Battle for Basra Continues

The Iraqi Army, under the personal command of Prime Minister Nouri al Maliki, is battling Moqtada al Sadr's Mahdi Army militia for control of Iraq's second city, Basra. Despite a demand from the Shia dominated central government to lay down their arms, Shia militiamen hold parts of the city after three days. Government forces have called upon American airpower and British artillery for support as fierce fighting continues in the southern oil hub. [map credit: UK Guardian]
Update: Iranian religious leaders brokered a ceasefire in Basra on Sunday. Despite instructions from Moqtada al Sadr to cease fire, new rocket attacks on the US controlled "green zone" occurred today in Baghdad.

Another Killer Gets Off

Five of the eight enlisted Marines charged in the massacre of 24 Iraqi men, women and children at Haditha on November 19, 2005 have escaped court martial. The latest dismissal involved a lance corporal[AP photo] who was charged with involuntary manslaughter, reckless endangerment and aggravated assault. The Marine Corps said it was dropping all charges and granting him immunity "in order to continue to pursue the truth-seeking process into the Haditha incident". The leader of the patrol responsible for the killings, Sergeant Frank Wuterich, still faces nine counts of manslaughter and remains on active duty. The lance corporal's defense lawyer denied that his client had struck a deal in which he would testify against his former team leader. The defense lawyer claimed his client had reacted according to his conditioning while on patrol in Haditha and was therefore legally innocent of any wrongdoing.

'Toontime: Dem Dilemmas

[credit: Joel Pett, Lexington Herald-Leader ]

Le Shorter: Adding Insult to Injury

After finagling a bailout of his insolvent investment bank at taxpayer expense, Bear Sterns CEO James Cayne sold his shares for $10.84 each, a total of $61.3 million, ahead of the company's expected purchase by JP Morgan. Bear Sterns was scrutinized by Manhattan District Attorney Robert Morganthau because of the firm's well known penchant for pushing the limits of legality. The profits generated from Bear's lucrative trade in mortage backed securities allowed Cayne to buy a $28 million mansion. Now that is what I call a tax rebate!

The Critical Two Degrees

World climate scientists are reaching a consensus based upon substantial scientific evidence that an increase of more than 2 degrees Celsius in global average temperature above pre-industrial levels (1860) would result in catastrophic climate change. A temperature increase above 2 degrees would result in species extinction and significant human suffering. Sea levels would rise between 12 and 40 feet due to melting of the land born Greenland and West Antarctic ice sheets. The Antarctica Peninsula is already experiencing the greatest increases in temperature on Earth. In fifty years the average ambient temperature has increased 0.5 degrees (C). The break up of the Wilkins Ice Shelf, thought to have been in place for a century, is an undeniable effect of the increase in local temperatures. This photo from space shows the 160 square mile piece of the shelf breaking off. The blue color is due to exposure of deep glacial ice.

Policy makers in Europe have committed to a long-term goal of limiting warming to this critical two degree increase over pre-industrial levels. The United States has done little to address the growing crisis besides agreeing in principle to work within the UN Framework Convention on Climate Change. In the absence of federal action, several states in the west and northeast have entered into agreements or established policies to pursue global warming reduction targets. There are several bills pending in Congress, however there is little likelihood that any of these bills will pass during the current regime. Assuming the current political deadlock will change after the 2008 presidential election, the differences and relative effectiveness of these bills in reaching the needed temperate change limit should be evaluated. One objective measure suggested by the Union of Concerned Scientists is the amount of CO2 equivalent in parts per million removed or saved from the atmosphere. This measure, CO2eq/ppm, expresses the amount of all heat trapping gases in terms of carbon dioxide. Studies indicate that to have a 50% chance of reaching the two degree limit a policy measure must achieve 450ppm CO2eq or below. To achieve this concentration level world emissions of heat trapping gases must be limited to 1700 gigatons for the period 2000-2050. 330 gigatons have already been emitted. To stay within the world emissions budget, industrial nations like the US must be expected to achieve a70-80% reduction in their 2000 gas emission levels by 2050. The US has already emitted approximately 45 gigatons(Gt)CO2eq which means that it needs to reduce the level of polluting gas emission by at least 80%. A business as usual approach would mean the US would use 80% of its share of the world budget by 2030 according to the Energy Information Administration. Such a scenario would require drastic cuts that could not be realistically achieved without American returning to caves and eating raw meat.

Of the eight proposals on the table in Congress only two meet the criteria discussed here, S.309 introduced by Senators Boxer and Sanders, and H.R. 1590 introduced by Rep. Waxman, given a US emission budget of 160-265 GtCO2eq as the target range[1]. H.R. 1590 is the most aggressive proposal, while S.309 skirts the upper limit of the target range. Senator McCain's proposal (S.280) exceeds the target range substantially (over 300 GtCO2eq). According to Senator Obama's campaign material[2] he supports an auction cap and trade system to reduce CO2 emissions to the necessary level of an 80% reduction by 2050. He also promotes the use of economic incentives to reward stewards for protecting and expanding forest and grasslands as a means of carbon sequestration as well as a $150 billion investment in clean energy sources.
[1]Union of Concerned Scientists,http://www.ucsusa.org/ depending upon which allocation method is used to det ermine the US share of the world's total 700 GtCO2eq. Assumes the industrial nations' emissions peak in 2010 and the developing nations' emissions peak in 2020.
[2]Obama08, Blueprint for Change, p.25

For the Record with Harry Reid

Q: Do you still think the Democratic race can be resolved before the convention?
Reid: Easy.
Q: How is that?
Reid: It will be done.
Q: It just will?
Reid: Yep.
Q: Magically?
Reid: No, it will be done. I had a conversation with Governor Dean (Democratic National Committee Chairman Howard Dean) today. Things are being done.

Yes, its time Senator, otherwise Senator Hothead will be appearing in the role of Oksana Baul.

Vox Versi: Broken Record

"We're succeeding [in Iraq]. I don't care what anybody says. I've seen the facts on the ground." --John McCain, March 24, 2008

VERSUS

Heavy fighting has erupted in Iraq's southern city of Basra between Iraqi security forces and members of the Mehdi Army...[t]he powerful militia loyal to radical Shia cleric Moqtada Sadr. --BBC News, March 25, 2008, 6:45 GMT

Dialogue with Hillary: Bullets Over Bosnia

Hillary, the campaign is wearing you out and affecting your mind. Only your friends will tell you that. When you start talking about non-existent sniper bullets, its time to sit back and ask yourself, "Am I really willing to wreck the future of America so I can sit behind the desk in the Oval Office and tell Bill to get me a cup of coffee?" When your husband's former UN ambassador endorses the other candidate, that has got to tell you something. Instead you let your favorite junkyard dog, James Carville, compare Governor Richardson to Judas. Give America a break! You are not entitled to sit in the White House. Nobody owes you for standing by your wayward husband when he was titillating Monica instead of minding the store. Sure, you will win Pennsylvania. But Obama will win North Carolina, Oregon, Hawaii, and Indiana. You will still be behind in delegates won. The longer you prolong this race, the more difficult John W. McBush will be to beat. Is party loyalty a factor in your endless political calculus? Or is it you would rather see a Republican win in November than a liberal Democrat? Be a sweetheart and become Senate Majority Leader. Who knows-- you might be able to legislate universal health care and have your own record on which to run for president.

Free Market R.I.P.

More: The market took heart from JP Morgan's revised offer for the carcass of Bear Sterns. Instead of a paltry $2.00/share, the banker of last resort upped it's offer to $10.00/share. WHOO HOO! Bear was selling not to long ago for over $160/share and the revised price is still a small fraction of its supposed book value--$84/share. Market optimists are running out of feel good news. Bernacke is throwing in everything but the kitchen sink to rescue the Street of Broken Dreams, but the drip, drip of toxic debt keeps on running. And you have the financial raptors, the short sellers, to deal with too--perched on the crumbling edifices of finance capitalism just waiting to swoop down and pick the bones of dead or dying funds and banks. Another victim was uncovered this weekend, HBOS, Britain's biggest mortgage lender. HBOS recently disclosed a £7.1bn exposure to US Alt-A mortgages, classified as one notch above sub-prime. HBOS's exposure to sub-prime, collateralized debt obligations and Alt-A amounts to 66% of its tangible book value. There was a run on it's stock last week, apparently based on rumors that it was headed the way of Northern Rock which was nationalized. At one point the bank's stock price was down 17%, but managed to recover. The Bank of England was forced to step in with a £5 billion loan injection to steady the city market.

Whether our fourth branch of government--the Federal Reserve--has enough resources to prevent the Street from going down the drain a la 1930 is an unanswered question. Nouriel Roubini, professor of economics at Stern Business School says, "This is the most radical change and expansion of Fed powers and functions since the Great Depression: essentially it now can lend unlimited amounts to non-bank, highly leveraged institutions that it does not regulate.... the Fed is taking serious financial risks." The $330 billion term-action market for loans has frozen. Next in line is the $45 trillion derivatives market for credit default swaps. And US home prices--the plug in the drain--keep falling at an annualized 18% rate in the fourth quarter. Many professional speculators thought a 225 basis point rate cut would normalize the market. But noooo: the market is too overleveraged and capital is too depleted. 'Plumber' Bernake has his finger up the drain, but the entire sink is cracked. Stay tuned.

So the federal government is bailing out another corporate victim of greed lying gutted in the Street of Broken Dreams with your tax dollars (actually fiat dollars backed by the power to tax you).Bear Sterns, an investment bank institution and an icon of finance capitalism, had to ask Uncle Sugar for an emergency bailout on Friday. The Federal Reserve has not been done since the Depression and the Fed's handout shows the extent of fear that a tsunami of bank closures could follow unless there is direct government intervention to prevent a financial Armageddon. However, experts at the World Bank have studied the actual cost of direct government intervention in banking crises around the world. A January 2002 study[1] of thirty years of systemic banking crises across 94 countries came to a simple but disconcerting conclusion: Doing nothing saves money in the long run. Think about it. Buying a consumer good on sale is cheaper than buying it at full price. But not buying it all is even cheaper. As one economist put it in more professional terms, "we find no evidence that accommodating policies reduce fiscal costs." The World Bank study elaborated,"Indeed, each of the accommodating measures examined-- open ended liquidity support, blanket deposit guarantees, regulatory forbearance, repeated recapitalization...and debtor bailout schemes–- appears to significantly increase the costs of banking crises." Without bailout programs in the sample studied, the actual fiscal cost borne by taxpayers of a banking crisis would be less than 1% of GDP. The S&L crisis in the 80's destroyed some 1400 institutions and 1300 banks. The direct cost to the US taxpayer of the federal bailout program was an estimated $180 billion or 3% of our annual economic output. The current toxic debt crisis is much larger. Swiss bank estimates US bank loses in the range of $600 billion. Bloomberg News puts the total count of losses and write-downs related to the crisis so far at $188 billion. More firms and funds will collapse like Carlyle Capital Corp. did last week. It defaulted on $16.6 billion in debt because it could not meet margin calls on rapidly depreciating mortgage backed securities (MBS) used as collateral. Barron's ominously reported that two government chartered mortgage institutions--FreddieMac and FannieMae--may not have enough money to cover losses on $5 trillion in loans they insure. To put it bluntly, nobody who knows the value of a buck believes Standard&Poor's blue sky claim that write downs are done.

But besides the sheer magnitude of the bailout needed to re-inflate the market, there is another danger. You do not have to be a financial capitalist in line for a handout to understand that throwing good money after bad is hazardous to the health of your nation's economy. The bare facts are that banks created trillions of dollars in credit through various securitized debt instruments like MBSs, collateralized debt obligations (CDOs) and structured investment vehicles (SIVs) without maintaining proportionate reserves. These obligations were not carried on their books, but sold to non-bank financial intermediaries. So the creation of more credit was driven solely by the desire to generate more profit by making more bad loans. Since the banks do not have the power to print money, they are now caught in a liquidity squeeze as the bad loans default in massive numbers and investors refuse to accept securities related to mortgages or real estate. Financial companies owning structured investments are being forced to write down their value or meet margin calls if they are leveraged.

Alan Greenspan ignited the credit frenzy with his very low (1%) Federal funds rate policy for 31 strait months to cushion the impact of the tech bubble collapse. But the policy also resulted in cheap adjustable rate mortgages (ARMs) and real estate price hyperinflation. Now, Bernacke and company appear willing to sacrifice the nation's currency by recapitalizing failed investment firms and accepting near worthless mortgage backed securities in exchange for valuable treasury instruments (TSLF). The World Bank economists warn: "Fiscal outlays are not the only economic costs of bank collapses. The losses covered [by taxpayers] reflect wasted resources. Furthermore, a government's assumption of large, unforeseen bailout costs can destabilize fiscal accounts, triggering high inflation and a currency collapse–costly in themselves–as well as adding to the dead weight cost of taxation." Now that we have financial "socialism" on the Street of Broken Dreams, perhaps we could have a little of the bourgeois variety for a change. Uncle, can you spare some health insurance?
Update: Before posting this entry, JP Morgan agreed to buy Bear Sterns for a bargain basement price of $2.00 per share to avert the insolvent investment bank declaring bankruptcy. Morgan got a $30 billion credit line from Bernacke and friends. Goldman Sachs, the world's biggest investment bank announced it will write down $3 billion in bad debt.
[1] http://marketoracle.net/Article3990.htm

'Toontime: Exceeding the Weight Limit

[credit: Richard Crowson, Wichita Eagle]

Richardson Endorses Obama

Governor Bill Richardson of New Mexico announced today that he is endorsing Senator Barack Obama for President. In a note to supporters he said that he was touched by the Senator's conciliatory speech on race relations since he was troubled about the "demonization of some immigrant groups--specifically Hispanics". The Governor joins Senator Chris Dodd among the former candidates in endorsing Senator Obama.

Total Bovine Excrement

The Charlatan says we must "win" in Iraq. Only somebody who has never fought in a war, and in fact went out of his way to avoid service in Vietnam, could take such a sophomoric attitude to a conflict that is now longer than all of our previous wars except Vietnam. We all know how that turned out. Hans Blix, former head UN weapons inspector wrote in the Guardian, "Unmovic inspectors had carried out some 700 inspections at 500 sites without finding prohibited weapons. The contract that George Bush held up before Congress to show that Iraq was purchasing uranium oxide was proved to be a forgery. The allied powers were on thin ice, but they preferred to replace question marks with exclamation marks". There is no "winning" in Iraq as the British experienced when they were finally forced out of the country by Islamic nationalists. But as convervative commentator Pat Buchanan has observed, the only thing we learn from history is that we do not learn. Our invasion of Iraq has cost the lives of some 600,000 Iraqis and more American soldiers than died on the D-day beaches of Normandy. The Charlantan has spent our nation's treasure like a drunken sailor, yet Iraq is not reconstructed and the price of oil is at an all time high. This conflict is not a football game, but a blood and guts struggle pitting an invading imperial army against militiamen who will only be viewed as patriots by their countrymen and fellow Muhammadans. Winning is not a strategy, and dying for one's country without moral justification is only tragic.

Subsidizing Slaughter

One of John McCain's campaign advertisements rants about the federal government spending millions to study the biology of grizzly bear reproduction, holding the program up for ridicule as an example of wasteful spending. Leaving aside the $12 billion a month spent on war, and the scientific need to understand a specie's biology if we are to save them from extinction, there is another wildlife program that more merits the derision of Senator McCain. Despite hundreds of thousands of protests from Americans, the Regime is forging ahead with plans to slaughter hundreds of grey wolves (canus lupis) in the Northern Rockies. The predator is recovering from decimation as vermin and fur bearers, but is still on the endangered species list. Federal officials are bowing to political pressure from state managers, ranchers and hunters to resume killing their competition to the point of near extinction under a revised exception in the Endangered Species Act (Section10j). In short the federal government wants to spend taxpayer's money--it has already purchased two aircraft to allow extermination from above--to slaughter an animal it has spent money to protect and rehabilitate. Thanks to thirty years of protection the wolves have made a modest comeback. Their population is about 1500 living across a vast area of mountainous terrain. Their increase is central to reviving the region's ecosystems and tourist economy. Despite these positive developments, Idaho wants kill up to 85% of the wolves in it's boundaries leaving as few as 104 animals. Wyoming wants to kill more than 100 wolves. These proposed lethal actions have met concerted resistance from citizens of these states. There is a ballot initiative pending in Idaho to overturn the state's ill considered plan. Seventy-five percent of the public comments filed in Wyoming were against the plan. Help with your comments and donations. Go to http://www.nrdcactionfund.org/ and tell the Regime to call off this senseless killing. Ask John McCain to help stop wasting more federal funds by slaughtering grey wolves.

Vox Versi: Pedalogical Opinion

The number of Iraqis seeking political asylum in Europe doubled in 2007. According to the UN Iraqis are the world's biggest national group of refugees and their numbers have almost reached the peak seen in 2002 under Saddam Hussein.

VERSUS:

"If you look back on those five years it has been a difficult, challenging but nonetheless successful endeavor ... and it has been well worth the effort," --V.P. 'Darth' Cheney in Baghdad.

Crooked

Item: Former Attorney General John Ashcroft got a "sweetheart deal" from US District Attorney for New Jersey. He was awarded a $50 million dollar no-bid contract to monitor a corporate law settlement. Before the House judiciary subcommittee, he defended the award from his former employee as not even constituting an appearance of conflict of interest. An Indiana medical supply company hired Ashcroft at the direction of the US Attorney as part of an out of court settlement of a criminal investigation.

Item: The Senate appropriations committee got testimony from the GAO comptroller that significant amounts of money spent in Iraq is being diverted to Sunni and Shite militias. Meanwhile Iraq is running a budget surplus from record oil prices while US taxpayers have spent $45 billion to "reconstruct" the country.

Item: Political appointees at HUD discussed by e mail ways to retaliate against Philadelphia Housing Authority director Carl Greene after he refused to transfer a piece of vacant city property worth $2 million to a business friend of HUD Secretary Alphonso Jackson. Greene alleges in a court affidavit that two officials at HUD made repeated threats during an 11 month period to find the city in violation of it's federal grant for redevelopment if it did not hand over the land. The city alleges that HUD's "capricious" finding of violation will cost the authority $50 million, causing it to raise rents for its low income tenants and forcing it to lay off 250 people.

Ted K Tries a Legacy

The Oregon Coast is still a scenic wonder. I drove south on US 101 a while back and was thrilled by the vistas of the Pacific and several chasm crossings on bridges that were designed by men who wanted to build handsome as well as functional structures. But the fine scenery and good bridge design mask a truth about the Oregon coast. It is an economically depressed area. The economies of coastal towns were once fueled by logging and fishing. Logging has substantially declined caused in part by new forest management rules and protection for endangered species. Commercial fishing is confronted with drastically reduced catches as a result of too much human exploitation. The state cancelled the commercial salmon fishing season this year because less than a third of the Chinook salmon are returning to the Willamette River compared to three years ago. Governor Ted Kulongoski enters this scene of shrinking livelihoods with a controversial proposal. He wants to create nine marine reserves along the Oregon coast to save, and hopefully rejuvenate, dwindling numbers of bottom fish in Oregon's territorial waters. According to local fisherman, the Governor is attempting to impose his environmental legacy on coastal communities. Marine reserves are already established in Washington and California, but they are a tough sell in provincial Oregon despite the state's trendy "green" image. No one appears to dispute that commercial and recreational fishing have devastated near shore habitats. Of forty three ground fish species found within the three mile limit, only two, yelloweye rockfish and canary rockfish, have been studied. Both are considered over fished. Sea otters are gone as well as scallops and healthy ocean perch. The signs of environmental stress are unmistakable. Establishing no fishing zones would give hard pressed habitats and fish a chance to recover. Reserves would be small in comparison to the total territorial sea of 1200 square miles. If nine reserves are established, they would cover only 13.5 square miles of sea[1]. None would be located near ports or prime fishing areas according to the state Fish and Wildlife Department. The Governor says he will only consider proposed designations supported by local communities. Despite these reassurances, coastal communities made their objections to no fishing in marine reserves clear at town meetings recently concluded. Kulongoski has the right idea. Marine reserves would allow more needed research on temperate undersea habitats and also give marine species a reprieve from total destruction. If marine reserves are to be the Governor's political legacy to Oregon, it is a worthy one.
[1] The Oregonian, March 5, 2008

'Toontime: Metamorphosis

[cartoon credit: Morin, Miami Herald]

Le Shorter: The Panic is Near

Gold, the investment of last resort, reached almost $1000 an ounce on world markets as the dollar continued to sink in value. Oil hit a new record of $110/barrel. Bernacke's $200bn plan to bail out the Street of Broken Dreams--once again--is in effect monetizing securities of dubious value (Bloomberg News: AAA mortgage securities hit 61/100) leading to hyperinflation and downward pressure on the dollar. US banks have no non-borrowed reserves, i.e. they are insolvent.
[US Federal Reserve chart,http://benbittrolff.blogspot.com/2008/03/really-scary-fed-charts-march.html].
Update: Bear Sterns the nation's fifth largest investment bank was another victim of toxic mortgage debt, but got bailed out by the NY Fed and JP MorganChase (query: are they the same firm?). The venerable bank confessed its coffers were dry when asking for help from the third largest bank. It's shares lost 50% of value when the market opened. Gold passed the $1000 mark yesterday for the first time in recorded history.

For the Record: with Economist Nouriel Roubini

There is now a rising probability of a "catastrophic" financial and economic outcome; a vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe. The Fed is seriously worried about this vicious circle and about the risks of a systemic financial meltdown....Capital reduction, credit contraction, forced liquidation and fire sales of assets at below fundamental prices will ensue leading to a cascading and mounting cycle of losses and further credit contraction. In illiquid market actual market prices are now even lower than the lower fundamental value that they now have given the credit problems in the economy. Market prices include a large illiquidity discount on top of the discount due to the credit and fundamental problems of the underlying assets that are backing the distressed financial assets. Capital losses will lead to margin calls and further reduction of risk taking by a variety of financial institutions that are now forced to mark to market their positions. Such a forced fire sale of assets in illiquid markets will lead to further losses that will further contract credit and trigger further margin calls and disintermediation of credit.
To understand the risks that the financial system is facing today I present the "nightmare" or "catastrophic" scenario that the Fed and financial officials around the world are now worried about. Such a scenario – however extreme – has a rising and significant probability of occurring. Thus, it does not describe a very low probability event but rather an outcome that is quite possible.”--from testimony before Congress.

Tell Them It Ain't So

It is not that the Pentagon officially concluded, reluctantly, that Saddam Hussein had no operational relationship with Al Qaeda that is news worthy of Persona Non Grata. Everybody in Washington knows that except for the occupants of the bunker who suspend themselves in a sickening miasma of zealotry, denial and disinformation. What's news is that the Pentagon is suppressing its own report because it does not want the conclusion which contradicts the official line to be given any more attention. The 'Puzzle Palace' has cancelled plans to send out press releases about the study and will not make it available on line. A military spokesman said that initial reports in the press about the study made it too "politically sensitive": Darth must have been on the phone chewing some military brass too 'ricky tic'.
[Photo: 'Scooter'Libby, former White House Chief of Staff.]

Obama Swings Swing States

As expected with a 50% black Democratic voter turnout, Senator Obama took the Mississippi primary with ease and padded his significant pledged delegate lead over Senator Clinton. But the real story is that the only states Senator Clinton is winning are those with traditional Democratic machines still in place, like Pennsylvania which will vote next month and where she holds approximately a 10 point lead in polls. Superdelegates, think about that. Do you want a candidate in the general election that will loose to McCain in so-called "purple" states? These states are ones where Obama has won (Iowa, Wisconsin, Missouri, Virginia, Washington and Colorado) and is beating McCain in those opinion polls. Obama has won more delegates than Clinton in Texas, Nevada, Idaho, Utah, Wyoming and Nebraska of all places. Admittedly not all of these contests were open to independents or Republican voters, but nevertheless the results are indicative of his much broader voter appeal. In the general election non-Democratic voters will be more likely to vote against Hillary Clinton than against Barack Obama. One proposition is undisputed now-- a Democrat cannot win the White House only carrying the coasts. Senator Obama is appealing to voters in the Midwest, West, and South, regions in which the Democrats must score a few victories to keep John W. McBush out of power. It is time to dialogue with Ms. Hillary before the attacks get too shrill.

Eliot Spitzer Should Resign--

For a lot of reasons. Any attempt to tough it out against his Republican enemies in the state legislature will only provide grist for conservative candidates desperate to distract the electorate from the walking disaster now occupying the Pennsylvania Avenue bunker. The Governor of New York made his political reputation fighting corruption and criminality in high places as state Attorney General. It turns out he is one of the rackets' big clients. AP reports he may have spent as much as $80,000 patronizing a VIP prostitution ring. It is a sad, twisted fact of American politics that personal immorality has greater negative impact that professional incompetence or ideological belligerence. If the Democratic Party wants to convince voters in November that it is less corrupt than the Republican Party, it cannot afford to have one of its leading office holders held up to public ridicule during a drawn out impeachment process that would resemble death by a thousand cuts; even if impeachment ultimately fails because of party loyalty. Democrats hold a majority in the lower house which must approve articles of impeachment. The people of New York state would not be well served either by a Spitzer hang out. Public business would undoubtedly come to a standstill. I seriously doubt even the worldly people of New York would be "fine with it". Spitzer, a no compromise prosecutor in his day, apparently committed a federal criminal offense by violating the Mann Act(the same statute that took down heavyweight champion Jack Johnson). He has no professional credibility remaining with his opposition colleagues or a large segment of the public, making it impossible for him to do business with powerful state Republican leaders he once attempted to hoist on their own petards. And there is another constituency that has been betrayed in all of this: his family. You don't have to read crystal balls to know his wife and three children could use some undivided attention right now and in the immediate future. The word president and Eliot Spitzer were often mentioned in the same sentence. But the only operative word now is, finished.
Update: Client 9 resigned today citing "personal failings".[photo:"Kristen", the lady in question]

It's 3am and Bill's Coattails are Shredding

Hillary has been touting her "foreign policy experience" as vice-president-by-osmosis in the Bill Clinton White House. Barack has been loath to call her on this claim, but former officials of the Clinton presidency are beginning to speak on the issue. Their verdict is she made a good activist First Lady, but she did not do the heavy lifting in foreign affairs. http://www.chicagotribune.com/news/nationworld/chi-experiencemar07,1,2875944.story

Read the Obama camp's memo on former First Lady's foreign policy experience: www.huffingtonpost.com/2008/03/11/obama-camp-clinton-forei_n_90894.html

A Police State Legacy

Even though Congress refused to fund the Pentagon's Orwellian Total Information Awareness program in 2003, the NSA has been working to expand its ability to collect information on American citizens' private affairs. TIA never completely went away because NSA has a combination of data mining programs that mirror it. NSA receives massive amounts of electronic data from other sources and processes it using high speed computers looking for patterns that seem suspicious. Input data ranges from Internet searches and cellphone traffic to international banking records kept by the Belgium based clearinghouse known as SWIFT(Society for Worldwide Interbank Financial Telecommunications). NSA gets access to telecommunications from switches maintained by the FBI. Former agents confirm that there are several shadow telecommunication hubs around the country. The Treasury Department provides access to bank and credit card data. Generally the contents of an e mail or telephone conversation are not used, but the "transactional" records can reveal a lot of information such as a cellphone's location, the identity of persons involved, what Web sites are being accessed, the subject matter of e mails, passenger manifests, travel times and destinations. The agency uses a sophisticated form of social network analysis developed by the Pentagon in it's experimental TIA program to analyse the data. The Pentagon's program was not funded for operation when it became public, but some money was provided for further research. NSA receives it's budget from the Pentagon and much of it is black, or beyond close scrutiny by Congress. The budget for data mining at NSA is estimated to be $1 billion. The FBI is requesting $42 million for it's Digital Collection System. Budget justifications cite an ever increasing demand for information and facilitating information sharing. According to the Wall Street Journal, the agency's secret activities offer citizens even less protection than the Pentagon program such as requiring intelligence officers to obtain leads from other sources first. Reasonable people can differ over how many details of a person's life should remain private, but the Fourth Amendment implications of the government's increasing ability to extensively profile an individual from their electronic trail is being lost in the political battle over telecommunication company immunity and stymied by the government's insistence on secrecy.

Euro Banks Holding the Bag

In what could be a new and more devastating phase of the global credit crunch caused by subprime lending, European banks are being advised to devalue their debt holdings by another $68 billion. They have already written off $58 billion in losses due to the collapse in credit markets. Merill Lynch advised City bankers that the top eleven banks could need a further write down because the markets do not support the 74 cents on the dollar valuation currently used by European banks for subprime debt. The banks most likely affected are UBS, Barclays, Royal Bank of Scotland, Fortis and HBOS which could suffer a 14% wallop to their book value. Investors and regulators are calling for large write downs to reduce uncertainty in global credit markets. The affected banks are reluctant to take the action since their profitability would be negatively impacted.

Torture Officially OK

Update: Canada's intelligence service(CSIS) rejected the use of evidence against alleged terrorists in Ottawa and Montreal because the information was obtained from the waterboarding of Al Qaeda's Abu Zubaydah Newsweek reports. A CSIS spokesman has stated that the agency considers evidence obtained by torture to be morally repugnant and not reliable. It will not knowing use such tainted information. The Canadians excised statements obtained from Zubaydah linking a suspect to Al Qaeda from a dossier. CSIS replaced the statements with evidence from public documents.

The torturer- in-chief made good on his threat to veto the bill outlawing waterboarding. Congressional Democrats probably do not have enough votes to override it since the measure passed both houses on partisan votes. So the United States of America, "the greatest democracy on Earth", officially joins the ranks of banana republics, communist dictatorships and totalitarian theocracies in the march of history.

From a new book about the Charlatan's failure to act despite repeated warnings from American intelligence about an imminent attack at home: "The warnings were going straight to President Bush each morning in his briefings by the CIA director, George Tenet, and in the presidential daily briefings. It would later be revealed by the 9/11 commission into the September 11 attacks that more than 40 presidential briefings presented to Bush from January 2001 through to September 10, 2001, included references to bin Laden" [1]. The threat of hijacked airliners being used as missles by terrorists was so palpable prior to September 11th that the Defense Department had already conducted drills at the Pentagon to prepare for such an attack. Feel safe yet?
[1]The Commission, Phillip Shenon (2008)

Its 3am, Where's the Beef?

Update: According to the Obama campaign, late results from the Texas primary/caucus menage show that the Senator from Illinois actually snatched victory from the jaws of defeat in the Lone Star State. Clinton netted only two delegates from the state's primary process, but Obama won the caucuses where he has showed strength in other states. Based upon a large sample in all 31 state senate districts, Obama is expected to net seven delegates from the meetings. That gives him an overall win of 5 more delegates from Texas than Clinton. Join us.

'Toontime: Man-Love

Digby is spot on. There is a lot of man-love in the air these days:

Brian Williams: You know what I thought was unsaid ---they took their position Chris, we're seeing the replay --- they end up in this spot and the sun is coming is just from the side and there in the shadow is John McCain's buckled, concave shoulder. It's a part of his body the suit doesn't fill out because of his war injuries. Again you wouldn't spot it unless you knew to look for it. He doesn't give the same full chested profile as the president standing next to him. Talk about a warrior...
Chris Matthews: You know, when he was a prisoner all those years, as you know, in isolation from his fellows, I do believe, uhm, and Machiavelli had this right --- it's not sentimental, it's factual --- the more you give to something, the more you become committed to it. That's true of marriage and children and everything we've committed to in our lives. He committed to his country over there. He made an investment in America, alone in that cell, when he was being tortured and afraid of being put to death at any moment -- and turning down a chance to come home. Those are non-political facts which I think do work for him. When it gets close this November, which I do believe, and you likely agree, will be a very close contest between him and whoever wins the Democratic fight. And I think people will look at that fact, that here's a man who has invested deeply, and physically and personally in his country.
Williams: Absolutely, Couldn't agree more. Of course the son of a Navy Admiral, a product of Annapolis who couldn't wait to become a Navy aviator...

I thought you outgrew hero worship in college.

The Empire Strikes Back

The ACLU has issued a press statement saying that a presidential fiat (aka signing statement) issued in December has greatly expanded the government's secret program of opening first class mail. About 10,000 pieces of mail are opened each year without warrants and only upon approval of the Postal Inspectors Office if there is credible evidence that the mail contains dangerous materials such as a bomb. The figure does not include national security matters. The signing statement accompanied H.R. 6407, the Postal Accountability and Enhancement Act of 2006. The Act reiterated the requirement for a warrant to open mail if the matter is not within the narrow exceptions defined in postal regulations. ACLU has filed a FOIA request seeking more information about the expanded program of snooping which it believes violates the FISA law as well as the Constitution. The Foreign Intelligence Surveillance Act was passed in response to the civil rights abuses during the dark days of Hoover's FBI which extensively spied on domestic anti-war radicals and black militants. The CIA's COINTEL program also included the opening of mail related to individuals on a "Watch List".
[photo credit: 12 Warning Signs of Fascism, http://www.mvp-seattle.com/pages/pageFascism.htm]

Le Shorter: A Note from Barack

"But today I want to share another staggering number: supporters like you donated more than $55 million to this campaign in the month of February....No campaign has ever raised this much in a single month in the history of presidential primaries. But more important than the total is how we did it-- more than 90% of donations were $100 or less, and more than 385,000 new donors in February pushed us past our goal of more than 1,000,000 people owning a piece of this campaign."

Still believe in government of, for and by the people? Join us.

Bully!

As I repeatedly have said the Charlatan has nothing to loose by attempting to expand the powers of the Executive as the expense of Congress until he goes back to Crawford to cut brush. An imperial presidency operating on a permanent war footing where checks and balances can be ignored or overridden has become a touchstone of the neoconservative movement. Theodore Roosevelt, a hero of the movement said, "No triumph of peace is quite so great as the supreme triumphs of war." (TR happens to be one of John McCain's heroes too). The Charlatan's latest gambit is so outrageous that he may finally have exasperated both sides on the Hill. He signed a permanent security agreement with Iraq that commits the United States to defend Iraq from external and internal threats. That my friends, is a major treaty obligation which according to the Constitution requires ratification by the Senate (Article II). But the Constitution has not stopped him before. Regime officials are attempting to diminish the treaty as simply a "status of forces" executive agreement similar to those we have with countries where there is a permanent presence of US military forces. Even Republicans are not buying that one. But as one Democratic congressman noted nothing is routine with Iraq and especially when the agreement commits US forces to fight there indefinitely. Senator Joseph Biden (D-DE) said the Charlatan's latest attempt to circumvent Congress in the pursuit of global hegemony contravenes 200 hundred years of settled practice in American government. He has introduced legislation requiring that the agreement signed with Nouri al-Maliki on November 26th last be submitted to the Senate for ratification. But once again such puny efforts by the Senate to exercise it's constitutional powers does not stop a bully. Congress passed a provision in a Pentagon budget bill barring funding for permanent bases in Iraq. The Charlatan promptly issued his own fiat of a signing statement saying he would ignore Congress' directive on how the funds would be spent. He has issued 151 such statements challenging the validity of 1149 laws. If anybody deserves impeachment, as the village in Vermont rightly concluded, it is the former Governor of Texas.

Le Shorter: Its 3am, Where's the Beef?

On a conference call Friday with Hillary’s ever-more-hysterical male strategists, Slate’s John Dickerson asked exactly when she had been tested in a foreign policy crisis. After a silence long enough to knit a sweater in, as the Web site The Hotline put it, Mark Penn cited “her work on the Armed Services Committee."--Maureen Dowd, Syndicated Columnist.

Update: After winning three out of four states on "Mini-Tuesday" Hillary only managed a net gain of 12 delegates, cutting Obama's lead to 101 according to early AP reports (the Obama campaign touts only a net gain of 4). Senator Obama split the Texas delegation 61-65 in the primary. He appears to be ahead in the caucuses. Final results from the caucuses are not in due to heavy turnout. Some caucuses were chaotic scenes, and police were called to maintain order. Nevertheless her victories represent a triumph of Democratic establishment politics. Senator Clinton is focused on winning the support of party leaders--superdelegates--at the convention to overcome Obama's lead in pledged delegates. According to AP there are 350 uncommitted superdelegates. Obama is increasingly identified with the anti-war, reform wing of the party. Hillary's wins allow her to continue the campaign into the spring, but prolonging the primary battle gives Republicans a tactical advantage. They will no doubt adopt a divide and conquer strategy. Which puts Senator Obama in the unenviable position of fending off attacks on two fronts. Here is a sample of what is in store for Obama. Hillary Clinton told reporters in Fort Worth that both she and the Republican nominee John McCain offer the experience to be ready to tackle any crisis facing the country under their watch, but Barack Obama simply offers more rhetoric. “I think you'll be able to imagine many things Senator McCain will be able to say,” she said. “He’s never been the president, but he will put forth his lifetime of experience. I will put forth my lifetime of experience. Senator Obama will put forth a speech he made in 2002.” That qualifies as a low blow, dissing a fellow Democrat in favor of the Republican candidate. The truth is there is very little foreign policy difference between Hillary and John McCain, so why not vote for the real thing? Oregon, with 65 delegates, does not hold it's primary until May 20th. Oregon's Democratic primary voters may actually matter in this epic battle.

Underwater

Americans may be asking what the Charlatan is smoking in the relative safety of the rent free bunker on Pennsylvania Avenue, as households in record numbers are financially sinking. Moody's, the bond rating company, reports that 10.3% of homeowners are "underwater" or owe more on their homes than they are worth. That is about 8.8 million owners according to Moody's chief economist. You have to go back to the Great Depression to find a number that large. Foreclosures have also hit record highs. The Mortgage Bankers Association said the delinquency rate for all loans is at 5.59% in the third quarter, the highest rate since it's survey began in 1986. ARMs had the highest rate of foreclosures (4.72%) and late payments (18.81%). By the end of 2008 as many as 15 million households will be in the red. So many insolvent consumers will have a large impact on the economy as a whole. The Joint Economic Committee report released by congressional Democrats estimates that there will be $100 billion in losses to the economy by the end of 2009. Property tax revenues will also be hard hit. The estimate is $917 million in total lost tax revenue. Undoubtedly, the lost tax revenue will have to be recovered in some other way. Current proposals to help insolvent homeowners are widely viewed as too little, too late. The two plans offered by the Regime only help 15 to 20% of the households in danger of loosing the home. State governors in Washington, DC for their winter meeting called on the Regime last week to offer a comprehensive solution to the growing subprime mortgage crisis.