AMERICAN POLITICS:

OBAMA BE DAMNED:

BREAKING THE CHAINS OF ILLUSION.

POLITICAL HUMOUR:

WAR IN IRAQ ENDS AS US FORCES LEAVE UNDER COVER OF DARKNESS:

HUMOUR:

YES WE CAN ?

HUMOUR:

TIME TO QUIT ?

HUMOUR:

SCENES FROM THE AMERICAN MEDIA:

HUMOUR:

OBAMA TRIES TO REVIVE GULF TOURIST TRADE:

HUMOUR:

WAITING FOR THE RECOVERY WAVE:

HUMOUR:

THE PASSING OF BLAME:

HUMOUR:

CAN "WHAT" ?:

HUMOUR:

OBAMA'S PLAN B:

AMERICAN POLITICS:

HEALTH CARE BILL- LESS THAN YOU THINK:

The all-too-debated health care bill in the USA has finally been passed. While the sound and fury still hasn't abated it may be time to begin to take stock about what the bill actually contains. Both sides of the ruckus down USA way have magnified the legislation way beyond its actual importance. To the left it was something akin to the Second Coming, to the right it was instead more like the Antichrist. Out here in the civilized world the general feeling was that it was insufficient and of Byzantine complexity.

The following opinion piece comes from the Trial By Fire blog. It came to Molly's attention via the LibCom website.

APAPAPAPAPAPAP
Whats in the Health Care Bill
Below is the first of a two-part series on the Democrats bill, HR 3590 – the health care reforms.



Health care reform in the United States has finally arrived.

After years of debate, President Barack Obama signed HR 3590 into law on March 23rd, 2010, heralding a new chapter in health care for millions of Americans.

The Democrats are ecstatic over the win. But is this really a victory for the American working class?

Lets take a look.

Health Care Reform’s History:

Health care reform, or “Obamacare” as it’s sometimes called, has its roots in Hilary Clinton’s own health care battle of the 1990’s. But it may surprise you exactly where in that debate its major ideas come from.

No, it wasn’t Hilary’s legislative proposals which inspired Obama’s reformation – it was in fact Republican proposals which formed Obama’s health care overhaul. Specifically, it was a health care strategy first articulated by the conservative think tank the Heritage Foundation. You can still read the original plans here and here.

Notably, amongst its original supporters were Richard Nixon, George Bush senior and even Mitt Romney.

Amongst their proposals were the creation of an “individual mandate,” and the founding of “insurance exchanges” – both of which are now pillars of the Democrats’ reforms; but originally, the republicans supported them as good “free market” alternatives to government entitlement programs like Medicare.

This is precisely why Obamacare passed where numerous other health reform efforts failed. It was a good, free market option that CEO’s could get behind. “Government is,” after all “the shadow cast by big business over society,” as John Dewey once remarked.

That being said, lets take a closer look at the contours of this new silhouette on the next page.

&&& PART TWO &&&

Whats in the Bill?

The bills effects on the health care industry are mixed. Certainly, there are some positives.

On the one hand, it restricts some of the worst practices of the insurance industry – such as refusing to cover children with preexisting conditions.
On the other hand, it leaves health care under the control of the same corporations that got us into this mess.

Below we will begin to address the biggest changes the new reform brings to our system of health care.

1. The individual mandate: Amongst the reforms, the democrats have introduced an “individual mandate,” meaning individuals who do not purchase health insurance will be fined by the federal government. The fines will be introduced in 2014, and will grow until 2016, when they will total $695 a year, or 2.5% of personal income (whichever is greater).

Because of this, Democrats have touted the myth that this bill will “provide health care to 31 million people who are currently uninsured.”

In reality, these reforms don’t actually “provide” us with anything. It only punishes those who cannot provide it for themselves. But even then, the incentive to buy insurance won’t be great enough to cover millions of Americans: according to a report put out by the Congressional Budget Office, the total number of uninsured Americans in 2019 without reform is still expected to hit 24 million.

The individual mandate is expected to be a magnificent profit maker for the insurance industry. And of course it will be – it will force tens of millions of Americans into consuming the insurance industry’s goods.

But the bonanza of new profits doesn’t end there. Big Pharmaceutical companies are laughing their way to the bank as well, specifically Biotech companies.

Tacked onto the health care reform bill was a guarantee of market exclusivity for Biotech drugs for the next decade. In effect, less expensive, generic versions of biotech drugs are forbidden from being sold in the U.S. for the next 12 years, giving them a complete monopoly in their markets.

2. Cost control: Undoubtedly, one of health care reforms biggest selling points was that it would bring down the cost of health care.

So will this bill bring down costs? Yes and no. Certainly in some cases, costs will come down.

But overall, the costs of health care will remain astronomical.

Whereas in 2009 health care costs accounted for about 17% of our GDP, costs with the bill are expected to rise a tenth of a point higher than they would have without the reforms (20.8% of GDP in 2019 without reform, 20.9% with, according to the Center for Medicare and Medicaid Services).

Jane Hamsher of the Firedoglake points out that premiums will not come down significantly for most Americans either, and certainly will not decrease as much as Obama had promised ($2,500 a year). In fact, families shopping for insurance on their own are projected to spend nearly $2,000 more on insurance in 2016 than they would have without the reform, achieving exactly the opposite of what the bill claims it would.

Further projections for working class Americans are equally dismal. Jane Hamsher writes:

“A family of four making $66,370 will be forced to pay $5,243 per year for insurance. After basic necessities, this leaves them with $8,307 in discretionary income — out of which they would have to cover clothing, credit card and other debt, child care and education costs, in addition to $5,882 in annual out-of-pocket medical expenses for which families will be responsible.”

In short, the lower costs we were promised in the run up to these reforms are seriously lacking.

3. Insurance exchanges: State governments will create what are called “exchanges” to facilitate the purchase of health insurance, with the aid of federal start-up funds. Individual states may choose not to open an exchange, in which case the federal government may open one for them.

The exchanges would offer a range of private insurance options for qualified consumers to pick through, rated on a scale from cheapest to most expensive – or from a “platinum plan” to a “bronze plan.”

In theory, insurance policies on the exchange will be cheaper and of better quality than their counterparts in the private market, because the exchanges can offer larger customer pools, giving consumers more bargaining power.

But in practice, the results haven’t been quite so good.

In April of 2006, former Massachusetts governor Mitt Romney signed into law chapter 58, the forerunner of HR 3590. The bill would be the first in the U.S. to test out the ideas of both an individual mandate and a health care exchange.

Although the reform was supposed to lower costs to bearable levels for the working families of Massachusetts, a study conducted by the state found that 21% of their residents still went without medical treatment because they couldn’t afford it. This includes a stunning 12% of children.

And additional 18% are covered by insurance, but can’t afford to use it.

And of course they can’t. Since the reforms, the cost of insurance has substantially increased in Massachusetts, both in the private sector and in public spending.

In the private sector, the states’ Attorney General found in her research that this was largely because of disparities in bargaining power between consumers and the insurance companies – or, simply put, because insurance companies had too much power over consumers.

Publicly, costs have grown at an average of $88 million a year. This has been due, at least in part, to the reforms failure to address emergency room visits – a central concern of all health care reform efforts.

Although reformers predicted an astounding decrease of 75% in emergency room visits, in the first two years of the reform alone, it’s turned out that visits have increased by over 17%.

INTERNATIONAL HUMAN RIGHTS-COLOMBIA:

DEATH THREATS AGAINST COLOMBIAN RIGHTS ACTIVIST:

The following story and appeal for solidarity is from the School of the America's Watch, and it is for solidarity is pressuring the USA to cease its support for the murderous regime in place in Colombia.

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Death Threat against Martha Giraldo:

Martha Giraldo, a Colombian human rights activist and a featured speaker at the 2009 November vigil to close the SOA (video), was subjected to a chilling death threat earlier this week in Cali, Colombia. Two SUVs with tinted windows -- the vehicle of choice of Colombian assassins -- tried to run her car off of the road. As they pulled up beside her, they pulled out guns and pointed them at her. They never fired a shot, but the message was clear: we can kill you, and if you don't keep quiet, we will.

Martha Giraldo and her family continue to tell the truth about how the Colombian army killed her father, a campesino, and dressed him up in guerrilla clothing to make the murder look like a "combat kill." Colombian human rights organizations report that extrajudicial executions of civilians by the Colombian Armed Forces is on the rise. Please take two minutes out of your day today to call one of the Colombia specialists at the State Department, Terry Steers-Gonzalez (202-647-4173) or Susan Sanford (202-647-3142). Click here for the message Martha would like you to communicate.

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A Letter Too:

The School of the America's Watch is also asking people to send the following letter to the Obama Administration. Please go to This Link to send the following letter to 'Mr Change' and his boys and girls.

♣♣♣♣♣♣♣♣♣♣♣♣♣♣♣

The recent death threat against Martha Giraldo, who had spoken out about her father's murder in Colombia, illustrates once more the dire situation that people who are speaking up for justice are facing in Colombia.

I am urging you to stand with people like Martha Giraldo, to stand for justice in Colombia and to abandon the failed U.S. policy of relying on the repressive Colombian military to protect U.S. interests. I am urging you to end U.S. military bases in Latin America, to stop U.S. military aid to Colombia and to issue an executive order to shut down the School of the Americas, now known as the Western Hemisphere Institute for Security Cooperation (SOA/ WHINSEC)
cc: Ambassador Brownfield
Sincerely,

AMERICAN POLITICS:

OBAMA MISSES THE GREEN:

It's been almost one year on, and the sheen is starting to fade from the 'Obama Golden Boy' belief. the man receives an embarrassing 'Nobel Peace Prize' while overseeing not one but two wars. Nothing much happens domestically except a continuation of the massive bailouts to corporate America begun under the previous Administration. The only serious domestic reform-health care ie joining the civilized world- is gutted in the service of the usual special interests while the President sits Buddha-like as the dead is done.

If it was not apparent before it should be apparent now that America's political culture suffers from an illness that goes beyond the left/right divide. The illness is that image has become all, and that there is no substance in the pronouncements of pretty well any politician. Certainly other countries also suffer from this disease, but the USA has travelled furthest along the road. Obama is basically a triumph of image over substance. To be quite frank he said very little in terms of real policy while running for the post of Emperor, aside from the promise to close Guantanamo which has yet to be fulfilled. If it is it means merely transferring the whole atrocity, lock stock and barrel, to Illinois. People on the "progressive side" of the political divide were, more often than not (unless they had an 'ideological halter' such as anarchism), swept up in the romance of Obama's campaign, especially as the alternative was so unappealing.

Now the gloss has fallen off, and it will continue to fall in the years to come. Here is an article written by Naomi Klein for The Nation about another aspect of the Obama failure ie how his "green rhetoric" has not risen to the point of deeds.

OOOOOOOOOOOOOOO

For Obama, No Opportunity Too Big To Blow:
posted by Naomi Klein

Contrary to countless reports, the debacle in Copenhagen was not everyone's fault. It did not happen because human beings are incapable of agreeing, or are inherently self-destructive. Nor was it all was China's fault, or the fault of the hapless UN.

There's plenty of blame to go around, but there was one country that possessed unique power to change the game. It didn't use it. If Barack Obama had come to Copenhagen with a transformative and inspiring commitment to getting the U.S. economy off fossil fuels, all the other major emitters would have stepped up. The EU, Japan, China and India had all indicated that they were willing to increase their levels of commitment, but only if the U.S. took the lead.

Instead of leading, Obama arrived with embarrassingly low targets and the heavy emitters of the world took their cue from him.

(The "deal" that was ultimately rammed through was nothing more than a grubby pact between the world's biggest emitters: I'll pretend that you are doing something about climate change if you pretend that I am too. Deal? Deal.)

I understand all the arguments about not promising what he can't deliver, about the dysfunction of the U.S. Senate, about the art of the possible. But spare me the lecture about how little power poor Obama has. No President since FDR has been handed as many opportunities to transform the U.S. into something that doesn't threaten the stability of life on this planet. He has refused to use each and every one of them. Let's look at the big three.

Blown Opportunity Number 1:

The Stimulus Package

When Obama came to office he had a free hand and a blank check to design a spending package to stimulate the economy. He could have used that power to fashion what many were calling a "Green New Deal" -- to build the best public transit systems and smart grids in the world. Instead, he experimented disastrously with reaching across the aisle to Republicans, low-balling the size of the stimulus and blowing much of it on tax cuts. Sure, he spent some money on weatherization, but public transit was inexplicably short changed while highways that perpetuate car culture won big.
Blown Opportunity Number 2:

The Auto Bailouts

Speaking of the car culture, when Obama took office he also found himself in charge of two of the big three automakers, and all of the emissions for which they are responsible. A visionary leader committed to the fight against climate chaos would obviously have used that power to dramatically reengineer the failing industry so that its factories could build the infrastructure of the green economy the world desperately needs. Instead Obama saw his role as uninspiring down-sizer in chief, leaving the fundamentals of the industry unchanged.
Blown Opportunity Number 3:

The Bank Bailouts

Obama, it's worth remembering, also came to office with the big banks on their knees -- it took real effort not to nationalize them. Once again, if Obama had dared to use the power that was handed to him by history, he could have mandated the banks to provide the loans for factories to be retrofitted and new green infrastructure to be built. Instead he declared that the government shouldn't tell the failed banks how to run their businesses. Green businesses report that it's harder than ever to get a loan.

Imagine if these three huge economic engines -- the banks, the auto companies, the stimulus bill -- had been harnessed to a common green vision. If that had happened, demand for a complementary energy bill would have been part of a coherent transformative agenda.

Whether the bill had passed or not, by the time Copenhagen had rolled around, the U.S. would already have been well on its way to dramatically cutting emissions, poised to inspire, rather than disappoint, the rest of the world.

There are very few U.S. Presidents who have squandered as many once-in-a-generation opportunities as Barack Obama. More than anyone else, the Copenhagen failure belongs to him.

Research support for Naomi Klein's reporting from Copenhagen was provided by the Investigative Fund at The Nation Institute.

OOOOOOOOOOOOOO

MOLLY NOTE:

Klein is, of course, a 'left social democrat' with all the illusions that follow from that position. Like most people in her ideological camp she makes genuflections to "self-managed socialism" while, at the same time, harbouring illusions about both the power of and the realism of massive state action to "direct this grassroots democracy". All that being said, her criticisms of the Obama Administration have just as much force as if they were advanced from a more libertarian position. In other words, all that she has said is true. It's just that I, as an anarchist, am not surprised at the choices that Obama has made. A lot of "the left" feels betrayed. That is unrealistic. The Emperor is, after all, the Emperor, and it is not unexpected that he continues policies that benefit the ruling strata of the Empire. It would be surprising if the converse was the case.

INTERNATIONAL ANARCHIST MOVEMENT-POLAND:

PROTEST AGAINST US VP VISIT TO POLAND:

Ah, the joys of 'Imperialism-Lite'. The new Democratic Administration in the USA is gradually creeping up to its first year in power, and very little has changed in terms of US policy towards the rest of the world. Yeah, President Obama has been awarded the Nobel Peace Prize despite the fact of having accomplished nothing. America's two foreign wars continue and will do so for the foreseeable future. The immovable object of Israeli/Palestinian peace remains just as unachievable as it has been for decades. No doubt others have been awarded the Nobel Peace Prize for empty words, but this may be most glaringly empty award in history. Meanwhile the one substantial change in US policy ie backing down from an anti-missile system in eastern Europe may not be as substantial as its appears, as the following story hints at.

The following came to Molly's attention via the A-Infos website. It is originally from the Polish anarchist news site Centrum Informacji Anarchistycznej.

@@@@@@@@@@

Poland, NO TO PATRIOTS! Anarchist Antimilitarist Action During Biden's Visit to Warsaw:

On Oct. 21, US Vice-President Joe Biden visited Poland as part of a four-day visit to Central Europe and the Balkans meant to seal various sorts of military deals in the region. The Campaign Against Militarism protested during his visit with the Prime Minister.

---- Before the protest, one activist accidentally met Biden on the way to an announced trip to the monument of the Heros of the Warsaw Ghetto and came within arms reach of the VP with a banner reading "No Patriot Missiles". Poland is trying desperately to obtain Patriot Missiles. Previously the US had offered its ass-licking ally only training versions of the missiles, without any real warheads.

---- Upon arrival at the Prime Minister's Office, the police, secret service, etc. etc., tried to detain the first protester and claim that there could be no protest.

The person naturally refused to be led to the police wagon and journalists became interested in this action. When more people arrived, the police tried parking police vans in front of the protesters, which, although a decidedly modest group of people, were apparently not to be shown to the US Vice President or the media. The police also tried to block the banner, but one person jumped out around them with another banner. All the time the police were harassing and trying to block the protesters, which pissed one journalist off so much that he called the police headquarters complaining. Journalists also had reasons to be pissed off: the government announced that yes, they can go to a "press conference" with Mr. Biden - but nobody would be allowed to ask any questions.

And there are lots of questions to be asked. Nobody knows much about the SM3 IB, the version of anti-ballistic missile which Poland may receive sometime after 2018 since it is still in testing. Nobody knows about the warheads on the ten Patriot missiles Poland is supposed to get (at a cost of 300 million dollars for just the missiles) or what exactly the US soldiers at the military base scheduled to open next year in Poland really will be doing. And nobody knows for sure what America's missile defense plans in the region really are.

Eventually the cops had to leave the protesters alone.

In the meanwhile, the case of some people arrested in Slupsk in March 2008 after a demonstration against the planned missile shield is finally in court. So far, people are only denied the charges; witnesses will be heard next week.

Leaflet: No to Patriots!

The Campaign Against Militarism strongly protests against the location of Patriot and SM3 IB rockets in Poland. All of these rockets, regardless of their kind, are instruments of war and imperialist politics. War is killing in the interest of governments, power elites and business. In wars the ruling classes always win, and normal people always lose.

The military policy of the USA has for a long time rested on the promotion of the arms industry, to profit corporations. Wars are conducted ensure corporate profit, foreign governments are overthrown for the same reasons. The Polish government, supporting the military adventures of the ISA like the wars in Afghanistan or Iraq often says outright that they are in it for the profit (for example for contracts in Iraq), or for strengthening their relations with the USA. We oppose Poland's participation in these criminal campaigns,

No to Polish and American Imperialism!

No to Pro-War Manipulation!

No War for Profit!

No More Hate Wars!

Campaign Against Militarism

http://cia.bzzz.net/no_to_patriots_antimilitarist_action_during_bidens_visit_to_warsaw

AMERICAN POLITICS:

STOP THE KEN LEWIS GOLDEN HANDSHAKE:

Some of us can only dream of a just a little goodby present after screwing things up. ken Lewis of the Bank of America will get a $53.3 million pension for his role in producing the present financial crisis. The following appeal from the Service Employees International Union asks you to add your voice against this atrocity.

APAPAPAPAPAPAP
Stop the Ken Lewis Bailout:‏
Ken Lewis is on his way out at Bank of America. But not without one more parting gift from all of us.

Despite helping to drive us into one of the worst financial meltdowns in history, it's been revealed that Bank of America plans to send Ken Lewis out the door with a $53.3 million pension on top of the hundreds of millions he's already made during his failed tenure as CEO.
We're the ones paying billions in tax dollars to bail out Bank of America for the mistakes Ken Lewis made. We shouldn't let him take one more penny of our hard-earned money.

The Obama administration has appointed a 'pay czar,' Kenneth Feinberg, to make sure our tax dollars aren't being used to pay outrageous earnings to bank CEOs.
Will you tell the pay czar to stop payment on the Ken Lewis bailout? http://seiu.org/stoppayment

SEIU Secretary Treasurer Anna Burger will be delivering a letter to Mr. Feinberg, asking him to withhold Lewis' absurd compensation until Bank of America agrees to stop hurting our communities with reckless financial practices. But we want you, as a taxpayer, to sign on to the letter before we deliver it to Mr. Feinberg: http://seiu.org/stoppayment

The changes we're asking for are simple - and they're necessary to stop greedy banks from driving us toward another financial meltdown. Help make sure Ken Lewis doesn't get another dime of our money until Bank of America cleans up its act.

Sign on to Anna Burger's letter at http://seiu.org/stoppayment

Thanks,

John VanDeventer

SEIU.org

P.S. It's not just Ken Lewis. CEOs at all the major banks are continuing to rake in millions, but they've done nothing to fix the problems that got us into this mess. Help us put them all on notice by signing the letter to pay czar Kenneth Feinberg.

MOLLY NOTES

The actions of CEO Ken Lewis are actually quite typical, and they repeprsesent an huge undergound iceberg of managerial control in presumably 'capitalist' companies where the managers can undercut both the workers and the stockholders, who are too dispersed to control the managers. Win or loose in some supposedly 'competitive' system where the rules are usually jeririgged to produce less competition rather than more, the managers exit the companies they have ruined with extraordinarily high payment for 'failure'. Nothing could be so demonstrative of how far the USA is aways from an actual "free market" (assuming such a thing could work. The "socialism" that right wing Americans like to scream about has been in place for many decades now. Its purpose is to provide social security 'on a grant scale' to those who have wealth in society while putting every roadblock in the path of the poor and working classes.

Here's the letter from the SEIU to Obama "pay czar" asking him to block Ken Lewis' bailout, You can send the following letter via THIS LINK. Not that the Obama administration is very much adverse to making awards for failure, but the more public protest the less than can carrying out this looting of the public treasury.

Here's the protest letter

ALALALALALALAL

Dear Mr. Feinberg:

On behalf of the 2.1 million members of the Service Employees International Union (SEIU), I ask that you take immediate action on the multimillion-dollar retirement package being offered to one of the chief architects of the most severe economic crisis since the Great Depression, Bank of America CEO Ken Lewis.

News reports indicate that Mr. Lewis will be leaving the bank with $126 million—including a $53.3 million pension. We do not yet know what kind of additional bonus money will be paid out upon Lewis’ departure.

At the same time, SEIU members and Americans across the country continue to lose their homes, their jobs and their retirement savings.

Bank of America, under the management of Lewis, has restricted lending to small businesses and consumers, continues to rake in billions in fees and high interest charges from their customers, and has been slow to modify mortgages and save homeowners from foreclosure. Shareholders have seen the value of their holdings plummet and Americans have seen their pensions and 401(k)s evaporate.

The housing crisis created by Bank of America and other banks has created severe budget crises for state and local governments—and even though they continue to receive taxpayer support, Bank of America and other large banks’ lending decisions have forced states and cities to lay-off workers and cut critical public services.

Personal bankers, tellers, credit card call center workers, and other frontline Bank of America workers have revealed to the press compensation and quotas systems built around selling products consumers do not need or cannot afford. These quotas incentivized workers them to engage in the predatory practices that led to the mortgage crisis and the overabundance of credit card debt.

In addition, Bank of America continues to spend millions lobbying against pro-working family legislation. Together, Bank of America and Merrill Lynch spent more than $12 million on lobbying in 2008. Just three days after receiving $25 billion in federal bailout funds, Bank of America held a conference call with clients to organize opposition to the Employee Free Choice Act and raise funds for those efforts. The bank opposes President Obama's financial reform efforts and lobbied against bills, such as the Credit Cardholders Bill of Rights and the Foreclosure Prevention Act of 2008.

Beyond the damage done to our economy, Bank of America and Ken Lewis continue to face investigations and potential legal action for misleading shareholders about commitments to pay Merrill Lynch executives up to $5.8 billion in bonuses during Bank of America’s purchase of Merrill last year. Shareholders have already soundly rejected the failed practices of Lewis. In an unprecedented show of no confidence earlier this year, shareholders ousted Lewis as Chair of the Board. The action followed demands of nearly 100,000 taxpayers from across the country for shareholders to fire Lewis.

Taxpayers have already provided nearly $200 billion in bailouts and backstops to Bank of America. This enormous public investment entitles taxpayers to have a say in the bank’s executive compensation practices.

We request that Ken Lewis and other executives at banks supported by taxpayer dollars be prevented from receiving any retirement or severance package until the banks commit to:

* Stopping foreclosures to save Americans’ homes and state and local budgets;

* Providing the same affordable loans to state and local governments that the banks receive from the federal government;

* Restoring small business lending to save jobs and tax revenue;

* Lowering interest rates on consumer credit cards and stopping charging abusive overdraft fees that take billions out of consumers’ pockets; and

* Allowing employees to negotiate compensation practices so they are no longer directly tied to quotas and unreasonable sales goals, targeting consumers with unnecessary or harmful products, and amassing consumer debt.

According to a report released by SEIU[1], once all crisis-related programs are factored, taxpayers could be on the hook for up to $17.8 trillion to rescue the big banks. A year has passed since our economic crash and since then, banks have refused to aid in the recovery of our economy. Instead, they continue to engage in the same failed policies that created the crisis and engorge themselves with profits and bonuses.

The American people are counting on you to reform the reckless culture of Wall Street that allows bank executives to drive our economy into the ground and walk away with millions. Immediate action by your office will set a precedent that no bank executive will receive compensation packages until they put policies in place to create jobs, allow homeowners to retain their homes and support state and local governments.

Sincerely,

Anna Burger

International Secretary-Treasurer

Service Employees International Union

[your name]

[1] The Trillion Dollar Bank Job: How Wall Street and the Big Banks Are Holding Up America’s Economic Recovery, SEIU, September 2009.

AMERICAN POLITICS:

CIA TORTURE REPORT-DEEPER INVESTIGATION NEEDED:

The long awaited- and I do mean long awaited; it was written in 2004 under the Bush Administration and kept under wraps- CIA Inspector General's report on US interrogation techniques (aka torture) was released today. You can read more about this report and the American government's co-announcement of appointing a special prosecutor to investigate HERE at the BBC and HERE at the English news section of Al Jazeera. Many are already criticizing both the report and the US Administration's actions as being insufficient. Amongst these is the Human Rights First organization. Here is their story and appeal.

APAPAPAPAPAPAP
New evidence on torture: call for an investigation:‏
From:
Devon Chaffee,

Human Rights First

(Communications@HumanRightsFirst.org )
New report on torture: there are still unanswered questions.
Sign our petition supporting an independent inquiry to get the full truth.
The wheels of justice...are creaking.

Today the Obama Administration released new excerpts from a report that expose more evidence of torture. How many more reports do we need before we make one clean, thorough, and independent investigation that gets to the bottom of not just what happened – but how it happened, and who is responsible?
Join our efforts to demand answers. Sign our petition.

The 2004 CIA Inspector General’s report released today details harsh interrogation techniques used from September 2001 to October 2003. This document underlines the need to conduct both a criminal investigation – as part of the preliminary review announced today by Attorney General Eric Holder – and an independent review of how torture and abuse were authorized and implemented.

The release of these documents is good news, but it leaves many questions unanswered. We need those questions answered.

Sign our petition supporting an independent commission empowered to get to the bottom of how torture happened.
Sincerely,

Devon Chaffee

Advocacy Counsel

APAPAPAPAPAPAP

THE PETITION:

Please go to THIS LINK to sign the following petition.

APAPAPAPAPAPAP

We call on the President of the United States to establish an independent, non-partisan commission to examine and report publicly on torture and cruel, inhuman, and degrading treatment of detainees in the period since September 11, 2001. The commission, comparable in stature to the 9/11 Commission, should look into the facts and circumstances of such abuses, report on lessons learned, and recommend measures that would prevent any future abuses. We believe that the commission is necessary to reaffirm America's commitment to the Constitution, international treaty obligations, and human rights. The report issued by the commission will strengthen U.S. national security and help to re-establish America's standing in the world.

INTERNATIONAL POLITICS-HONDURAS:

BUT IT WAS ONLY A LITTLE LIE:

Down America way the hangover of unrealized dreams fed by unrealistic expectations over Saint Obama has only slightly begun to take hold. No doubt there are many head and stomach pains to come. Running the greatest empire that the world has ever see is, after all, "running the greatest empire the world has ever see". One should expect very little of a new emperor except to end the most egregious practices of their predecessor. Other than that business will go as usual.

In response to the recent military coup in Honduras the American administration made several "ringing declarations". One of these was to cut off all military aid to the government of the coup. Of course it didn't happen. The following article from the School of the Americas Watch tells how business as usual continues over at Fort Benning (the torture school dedicated to training army officers from Latin America the best ways to serve their American masters) with the Honduran "students" learning all they have to know with no interruptions. The link to the original article from the National Catholic Reporter lays bare even more examples from within Honduras itself.

The substance of the actions of the Obama administration certainly is less than its rhetoric. This seems to be a pattern with Obama. Every time he is asked a question of substance he slowly repeats a selection of abstract platitudes. One wonders whether his hesitations (very rarely punctuated by the required "umms" of normal speech) are actually a rhetorical devise designed to give the appearance of "thoughtfulness" or whether they are really pauses necessary to form words that are void of all reference to the real world. I'm beginning to think the latter. Obama is, of course, a politician. As such he is fully cognisant of the need to say a nothing so that his words can be taken by all audiences as reflections of their own desires. I am still, however, becoming increasingly appreciative of the "poker strategy" of the man. Not only does he give nothing away in terms of his hand before the fact. Even after the cards are already down he maintains the poker face of saying nothing. It will likely serve him well until the various medias become accustomed to calling his way of speaking as to what it really is.

The present situation in Honduras is one more proof that the American empire will continue as before (with a little "progressive lip gloss" of course). The statement that the USA had cut off all military aid is a lie. The supporters of Obama will try to ignore the fact, but, if pressed, they are sure to say, in one way or another that "it was only a little lie. Here's the story....

IPIPIPIPIPIPIP

U.S. continues to train Honduran soldiers:
Military coup that ousted president, didn't stop U.S. engagement in Honduras
A controversial facility at Fort Benning, Georgia -- formerly known as the U.S. Army's School of the Americas -- is still training Honduran officers despite claims by the Obama administration that it cut military ties to Honduras after its president was overthrown June 28, NCR has learned.

A day after an SOA-trained army general ousted Honduran President Manuel Zelaya at gunpoint, President Barack Obama stated that "the coup was not legal" and that Zelaya remained "the democratically elected president."

The Foreign Operations Appropriations Act requires that U.S. military aid and training be suspended when a country undergoes a military coup, and the Obama administration has indicated those steps have been taken.

However, Lee Rials, public affairs officer for the Western Hemisphere Institute for Security Cooperation, the successor of SOA, confirmed Monday that Honduran officers are still being trained at the school.

Click here to read the full article by James Hodge and Linda Cooper from the National Catholic Reporter

AMERICAN POLITICS/INTERNATIONAL HUMAN RIGHTS:

DON'T LET TORTURE BE JUSTIFIED:

In the last few days ex-Vice President Dick Cheney has been on the circuit, trying to claim that the past use of torture by US government agencies was fully justified. Here is a statement from the Human Rights First group questioning this assertion, and asking that the use of torture be fully investigated and totally repudiated.

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The torture testimony that Cheney is trying to drown out:‏

The debate on torture must not be led by Former Vice President Cheney’s press tour
Fight back: Demand the truth about torture, not more spin.
Urge President Obama to set up a nonpartisan inquiry on torture today!:
In the wake of several investigations into the Bush administration's use of torture, and despite expert evidence to the contrary, Former Vice President Cheney has been all over the press saying that torture actually worked.

Why is he suddenly making such a loud case for torture? His side of the debate is trying to drown out new evidence that torture actually weakened American security.

The scary thing is, even today, as we heard new testimony from seasoned FBI interrogator Ali Soufan showing why torture does not work and how the Bush administration's insistence on using these techniques actually hurt our intelligence gathering – much of the public is only hearing Cheney's side of the debate.

So today we need your help to push back. Urge President Obama to set up a nonpartisan inquiry on torture to evaluate the full cost of abuses, look at how we got there, and come up with safeguards so we don't repeat the same mistakes.

Your action isn't just critical to making sure we inform the public – even some Senators aren't listening to the evidence of experts. In a Senate hearing today, FBI interrogator Ali Soufan clearly laid out in his testimony that "harsh interrogation methods are harmful, shameful, slower, unreliable, ineffective, and play directly into the enemy's handbook."

Senator Lindsey Graham — who has zero interrogation experience or expertise — actually responded, "One of the reasons these techniques have survived for about 500 years is apparently they work." (Torture is only 500 years old ??????. I think the good senator refers to "dunking", but I am not too sure. Maybe it is to throwing so-called witches into water to see if they float.-Molly)

Wrong, wrong, wrong. Even before today's testimony, Human Rights First has worked with dozens of experienced interrogators and retired generals and admirals who firmly stand against torture, as an inhumane – and ineffective – technique.

The reality is that there is no debate, and this false back and forth about torture's effectiveness is keeping us from moving forward. Help us increase the pressure – support a nonpartisan inquiry to get to the truth and make sure we never make the same mistake again!
Sincerely,
Sharon Kelly

Human Rights First

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THE PETITION:

Plrase go to THIS LINK to send the following petition to the Obama Administration.

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We call on the President of the United States to establish an independent, non-partisan commission to examine and report publicly on torture and cruel, inhuman, and degrading treatment of detainees in the period since September 11, 2001. The commission, comparable in stature to the 9/11 Commission, should look into the facts and circumstances of such abuses, report on lessons learned, and recommend measures that would prevent any future abuses. We believe that the commission is necessary to reaffirm America's commitment to the Constitution, international treaty obligations, and human rights. The report issued by the commission will strengthen U.S. national security and help to re-establish America's standing in the world.
Signed by:

[Your name]

[Your address]

AMERICAN LABOUR:

HELP SAVE HARTMARX JOBS:

The following appeal from the Service Employees International Union (SEIU) definitely has potential. It seems that Wells Fargo, one of the beneficiaries of the recent free money (bailouts) from the US Treasury has been nowhere near as forgiving with its own debtors. Par for the course I guess. What makes the matter interesting, however, is the following. One is that the company, Hartmarx (yes ! that is the name) is one that makes President Obama's suits. The other is that the workers involved have threatened to stage a factory occupation if their jobs are not saved. They have been no doubt inspired by the recently victorious factory occupation at Republic Windows and Doors in their city.One wonders about the conniptions this may be creating in Washington as they weigh their various options. Here is the article asking you for online solidarity with these workers.

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Bailed out bank wants to bail on union workers:‏
The public gave Wells Fargo $25 billion in bailout funds, but rather than investing that money in American jobs by keeping credit flowing, Wells Fargo is considering cutting the cord.

1,000 workers at Hartmarx, the Chicago-based apparel company that makes President Obama's suits, may lose their jobs if Wells Fargo forces the company to liquidate. Two of the bidders on the manufacturer have said that they see the value in continuing the production of top quality suits and will keep the plant open and a third bidder wants to liquidate.

These Hartmarx workers are members of Workers United, SEIU's newest affiliate.

Please take a moment to sign a letter to Wells Fargo Executive Vice President John Stumpf asking him to choose a bidder who will save these jobs. We'll make sure the letter is delivered with your signature and keep you updated on the situation.

http://action.seiu.org/page/m2/18a1e56d/165dd20/5a89ca52/ce67296/388944281/VEsE/

Yesterday, workers at Hartmarx voted in favor of a "sit in," which means that if Wells Fargo or a buyer tries to close the factory, the workers will remain at their job site.

These workers are taking a stand not just for their own jobs for all workers jeopardized by shortsighted banks.

Please co-sign the letter to Wells Fargo right now.
http://action.seiu.org/page/m2/18a1e56d/165dd20/5a89ca52/ce67296/388944281/VEsF/

The predecessor unions of Workers United like the ILGWU (remember "look for the union label") have represented Hartmarx employees for almost a hundred years. I'm proud to ask you to join me in standing with them today.

In Solidarity,

Andy Stern

WWWWWWWWWW

THE PETITION:

Please go to THIS LINK to sign the following online petition.

WWWWWWWWWW

Dear Mr. Stumpf,

The American people gave Wells Fargo 25 billion in TARP Funds. Now we are asking you to do the least you can do in return -- keep the Hart, Schaffner and Marx apparel company open by accepting one of the two bidders on the company that plans to keep the factory open.

Forcing the liquidation of American jobs is the last thing our economy needs right now. Wells Fargo has an obligation to shareholders, investors and public to take a longer term view of the economics, that means keeping jobs and supporting this profitable business. I urge you to do the right thing.

[your signature will go here]

ANARCHIST MAGAZINES/ECONOMIC CRISIS:

WILL OBAMA'S STIMULUS WORK ?:

There is a lot of controversy about whether the economic stimulus package of the Obama administration can actually work to bring the USA (and the world by extension) out of the present recession/depression. Molly has to admit that most of the discussion is way over her head, particularly as it revolves around unknowns that are actually way over anybody's head. In an interesting "optical trick" both radical leftists and American conservatives inform their guesstimates with the hope that it will fail in a mirror image of each other. Still, the subject has to be discussed.

The following is from Z Communications, the publishers of Z Magazine. After a preliminary "infomercial" they send an article by Jack Rasmus on the limitations of Obama's bank bailout. This may be particularly useful for those who are under the illusion that all that is needed is more and more government cash thrown at the problem. It is also useful for those who want to think about both the justice and the practicality of Obama's plan.

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Z Magazine April Preview -- Jack Rasmus on the economy:
Z Magazine's April issue is currently being mailed around the world to subscriber mailboxes and independent newsstands. We will post all the articles online around March 31, but we are sending you an email preview this week with Jack Rasmus's article, "Obama's Busted Bank Bailout."

Jack Rasmus has been writing for Z Magazine for years, dissecting the welfare-for-the-rich economics which funnels up and (sometimes) trickles down. He has accurately predicted the current crisis for more than a year while pointing to progressive solutions. Here, Rasmus describes the latest corporate giveaways masquerading as help for "main street": Public-Private Investment Funds, TALF, and HASP,

For 21 years, Z Magazine has offered an enduring venue for the best analysis of an unjust system, activist efforts for change, and alternative visions. Please consider subscribing to Z Magazine in print to keep this method of getting a left message out to the public thriving.

To subscribe to Z Magazine, click here to use the secure online form, or click here for a printable PDF form that you can mail or fax to us. Alternatively, you can call us to subscribe at 508-548-9063. Subscriptions placed within the next few weeks will start with the May issue, but you can call us to order the April issue for $5 each (plus shipping cost if sending overseas). Print subscribers and Sustainers also have access to Z Magazine Online.

"This is an essential publication for people who refuse to be spun by evasion or euphemism and who want to help strengthen movements for social justice and peace. Z Magazine is present-day radicalism at its best."

— Norman Solomon

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Obama's Busted Bank Bailout:
By Jack Rasmus, from the April 2009 issue of Z Magazinewww.zcommunications.org/zmag

In February 2009, economic data across the board revealed an accelerating decline of the U.S. economy, both in its financial and non-financial elements. Gross domestic product (GDP) data for the U.S. economy for the fourth quarter 2008 was revised downward, showing the U.S. economy had contracted by more than 6.2 percent.

Unemployment levels from November 2008 through February 2009 show an official rise in joblessness of nearly two million, according to official U.S. government data. When properly adjusted, however, to include the six million new underemployed since the recession began, plus discouraged and other workers not recorded in the official data, the actual U.S. unemployment has risen by at minimum three million since November. Properly calculated, there are now more than 13 million unemployed in the U.S. By December, the unemployed will very likely exceed 20 million.

Meanwhile, in January-February 2009 the balance sheets of banking and finance giants like Citigroup, Bank of America, AIG, Fannie Mae, and more than 250 regional banks now on the FDIC's official danger list continued to deteriorate badly. As the financial crisis continues to drag on unresolved, a rapidly growing number of once financially sound banks and financial institutions entered the growing ranks of zombies (i.e. banks in name only and not performing the functions of banks in fact), while previous zombies became virtual cadavers—many of the latter are the top 20 largest banks in the U.S.

In an attempt to stabilize the financial decline the Obama administration proposed a four-part recovery program. The first part was the $787 billion fiscal stimulus bill passed in February. Of equal import to the fiscal stimulus package were three proposals to try to stabilize the financial system. These include the so-called PPIF (Public-Private Investment Fund), the TALF (Term Asset Backed Securities Lending Facility), and the HASP (Homeowner Affordability and Stability Plan).
20 Million Jobless vs. $3 Trillion More for Banks
The Obama $787 billion fiscal stimulus bill designed to resurrect the non-financial economy—now in virtual freefall—provides only $180 billion in total spending in 2009. Only $26 billion of that is allocated for job spending, according to the U.S. Congressional Budget Office. New jobs created in 2009, given that level of spending, will be in the low hundred thousands at best, while simultaneously a minimum of five to seven million new unemployed will be added to the jobless rolls in 2009. That's less than a half-million new jobs compared to 13 million new unemployed.

One thing is thus quite clear about the Obama fiscal stimulus plan: it is not designed to create anything near the number of jobs that have been, and will soon be, lost. That key fact means the Obama stimulus package will not appreciably slow the collapse of consumer spending currently underway in the U.S. Job loss is at present the main driver of that collapse, along with other forces previously driving the decline of consumption—collapse of 401k and defined pension plans, freefall in stock and homeowner equity, and sharp reductions in hours and earnings for the 90 million non-supervisory and production workers in the U.S. still with jobs.

Constituting more than 70 percent of the U.S. economy's GDP, consumption has literally fallen off a cliff since October 2008. For the first time in data collecting history, consumption declined absolutely in the U.S. the past year while the index for future consumer spending hit a postwar low at 35 out of 100. Business spending has fared no better. Business plans for capital expenditures show a decline of more than one-third. At the same time, exports and world trade are contracting at the fastest rate in decades.

The $787 billion represents a stop-gap program to try to offset in part the magnitude of consumption collapse, not a spending program to turn around the economy. Fully 38 percent of the stimulus is in the form of aid measures to offset job loss income with unemployment, food stamps, medical costs assistance, and various grants to state and local government. While worthy and necessary, it will not create any jobs. Another 38 percent of the stimulus is targeted for tax cuts, which will have no net effect on consumption. In fact, as many economists now note, the multiplier effect of the tax cuts may actually be negative—that is the tax cuts will produce spending in an amount actually less than the value of the cuts themselves. That leaves only 24 percent remaining for spending on potential jobs projects. Plus, the vast majority of the jobs that might be created will be longer-term, capital-intensive, infrastructure jobs in alternative energy and public works.

Both the magnitude of the direct spending on jobs creation ($26 billion in 2009 and less than $200 billion over the life of the package), as well as the composition of the jobs creation, are grossly deficient. Measured in terms of jobs, consumption, and general economic recovery, the stimulus package represents "too little too late." The likelihood is therefore high that a second stimulus package will be necessary within the next 12 months.

In sharp contrast to the paltry spending for jobs is the virtually unlimited, rapidly disbursed, and open-ended flow of funds now underway from U.S. government coffers to banks and other financial and quasi-financial institutions. This uninhibited flow includes a second $200 billion injection for Fannie Mae/Freddie Mac now that they ran out of the first $200 billion given them last August; another $60 billion for AIG, American Insurance Group, bringing its total to more than $200 billion to date; tens of billions more for Citigroup and Bank of America; hundreds of billions more for brokers of commercial paper and money market funds, for foreign banks holding U.S. securities, for credit card company giants like American Express, for auto companies, plus a long list of others waiting in the wings. The grand total is at least $3 trillion thus far—and rising—disseminated to the banks, the broader financial sector, and beyond. That includes $1 trillion designated to the PPIF for buying banks' bad assets; another $1 trillion to TALF for resurrecting the shadow banking system of hedge funds, private equity firms, and the like (the people who gave us runaway speculation in securitized assets, excess leveraging, and debt run-up, which underlies the continuing collapse of the financial system); and another $275 billion to HASP, which will be used primarily to subsidize mortgage lenders, servicers, and investors.

What follows is an assessment and critique of these three elements of Obama's bank-finance bailout, showing why the bank bailout won't succeed in stabilizing the financial system and why a totally new kind of restructured banking system is required before the real economy halts its accelerating decline.
Public-Private Investment Fund (PPIF)
The PPIF is the inheritor of the failed TARP program launched in September 2008. Then Secretary of the Treasury Paulson panicked Congress into granting him a check worth $700 billion in order to buy the bad assets on the balance sheets of banks. Cleaning up the bad assets was necessary, he argued, in order to get the banks to begin lending again—to homeowners, the mortgage markets, and to general business.

Paulson was given the money and then did nothing about buying bad assets. He instead threw $125 billion at the 9 biggest banks, followed by another roughly $125 billion to scores of regional and smaller banks. Another $80 billion or so went to AIG in several installments. Tens of billions more to Citigroup. Nearly $20 billion to auto companies. Further billions were disbursed here and there, so that by February 2009 less than $190 billion of the $700 billion remained, none of it expended to purchase bad assets.

The reason why it was never used to sop up the bad assets is because Paulson faced the dilemma of buying the assets at their market price, which was virtually worthless. Since the banks were keeping the assets on their books at inflated, above market prices, they had no incentive to sell them at market prices and register even greater losses in doing so. They wanted Paulson to buy them at above market prices. If he did, however, he would be charged with providing a windfall profit to the banks. So he used TARP to purchase preferred stock in the banks, in the hope that it would at least partially close up the black hole on bank balance sheets that was ever-widening as the value of housing prices, mortgage bonds, and other securities continued to collapse. The fall in housing prices was in turn due to the flood of houses coming onto the market as a result of foreclosures.

In other words, pumping money into the banks via TARP addressed the symptom of collapsing balance sheets and not the cause. All the measures of the Treasury and Federal Reserve since the crisis began in 2007 share the common strategic error of throwing liquidity (read: taxpayer money) at the balance sheet hole while ignoring solutions to stop the cause of the hole's constant expansion.

PPIF and Geithner face the same dilemma, namely how to get the banks that are refusing to lend to begin doing so. Geithner's plan is TARP with a twist. The idea is to subsidize the price of the bad assets at government expense, and, by doing so, provide an incentive to both the banks to sell and investors to buy at well above their market price.

Here's how PPIF will work: Geithner will put in what remains of TARP ($190 billion) plus additional money up to $1 trillion (which will likely be expanded eventually well beyond $1 trillion). This trillion will be used to pay the banks the difference between the low market price and whatever the new price might be. In addition, the government will pay the investors another amount at taxpayer expense to entice them to purchase at a price above the market value. An auction-like event will be held. Whatever the seller (banks) and buyer (investors) end up with as a price, the government will subsidize the difference for both. That will, theoretically, establish a new market price at which subsequent assets might be sold.

But how much bad assets are out there that must be sold in order to clean up bank balance sheets? The estimates range from $3.6 trillion according to New York University professor Nouriel Roubini (who has been accurately predicting the crisis for more than a year now) to $4 trillion by Fortune magazine to $6 trillion by Treasury secretary Geithner in a talk he gave in June 2008 before becoming Secretary. So there's at least $2.5 to $5 trillion more that taxpayers may have to fork over to the PPIF before it's over.

The flawed premise of PPIF is that enough investors will enter the market if subsidized to buy such a huge amount of bad assets or that the banks will agree to sell at the auction-determined price or that the U.S. government will be able to throw in $2.5 to $5 trillion more.

Another problem is that the root cause of the bad asset price decline—i.e. the collapsing housing and other asset prices—will still continue despite PPIF. The $2.5 to $5 trillion is what the bad assets are worth at the moment. Those values can potentially fall further, as in fact they have for the past 18 months. Housing prices have fallen by 25 percent to date and may fall at least another 20 percent. Foreclosures are rising, as are delinquencies and defaults. Moreover, they are spreading from subprime to Alt-A to prime mortgage loans and bleeding into the commercial property mortgage markets as well. Homeowners with negative equity will also walk away from properties, throwing more supply on the market and further depressing prices. Then there are the millions more now experiencing unprecedented job loss. They too will add appreciably to the delinquency, default, and foreclosure downward pressures on home prices. Bank assets will continue to erode in value and bad asset totals will rise. The fundamental problem is thus still not addressed, let alone resolved.

This scenario is not unique or unprecedented. The same happened in the 1930s. Housing prices did not stop falling for more than five years into the Depression, until the Roosevelt administration created the Reconstruction Finance Corp (RFC) and revitalized the Home Owners Loan Corp (HOLC) and went into the mortgage market directly. The RFC arbitrarily determined a price and enforced it. It dissolved bad banks and wrote off their worthless assets. It forced mergers with those banks that could be saved. The HOLC then directly renegotiated with homeowners, resetting their interest and principal. That finally stabilized the housing market. It quickly produced an equity/stock market resurgence in 1935-36.

The day after Geithner's PPIF announcement, the press panned the plan and the market fell significantly. The spin in the business press was that the plan was not explained clearly. But the opposite likely occurred. The markets knew full well what the plan represented. They didn't believe investors would sufficiently enter the market to buy enough of the bad assets. This would mean the government would eventually have no alternative except to reluctantly engage in rolling nationalizations of the banking sector. That's why a debate on the meaning of bank nationalization emerged in the general business and political press, which still continues.
TALF As Plan B
Another problem with PPIF is what was the alternative if PPIF did not succeed in cleaning up the bad assets? How much longer and further would Congress and the public support throwing more money down the black hole of bank balance sheets? Enter TALF (Term Asset Backed Securities Lending Facility) as Plan B. TALF is another $1 trillion plan for financial bailouts at taxpayer expense. The idea originated at the Federal Reserve in the closing months of 2008 but was put on hold. Originally funded at $200 billion, Federal Reserve Chair Ben Bernanke held the program back until the Obama administration assumed office.

Unlike PPIF, TALF is envisioned as a plan to resurrect the shadow banking system and the securitized asset markets that collapsed after 2007. Approximately one half of total lending in 2007 ($5.65 trillion) occurred in the securitized markets. This declined to $160 billion in 2008 and to a mere several billion by early 2009.

The shadow banking system, a network of non-bank financial institutions, was responsible for much of the speculation driving the subprime and other asset markets until they busted in the summer of 2007. It is thus ironic that the Fed and Treasury now pursue via TALF the resurrection of those same markets and that same system.

The idea of TALF is to loan $1 trillion or more to the shadow banking system to have its various institutions (hedge funds and private equity in particular) buy up securitized assets that bundle auto loans, credit card loans, student loans, and even commercial property loans. These latter consumer credit markets are about to collapse and in doing so provide a subprime-like magnitude of losses for financial institutions, including banks. Credit card companies, for example, estimate that defaults on payments will rise from around 4 percent in early 2009 to 8-10 percent or more. TALF is designed to prevent the collapse of these securitized asset backed consumer credit markets.

But TALF represents something more significant. It represents the lack of confidence on the part of the Obama administration that the regular banking system can lead a lending recovery and restore financial market stability. The logic of TALF, moreover, is that if the shadow banking system does not rise to the incentive and finance the consumer credit markets, then the Federal Reserve will have to do so itself directly. Should that happen, the Fed will not only evolve from lender of last resort and lender of first resort (since 2007), to lender of primary resort—at least in the consumer credit markets. There is no other alternative. The consumer credit markets cannot be allowed to collapse. To do so would precipitate a bona fide depression given the current weakness of the economy and financial system.

The question is whether the hedge and private equity funds can sufficiently participate. Hedge funds in particular have lost half their value in the past 18 months due to losses and withdrawals. Once a $2 trillion industry it is now barely $1 trillion. Similar declines have characterized the state of the private equity funds. Furthermore, it is hard to see how the securitized asset markets can be revived, given their toxic reputation and the virtual total collapse of these markets.

Should the Fed have to go it alone, that would represent a major shift in banking structure. There is also the possibility that TALF and the Fed would serve as a holding action to buy time for the implementation of a Swedish Model of bank nationalization, such as occurred in that country in the early 1990s when the government took over the banks directly, and then spun them off to private interests again in a kind of capitalist form of nationalization.
HASP—Obama's Housing Recovery Proposal
Obama's housing plan has two parts. The first is another $200 billion funding set aside for Fannie Mae and Freddie Mac. This is a continuation of prior arrangements under the Bush-Paulson period. The two companies were partially nationalized in August 2008 and provided with $200-$300 billion to buy home mortgages. By February 2009 they had run out of those funds, and now another $200 billion is allocated as part of the Obama plan. The problem with Fannie/Freddie, however, is that they own only roughly 26 percent of the $12 trillion residential mortgage market. The major problem with subprime mortgages and foreclosures is occurring totally outside Fannie/Freddie's reach—in the securitized residential mortgage market segment.

Another major problem with this first part of the Obama Housing Plan is that any homeowner that is delinquent, in default, or in foreclosure proceedings is not eligible. Those who need it the most are thus excluded. And if the market value of your home has fallen more than 5 percent below the mortgage owed, forget it. You don't qualify. In other words, Part 1 is a subsidy to the industry, a gimmick to help lenders refinance safe mortgages and thus generate refinancing income for lenders; it is not a program to help homeowners in distress or to stop housing supply continuing to flood the market and depress housing prices.

As of late February, data show that the U.S. home price index has fallen 27 percent from its peak in 2006, for the 30th consecutive month. The last three months show an accelerating rate of decline. Should prices continue to fall at the rate registered between last November and January 2009, it will mean another 33 percent fall in median home prices this coming year, according to data from the National Association of Realtors.

A second part of the Obama housing program would provide a further $75 billion. These funds are committed to subsidizing mortgage lenders to lower their interest rates on new mortgages to 4-4.5 percent on average from current higher market rates at around 5.5 percent. Under Plan 2 loan principal may also be lowered to 31 percent of the homeowners' gross income, but only as a very last resort and for a temporary period of up to five years. And the government will pay (i.e., subsidize) the lenders the difference between the 31 and 38 percent, or 7 percent of the loan for that period. Part 2 may apply to homeowners who are delinquent, but it is still largely a voluntary program dependent on the agreement of lenders. If they are unwilling to modify rates and principals when requested by the homeowner, too bad for the homeowner. While progressive Democrats in Congress are attempting to give bankruptcy judges the power to force lenders to modify loans if they refuse after requested, that legislation has been vigorously blocked so far by industry groups like the American Bankers Association.

Who are the financial institutions that will benefit most from Plan 2? The banks. Two thirds of all the home loans in the U.S. are serviced by Citi, JP Morgan Chase, Bank of America, and Wells Fargo. Once again, we have a subsidy to the same institutions set to benefit from the PPIF. It is another version of trickle down, in which government-taxpayer money is given to companies to entice them to lower rates, which they should be doing on their own in the first place.

Like prior Bush initiatives, the HASP approach is to try to stimulate housing demand and in that way to slow the collapse of housing prices. But the supply of houses coming on to the market is massive, swamping any tepid attempts to put a floor under housing prices via a demand-side approach. Housing supply has been and will continue to overwhelm housing demand, with the consequent decline of housing prices continuing. Thus far no credible approach has been offered to check housing supply and stem price declines. In the end housing price decline can only be contained by a nationalization of residential mortgage markets and a fundamental reset of both interest and principle for homeowners in stress, much as was done in the 1930s.
Summary and Predictions
The fiscal stimulus side of the Obama program fails to address the central need of massive job creation. It lacks in both magnitude and composition of its focus. A second stimulus package within a year is inevitable.

The bank and finance stability measures of the Obama program are no more likely to succeed. They do not focus on housing asset price collapse directly. PPIF attempts to create a market for bad assets by subsidizing banks and investors at taxpayer expense. That expense will eventually have to exceed the initial $1 trillion by several more trillions using the PPIF approach. Other less costly approaches exist and pursuing the PPIF virtually prevents any real stimulus spending. TALF represents a wild gamble that a revived shadow banking system and a resurrection of the securitized asset markets will somehow be able to prevent the collapse of the consumer credit (auto, student loan, credit cards) and the commercial property markets which will have to refinance more than $170 billion in 2009. This is unlikely to happen, given the declining condition of hedge funds, private equity, and the rest of the shadow banking community.

The cost of all this excess bank rescue spending to the U.S. taxpayer is a minimum of $4 to $5 trillion over the next few years. A recent study by two University of California economists, Alan J. Auerbach and William G. Gale, projects annual deficits of $1 trillion or more for each of the next 10 years. It is highly doubtful the U.S. economy can sustain that kind of deficit spending for that period of time without seriously threatening the U.S. Treasury markets and causing an eventual collapse of the U.S. dollar in world markets.

The U.S. and world economy are on the knife-edge of a transition from an epic recession to a bona fide depression. Any number of several severe events could precipitate this. A series of sovereign debt crises in Europe are a real possibility. A likely scenario is the collapse of one or more east European countries that might pull down, for example, Austrian and then Italian banks and spread thereafter to other banking institutions. Another scenario might be the continued escalation of job loss beyond 20 million in the U.S., TALF failure to rescue consumer credit markets, a collapse of the Treasuries markets, and the like. Another precipitating scenario might be the global collapse of bond markets, in particular investment grade bonds, or a severe crisis in the credit default swaps market globally as well. There are, of course, other potentially serious scenarios that might serve as precipitating events.

A new, alternative plan will have to be proposed and implemented before the end of 2009. That effort now moves to the battle lines being drawn over the Obama budget. The Obama administration will have to get much bolder and aggressive, as its enemies on the right, in corporate boardrooms, and among evangelical interests are now gathering forces. It will be interesting to see whether the Obama team can make the transition from a vision that is much like 1993 to one that is more like 1933.
Z ZZZZZZZZZZ
Jack Rasmus's forthcoming book is Epic Recession And Global Financial Crisis (Pluto Press).

His articles, speeches, and interviews are available at www.kyklosproductions.com