumer-led demand, while if it's the wealthy who get taxed, all kinds of investment, both speculative and genuine, will decline. Growth will decline, but that could be good. I. 4. Inflation rises, soaking up the excess dollars and making everyone (except owners of hard assets and foreign stocks) poorer. Realistically, one would expect to see a blend of all four, rather than a single response. But there's another narrative. Call it the "Wile E. Coyote makes it across the canyon" narrative. In this narrative, the US may be defying conventional economic wisdom, but at a time when productivity growth is so high as to make convetional wisdom irrelevant irrelevant. By pumping tens of billions into the economies of China and India, we are giving them the kickstart to radically increase the wealth of the world. Wages worldwide rise, making American labor costs globally competive. Happy days are near again! Think of it as a Marshall Plan as administered by Alfred E. Neuman. The thing is, no one knows for sure which narrative is correct. Now, there's no doubt where I stand. I predict that the economy heads south. Wile E. Coyote heads for his rendevous with dust. The dollar falls maybe 20%, inflation heads toward 10%, the bond bears demand the Fed kill growth to protect their investments, and we end up in a Reagan-style recession, our remaining assets getting hawked to those buyers who are prepared for that moment. It's not so much the financial side, the debt and the war-- all pretty grim indicators-- that convinces me of this end. It's the loss of national purpose. The corruption. The likelihood that there will be a period of quasi-anarchy as we resolve the constitutional crisis Bush has created. The aimless drift of the nation: "Where there is no vision, the people perish." But at this moment, the market signals are unclear. Here are today's from Business Week, where the emphasis seems to be on theory I.4: Christopher Wang, Business Week: Wall Street skidded lower Wednesday after an upswing in consumer prices intensified investors' fears that the Federal Reserve will extend its nearly two-year string of interest rate increases. The Dow Jones industrial average suffered its biggest one-day loss in three years, and the Nasdaq composite index turned negative for 2006. Sam Stovall of S&P, Business Week: If you asked investors... what the S&P 500 and its constituents would do after the Fed had raised interest rates.... most would have expected the economy to slow, corporate earnings to slump, and share prices to tumble. And they would have been wrong. ... So what's next? ... [Oil prices will stabilize. ] S&P's Chief Economist, David Wyss, expects the economy to slow fairly abruptly in the second half of this year ... Core consumer price inflation [will] reach 2.5% by yearend. Overall, he predicts a rise of 11% in equities. Alec Young of S&P in Business Week: Despite their strong recent performance, Standard & Poor's equity strategists continue to favor stocks in emerging markets. After rising 31% in 2005 in U.S. dollar terms, the MSCI Emerging Markets Index is up 21% year to date, making it the best-performing major equity region in the world in 2006.... these countries' stronger fiscal condition is allowing for the early retirement of external debt and improved sovereign debt ratings, in our view. Hence, we believe, rampant inflation and boom and bust economic cycles, long the Achilles' heel of developing nations, are less prevalent in the world's key emerging nations than in past economic cycles. (This article has the fascinating tidbit that S&P undervalues stocks in countries with left-wing governments by 30%-- another reason to Buy Blue). Michael Englund and Rick MacDonald of Action Economics, , Business Week Financial markets received some unwelcome news on inflation on May 17 ... In midday trading on May 17, each of the major U.S. stock indexes had dropped more than 1%, while the yield on the benchmark 10-year Treasury note jumped from 5.12% to 5.18%. The dollar moved marginally higher in the immediate aftermath of the report... The relative lack of reaction could be a good signal of how bearish overall sentiment on the dollar remains. ...As expected, energy prices were a major culprit in the overall price advance But amazingly (from Smartmoney) Gold, which had soared as much as 4% overnight during a brief revival of the commodity craze, fell back below $700 an ounce. Crude closed below $69 a barrel as high fuel prices appeared to curb demand based on the latest survey of inventories. Asian markets revived after a slump, led by Bombay, Hong Kong and Jakarta. But Europe followed Wall Street's example downhill. Why would gold and oil fall on news of American inflation? Was the news less bad than predicted? Or could there be a different dynamic at work. I believe that printing money -> inflation, higher oil prices -> slower growth -> lower stock prices, which is why stock markets under Democrats routinely outperform those under Republicans. But even Alfred E. Neuman could have his day.

When the leadership is corrupt, criminality starts to engulf law enforcement: Bad: AMY GOODMAN: Explain what happened to your client, to [Gulf War veteran] Dennis Kyne [at the protests at the RNC convention]. GIDEON OLIVER: Dennis, on August 31, 2004, went to the steps of the New York Public Library at around 6:00 p.m., was there for a few minutes before police began -- before a large number of NYPD officers began searching people's backpacks and arresting people, which caused many of the folks who were at the library to get upset and to chant and do other entirely peaceful things, as a result of which the police officers gave dispersal orders. And Dennis was arrested as he was walking away and leaving and yelling at the police. And as he was being placed under arrest, when he was on his knees with his hands behind his back, the then Deputy Commissioner of Legal Matters, the top lawyer for the Police Department, came over to him and pointed to him and said, “This one is discon and resisting.” AMY GOODMAN: Discon? GIDEON OLIVER: Disorderly conduct and resisting arrest. AMY GOODMAN: And who was the officer? GIDEON OLIVER: The deputy then, it was Stephen Hammerman, was then -- he's no longer the Deputy Commissioner of Legal Matters. Deputy Commissioner of Legal Matters Hammerman then walked over to a Legal Bureau lieutenant who was nearby and said, “We've got one of the troublemakers from Pataki’s the other night,” referring to Dennis. So it was very eerie, because at least he knew who Dennis was from a protest several days before and referred to him as a troublemaker, was pleased he had been arrested and ordered that he be charged with something he was absolutely not doing, which was resisting arrest. AMY GOODMAN: You had this on film? GIDEON OLIVER: Yes. Worse: GIDEON OLIVER: Certainly. Well, during the RNC, five was the golden number. That is to say, arresting officers were to arrest, the Police Department says, up to five individuals in a mass arrest situation, and in fact, Officer Wohl swore that he arrested five individuals that day at the library. And as it turns out, we have video of the arrests of all five of those individuals, and Officer Wohl doesn't appear anywhere near them at any time. It appears that he was at the back of a prisoner transport vehicle. Worst: AMY GOODMAN: And on Democracy Now!, we showed the videotape that was doctored by the Police Department, that was proved in court when the longer video was brought out that showed precisely the opposite of what they supposedly said happened. GIDEON OLIVER: I believe that was in connection with Alexander Dunlop’s case. He was arrested on August 27, allegedly in connection with the Critical Mass bike ride. It turned out he had lived in the neighborhood and was going to get some sushi, and he was a guy with a bike, and they were arresting people with bikes. And in connection with his case, the District Attorney's office turned over one videotape that did not show him acting, you know, completely reasonably and trying to figure out how to get out of the police trap, and Eileen Clancy from I-Witness video discovered that the video was incomplete, comparing it to another copy that had been turned over in another case. Ok. What's worse than worst? This: AMY GOODMAN: So 1,800 people arrested, largest in any convention in the history of conventions. Over 1,600 of them, these cases were dropped or shown [to be meritless] in trial, acquitted, etc. 1,600 American citizens arrested based on provably false and in cases perjurious testimony, held in unsafe conditions, and the orders emanating from the top of the Republican machine. Almost two years later, the Justice Department has launched an investigation. A very intensive investigation. With lots and lots of buckets of white paint.

Bush defenses continue to fall AMY GOODMAN: Last week, Admiral Bobby Ray Inman, who headed the NSA from 1977 to 1981, spoke in New York at a forum sponsored by the New York Public Library and the Century Foundation. It was part of the library’s “Live at the NYPL” series. Besides an article at the website wirednews, Inman's statements have received almost no media attention, even though he's believed to be the highest ranking former NSA official to speak out about the program. At the forum, he disputed the Bush administration's claim that Congress authorized the secret spy program when it authorized the President to use force following the September 11th attacks. Inman also said the program clearly contradicts the Foreign Intelligence Surveillance Act, which Congress passed in 1978, at the time he was head of the National Security Agency. BOBBY RAY INMAN: My own view, this activity was not authorized by a resolution to use whatever force you need to do. There clearly was a line in the FISA statutes, which says you couldn't do this. AMY GOODMAN: Former NSA Director Bobby Ray Inman also said Congress should consider rewriting the FISA Act to account for changes in technology, but to prevent the administration from continuing to do what it's doing. BOBBY RAY INMAN: In carefully crafting legislation, you should leave the prospect of an emergency situation and a limited response to that emergency situation to then be followed by getting it by, because we -- just as I didn't envision in 1978 some of the things that popped up, that might happen again. What you want is to get away from this idea that they can continue doing it. AMY GOODMAN: Bobby Ray Inman served as head of the NSA in the late 1970s.

US names all 759 Guantanamo Bay prisoners That's the headline in the Independent. The Independent should know better. How can we know it's a complete list?

The Stupie Award was created specifically for journalists of the first rank who say things they know make no sense. If Peter Jennings had said that Canada were part of Latin America, that would merit a Stupie. On the other hand, if Bill O'Reilly said it, it would be unworthy of mention. Bill O'Reilly will never receive a Stupie, because he is neither a journalist, nor of the first rank, except among his fellow members of Equus asinus. The very first Stupie is hereby awarded to William Arkin, author and (where else) Washington Post blogger. Arkin is one of a very small handful of journalists who have a clue what they're talking about with regard to intelligence matters, does independent investigative journalism, and almost certainly was burned by Bushco's monitoring of journalists's phone calls-- or, rather, his sources were. So, exactly how stupid does William Arking have to be to post a bald assertion, completely unsubstantiated by facts, that the Bush Administration has not created an Enemies List, ala Nixon? I'll be the first to admit that facts are not yet in public evidence to prove much of anything to courtroon standards. But absence of evidence is not, as Rummy is famed for saying, evidence of absence. We have Congress and the courts to investigate the evidence and reach the conclusion Arkin leaped to... or another. Now, I thave a guess as to what is going on. Arkin's intelligence sources are telling him it isn't happening. Arkin has gotten to know his sources, formed friendships, and assumes that they wouldn't lie. But as James Bamford learned to his chagrin, sometimes-- like Michael Hayden-- they do. And they drag the journalists who imagined they were friends rather than sources down with them. Because Arkin is one of the first rank journalists, and because he should know better, he is hereby awarded the first Stupie. Plese note the gold filigree and inlaid semi-precious stones spelling out D-O-P-E.

Via Glenn Greenwald, we get the reviews of Bush's speech from the right. Here are excerpts of Glenn's excerpts: Michelle Malkin: "platitudes, non sequiturs, and recycled rhetoric I've been deconstructing the last five years." John "The Rocket" Hinderaker: "He had his chance and he blew it . . . . President Bush doesn't have many chances left to salvage his second term. After tonight, he might not have any." ... Paul "Deacon" Mirengoff: "President Bush did wimp out, and fatally so ... Ankle Biting Pundits: "... I believe he cheapened his argument." Misha at Anti-Idotarian Rottweiler: "long on blather and emotion and amazingly short on actual solutions. . . . Take your 'virtual' fence and your hi-tech vaporware coupled with your amnesty plan and shove them up your ass, Jorge." ... Mark Levin, National Review: ". . . . This is pure idiocy, and it has the potential of being far more damaging to this nation than any big-government power-grab perpetrated by any previous president and Congress." Dave Riehl: ... a eulogy for the so-called Reagan Revolution...President Bush all but declared himself irrelevant ... John Hawkins, Right Wing News: "After the speech last night, I took a look around the right side of the blogosphere to get a sense of what people thought. The reaction was probably -- oh, let's say somewhere between 75-90% negative ..." But Bush's approval will never reach zero because, as we see, there are still people who will defend him. As long as they can do it anonymously.