About Those Memos

Is OPR Report the Key?

This story from the Future of Freedom Foundation's Andy Worthington (h/t Mike's Blog Roundup) has some interesting facts about the torture memos affair.

Some people have been saying that a full investigation won't and shouldn't get underway until the release of a report by the DoJ's Office of Professional Responsibility into actions taken by the Office of Legal Counsel, another branch of DoJ, the latter having much closer ties with the White House. OPR has been investigating OLC for FOUR YEARS now.

[T]he Justice Department’s Office of Professional Responsibility (OPR), ... was charged with looking at whether the legal advice in the crucial interrogation memos “was consistent with the professional standards that apply to Department of Justice attorneys.”

According to Newsweek’s Michael Isikoff, who broke the story, a draft of the report, submitted in the final weeks of the Bush administration, caused anxiety among former Bush administration officials, because “OPR investigators focused on whether the memo’s authors deliberately slanted their legal advice to provide the White House with the conclusions it wanted.” A former Bush lawyer, speaking anonymously, added that he “was stunned to discover how much material the investigators had gathered, including internal e-mails and multiple drafts that allowed OPR to reconstruct how the memos were crafted.”

That's news to me, and a significant positive for those who wish to see justice done on this issue. We already know that these memos were complete fabrications by any legal standards; created to provide an impression of legality that was utterly without substance. Chances are very good that the internal e-mails and multiple drafts will show that the various players - Bybee, Yoo, Bradbury, Gonzales, etc. - were not just bad lawyers doing sloppy work, but criminals entering into a conspiracy against the constitution and rule of law. Another repercussion if this is found to be the case -- the attorney-client privilege goes out the window. But even more significantly,

The OLC, as the New York Times explained in September 2007, holds a uniquely influential position, as it “interprets all laws that bear on the powers of the executive branch. The opinions of the head of the office are binding, except on the rare occasions when they are reversed by the attorney general or the president.” The legal opinions were, therefore, regarded as a “golden shield” by the administration, although, as lawyer Peter Weiss noted after I last wrote about the Bush administration’s war crimes, “it cannot be binding if it violates the constitution, or a jus cogens prohibition of international law, e.g. torture, or, perhaps, if it was made to order for the executive, as you demonstrate it was.”

So, such a finding would not only put exoneration for the memos' authors well out of reach, it would nullify any protection that those documents extend to any of the torturers themselves. Note that I'm speaking in legal, not political terms. Political mechanisms for protecting the guilty seem to be both numerous and robust. Even so, the anonymous former Bush lawyer quoted above who was "stunned to discover" the details at OPR's disposal must be filling his Fruit of the Looms. A particular sticky point hinges on the actions of Jack Goldsmith.

...Jack Goldsmith ... took over from Bybee as the head of the OLC in October 2003. A supposedly “safe pair of hands,” who, with Yoo, was regarded as “a leading proponent of the view that international standards of human rights should not apply in cases before U.S. courts,” Goldsmith in fact turned out to be a nightmare for the administration, as he withdrew four pieces of legal advice — including the “torture memo” and a March 2003 memo approving the more general use of “enhanced interrogation techniques” — because he regarded them as “tendentious, overly broad and legally flawed.”

As Goldsmith explained in September 2007 to Jeffrey Rosen of the New York Times, he concluded that the “torture memo” contained advice that “defined torture far too narrowly,” and also took exception to the memo’s claim that “any effort by Congress to regulate the interrogation of battlefield combatants would violate the Constitution's sole vesting of the commander in chief authority in the president,” explaining that he believed that “this extreme conclusion” would “call into question the constitutionality of federal laws that limit interrogation, like the War Crimes Act of 1996, which prohibits grave breaches of the Geneva Conventions, and the Uniform Code of Military Justice, which prohibits cruelty and maltreatment.” He added that he “found the tone of both opinions ‘tendentious’ rather than cautious and feared that they might be interpreted as an attempt to immunize government officials for genuinely bad acts.”

When it came to withdrawing the “torture memo,” Goldsmith was acutely aware that it would anger the administration, because it “provided the legal foundation for the CIA’s interrogation program,” and, as Rosen described it,

He made a strategic decision: on the same day that he withdrew the opinion, he submitted his resignation, effectively forcing the administration to choose between accepting his decision and letting him leave quietly, or rejecting it and turning his resignation into a big news story. ”If the story had come out that the U.S. government decided to stick by the controversial opinions that led the head of the Office of Legal Counsel to resign, that would have looked bad,” Goldsmith told me. ”The timing was designed to ensure that the decision stuck.

Given the time line there should be no-one whose undies are more stained than those of the OLC’s Principal Deputy Assistant Attorney General, Steven G. Bradbury. Yoo and Bybee might argue, however lamely, that they were just mistaken in their interpretation of the law, but Bradbury's three memos of May 2005 (available as PDFs here, here and here) came after Goldsmith had called bullshit on the earlier arguments. There seem no legal defenses left for Bradbury, unless he can demonstrate himself to have been clinically insane at the time. Then again, the APA might add Republicanism to its list of mental defects in the next DSM IV.

As I noted above, as dire as things get for these potential defendants in pure legal terms, there is still a chance that political forces wishing to just move on will prevail. As Worthington notes,

I maintain, as I last stressed a month ago, that the release of the OPR report is of critical importance (especially in light of recent reports that it has been rewritten, or is being rewritten, to reach a less stark conclusion of wrongdoing), as it seems clear that it is the key to securing concrete proof of the involvement of Dick Cheney, David Addington and Alberto Gonzales in the creation of the torture memos.

If true, that sucks. And what sucks worse is the way that the Lamestream Media has bent over backwards to portray the entire torture program in very Cheney-esque terms, as though it were 'a dunk in the water' being talked about here. Something you can do wearing a suit and tie, like watering the plant next to your desk in the office. (see illustration, top)

Glenn Greenwald has of course been meticulously chronicling the media's wave of propaganda in defense of the indefensible here, here, here, here, here and here. He's also done a post on the complicity of the Democrats here. So don't hold your breath waiting for justice - if you do you may end up feeling like a waterboarding victim yourself.

TAGS: Waterboarding, Torture Memos, Jay Bybee
Steven Bradbury, John Yoo, David Addington, Alberto Gonzales, Dick Cheney and the usual cast of clowns.

Things that make RevPhat Cuss, #266

I've been reading Digby and Emptywheel and Ackerman this morning. So the way I'm understanding it, this is why the Bush regime tortured in my name:



Digby concludes:

If the SASC report is correct, then much of the torture regime was devised to justify the invasion of Iraq. It explains why Cheney is out there behaving like he's on methamphetamines. If that's the case, he and Bush and all those who signed off on it are subject not only to prosecution, they are subject to the kind of historical legacy reserved for the worst of the worst. This is as bad as it gets.

I hope she's right. I hope this is as bad as it gets. Because this is fucking sick. Fucking cowards.

I Am A Newly Minted "Uncle"

Baby "ruschka" made her appearance Saturday at 8:18 Mountain time.

Damn russkis were all secretive until last night.

Proud papa was tired, but happy, reporting the events to me last night. Once all the immediate family was notified, which took some time across continents and stuff, mere mortals like myself were allowed to know.

Reports are that she has the same beautiful hazel eyes and dark hair as her mom.

Lettuce spray that she has the same sensibilities; her parents are top drawer humans. They let me in their house! Wild! How crazy is that?

TAGS: Hooray for ME!, Future Unrulians, Hair Is Relatively Good, Get one of your own, leave me alone

Nineteen Reasons We Should Encourage Texas to Secede

No, Nosy isn't dead. Here are 19 reason thinking Americans should encourage the Lone Star State to go it alone:

1) 49th in teacher pay
2) 1st in the percentage of people over 25 without a high school diploma
3) 41st in high school graduation rate
4) 46th in SAT scores
5) 1st in percentage of uninsured children
6) 1st in percentage of population uninsured
7) 1st in percentage of non-elderly uninsured
8) 3rd in percentage of people living below the poverty level
9) 49th in average Women Infant and Children benefit payments
10) 1st in teenage birth rate
11) 50th in average credit scores for loan applicants
12) 1st in air pollution emissions
13) 1st in volume of volatile organic compounds released into the air
14) 1st in amount of toxic chemicals released into water
15) 1st in amount of recognized cancer-causing carcinogens released into air
16) 1st in amount of carbon dioxide emissions
17) 50th in homeowners' insurance affordability
18) 50th in percentage of voting age population that votes
19) 1st in annual number of executions

Of course, they are number one in wind energy generation but with Rick Perry for a governor, what could you expect? I'd vote immediately to approve secession provided they take everything south of the Ohio River with them.
TAGS: Texas, Rick Perry, South's Gonna Do It Again, LABEL

Prosecute!!

"Mr. President, You're Wrong."

KO did a good job here, and his historical perspective on the costs of 'going forward' without resolving an issue is exactly the way I would have gone but I have one quibble. It's about this quote from PresBo:

"Our national greatness is embedded in America's ability to right its course in concert with our core values, and to move forward with confidence. That is why we must resist the forces that divide us, and instead come together on behalf of our common future."

Olbermann incorrectly assumes that the divisive forces that Obama refers to are "the ones lingering with pervasive stench from the previous administration." This is an understandable mistake on Mr. Olbermann's part, for one can certainly identify a number of sources of the stench to which he refers.

There are still dozens if not hundreds of partisan Republican civil servants in the DoJ alone, illegally hired by Monica Goodling and now embedded there like a colony of cockroaches under the sink. Ironically it would now be illegal to fire those illegally hirees, due to civil service regulations. Sad, but true.

There are still many partisan Republican US Attorneys appointed by the Bush administration whom Obama has not bothered to replace, and who have refused to resign as is traditionally done; hacks like Mary Beth Buchanan, who incidentally hired Goodling. In that latter instance, Obama has the option of firing any US Attorney he wishes to and hiring replacements, a relatively light duty task that would have the effect, stench-wise, of Hercules' cleaning out of the Augean Stables, without any of the heavy lifting required.

Or perhaps the stench emanates from the right-wing extremists recently designated a threat by the Department of Homeland Security - the redneck racist core of what's left of GOP electoral support. (Ya gotta love Janeane Garofolo's description of this crowd, "You can tell these type of right-wingers anything and they'll believe it - except the truth. You tell them the truth and it's like showing Frankenstein's monster fire.") An even greater reek rises out of the studios of FOX "news," who are usually the one telling them anything but the truth, and egging them on.

With all these candidates to be the divisive forces I have to conclude from the context that Obama is really talking about those who insist on the continuing rule of law, those who demand that criminals be brought to court and prosecuted. Us. We are, in Obama's reckoning, 'the forces that divide us.'

What really divides 'us' (those who wish for transparency and accountability) at least today, is the question of whether Obama should be praised for the transparency inherent in the release of these documents or condemned for putting yet another item of accountability off the table. Glenn Greenwald argues that we should both praise him on the one hand and condemn him on the other. This would be a very rare instance of my disagreeing with GG on even a small point and even now it's only a matter of degree. Because he's right - Obama does deserve some praise for releasing these memos, just not very much.

For me the balance lies in the duplicity in the first part of the quote above. To talk about, "America's ability to right its course in concert with our core values" while promising to resist all calls to exercise that ability only leaves America on the wrong course, and bereft of core values. The rest of the world will take Obama's pledge with the same seriousness as someone who tells you, "I could benchpress 1,000 lbs., I just don't want to." Yeah, right buddy. Uh huh.

The president and his Attorney General seem to be on the same page on the issue of protecting the guilty. As Glenn Greenwald quoted them,

Barack Obama, yesterday:

In releasing these memos, it is our intention to assure those who carried out their duties relying in good faith upon legal advice from the Department of Justice that they will not be subject to prosecution.

Eric Holder, yesterday:

It would be unfair to prosecute dedicated men and women working to protect America for conduct that was sanctioned in advance by the Justice Department.

That's pretty unambiguous. Jonathan Turley responded just as unambiguously on the Rachel Maddow Show.

What is really disturbing is that President Obama is obviously referring to criminal investigation and prosecution ... somehow he's equating the enforcement of federal laws -- that he took an oath to enforce to uphold the constitution and our laws -- and he's equating that with an act of retribution, and some sort of hissy fit or blame game. It's not retribution to enforce criminal laws. What it is is obstruction to prevent that enforcement, and that is exactly what he's done thus far.

That sounds like a clarion call to me, "PROSECUTE!!" And it also sounds like a counter-argument to what Greenwald calls "an unhealthy tendency to want to make categorical, absolute judgments about the persona of politicians generally and Obama especially." Well Glenn, he's a politician and until some mechanism comes along where the electorate can vote in a different guy for each issue (or in this case for each action taken on the same issue) you're going to see a lot of that. Someone being selected to make decisions on a wide variety of matters over a period of at least four years must eventually be judged on his overall character.

And bottom line, the release of these memos was required by law. Obama himself acknowledges that. And so are investigations required by law, a law that is so far being broken. So we have a case similar to someone who comes to a full stop at a red light, then makes an illegal left turn and runs over a pedestrian. I don't think the first cop on the scene is expected to heap any praise on that driver.

TAGS: Jay Bybee, Torture Memos
Barack Obama, Bush Light?

Canadian Study a Lesson for Teabaggers

"Three in Four Suffer From Cuts to Public Spending"

From CBC.ca:

Tax cuts could diminish the standard of living for the vast majority of Canadians who enjoy the public services that they fund, according to a study (pdf HERE) by the Canadian Centre for Policy Alternatives released on Wednesday.

The majority of Canadian households enjoy a higher quality of life because of the public services their taxes fund, the study argues.
[...]
"What passes for a tax cut debate in Canada is really only half the debate," said study co-author Hugh Mackenzie, an economist. ..."The suggestion we often hear, that taxes are a burden, hides the reality that our taxes fund public services that make Canada's standard of living among the very best," he said.

The study uses Statistics Canada data on government revenues and expenditures to compare public spending in categories including health care, education, social services, old-age security benefits and employment insurance. ...Using the statistics, the report finds that the average per capita benefit from public services in Canada in 2006 was about $16,952.
[...]
"The overall impact of tax cuts — and the cuts in public services that accompany them — has not been addressed in any substantive way," the study states. "Tax cuts are always made to sound like they're free money to middle income Canadians. They are anything but," Mackenzie said. "We're far better off with the public services our taxes fund than we are with tax cuts." Any reduction in income tax results in an equivalent constraint on public spending, the study says, and about three in four Canadians suffer from cuts to public spending.

Overall, the tax cuts implemented in Canada in the last 15 years have had the net effect of reducing the living standards of most Canadians, the reports says.

The study also finds that the number of public services used by Canadians appears to increase as household income and size increase. This is particularly true for households that have children who are accessing publicly funded elementary and secondary schools and seniors who are more likely to use the public health-care system. "Families with young children will tend to benefit relatively more from the health-care system, whereas families with older children will tend to benefit from the public education system to a greater extent than other types of families," the study states.

It's not hard to predict the kind of reaction that this report is going to get from the conservative movement in the US. Reports based on provable facts and confirm-able statistics are not to their liking anyway. They much prefer to rely on ideologically-based theory drawn out of thin air (or worse) - thin air that evidently gets compressed and heated, then spewed out of bloviators' blowholes at FOX "news" in support of this tea-bagging movement. Which, by the way, is an excellent example of astroturfing as defined by Wikipedia, "formal political, advertising, or public relations campaigns seeking to create the impression of being spontaneous "grassroots" behavior, hence the reference to the artificial grass, AstroTurf."

Nor should the motive behind this campaign escape anyone but the morans (sic, see photo) it is directed towards. (or should that be against?) The conservative movement has been pretty successful in the past at getting the poorly educated to vote against their own interests based on simplistic slogans. "Read my lips, just say no, drill baby drill" etcetera. My guess is that they're trying to bring back the glory days of monosyllabic right-tard propaganda -- in spite of being utterly discredited by the spectacular economic disaster wrought from their trickle-down 'free market' policies. My hope is that they're wrong, and that even the worst of the low-information voters will wake up once they've lost their jobs and their homes, and are living in cardboard boxes and depending on food stamps. But then, past experience has been that really poor people don't vote at all, and the GOP has made it nearly impossible for the homeless to even register to vote, so that hope might be a bit optimistic.

The Economist just hosted a debate on whether it's time that the rich be required to pay more in taxes. Just reading some of the closing remarks by Chris Edwards of the Cato institute, arguing against the motion, reveals the paucity of the conservative argument. Unable to attack the logic of his opponent, he mounts a personal, ad hominem attack. "[Parisian economist Thomas] Piketty's understanding of the nature of income is very European, " he whinges. Name calling is rightly regarded as the lowest rung on the scale of debating technique, (see triangular diagram near the bottom) and is characteristic of someone who can't base their argument on facts or logic. So I would say the pro-tax side won the argument.

(Parenthetically, it could, should and must be said that this debate is just one battle being fought in an ongoing and increasingly bitter war between the classes. Because this whole unfortunately named teabagging movement is nothing more than a propaganda effort to perpetuate the Reagan tax cuts. The rich would prefer that you pay for the jackboot that presses against your own neck. If you don't mind, there's a good boy.)

One of the comments at The Economist succinctly expresses why certain functions should not and can not be left to the marketplace.

Of course, the free market doesn't provide universal quality education: thus we must rely on governments to provide this service, and others like it that also serve the greater good but generate no profit. Isn't that the point of taxes in the first place?

You'll often hear Thom Hartmann make the same point in a slightly different way on his radio show. "Don't we already have socialist fire services, socialist police forces, socialist roadways, and a socialist armed forces?"

I would add an observation of my own to that argument. When governments contract out to private enterprise to provide necessary services, they almost invariably do so under a system that is more crony capitalism than healthy competitive free enterprise. Can you say 'cost-plus, no-bid?' It is far better for the public that the money be spent within a government department where it can be more carefully controlled, and where there is recourse for diversion, mis-spending and waste. The whole 'privatization is more efficient' argument falls apart under any close examination.

Certainly the argument against paying taxes for government corruption is a valid one, but just as certainly the remedy is to attack the corruption, not the taxation. Ironically the same type of people who want to spare their buddies the burden of paying their fair share tend to be the type who want to pay off those same buddies through graft. A kind of self-fulfilling prophecy which if you think of it is hardly surprising considering that they want the government to fail. Or at least they claim to; really what they want is a government under their control - maximizing and guaranteeing their profits, socializing their losses, and calling out the guard should the hoi-polloi ever get fed up with the arrangement. In a word, fascism.

Going back to the comment made in The Economist, I think the author chose the perfect example. There is no better investment that a government can make than providing the public with free quality education. A better-educated citizen will earn much more during his lifetime, eventually paying back all the taxes gone into his schooling with interest. Which a wise government will then re-invest on educating his kids.

Maybe it's high time that the wise taxpayer learned that simple lesson. It would certainly be preferred to being conned into participating in some phony protest against your own interests.

ADDENDUM: Just as one example of the COST of LOWER taxes, here's a study of what it cost Americans to NOT have universal health care. (From the National Coalition on Health Care.) Just one fact from this piece forms a conclusive argument. The US spends 17% of GDP on health care and 40% of people are either not covered or not sufficiently covered. Canada covers EVERYBODY for 9.7% of GDP.

TAGS: Tax Day, Public Policy
Conservative "Ideology", vs. Common Sense

London Calling

Pissed off people, doing something about it:



And the reporter in the middle of it. Good for him!

From Digby:

Update: Zbigniew Brzeznski just said, when asked about whether the G20 leaders care about these protests:

It is a signal to all of us, including them, that if the economic financial crisis is not brought under some constructive control we could have a repetion of this in many other parts of the world, including in the United States.

You know there is a potential rage, public rage, in the United States, at the unfairness and inequality that's involved in the financial crisis and the financial scandal.

Seriously, these MOUs really need to stop their public whining and get behind some things like Grayson's measure. They are fanning the flames of their own funeral pyre. It's just dumb.

Yep - it's just dumb.

Now, just for fun, and reminds me of my punk/eurotrash days:





TAGS: G20 Protests, Banksters and Pushing Back On Them, Won't See This On US Television Will Ya?, Not All People Are Sheep

Another Edition of: Where Are They Now?

I was watching this on Rachel Maddow:

Visit msnbc.com for Breaking News, World News, and News about the Economy

And while I thought I was just going to do a primer on the the genesis of Graham-Leach-Bliley Act that I've been bitching about for a while in comment sections everywhere, doing the homework reminded me of several things. The whole ass-end of the '90s flashed in my head. Bill-Gotta-Blow-Job was the dominant theme, and everything revolved around "What You Could To To Make Clinton Pay You For Getting An Unauthorized Hummer While Prez!"

Such leverage was entirely unfortunate, because years of lobbying efforts became true (patience please, as I do snag some long swaths from the wayback machine):

The NYT, Oct. 23rd, 1999, reporting that an agreement was nigh:

Agreement Reached on Overhaul of U.S. Financial System

The Clinton Administration and top Republican lawmakers reached an agreement early Friday to overhaul the financial system, repealing Depression-era laws that have restricted the banking, securities and insurance industries from expanding into one another's businesses.

The deal was announced about 2 A.M. after a compromise was reached over the measure's effect on lending rules for the disadvantaged, the source of months of partisan bickering between the White House and Senator Phil Gramm, the Texas Republican who heads the banking committee.

[...]

For instance, the nation's largest financial services company, Citigroup, would have been forced to sell some of its insurance operations as part of the $72 billion merger last year between Citibank and Travelers Group without either the legislation or a waiver from regulators. [emphasis mine (these above and all emphases below too) - the merger was "technically" illegal - read ILLEGAL - at the time, and this was a retro-patch to make it legal. Sound familiar?]

[...]

Treasury Secretary Lawrence H. Summers said in an interview, "At the end of the 20th century, we will at last be replacing an archaic set of restrictions with a legislative foundation for a 21st-century financial system." The measure, he added, "would provide significant benefits to the national economy."

[...]

The idea behind Glass-Steagall, named for the two lawmakers who wrote it, was that confidence in America's financial house could best be restored if bankers and brokers stayed in separate rooms. Such a separation, it was thought, achieved two purposes.

First, it would reduce the potential conflicts of interest between investment banking and commercial banking that were thought to have contributed to the speculative frenzy in the stock markets. Under the 1933 Banking Act, commercial banks could receive no more than 10 percent of their income from the securities markets, a limit so restrictive that most simply abandoned business on Wall Street.

Second, it would provide a safe harbor for the money of ordinary Americans by enabling them to put their money in accounts that were protected by deposit insurance and insulated from more speculative investments like stocks. (The 1933 act also established the Federal Deposit Insurance Corporation, which now insures bank deposits up to $100,000.)

Over time, Federal judges and regulators chipped away at the Glass-Steagall Act and other restrictions on cross-ownership of banks, insurance companies and securities firms, enabling, for instance, Citibank to merge with Travelers last year to form Citigroup, the world's largest financial services company. But large hurdles remained that have discouraged the expansion by banks into new businesses.

[...]

The breakthrough in Friday's legislation came in a backroom meeting at the Capitol soon after midnight, when a group of moderate Senate Democrats -- led by Christopher Dodd of Connecticut and Charles E. Schumer of New York -- forced a compromise between Gramm and the White House over the legislation's effect on the Community Reinvestment Act, a 1977 anti-discrimination law intended to encourage lending to minorities and others historically denied access to credit.

Dodd, whose state is home to the nation's largest insurance companies, and Schumer, with strong ties to Wall Street, have long sought legislation to repeal the Glass-Steagall Act. Both men said in interviews Friday that they moved to strike a compromise after it became apparent that the legislation might be killed, as it was last year by Gramm, over the debate about the Community Reinvestment Act.

Gramm had maintained that he did not want anything in the bill that would expand the application of the Community Reinvestment Act because it was, he said, unnecessarily burdensome to banks. He had sought a provision that would exempt thousands of smaller banks from the law. He also wanted a provision that would expose what he has described as the "extortion" committed by community groups against banks by requiring the groups to disclose any special financial deals the groups extract from the banks.

But the White House found that provision unacceptable and had its own ideas about community lending. It wanted the legislation to prevent any bank with an unsatisfactory record of making loans to the disadvantaged from expanding into new areas, like insurance or securities.

The White House had insisted that the President would veto any legislation that would scale back minority-lending requirements. Four days of intense negotiations between Summers, Gene Sperling, the President's top economic policy adviser, and Gramm, while moving the two sides closer, failed to resolve the differences.

Such was the state of play Thursday evening when Gramm decided to force the issue by having the House-Senate conference committee vote on his proposed compromise, which the White House had already rejected for failing to block banks with bad lending records from expanding to new businesses.

When Gramm's measure was defeated by one vote, it quickly became clear that there would be no law unless Gramm could get some Democrats to break from the White House.

But Administration officials had spent all day making sure that the Democrats remained solidly against the measure until their concerns about the Community Reinvestment Act could be worked out.

After receiving calls from executives of some of the nation's leading financial companies, Dodd and Schumer began trying to work out a compromise. An agreement was quickly reached on the issue of banks and expanded powers -- no institution would be allowed to move into any new lines of business without a satisfactory lending record.

The lawmakers bogged down on Gramm's insistence that all community organizations disclose to the regulators what benefits they get from banks. Some Democrats expressed the fear that Gramm's proposal would require the Boy Scouts to file reports with the regulators.

Ultimately, the following provisions were drawn up and both the White House and Gramm said they could accept them:

-Banks will not be able to move into new lines of business unless they have satisfactory lending records.

-Community groups will have to make disclosures to regulators about certain kinds of financial deals with banks that they have pressed to make loans under the Community Reinvestment Act.

-Wholesale financial institutions, a new kind of business that takes large, uninsured bank deposits, cannot be affiliated with commercial banks.

-Small banks with satisfactory or excellent track records of lending to the underserved would be reviewed less frequently under the Community Reinvestment Act. As a practical matter smaller banks are reviewed about every three years. The deal struck today allows all rural banks and banks with less than $250 million in assets to undergo examination once every five years if their last exam resulted in an "outstanding" grade and every four years if they last scored "satisfactory."

Familiar? The playahs are really the same from yesterday to today. Not really a surprise. But the nugget I get out of that is revenge of the Banksters today regarding sticking them with CRA provisions: "Hey, if We, The Banksters Of The United States (TBOTUS) are going down, so are those godamned brown and poor people that you made us have in our godamn cake. Otherwise our plan WOULD HAVE BEEN PERFECT!"

The NYT, Oct. 23rd, 1999 on background:

Behind the Banking Bill, Years of Intense Lobbying

[...] banking deregulation has been vigorously lobbied and debated for 20 years by three of the nation's wealthiest industries: banking, insurance and securities.

In 1997 and 1998 alone, these three industries gave $58 million to Federal political candidates, according to compilations by the Center for Responsive Politics, a nonpartisan research group. They donated $87 million in so-called soft money to the political parties, and they reported spending $163 million in additional lobbying expenses.

Some other issues generate larger donations and expenses over limited periods of time. Health care lobbyists on both sides of the managed-care debate, for example, reported $230 million in lobbying expenses in 1997 and 1998. But that issue has been lobbied for a relatively short time. Over two decades of lobbying, the insurance and financial services industries have certainly spent more.

"A tremendous amount of money has been spent just because it has gone on for such a long, long time," said Wright Andrews, a longtime Washington lobbyist who over the years has represented companies on both sides of the debate.

Of course, not every dollar donated by every bank and insurance office was dedicated to this subject. But Gary Hughes, a senior vice president with the American Council of Life Insurance, noted: "The lion's share of our resources have been devoted to this. We viewed this is as critical to the long-term viability of our industry."

Yingling of the bankers association said: "The way we saw it, if we didn't get this legislation we were going to disappear. This was our top issue for a long, long time. The resources devoted to it were huge, and we fought it tooth and nail."

[...]

Schumer was on the House Banking Committee and is now on the Senate Banking Committee. He has long been regarded as the securities industry's strongest ally in Congress. Of course, most brokerage and financial services companies are based in New York City, parts of which Schumer represented in the House. He received more money from the securities industry in 1997 and 1998 than anyone else now in the Senate, almost certainly because he was running for the Senate.

Senator Christopher Dodd, the Connecticut Democrat, is regarded as one of the strongest allies of the insurance industry. Hartford is the nation's insurance capital. Between 1993 and 1998, Dodd received $325,124 from insurance companies -- not a great deal less than the Republican chairman of the Banking Committee, Senator Phil Gramm of Texas, the man who determined whether banking bills came up for a vote.

The insurance industry gave Gramm $496,610. He also received $760,404 from the securities industry and $407,956 from the banking industry.

[...]

Oddly, though, the lists show that Jim Leach, the Iowa Republican who is chairman of the House Banking Committee and has the power to bring bills up for votes or bury them, received meager amounts from the three industries in 1997 and 1998: $8,570 from the bankers, $10,483 from the securities industry and just $3,000 from the insurance companies.

A member of his staff explained: " Leach doesn't take money from PAC's; he never has." Much of the industry money has been donated to members of Congress through political action committees.

More on Leach momentarily.

----------------------------

Let's look at and memorialize who actually voted against Gramm-Leach-Bliley.

Senate:

NAYs ---8
Boxer (D-CA) Bryan (D-NV) Dorgan (D-ND)	Feingold (D-WI) Harkin (D-IA) Mikulski (D-MD)	Shelby (R-AL) Wellstone (D-MN)

Present - 1
Fitzgerald (R-IL)

Not Voting - 1
McCain (R-AZ)

House: (Dems in Italics)

---- NAYS 57 ---

Baldwin Barrett (WI) Barton Brady (PA) Campbell Capuano Clay Condit Conyers Costello Coyne Davis (IL) DeFazio DeLauro Dingell Dixon Edwards Evans Fattah

Filner Frank (MA) Gejdenson Gutierrez Hastings (FL) Hefley Hinchey Inslee Jackson (IL) Kaptur Kildee Kucinich Lee Lewis (GA) Lipinski Luther Markey McDermott McKinney

Meek (FL) Mica Miller, George Obey Phelps Rivers Rodriguez Roybal-Allard Rush Sanders Sanford Schakowsky Serrano Taylor (MS) Thurman Tierney Waters Waxman Woolsey

---- NOT VOTING 15 ---

Bereuter Dickey Kanjorski Larson Martinez

McInnis Mollohan Ney Norwood Paul

Radanovich Scarborough Shuster Stark Taylor (NC)

These are the "relatively" good guys on today's economic issues.

Certainly, I must withdraw my previous strong support for Dodd. I applauded his FISA floor speeches, which I still do, but civil liberties and ordinary citizen economic liberties are indeed LINKED in my view. A strong citizen, all the way around, both civilly and economically are really the American way. You can't have one without the other Chris Dodd, and you split the baby. Don't get shy when EFCA comes up or you are really doomed. Ask Arlen Specter about that.

Anyhow, amongst the Senators, at least Feingold has both issues right. I still mourn Wellstone.

---------------------------

So I looked up the headliners on the GLB (hah!) Act, except for Phil Gramm. He gets enough ink, and I just didn't want to. Blergh.

Bliley has been replaced in the House, beginning in the 2002 class, by Eric Cantor. Bliley works at Steptoe & Johnson, and has made most of his 2008 lobbying money, well, look here for yourself. Kudos on the autism, Tom, but it's a shame that it's the least amount of money, where the others are generally reprehensible.

Leach - is a little weirder character. I can't figure out the total angle, as he didn't take PAC money, and strangely broke rank with Republicans and endorsed Obama, and even spoke at the Convention (YouTube). He is, however, a Lecturer and John L. Weinberg/Goldman Sachs Visiting Professor at Princeton.

Goldman Sachs - the world revolves around YOU!



TAGS: Gramm-Leach-Bliley, Economic Crisis, Goldman Sachs, Prates, Jerks and Thieves

A Wonderful Lie

Glenn Greenwald's post yesterday leaves very little left to be said about the bailout - quite brilliantly covering all the bases.

The virtues of public anger and the need for more:

The public rage we're finally seeing is long, long overdue, and appears to be the only force with both the ability and will to impose meaningful checks on continued kleptocratic pillaging and deep-seated corruption in virtually every branch of our establishment institutions. The worst possible thing that could happen now is for this collective rage to subside and for the public to return to its long-standing state of blissful ignorance over what the establishment is actually doing.
[...]
...the financial crisis is a fundamental indictment on the way the country functions and of its ruling class. What would be unhealthy is if there weren't substantial amounts of public rage in the face of these revelations.
[...]
(Quoting The Rolling Stone's Matt Taibbi:)
The most galling thing about this financial crisis is that so many Wall Street types think they actually deserve not only their huge bonuses and lavish lifestyles but the awesome political power their own mistakes have left them in possession of. . .Actually, come to think of it, why are we even giving taxpayer money to you people? Why are we not throwing your ass in jail instead?
[...]
(Quoting Atrios:)
The issue is that [Geithner] and friends never distinguished between bailing out the system and bailing out the players. There was a way to do that, and they didn't do it.
(Quoting Krugman:)
"The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system."

If you were to do nothing this weekend other than read this tour de force of a blog post and click a few links to Glenn's sources you would end up better informed about this issue than the vast majority. And a hell of a lot angrier.

Speaking on clicking on source links, if I have one criticism of Glenn it's that he truncated the Krugman quote robbing it of some of its impact. The original reads:

The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank.

Now that inevitable brings to mind the famous George Bailey speech from It's a Wonderful Life. Trying to prevent a run on an essentially sound bank, Bailey points out that the money isn't cash sitting in the bank's vault, it's invested in the homes and businesses of Bedford Falls.

A Community Chest

Try to translate that to the current system and you get,
"Well, shucks Joe, your life savings are tied up in Goldman Sachs' CDO's and Goldman Sachs is heavily into Merrill Lynch's Credit Default Swaps, and Merrill Lynch is putting it into Lehman hedge funds. Then Lehman leverages it back into Goldman and we all make a tidy profit."

No matter how homespun your cloth coat or how endearing your accent, you're going to come off more like the despicable Mr. Potter than the lovable George. Lending out money to build assets makes sense. Lending money to tear down structure is unremittingly wrong-headed.

The bottom line of this post is the source of all this righteous anger. As Glenn says, "When it comes to its primary challenge, the administration elected on a platform of "change" is, above all else, viciously devoted to preservation of the status quo." Greenwald's underlying point, that it is well past time for an angry population to re-exert some influence on their government echoes a Thomas Jefferson sentiment - one I have always heartily agreed with.

"When the people fear their government, there is tyranny;
When the government fears the people, there is liberty."

So, keep those pitchforks sharp and be ready to light those torches at a moments notice.

TAGS: Kleptocracy, Bailout, Anger AGAINST Management
AIG - The Pirates of Wall Street

Do Not Lie To Me About These Fucking AIG Bonuses

The fastest way to piss me off is to out-and-out lie to me. I mean Lie. Lie, lie, lie. Prevaricate. Say something you know to be untrue. And that's what's going on right now about these AIG bonuses and from the Obama Administration! Via Jane Hamsher at FDL:

Language from the Senate bill, written by Dodd:

(4) a prohibition on such TARP recipient paying or accruing any bonus, retention award, or incentive compensation during the period that the obligation is outstanding to at least the 25 most highly-compensated employees, or such higher number as the Secretary may determine is in the public interest with respect to any TARP recipient;

Also:

(a) In General- Notwithstanding any other provision of law or agreement to the contrary, no person who is an officer, director, executive, or other employee of a financial institution or other entity that receives or has received funds under the Troubled Asset Relief Program (or ‘TARP’), established under section 101 of the Emergency Economic Stabilization Act of 2008, may receive annual compensation in excess of the amount of compensation paid to the President of the United States.

(b) Duration- The limitation in subsection (a) shall be a condition of the receipt of assistance under the TARP, and of any modification to such assistance that was received on or before the date of enactment of this Act, and shall remain in effect with respect to each financial institution or other entity that receives such assistance or modification for the duration of the assistance or obligation provided under the TARP.

Dodd's version prohibited TARP recipients from paying out bonuses, retention awards or incentive compensation to the 25 most highly compensated employees. It also prohibited any employee of a company receiving TARP funds from making more than the President. Both provisions would have been in effect so long as a company was receiving TARP funds. Since AIG just paid out $1 million in bonuses to 73 employees, Dodd's version limiting all employees to what the President made (roughly $500,000) would have substantially nipped that in the bud.

Very Fucking Crystal Clear. Dodd inserted the "don't pay these people" language into the bill.

In fact, the Wall Street Journal makes it entirely clear. From Jane again and the WSJ:

The most stringent pay restriction bars any company receiving funds from paying top earners bonuses equal to more than one-third of their total annual compensation. That could severely crimp pay packages at big banks, where top officials commonly get relatively modest salaries but often huge bonuses.

As word spread Friday about the new and retroactive limit -- inserted by Democratic Sen. Christopher Dodd of Connecticut -- so did consternation on Wall Street and in the Obama administration, which opposed it.

Who pushed back against Dodd, and told him to neuter the provision? The WSJ says Geithner and Summers:

The administration is concerned the rules will prompt a wave of banks to return the government's money and forgo future assistance, undermining the aid program's effectiveness. Both Treasury Secretary Timothy Geithner and Lawrence Summers, who heads the National Economic Council, had called Sen. Dodd and asked him to reconsider. [emphasis Jane's]

Glenzilla:

Jane's post documents this sequence of events without any possibility for doubt. The debate that took place over limits on executive compensation for bailout-receiving companies only occurred six weeks ago, and it is all documented in the public press. Dodd was the one fighting against the White House in order to apply the prohibition to all bonus payments, i.e., to make the compensation limits retroactive as well as prospective. As but one crystal-clear example that proves this, here is a February 14 article from the Wall St. Journal on the debate over executive compensation limits:

The most stringent pay restriction bars any company receiving funds from paying top earners bonuses equal to more than one-third of their total annual compensation. That could severely crimp pay packages at big banks, where top officials commonly get relatively modest salaries but often huge bonuses.

As word spread Friday about the new and retroactive limit -- inserted by Democratic Sen. Christopher Dodd of Connecticut -- so did consternation on Wall Street and in the Obama administration, which opposed it.

Can that be any clearer? It was Obama officials, not Dodd, who demanded that already-vested bonus payments be exempted. And it was Dodd, not Obama officials, who wanted the prohibition applied to all compensation agreements, past and future. The provision which shielded already-promised bonus payments from the executive compensation limits ended up being inserted at the insistence of Geithner. [emphasis Glenn's]

I'll tell you what change I can believe in; the change of employees, starting with Geithner and Summers.

Obama better clean house and keep promises or we're looking at a one-term-wonder. It's this kind of shit that Republicans eat with a goddamned spoon and it's not neccessary. Obama's administration SHOULD have said "Dodd was right, and we're inserting that language going forward." Because THAT'S THE EXACT POSITION THEY FIND THEMSELVES IN!

Why they find it necessary to pitch Dodd overboard amazes me. Connecticut ALREADY has 1 Rethug Senator named Joe LIEberman; do they want to hand CT 2 fucking senate seats?

Between the lie factor and the politics I am just amazed at the stupidity. And not a little concerned about how it's going to continue in the future. And despite all this bonus hoo-ha, Obama is still going to be painted as a SOCIALIST!

HA! HAHA! HAHAHAHA!

So, some cheery Socialist Music For Us Comrades:



TAGS: Lies!, Christopher Dodd, Change I can't Believe in, Geithner Must Go,

Missing the Point

By A Country Mile or Two

Congratulations to John C. Eastman of Chapman University Law School, the first recipient of the prestigious Just Not Getting It Award. The evidence in favor of his candidacy come from this New York Times Article about the John Yoo memos purporting to justify torture and war crimes during the Bush administration (or , to be more accurate, the Bush crime spree.)

The calls to begin a criminal investigation of Bush legal team members have so far been ignored by the new attorney general, Eric H. Holder Jr. But the demands reflect a widely shared view that the Bush administration lawyers played an outsize role in the disputed counter-terrorism policies.

Mr. Yoo and other top lawyers met as a “war council” to consider how far Mr. Bush could go. In addition to asserting that he could bypass the Geneva Conventions — war crimes treaties protecting detainees — the lawyers said the president’s wartime powers trumped many other legal limits. Their secret memorandums cleared the way for aggressive policies — like waterboarding and other harsh interrogation techniques — all but ensuring that neither policy makers nor operatives could face criminal prosecution for actions blessed as legal.

But John C. Eastman, the dean of the Chapman University law school and a friend of Mr. Yoo who invited him to teach there this semester, argued that it was deeply unfair to single out the Bush lawyers for the advice they gave under intense pressure after the 2001 terrorist attacks. “It’s unfortunate, and quite frankly it’s dangerous,” because it could make officials risk averse, Mr. Eastman said, blaming partisan politics.

As a professor of law Mr. Eastman should at least be aware that the entire reason for making things illegal, and for attaching penalties to those (including, and I would say especially, officials) who would consider taking illegal actions is to ENSURE that they be risk averse. Otherwise you could do away with armed guards at banks and just leave the money in sacks outside the front door. So that part of the statement alone is enough to get him on a very short list of complete idiots who Just Don't Get It.

But the blaming partisan politics part of it really seals the deal, because what he's really saying is that all Republican politics is by its nature non-partisan and all Democratic politics is equally partisan by nature. And I think the voters have demonstrated that they have seen through that little charade. They are clamoring for MORE partisanship from the Democrats, and with it more accountability. One reason that two parties is better than one is that with two at least you have some illusion of choice. Another is that the rivalry between two gangs of thieves will supposedly create a barrier against the worst excesses.

So, Dean Eastman, you may take your award and go stand with Coulter, Hannity, Beck and the growing crowd of the irrelevant people over there who Don't Deserve To Be Listened To Anymore. Hopefully someone will get around to throwing a big tarp over the lot of you so we don't have to look at you either.

TAGS: John Yoo, Torture Memos, Geneva Convention, GOP Apologists

My Financial Back Pages

The News Behind the Headlines

The big headlines these days are about the continuing effort to forestall another Great Depression, and this week's news on that front is of course the DJIA falling below 8,000, to a level that it hasn't seen since 1997. Analysts are predictably predicting that the market will soon recover sharply as investors take advantage of the record low prices. Investment analysts are of course under a certain obligation to interpret all news in as upbeat a manner as possible. This is because their predictions have a measurable effect on the market's performance, due to psychological factors - more investor confidence equals a better market. I'm not an analyst, so I see things a little differently. In fact, I tend to see high finance as being distinguishable from piracy only in the fact that the former avoids the necessity of a ship and crew. The question I want to ask is; "which investors are in position to take the greatest advantage?"

The really important economic stories often don't make the headlines, because they're subtle, and it takes some thought to see their significance. Here's one aspect of the current economic crisis that hardly anybody seems to want to talk about - I wonder why? From a diary by the Coffin Brothers at Kitco.com (a gold/metals stock tracker and currency trader):

" While western banks continue to undergo a period of deleveraging and retrenchment, Chinese firms are making use of the oldest form of leverage – available cash in a down market. That has come to the aid of Rio Tinto (RTP-L) which went into debt to purchase Alcan (Aluminum Company of Canada) in 2007. Chinalco (Aluminum Company of China) has agreed to take various minority stakes in aluminum, copper and iron producing Rio subsidiaries for US $12.3 billion, which is a reasonable sum for interests that earned $2.2 billion in 2008. Added to this are $7.2 billion of convertible bond purchases, which at significantly above market strike prices would bring Chinalco’s stake in Rio Tinto Group to 18%. "

It's no coincidence that the Chinese ideogram for crisis = danger + opportunity. Having used their cheap workforce to accumulate cash while the US and other countries have accumulated debt, the Chinese are now very smartly using the cash to take advantage of the crisis caused by the debt. One could call this economic warfare with little fear of contradiction except for one thing. US corporations like WalMart have been the prime movers of the trade arrangements that have undermined the US economy, and US consumers have happily maxed out their credit cards for the unbelievably cheap tube socks and wide screen TVs that have been dangled as bait. Once feared as a communist threat to the US, the Chinese now appear to be a much greater threat as capitalists.

The background for this depressing news cycle has been the CPAC conference featuring the bloated bloviations of the newly anointed Republican heir apparent Rush Limbaugh. One could hardly imagine that the conservative movement could retreat even further from reality than they already were, but they seem to have done so yet again. While choosing to blithely ignore the massive transfer of wealth upward that has been going on at an accelerated rate for nearly three decades, they express a shocked outrage at the slightest attempt to transfer the least bit of it back to the middle class. Because stealing from the middle class to give to the rich is The American Way™, don'tcha know, but turn it around and it becomes Class Warfare. If they are to be believed, Socialism, The Red Menace has come to America's shores personified as President Barack Obama.

What should be tragically obvious by now (but again, what nobody's even daring to talk about) is that mechanisms that transferred wealth from the American middle class to the ultra-rich didn't bother to ensure that they were transferred to America's ultra-rich. The most benefit went to Middle East oil sheiks and, of course, the Chinese. The scope of this economic treason is almost unimaginable, only measurable by the TRILLIONS of dollars being spent to try to deal with its consequences.

No matter how well-intentioned Barack Obama might be, he'll never be able to transfer that wealth back where it belongs. It's gone forever. His only option is to borrow even more foreign money to try to solve a problem that was created by the US government (and its people) borrowing too much foreign money. And to my mind borrowing money to try and solve a problem that was created to begin with by borrowing too much money has a very low probability of success.

"We can't solve problems by using the same kind of thinking
we used when we created them."
-- Albert Einstein --

A couple of years ago one of my first ever blog posts sought to compare the modern system of corporate feudalism with its eighteenth century counterpart - the system that patriots' blood was shed to overthrow in the American Revolution.

One distinction differentiates the modern corporate baron from the Peers of Olde England in the 18th century. The peers' capital was tied up in land, and could not conveniently be transferred to another country, whether that be a bank in the Caymans or a factory on the low-wage island of Saipan. This forced a noblesse oblige on the ruling class that is not in effect in this brave new world.

Project for the OLD American century posted this link today;

Cheneys Betting on Bad News
(The linked article deals with the fact that the Cheneys' investment portfolio includes instruments that pay off if the US dollar loses value - which, guess what, it DID some time after I wrote my post. As Condi would say, "who could have predicted that?")

The 'nobility' of old could not act as Cheney and his cohorts have, against the interests of their own country, for to do so would have been to act against their own interests. It has taken over two centuries, but the American system has finally achieved the worst of all possible worlds.

In the system we have seen emerge in America going back all the way to the Robber Barons there is no noblesse, no oblige, just a sense of entitlement without accountability that the Marquis de Sade himself would have envied. The conservative movement, in America and around the world, is no better than a gang of criminals. Should they continue to evade justice the system itself must be assumed to be complicit and in league. The only solution then is not political, but revolutionary. And I should warn you, the power structure that must be overthrown isn't confined to any one nation or even continent. This is a global problem that will require a global revolution.

The rhetorical question I asked in the first paragraph has some unexpected and unsettling implications. If you listen to Sparky and his gang, a large injection of foreign capital into the stock market will be a good thing. The market will go up, and the investment class (that diminishing segment of the population not struggling just to make their payments) will earn a profit. Confidence will rise. But the long term consequences are profound. As a greater proportion of American business is foreign owned, it becomes that much harder to pay back the enormous debt, and even if you do get to pay back some, it only gives China and other foreign interests more money to buy up more American business. The US now owes its soul to the company store, and that company's head office is in Beijing.

Under the current system this is a no-win scenario. Only by changing the system can there be any hope for a solution.

And for no better reason than that my title gives me an opening, I hereby present one of my favorite Bob Dylan songs - quite clear, no doubt, somehow.

MY BACK PAGES

UPDATE: Ellen Brown just came out with an article proposing what steps might be taken to get out of the fatal death spiral of debt. Not being a professional economist, Ms. Brown is in the habit of a) thinking out of the box and b) dealing with models that have a more practical than theoretical basis. It should come as no surprise considering what I've written above that her potential solution is NOT about saving the old system (and the privileged parasites who cling to it) but creating a whole new system where the central banks are owned and controlled by the government.


TAGS: Economic Crisis, CorporateFeudalism, Financial Piracy, National Debt