Friday, January 29, 2010

Obama State of the Union: Guns For the Pentagon, Butter For Wall Street, A Spending Freeze For You

Back during the Vietnam war, Democratic presidents Kennedy and Johnson promised we could have guns and butter too. They lied. The cost of the Vietnam war and the world's biggest military machine quickly gutted the War on Poverty. At least our First Black President isn't telling us that old, old lie. Not all the time anyway. At his first State of the Union tonight, President Obama is expected to declare an across the board freeze on federal spending. But not on military spending, or on the Federal Reserve pipeline to Wall Street. Hail to the chief.

After signing off on the biggest military budget in human history, and giving 23 trillion dollars of free money to Wall Street, much of it directly through the Federal Reserve without Congressional oversight, the president is expected to announce a "spending freeze" in his State of the Union address tonight. In keeping with his policy of waiting for "all boats to rise" the First Black President will not announce any special measures to address joblessness in African American communities, which in many urban areas has reached 50% of working age males, and has historically been double the white jobless rate, and is rising faster than unemployment among whites.

White House spokespeople assure us that the freeze will not apply to the military budget, or the uniquely American combination of policing, surveillance and corporate welfare programs they call "homeland security." Also exempt are veterans affairs and the State Department, impossible to separate from the military and our lawless mercenary armies, and social security, and Medicare, except for the $400 million cut that program will feel if either version of the president's health insurance reform package ever clears Congress. The corporate press describes all federal programs that don't fit into the slots just described as "discretionary," and the Obama White House, corporate to the core uses the same terminology. The budget freeze, they say, will affect all the federal government's "discretionary" programs.

With the adoption of NAFTA under the previous Democratic president, the US government became a full partner in corporate America's drive to relocate its factories outside the U.S., first in low-wage Mexico, and now in lower-wage China. That caused a radical shrinkage of local tax revenues across the country at the same time that wages fell and joblessness rose. Corporate Democrats (and Republicans) had a solution for that too --- selling off public assets like highways, parking meters, water systems, public hospitals, even jails, government fleet management and payrolls, even birth and death records to the same investor class that caused the shrinkage by offshoring as much of the US industrial sector as they could.

"Black America can expect to reap enormous benefits in self-esteem at the sight of a well-suited black man at the podium delivering this august address."

The current financial crisis has put state and local governments across the nation into unprecedented fiscal crises. Hundreds of thousands of state and local government employees are working days for free, taking forced pay cuts and days off, or sent home to join the growing ranks of the jobless. Had the president's "economic stimulus" been about stimulating the real economy and stopping the job and income losses of ordinary Americans, it would have shored up the budgets of states and local governments. It didn't. A federal freeze on "discretionary spending" that includes already inadequate funding of state and local governments is guaranteed to increase unemployment, to lower wages of those still working, and to shut down such "discretionary" expenses as road repairs, schools, libraries, health care, including state contributions to Medicaid and countless other things the investor class and their White House imagines we can do without. And although the president says black America must wait for "all boats" to rise before disproportionate black unemployment to go down, a spending freeze on aid to local governments will affect blacks disproportionately too, as they make up an outsize share of public sector employees.

Still, all the news for black America in this year's state of the union isn't bad. Despite tonight's grim economic tidings, Black America can expect to reap enormous benefits in self-esteem at the sight of a well-suited black man at the podium delivering this august address. As a recent Pew Center report points out, black America will bask in the glow of the pretty black family in the White House, and take comfort in misguided perceptions that racial gaps in health, wealth, mortality and everything else are at last shrinking. They're not.

Fortunately for this illusion, there will be no State of the Black Union this year. Tavis Smiley, mindful of the damage to his career the last time he voiced even mild criticism of Obama, called it off. Despite its failings and corporate sponsorship, a 2010 SOBU would certainly have allowed sharp left criticism of Obama's pro-war, pro-Wall Street policies to be broadcast to a nationwide audience in the tens of millions. Though elected by African Americans, and tens of millions of voters dissatisfied and disgusted with the preceding administration, Obama's loyalties are firmly with Wall Street and the Pentagon. The First Black President's office, as Glen Ford pointed out at last week's 2010 Black is Back conference, was purchased for him by more than $600 million in campaign contributions, mostly from the same corporations and wealthy individuals that gave to Bush four and eight years ago.

The Obama "spending freeze" is also part of the investor class's long term war to extract for itself every last bit of wealth the US economy produces. Besides promoting the crazy notion that vital public services are "discretionary" while war expenditures are sacrosanct, it validates the lie that these are what's making the government "broke," if any entity that can print or lend money into existence can ever be 'broke." Having corporate Democrats led by President Obama echo this capitalist propaganda softens us up for the next step --- entitlement reform, the polite term for the privatization of social security.

"After the election, Barack Obama was quoted as saying he'd rather be a great one term president than a mediocre two-termer. He might get part of his wish..."

Quietly, the Obama administration has endorsed a bipartisan commission to come up with "entitlement reform" proposals that will bypass the Congress, coming straight through the more-equal-than-the-others executive branch of government. The new presidential commission is also tasked to come up with other ways to effect permanent "savings," exempting the military budget.

In his first week of office, President Obama pledged an eleven figure down payment on a high speed rail transit system, an enterprise that could conceivably employ tens or hundreds of thousands, and replace millions of gas guzzling trips by air and auto every month. If that down payment happens at all, it won't be as big as advertised, and may not be followed up by much of anything. The same is true of its "green jobs" and other widely hyped proposals.

Massachusetts is often called the most liberal state in the union. It's the place where the president's version of health insurance reform, requiring everybody to purchase skimpy and expensive private health insurance under penalty of law has already been enacted. The state even has a black governor. Two weeks ago in Massachusetts, a right wing corporate nutcase beat a right wing corporate Democrat, an Obama Democrat, for the seat previously warmed by Ted Kennedy. Ted Kennedy was also a corporate Democrat, a fan of "entitlement reform" and big Pentagon budgets. After the election, Barack Obama was quoted as saying he'd rather be a great one term president than a mediocre two-termer. He might get part of his wish, and it could be preceded by a substantial reduction of or outfight oss of Democratic majorities in Congress in 2010.

If that happens, Black America will be sputtering with outrage. We'll blame it on Fox News and Bill O'Reilly, on those dastardly Republicans, those ignorant tea-party racists. We'll blame it on all those Negroes, Democrats and "progressives" who didn't cheer loud enough when we had a black man in the White House. So hail to the chief. And clap louder.

Bruce Dixon is managing editor at Black Agenda Report, and based in Atlanta. He can be reached at bruce.dixon(at)

What Should We Make of Obama's "Spending Freeze"

The big news today is Obama's proposed "spending freeze".

Fiscal liberals say this cuts spending at the exact time that we most need to increase it. See this and this.

Fiscal conservatives say this doesn't go nearly far enough. See this, this and this.

But I think there's a bigger issue that deserves some inquiry: is America being turned into a third world country?

As I wrote last June:

When the International Monetary Fund or World Bank offer to lend money to a struggling third-world country (or "emerging market"), they demand "austerity measures".

As Wikipedia describes it:

In economics, austerity is when a national government reduces its spending in order to pay back creditors. Austerity is usually required when a government's fiscal deficit spending is felt to be unsustainable.

Development projects, welfare programs and other social spending are common areas of spending for cuts. In many countries, austerity measures have been associated with short-term standard of living declines until economic conditions improved once fiscal balance was achieved (such as in the United Kingdom under Margaret Thatcher, Canada under Jean Chrétien, and Spain under González).

Private banks, or institutions like the International Monetary Fund (IMF), may require that a country pursues an 'austerity policy' if it wants to re-finance loans that are about to come due. The government may be asked to stop issuing subsidies or to otherwise reduce public spending. When the IMF requires such a policy, the terms are known as 'IMF conditionalities'.

Wikipedia goes on to point out:

Austerity programs are frequently controversial, as they impact the poorest segments of the population and often lead to a wider separation between the rich and poor. In many situations, austerity programs are imposed on countries that were previously under dictatorial regimes, leading to criticism that populations are forced to repay the debts of their oppressors.

What Does This Have to Do With the First World?

Since the IMF and World Bank lend to third world countries, you may reasonably assume that this has nothing to do with "first world" countries like the US and UK.

But England's economy is in dire straight, and rumors have abounded that the UK might have to rely on a loan from the IMF.

And as former U.S. Comptroller General David Walker said :

People seem to think the [American] government has money. The government doesn't have any money.

Indeed, the IMF has already performed a complete audit of the whole US financial system, something which they have only previously done to broke third world nations.

Al Martin - former contributor to the Presidential Council of Economic Advisors and retired naval intelligence officer - observed in an April 2005 newsletter that the ratio of total U.S. debt to gross domestic product (GDP) rose from 78 percent in 2000 to 308 percent in April 2005. The International Monetary Fund considers a nation-state with a total debt-to-GDP ratio of 200 percent or more to be a "de-constructed Third World nation-state."

Martin explained:

What "de-constructed" actually means is that a political regime in that country, or series of political regimes, have, through a long period of fraud, abuse, graft, corruption and mismanagement, effectively collapsed the economy of that country.

What Does It Mean?

Some have asked questions like, "Is the goal to force the US into the same kinds of IMF austerity programs that have caused riots in so many other nations?" Some predicted years ago that the "international bankers" would bring down the American economy.

I used to think, frankly, that such kinds of talk were crazy-talk. I'm not so sure anymore.

Catherine Austin Fitts - former managing director of a Wall Street investment bank and Assistant Secretary of the Department of Housing and Urban Development (HUD) under President George Bush Sr. - calls what is happening to the economy "a criminal leveraged buyout of America," something she defines as "buying a country for cheap with its own money and then jacking up the rents and fees to steal the rest." She also calls it the "American Tapeworm" model, explaining:

[T]he American Tapeworm model is to simply finance the federal deficit through warfare, currency exports, Treasury and federal credit borrowing and cutbacks in domestic "discretionary" spending .... This will then place local municipalities and local leadership in a highly vulnerable position - one that will allow them to be persuaded with bogus but high-minded sounding arguments to further cut resources. Then, to "preserve bond ratings and the rights of creditors," our leaders can he persuaded to sell our water, natural resources and infrastructure assets at significant discounts of their true value to global investors .... This will be described as a plan to "save America" by recapitalizing it on a sound financial footing. In fact, this process will simply shift more capital continuously from America to other continents and from the lower and middle classes to elites.

Writer Mike Whitney wrote in CounterPunch in April 2005:

[T]he towering [U.S.] national debt coupled with the staggering trade deficits have put the nation on a precipice and a seismic shift in the fortunes of middle-class Americans is looking more likely all the time... The country has been intentionally plundered and will eventually wind up in the hands of its creditors This same Ponzi scheme has been carried out repeatedly by the IMF and World Bank throughout the world Bankruptcy is a fairly straightforward way of delivering valuable public assets and resources to collaborative industries, and of annihilating national sovereignty. After a nation is successfully driven to destitution, public policy decisions are made by creditors and not by representatives of the people .... The catastrophe that middle class Americans face is what these elites breezily refer to as "shock therapy"; a sudden jolt, followed by fundamental changes to the system. In the near future we can expect tax reform, fiscal discipline, deregulation, free capital flows, lowered tariffs, reduced public services, and privatization.

And given that experts on third world banana republics from the IMF and the Federal Reserve have said the U.S. has become a third world banana republic (and see this and this), maybe the process of turning first world into the third world is already complete.

Washington's Blog is a frequent contributor to Global Research. Global Research Articles by Washington's Blog

Senate permits gov't to borrow an additional $1.9T

WASHINGTON (AP) - The Democratic-controlled Senate has muscled through a plan to allow the government to go a whopping $1.9 trillion deeper in debt.

The party-line 60-40 vote was successful only because Republican Sen.-elect Scott Brown has yet to be seated. Sixty votes were required to approve the increase. The measure would lift the debt ceiling to $14.3 trillion. That's about $45,000 for every American.

Democrats had to scramble to approve the plan, which means they won't have to vote on another increase until after the midterm elections this fall. To win the votes of moderate Democrats, President Barack Obama promised to appoint a special task force to come up with a plan to reduce the deficit. The House must still vote on the measure before it's sent to Obama for his signature.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

WASHINGTON (AP)—Senate Democrats are counting on their soon-to-expire 60-vote majority to raise the U.S. debt ceiling by $1.9 trillion so they do not have to take more politically painful votes on government borrowing until after the November elections.

They have no room for error. In the face of monolithic Republican opposition, they will need all 60 votes Thursday to let the government continue borrowing almost 40 percent of what it spends, much of it from China and other Asian nations who buy U.S. securities.

The legislation would put the government on track for a national debt of $14.3 trillion—equal to about $45,000 for every American—and provide a vivid reminder of the United States' dire fiscal straits. New estimates released by the Congressional Budget Office on Tuesday show that the U.S. this year could run a deficit matching last year's record $1.4 trillion shortfall.

To make raising the debt ceiling easier for moderates and politically endangered Democrats to swallow amid a populist uprising against government borrowing and spending, President Barack Obama promised in his State of the Union address Wednesday night to appoint a bipartisan task force to come up with a plan for dealing with the spiraling debt.

"I will issue an executive order that will allow us to go forward, because I refuse to pass this problem on to another generation of Americans," he said.

The 60 votes Democrats need from their own caucus include those of incumbents facing difficult re-election battles this year as well as longtime opponents of raising the debt limit, such as Sen. Evan Bayh.

The task was made more difficult last week when Republican Scott Brown won the late Edward M. Kennedy's Senate seat from Massachusetts. On Feb. 11, when Brown plans to take office, the Democrats' majority shrinks to 59 in the 100-member Senate and the Republicans will have a 41-vote ability to block what they do not like in Obama's and Democratic leaders' agendas.

If the $1.9 trillion debt ceiling increase fails, the Senate would immediately vote on a fallback $635 billion increase already approved by the House. But that would require still another vote before the Nov. 2 Election Day to raise the ceiling again.

"It took 200 years to build the federal debt to a total of $1.9 trillion," Sen. Judd Gregg, a Republican, said. "Now the majority wants to increase the current limit ... by $1.9 trillion so that we can finance the government's borrowing binge long enough to get us past the November 2010 elections."

Congress has until mid-February before the current $12.4 trillion debt ceiling is reached, so there would not be an immediate crisis if the measure were to be defeated. But a losing vote—the tally was scheduled for around noo (1700 GMT), when financial markets are open—could unnerve the stock market. Lawmakers in both parties have promised they will not permit a market-rattling, first-ever default on U.S. obligations.

Democrats and Republicans alike share responsibility for running up the debt, but it falls upon Democrats to pass the measure since they control the government. It makes no difference that Republicans routinely backed increases in the debt when former President George W. Bush was in office.

Republicans blame recent generous spending bills enacted by the Democratic-controlled Congress for driving up the debt. Those measures, however, are just one relatively small part of the problem. The far bigger element is a sharp drop-off in tax revenues because of the recession and the economy's slow recovery, as well as higher costs, since more people are taking unemployment benefits and food stamps in tough times.

As part of the debt ceiling bill, the Senate will also vote on new budget rules that would make Congress cover any increases in government benefits with either a corresponding tax increase, spending cuts elsewhere or a combination of the two. The same would apply for new tax cuts, such as the tax credit Obama proposed Wednesday night for small businesses that hire more workers. The tax cuts would have to be "paid" for with corresponding spending cuts or increases in other taxes.

Senate Majority Leader Harry Reid, a Democrat whose own re-election is in danger this November, reversed course and came out in support of the new rules after moderate Democrats in the House insisted on them as condition for passing a new $14.3 trillion debt ceiling.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Sheldon Speaks in Senate About Bernanke Nomination

Click this link .....

Peter Schiff Speaks About the State of the Union - 01/28/2010

Click this link ......

Storm leaves thousands without power in Okla.

OKLAHOMA CITY (AP) - A powerful storm is dumping snow, sleet and freezing rain on Oklahoma and the southern Plains.

Ice accumulations of more than one-half inch and high winds snapped electrical lines across Oklahoma, knocking out electrical power to about 57,000 homes and businesses.

Public Service Company of Oklahoma spokeswoman Andrea Chancellor says about 30,000 of PSO's electrical customers were without power in western Oklahoma.

Sid Sperry with the Oklahoma Association of Electric Cooperatives said power was disrupted to 20,322 customers of 8 rural electrical cooperatives in southwestern Oklahoma.

Oklahoma Gas and Electric Co. reported more than 6,700 of its customers in central and southern Oklahoma communities were without power.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Rep. Kaptur Drills Sec. Geithner over NY Federal Reserve - AIG Goldman Sachs. Scandal Bankergate Paulson Treasury

Geithner Recuse himself NY Fed
Dan Jester, the man hand-picked by Paulson to be Treasurys point person on AIG, also worked at Goldman Sachs.
Marcy Kaptur, D-Ohio grilling Geithner

Lynch Rips Apart Tiny Tim

Goldman Sachs Flunkies Neck deep in AIG coverup

Credit: GuerrillaNewsChannel (youtube account name)

The State of the Nation: I am afraid

Pres­i­dent, The Ruther­ford Institute

“As I look at America today, I am not afraid to say that I am afraid.” – Bertram Gross, Friendly Fas­cism: The New Face of Power in America

Omi­nous devel­op­ments in America have been a long time coming, in part pre­cip­i­tated by “we the people” – a cit­i­zenry that has been asleep at the wheel for too long. And while there have been wake-up calls, we have failed to heed the warnings.

Just con­sider the state of our nation:

We’re encased in what some are calling an elec­tronic con­cen­tra­tion camp. The gov­ern­ment con­tinues to amass data files on more and more Amer­i­cans. Every­where we go, we are watched: at the banks, at the gro­cery store, at the mall, crossing the street. This loss of pri­vacy is symp­to­matic of the growing sur­veil­lance being car­ried out on average Amer­i­cans. Such sur­veil­lance grad­u­ally poi­sons the soul of a nation, trans­forming us from one in which we’re pre­sumed inno­cent until proven guilty to one in which everyone is a sus­pect and pre­sumed guilty. Thus, the ques­tion that must be asked is: can freedom in the United States flourish in an age when the phys­ical move­ments, indi­vidual pur­chases, con­ver­sa­tions and meet­ings of every cit­izen are under con­stant sur­veil­lance by pri­vate com­pa­nies and gov­ern­ment agencies?

We are meta­mor­phosing into a police state. Gov­ern­mental ten­ta­cles now invade vir­tu­ally every facet of our lives, with agents of the gov­ern­ment lis­tening in on our tele­phone calls and reading our emails. Tech­nology, which has devel­oped at a rapid pace, offers those in power more inva­sive, awe­some tools than ever before. Fusion cen­ters – data col­lecting agen­cies spread throughout the country, aided by the National Secu­rity Agency – con­stantly mon­itor our com­mu­ni­ca­tions, every­thing from our internet activity and web searches to text mes­sages, phone calls and emails. This data is then fed to gov­ern­ment agen­cies, which are now inter­con­nected – the CIA to the FBI, the FBI to local police – a rela­tion­ship which will make a tran­si­tion to mar­tial law that much easier. We may very well be one ter­rorist attack away from seeing armed forces on our streets – and the Amer­ican people may not put up much resis­tance. According to a recent study, a greater per­centage of Amer­i­cans are now willing to sac­ri­fice their civil lib­er­ties in order to feel safer in the wake of the failed crotch bomber’s attack on Christmas Day.

We are plagued by a fal­tering economy and a mon­strous finan­cial deficit that threatens to bank­rupt us. Our national debt is more than $12 tril­lion (which trans­lates to more than $110,000 per tax­payer), and is expected to nearly double to $20 tril­lion by 2015. The unem­ploy­ment rate is over 10% and growing, with more than 15 mil­lion Amer­i­cans out of work and many more forced to sub­sist on low-paying or part-time jobs. The number of U.S. house­holds on the verge of losing their homes soared by nearly 15% in the first half of last year alone. The number of chil­dren living in poverty is on the rise (18% in 2007). As his­tory illus­trates, author­i­tarian regimes assume more and more power in trou­bled finan­cial times.

Our rep­re­sen­ta­tives in the White House and Con­gress bear little resem­blance to those they have been elected to rep­re­sent. Many of our politi­cians live like kings. Chauf­feured around in lim­ou­sines, flying in pri­vate jets and eating gourmet meals, all paid for by the Amer­ican tax­payer, they are far removed from those they rep­re­sent. What’s more, they con­tinue to spend money we don’t have on pork-laden stim­ulus pack­ages while run­ning up a huge deficit and leaving the Amer­ican tax­payers to foot the bill. And while our rep­re­sen­ta­tives may engage in a show of par­tisan bick­ering, the Wash­ington elite – that is, the Pres­i­dent and Con­gress – moves for­ward with what­ever it wants, paying little heed to the will of the people.

We are embroiled in global wars against ene­mies that seem to attack from nowhere. Our armed forces are pushed to their limit, spread around the globe and under con­stant fire. The amount of money spent on the wars in Afghanistan and Iraq is nearing $1 tril­lion and is esti­mated to total some­where in the vicinity of $3 tril­lion before it’s all over. That does not take into account the rav­aged coun­tries that we occupy, the thou­sands of inno­cent civil­ians killed (including women and chil­dren), or the thou­sands of Amer­ican sol­diers who have been killed or irreparably injured or who are com­mit­ting sui­cide at an alarming rate. Nor does it take into account the fam­i­lies of the 1.8 mil­lion Amer­i­cans who have served or are cur­rently serving tours of duty in Iraq and Afghanistan.

America’s place in the world is also under­going a drastic shift, with China slated to emerge as the top economy over the next decade. Given the extent to which we are finan­cially beholden to China, their influ­ence over how our gov­ern­ment car­ries out its affairs, as well as how it deals with its cit­i­zens, cannot be dis­counted. As of July 2009, China owned $800.5 bil­lion of our debt – that’s 45% of our total (for­eign) debt – making them the largest for­eign holder of U.S. for­eign debt. Little wonder, then, that the Obama admin­is­tra­tion has kow­towed to China, hes­i­tant to overtly chal­lenge them on crit­ical issues such as human rights. The most recent example of this can be seen in the Obama administration’s ini­tial reluc­tance to con­front the Chi­nese gov­ern­ment over its reported cyber­at­tacks on Google and other Amer­ican tech­nology companies.

As national bor­ders dis­solve in the face of spreading glob­al­iza­tion, the like­li­hood increases that our Con­sti­tu­tion, which is the supreme law of America, will be sub­verted in favor of inter­na­tional laws. What that means is that our Con­sti­tu­tion will come increas­ingly under attack.

The cor­po­rate media, increas­ingly acting as a mouth­piece for gov­ern­mental pro­pa­ganda, no longer serves a pri­mary func­tion as watch­dogs, guarding against encroach­ments of our rights. Instead, much of the main­stream media has given itself over to mind­less, celebrity-driven news, which bodes ill for our country. It doesn’t matter whether you’re talking about tabloid news, enter­tain­ment news or legit­i­mate news shows, there’s very little dif­fer­ence between them any­more. Unfor­tu­nately, most Amer­i­cans have bought into the notion that what­ever the media hap­pens to report is impor­tant and rel­e­vant. In the process, Amer­i­cans have largely lost the ability to ask ques­tions and think ana­lyt­i­cally. Indeed, most cit­i­zens have little, if any, knowl­edge about their rights or how their gov­ern­ment even works. For example, a national poll found that less than one per­cent of adults could name the five free­doms pro­tected in the First Amendment.

Finally, I have never seen a country more spir­i­tu­ally beaten down than the United States. We have lost our moral com­pass. A growing number of our young people now see no meaning or pur­pose in life. And we no longer have a sense of right and wrong or a way to hold the gov­ern­ment account­able. We have for­gotten that the essen­tial premise of the Amer­ican gov­ern­mental scheme, as set forth in the Dec­la­ra­tion of Inde­pen­dence, is that if the gov­ern­ment will not be account­able to the people, then it must cer­tainly be account­able to the “Creator.”

But what if the gov­ern­ment is not account­able to the people or the Creator?

As Thomas Jef­ferson writes in the Dec­la­ra­tion, it is then the right of “the People to alter or abolish it” and form a new government.

— —  —  —  —  —  —  —  —  —  —  —  —  —  —  —  —  — —

Con­sti­tu­tional attorney and author John W. White­head is founder
and pres­i­dent of The Ruther­ford Insti­tute. He can be con­tacted at Infor­ma­tion about the Insti­tute is avail­able

Pennsylvania Capital Should Weigh Bankruptcy, Controller Says

Jan. 26 (Bloomberg) -- Harrisburg, Pennsylvania, the capital of the sixth-largest U.S. state by population, should skip a $2.2 million debt service payment due Feb. 1 and consider bankruptcy, City Controller Dan Miller said.

Harrisburg faces $68 million in payments this year in connection with a waste-to-energy incinerator and should weigh Chapter 9 protection from creditors or state oversight through a program known as Act 47, Miller said today. Chapter 9 bankruptcy allows municipalities to reorganize rather than liquidate.

The alternatives are to sell assets such as an historic downtown market; an island in the Susquehanna River that includes the city’s minor-league baseball stadium; and the city’s parking, sewer and water systems, according to a preliminary 2010 budget and an emergency financial plan submitted yesterday.

“What I’m suggesting is we stop paying the debt service until we have a plan or we decide which way to go, in bankruptcy or Act 47,” Miller, a former city council member who became controller this month, said in a telephone interview. “I think it could save our assets instead of selling them.”

Mayor Linda Thompson, who unseated 18-year incumbent Mayor Stephen Reed in a Democratic party primary last year to lead the city of 47,000, didn’t return a call to her office for comment.

Thompson is scheduled to present her budget proposal to the city council tonight. The council has until Feb. 15 to adopt a final budget.

Asset Sales, Fees

Management Partners Inc. of Cincinnati, a consulting firm hired to study the city’s finances, recommended selling assets, raising city inspection and recreation fees, and reopening city labor contracts.

Harrisburg owes a total of $68 million in payments it guaranteed on bonds issued by the Harrisburg Authority for the incinerator and on a $35 million working capital loan for the project.

The city skipped more than $3.5 million in debt service and swap payments last year, prompting draws on reserves and back-up payments by Dauphin County, where Harrisburg is located, which has sued the city to recover its payments.

Harrisburg’s debt was downgraded to high-yield, high-risk junk status by Moody’s Investors Service in October. Moody’s lowered the city’s rating to Ba2 from Baa2, the second-lowest investment grade.

The city’s credit rating could be lowered further after an analysis of the steps taken to address future payments on debt and two interest-rate swaps that are costing about $800,000 a year, Moody’s said in an Oct. 19 report.

Home Depot to Cut 1,000 U.S. Jobs, Close Test Stores (Update2)

Jan. 26 (Bloomberg) -- Home Depot Inc., the world’s largest home-improvement retailer, will cut 1,000 U.S. jobs as it shrinks its pool of human-resources and construction workers and closes three test stores.

Home Depot will start cutting most of the jobs by the end of the week, Ron Defeo, a spokesman, said today by telephone. The positions being eliminated are also in finance and real estate. The company will also add 200 jobs, resulting in a net loss of 800 positions, he said.

Chairman and Chief Executive Officer Frank Blake announced the reductions in a memo to employees today, saying it “makes business sense to consolidate some functions” as store construction slows. Defeo provided a copy of the memo by e-mail.

The job cuts include 150 at its Atlanta headquarters, Defeo said. Stores in Wilson, North Carolina; Waveland, Mississippi; and Austell, Georgia, with 100 employees will close in six to eight weeks after merchandise is sold, he said.

The three stores being closed didn’t meet Home Depot’s “targeted financial returns,” Defeo said, declining to elaborate. The company has no plans to close any of its traditional stores, Blake said.

Home Depot employed about 322,000 people as of Feb. 1, 2009, according to an annual securities filing. It listed stores in the U.S., Puerto Rico, the Virgin Islands, Guam, Canada, Mexico and China.

Home Depot rose 11 cents to $27.73 at 4:15 p.m. in New York Stock Exchange composite trading. The shares rebounded by 26 percent in 2009 after sinking in the previous four years.

For Related News and Information: Sales by segment: HD US PGEO CHART Peer comparison: HD US PPC Consumer and retail headlines: RTOP Retail job cuts: TNI RET JOBCUTS Retail sales figures: RTSL

Record number of young Americans jobless

The U.S. economic recession has taken a particularly heavy toll on young Americans, with a record one out five black men aged 20 to 24 neither working nor in school, according to research released on Tuesday.

Teenagers have found it significantly harder to get a job since the recession began in late 2007, with black youths and young people from low-income families faring the worst, wrote Andrew Sum of Northeastern University in Boston, a employment researcher commissioned by the Chicago Urban League and the Alternative Schools Network.

"Low-income and minority youth, who depended on part-time jobs as a significant stepping stone to future employment, have been forced out of the job market and economically marginalized," Herman Brewer of the Chicago Urban League said in a statement.

Overall, 26 percent of American teenagers aged 16 to 19 had jobs in late 2009, said the report, which was based on U.S. Census Bureau data. That figure is a record low since statistics began to be kept in 1948, the researchers said.

Employment counts the number of people with a job as a percentage of the entire work force. By contrast, the unemployment rate -- which stood at 10 percent in December in the United States -- does not include people who have grown discouraged and stopped looking for work.

Joblessness was particularly rife among high school dropouts aged 16 to 24 who were neither in school nor holding a job, the report said. Family income also had a influence on joblessness.

Only 13 percent of low-income black teenagers in Illinois held a job in 2008 compared with 48 percent of more affluent white, non-Hispanic teens.

The "disconnection rate" -- Americans aged 20 to 24 who were neither in school nor working -- jumped to 28 percent last year from 17 percent in 2007.

"If you included those in prison it would be a couple of points higher," the report's co-author Joseph McLaughlin of Northeastern.

Among the proposals the report supported were government-funded jobs programs directed at the young, additional funding to help re-enroll school dropouts, and government-funded expansions of work internships.

(Reporting by Andrew Stern; Editing by Eric Walsh)

Record number of young Americans jobless 26 January 2010 (Reuters)

A New Moral Hazard in the Banking System

One commonly hears the argument that the FDIC creates moral hazard in the banking system, because depositors aren't worried about the soundness of their banks. I find this argument broadly dubious, since I have no idea how the vast majority of depositors could possibly be expected to have informed opinions on the soundness of their banks. Moreover, during the Great Depression, local wealthy people--who did have quite a lot of knowledge about the banks, and the local economies into which they lent--got hammered along with the rest of America.

But this suggests that there is a different, more plausible form of moral hazard operating right now:

"A California Banker" writes to Mish, giving yet another reason why banks aren't lending:

If you're a bank with a relatively healthy balance sheet with adequate capital, (like us)you want to maintain surplus capital in order to stay on the FDIC's list of banks they can transfer the loans and deposits from a failed institution into.

This is a home run for the acquiring bank and far more of an instant benefit than any new lending.

The problem here is that healthy banks end up competing with each other to have the largest capital surplus and therefore the greatest chance of being anointed in this manner by the FDIC. If everybody was lending, the FDIC would still have to place failed banks' assets and deposits with someone. But instead we get the opposite corner solution, where nobody is lending -- except, presumably, for banks which are close to failure and need all the interest income they can get. I wonder whether the FDIC has anybody thinking about how to counteract this syndrome.

The FDIC system of liquidating banks by selling their assets to other banks seems to be fostering credit contraction. On the other hand, so does letting a bunch of banks fail.

Central banks end US dollar emergency swap lines

The Bank of England said Wednesday that it and other major central banks are ending emergency lending arrangements put in place with the U.S. Federal Reserve in the wake of the global credit crisis, citing improvements in financial markets.

The decision marks the first unified retraction by central banks around the world of extraordinary support measures to boost lending after credit markets seized up in late 2007, causing the global economic downturn.

The Bank of England was joined by the European Central Bank, the Bank of Japan and the Swiss National Bank in announcing that the temporary reciprocal currency arrangements with the Fed would expire on Feb. 1.

"These lines, which were established to counter pressures in global funding markets, are no longer needed given the improvements in financial market functioning seen over the past year," the bank said in a statement. "Central banks will continue to cooperate as needed."

The Fed announced in December 2007 that it had authorized so-called liquidity swap lines with the European Central Bank and the Swiss National Bank. The agreement was extended to include several other central banks in April 2009.

Under the arrangements, central banks around the world provided each other with foreign currency -- the Fed made U.S. dollar liquidity available elsewhere, with the ECB providing euros and the Bank of England providing sterling. The agreements added up to hundreds of billions of dollars.

The aim was to improve liquidity conditions in U.S. and foreign financial markets after banks became nervous of lending to each other amid concerns about the state of balance sheets across the industry.

The stagnation in the interbank lending pushed up the premium for short-term U.S. dollar funding in particular, a currency that features widely in both asset and liability tables of banks and companies around the world. That led to a sharp rise in interbank lending rates, which flowed through to the rest of the financial system.

The Bank of England said it conducted its last U.S. dollar repo operation under the arrangements on Wednesday.

US View: Rating the State of the Union

President Obama's State of the Union address is poured over by US commentators, coming as it does at the end of a difficult year for the nation, and for the president.

Writer Verdict Score
New York Times
"We respect Mr Obama's deliberative nature. But too often in the last year he lingered on the sidelines, allowing his opponents to define and distort the issues and, sometimes, him - as happened last year in the health care debate. His speech Wednesday was a reminder that he is a gifted orator, able to inspire with grand vision and the simple truth frankly spoken. It was a long time coming." 4 stars
EJ Dionne,
Washington Post
"There was an unexpected poignancy to the moment. Barack Obama, who once strode across the political landscape as a master of the persuasive arts, found himself needing to prove that mastery all over again...
"It was clear that the Obama who addressed the nation on Wednesday also understood that he confronts a Republican Party that sees unflinching opposition as blazing a path to victory. And he offered himself as a president ready to do battle. 'We don't quit,' he said. 'I don't quit.'"
3 stars
Ron Fournier,
Associated Press
"Humility. Check. Bipartisanship, debt reduction, populist anger. Check. Check. Check. More jobs? On it. President Barack Obama checked every political box needed to restart his troubled presidency Wednesday night, but that may not be enough to consider his State of Union address a success. Did he strengthen his connection with the American public? Or did he sound like a politician with a stack of prescriptions for his political ills?" two stars
Katie Connolly,
"Obama Unleashes His Inner Tough Guy...
"He threatened vetoes, refused to pass problems on, he scoffed at suggestions of his naivete, foreshadowed consequences for Iran and made it powerfully clear that he won't accept second-place for America on the world stage."
four stars
Kevin McCullough,
Fox News
"As far as expectations for the State of the Union the president's speech was a sizable failure...
"It was messy, incoherent, disorganized, and most regrettably defiant.
"Which I guess when you think of it, defines the state of our union pretty well."
1 star
National Review
"Everything changes except President Obama. His agenda doesn't change. He has had no second thoughts about the wisdom of his health-care policies, or any of his policies; resistance is always and only a reason for redoubling.... All in all, though, our impression was of an administration that has no real understanding of the political straits in which it finds itself and thus no way to escape them." 1 star
Arianna Huffington,
Huffington Post
"The president, we were told, spent a good deal of time in the days leading up to his State of the Union address, going over it with a fine-toothed comb, making changes and additions in longhand. But judging from the speech, he also spent a lot of time going over the results of focus groups and polls. Indeed, the speech, despite its charm, humor, and occasionally impassioned rhetoric, had the feel of being focus-grouped within an inch of its life. There was a decidedly paint-by-poll-numbers air about it." 2 stars
Joe Klein,
"He almost seemed to be having fun up there; he delivered the speech in a free, almost informal manner. It was easily digestible, user-friendly...but it was also a fighting speech. Certainly, he stuck the needle time and again into the hides of the recalcitrant elephants in the room. It started early in the speech when he recounted the numerous tax cuts that had been passed in the past year as part of his much-distorted Stimulus Plan, to applause from Democrats and silence from Republicans, and he ad-libbed, staring at the Republican side of the room, 'I thought I'd get some applause on that one.'" 5 stars

The scores assigned to the candidates represent the BBC's interpretation of the writers' comments. One star indicates that they judged it a poor performance; five stars an excellent one.

Links in full

New York TimesNew York Times | The second year
Washington PostEJ Dionne | Washington Post | Obama shows he's a conciliator
MSNBCRon Fournier | Associated Press | Humbled Obama checks boxes
NewsweekKatie Connolly | Newsweek | Obama unleashes his inner tough guy
Fox NewsKevin McCullough | Fox News | Obama's sorry State of the Union speech
National ReviewThe Editors | National Review | Statist quo
Huffington PostArianna Huffington | Huffington Post | More a State of the Focus Group
TimeJoe Klein | Time | State of the Union
CNNCNN | Half of speech watchers have very positive reaction

Man accused of watching porn in front of his kids

LUFKIN, Texas — A man living at a Lufkin motel with his family was jailed Thursday on charges he watched pornography in front of his children.

Phillip Charles Taylor faces five counts of possession of child pornography and was being held on $250,000 bail, jail officials said.

Court-appointed attorney John Tunnell had no immediate comment.

Police became involved last week after a report to Child Protective Services that Taylor was viewing child pornography in front of his four youngsters, Detective David Cross said. The Lufkin Daily News reported Thursday that Taylor’s children are age 12 and younger.

A CPS caseworker and Cross visited Taylor on Tuesday at the motel, where he and his family had been living for the last month, Cross said.

The caseworker interviewed Taylor’s children and told him of the child pornography complaint, which he denied, according to an arrest report.

"His computer has been seized, but searching it will take a while," Cross said. "We’re still analyzing everything, but it looks like there’s a strong possibility of other charges being filed."

At least 21 DVDs were uncovered, including one marked "Our Movies" that contained children engaging in sexual acts with men, the police report said.

The videos apparently were produced commercially and most likely do not involve children in the Lufkin area, Cross said.

In 1974, Taylor spent six months on probation after being convicted of obscenity in Fort Worth, public records show. Cross had no details on that case.

Possession of child pornography is a third-degree felony carrying a sentence of up to 10 years in prison and up to a $2,000 fine.

© Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Pentagon calls for ‘Office of Strategic Deception’

WASHINGTON -- Remember the Pentagon Office of Special Plans that helped collect dubious intelligence that led to the war in Iraq? Or the program where the Pentagon secretly briefed military analysts to promote the Iraq war?

Meet the would-be Office of Strategic Deception.

In a little-noticed report earlier this month, the Defense Department's powerful Defense Science Board recommended creation of an entity designed solely for "strategic deception" against US adversaries.

"Specifically," the report reads (pdf), "we recommend that the Secretary [of Defense] task both the Under Secretaries of Defense for Policy and Intelligence, and the Joint Staff, working with the Office of the Director of National Intelligence, to create a tiger team to lay out courses of action and a way ahead for establishing a standing strategic surprise/deception entity. Once the initial work has been completed, all parts of the interagency should be brought into this effort."

"Strategic deception has in the past provided the United States with significant advantages that translated into operational and tactical success," it continues. "Successful deception also minimizes U.S. vulnerabilities, while simultaneously setting conditions to surprise adversaries."

Deception is a common war-time tactic nations use to gain a leg up on their enemies, but as Wired notes, the Pentagon apparently believes the United States must begin engaging in strategic tricks even before it wages war against another country.

"Deception cannot succeed in wartime without developing theory and doctrine in peacetime," the DSB report reads. "In order to mitigate or impart surprise, the United States should [initiate] deception planning and action prior to the need for military operations."

And such attempts at strategic trickery must occur at virtually every stage in the United States' dealings with other nations, the Pentagon's science board says.

"Denial and deception efforts will be included from the onset, factors into both intelligence and response research and development activities at every stage, including war gaming."

The DSB report was first flagged by

In 2003, New Yorker reporter Seymour Hersh highlighted the Office of Special Plans, a closely guarded cabal that did an end-run around the Pentagon to collect purported intelligence suggesting that Saddam Hussein had ties to al Qaeda and weapons of mass destruction.

"They call themselves, self-mockingly, the Cabal—a small cluster of policy advisers and analysts now based in the Pentagon’s Office of Special Plans," Hersh wrote. "In the past year, according to former and present Bush Administration officials, their operation, which was conceived by Paul Wolfowitz, the Deputy Secretary of Defense, has brought about a crucial change of direction in the American intelligence community. These advisers and analysts, who began their work in the days after September 11, 2001, have produced a skein of intelligence reviews that have helped to shape public opinion and American policy toward Iraq. They relied on data gathered by other intelligence agencies and also on information provided by the Iraqi National Congress, or I.N.C., the exile group headed by Ahmad Chalabi.

"According to the Pentagon adviser, Special Plans was created in order to find evidence of what Wolfowitz and his boss, Defense Secretary Donald Rumsfeld, believed to be true—that Saddam Hussein had close ties to Al Qaeda, and that Iraq had an enormous arsenal of chemical, biological, and possibly even nuclear weapons that threatened the region and, potentially, the United States," Hersh added.

Late last year, Raw Story's Brad Jacobson revealed evidence that directly tied the activities undertaken in the military analyst program under President George W. Bush -- where analysts were briefed to promote the Iraq war -- to an official US military document’s definition of psychological operations. Such propaganda that is only supposed to be directed toward foreign audiences.

Pentagon spokesman Bryan Whitman, who remains a spokesman for the Pentagon today, told Raw Story the program was intended only to "inform."

Whitman said he stood by an earlier statement in which he averred “the intent and purpose of the [program] is nothing other than an earnest attempt to inform the American public.”

Netanyahu to returning Haiti team: You raised Israel's image

The Israel Defense Forces team dispatched to Haiti in the wake of the devastating earthquake two weeks ago returned home on Thursday morning, receiving a hero's welcome from top Israeli officials at the Ben Gurion International Airport.

Prime Minister Benjamin Netanyahu, Defense Minister Ehud Barak, and IDF Chief of Staff Gabi Ashkenazi were on hand at the airport to laud the 200-member team as it landed.

"You have raised human spirits and elevated the name of the State of Israel and the Israel Defense Forces," Netanyahu told the returning team. "As many plot against us, distort and muddy our names, you have shown the real IDF."

"The Chief of Staff has told me that the other militaries were astounded by how quickly we arrived at the scene and began to work," added the prime minister. "Those who have seen the IDF over the years, operating under seemingly impossible situations and missions, are not surprised."

"Many have tried recently to tarnish our image," Ashkenazi said in his welcome. "With you deeds, you have proven that the opposite is true."

"Facing this massive catastrophe was an exceptional group of people from the Home Front Command and the IDF Medical Corps," Ashkenazi said. "This group was a source of pride for every Jew."

The Chief of Staff told the team that during his recent trip to Europe, numerous heads of foreign armies praised the work of the IDF crew, adding: "I was proud to be the man representing them."

In his welcoming address, Barak added his own accolades and praised the team for its efforts. "We all watched with excitement as the eyes of the world were on you. It warmed the heart to see you fulfill your professional mission."

"In a world where the IDF is criticized, you showed the true spirit of the IDF and the true spirit of Israel," Barak added.

The Home Front Command decided this week to bring the team back earlier than planned, as senior officers on hand in Haiti felt they had fulfilled their role in helping the earthquake victims.

One of the victims of the quake was a six-year-old boy named Wadli, who joined the Israeli team in its return. Wadli was born in Haiti with a life-threatening heart defect. In the coming weeks, he will undergo surgery at the Wolfson Hospital.

"I'm sure that the main memories you take with you will be of Waldi, the 16 babies that you delivered and the thousands of injured and sick people that you cared for," Barak told the team.

Maj. Gen. Yair Golan, the head of the Home Front Command, returned to Israel last Friday after spending a few days with the Israelis in Haiti, commanded by Brig. Gen. (res.) Shalom Ben-Aryeh. The command and the IDF Medical Corps are now preparing for the next stages of their mission: closing up shop and leaving behind a large part of the equipment brought there as a final goodwill gesture to the people of Haiti.

The winding up of the mission involved assisting the members of the team in returning to normal life back home after the complex experiences they they had, as well as drawing the necessary professional conclusions from the Haiti operation.

On the professional level, the IDF learned much about running a field hospital under such difficult conditions and operating rescue teams; and about dealing with a mass disaster that thankfully Israel has never experienced. The up close experience of dealing with an earthquake and its aftermath - a number of aftershocks occurred while the Israel mission was there - increased awareness of the enormous danger of such a natural event, but the upper echelons of the Home Front Command believe the situation in Israel is very different. While the earthquake in Haiti reached a magnitude of 7 on the Richter scale, it seems the incredible destruction resulted more from the poor-quality construction there. Two similar strength earthquakes in California in recent decades resulted in only a few dozen killed in each quake.

Members of the rescue team who toured the area were surprised to discover there are almost no buildings built with reinforced concrete in Haiti. "You wander through the ruins and see no iron bars. Everything is made out of simple concrete, which turns into a brittle material in an earthquake of this magnitude. Everything collapses," said one member of the Israeli mission.

In Israel, by way of comparison, a far stricter building code was adopted in the mid-1970s, making buildings far less vulnerable to earthquakes.

The main conclusion of the Haiti mission from an Israeli perspective, said one senior officer, concerned the "awareness of the citizens and local authorities of the possibility of an earthquake. It is possible that more exercises are needed, but if you prepare properly for a missile attack on the home front, then you have 95% of the tools [needed] at your disposal for dealing with an earthquake," said the officer.

An analysis of the decision making process on sending the team once again shows that time is the critical factor. Israel moved quickly, in terms of making its decision and making the necessary preparations.

This provided effective help at a very early stage. In the case of Haiti, the rescue operations among the ruins - even though they drew huge media coverage - were downplayed. "It is very exciting to pull out survivors, but it's a drop in the bucket. We rescued or aided in the rescue of four people, while all the rescue teams from all the countries saved 132 people altogether. It seems almost 200,000 people died in the earthquake," said the senior officer.

Israel's main accomplishment was in the quick deployment of the field hospital in Haiti. "For five critical days, it was the best hospital in Port-au-Prince," said the officer. "We provided timely medical care to about 1,000 people, we conducted 300 operations and delivered 16 babies. In the past few days the Americans arrived and then you can put things in proportion and become more modest in the face of their airlift and the scope of their aid. You need to understand that those who will continue to treat the main suffering there are the Americans," he added.

For Israel, this is further proof of the importance of field hospitals; the IDF closed the last one five years ago and only reopened them as part of the lessons learned from the Second Lebanon War.

The IDF has praised the cooperation with the Foreign Ministry and El Al during the mission to Haiti. The good public relations is seen as being of only secondary importance: "Our people went to Haiti to save lives, to provide the best medical care they can and to represent Israel. That is the proper order of priorities. They did not think constantly about the blue and white flag flying overhead," said the senior officer

Brown accused of cover-up: PM under fire as key papers on Iraq war are kept confidential

Gordon Brown was accused of 'gagging' the Iraq inquiry last night as it emerged the Government is blocking the release of secret documents about the war.

Senior MPs from all three main parties said the decision bore all the hallmarks of an official 'cover-up' and made a mockery of the Prime Minister's pledge of a fully open investigation.

Frustration boiled over as Labour's former Attorney General Lord Goldsmith, who gave the green light for the 2003 invasion after changing his mind and declaring it legal, gave evidence.

Lord Goldsmith himself condemned the Government's refusal to declassify key papers, meaning they cannot be made public or even quoted from by the inquiry panel during questioning.

'I didn't agree with the decision that has apparently been made that certain documents are not to be declassified, but I will give the evidence that the inquiry seeks,' he said.

The inquiry's mild-mannered chairman, Sir John Chilcot, told him: 'We share your frustration.'

Another member of the inquiry team, former diplomat Sir Roderick Lyne, referred sarcastically to 'this bountiful Government' having agreed to the release of one document.

A spokesman for the inquiry said the panel could 'talk around' declassified documents in 'general terms', but was unable to quote from them or ask witnesses to discuss them in detail.

The row is thought to centre on memos and documents covering Lord Goldsmith's initial advice on the legality of war in the months leading up to the March 2003 invasion, when he believed it would breach international law.

Other key papers which have not been disclosed include Tony Blair's private letters to George Bush in the run-up to the conflict, in which he apparently promised the U.S. President 'we will be with you', and memos to Mr Blair from his then foreign policy adviser Sir David Manning.

Lord Goldsmith

On the spot: Attorney General Lord Goldsmith condemned the Government refusal to declassify documents at the Chilcot Inquiry yesterday


JULY 24, 2002: Tells Downing Street self-defence and humanitarian intervention are no basis for war. Warns Blair in writing he can't agree to war with U.S. without UN support

NOV 7, 2002: Warns Jack Straw can't expect it to be 'alright on the night' after first UN resolution is passed

NOV 8, 2002: UN Security Council pass Resolution 1441 declaring Iraq in 'material breach' of its obligations and need for weapons inspectors to return

NOV 11, 2002: Tells Downing Street he's 'pessimistic' about the chances of war without another UN resolution

JAN 14, 2003: Blair given draft advice saying another resolution authorising use of force is needed

JAN 23, 2003: Meeting with Sir Jeremy Greenstock for first-hand account of UN negotiations. Told Russia and France know they've lost but unconvinced. Writes to Blair to say view unchanged.

FEB 10, 2003: Meets with U.S. officials and lawyers in Washington

FEB 12, 2003: At meeting with legal assistant in London, decides no new resolution needed and to revise early draft opinion

FEB 27, 2003: Tells No10 he's changed his mind, giving 'green light' for war

MARCH 7, 2003: Blair given 13-page legal opinion saying 'reasonable case' for war, but warns of possible legal action

MARCH 17, 2003: Upgrades advice to say first resolution gives authority for war

MARCH 18, 2003: MPs vote to back war by 412 to 149

MARCH 20, 2003: Invasion begins

The Government drew up a 'protocol' on the release of information when it set up the inquiry, setting out nine grounds on which publication of potentially damaging details could be blocked.

Secret intelligence documents, which are crucial to uncovering the truth about the way the Government 'sexed up' the case for war, are among those that can be held back, as can papers deemed to contain 'commercially sensitive' information.

The Tories and the LibDems said fears that ministers were attempting to 'suffocate' the inquiry were being borne out.

They said the refusal to release key documents would hamper the questioning of the central witness - Mr Blair - who is due to appear tomorrow.

Shadow Foreign Secretary William Hague said: 'Gordon Brown said unequivocally that "no British document and no British witness will be beyond the scope of the inquiry".

'It would be unacceptable for the Government to backtrack on that clear commitment.

'The Government's reported unwillingness to co-operate fully will do little to dispel the suspicion that Brown's Downing Street would have preferred a more restricted inquiry.'

LibDem leader Nick Clegg said: 'Despite Gordon Brown's claim that he has "nothing to hide" this has all the hallmarks of a cover-up. The protocol on the release of documents is being used to gag the inquiry.

'The Government must immediately declassify certain key documents ahead of Tony Blair's hearing: The memo from Sir David Manning to Tony Blair dated January 31, 2003, and the letter from Tony Blair to George W Bush, sent July 2002.

'Labour are leaving themselves open to charges of outright sabotage of Chilcot's work to save their own political skins.'

Labour MP John McDonnell said: 'This is contrary to the assurances that this would be a completely open and accessible inquiry.

'It demonstrates that the Government is anxious about what these documents will reveal. People will rightly ask questions about what they have got to hide.'

Lindsey German, of the Stop the War Coalition, said: 'At every stage, the Government has done its best to conceal evidence about the decision to go to war from the public.

'Initially, this inquiry was to be held in secret. It is refusing to apportion blame. Now we find that crucial documents are being withheld.

Enlarge Lord Goldsmith's formal legal advice to Tony Blair in March 2003

'Green light': Lord Goldsmith's formal legal advice to Tony Blair in March 2003

'There is only one conclusion to draw: That they contain evidence even more damning to the Government than that already heard.'

The Cabinet Office said the inquiry was entitled to request and view any document, no matter how sensitive, from Government departments.

But a spokesman added: 'Many of these documents are highly classified, for example in view of their potential impact on national security or international relations.

'If the inquiry wishes to make public reference to or release into the public domain any of this classified material, it can request this of the Government.

'Many documents have been declassified and the inquiry has made these publicly available on its website.

'In some instances, the Government has required further time to consider the inquiry's requests.'

The classified documents the critics say must be made public

MEMO: March 12, 2002. Sir David Manning, foreign policy adviser, to Tony Blair (partially leaked)

Sir David recorded that he had had dinner with Condoleezza Rice, U.S. national security adviser, and had a 'frank, one-on-one' discussion on Iraq.

He told Blair: 'I said that you would not budge in your support for regime change but you had to manage a press, a Parliament and a public opinion that was very different than anything in the States.

'And you would not budge either in your insistence that, if we pursued regime change, it must be very carefully done and produce the right result. Failure was not an option.'

Blair and Bush

Joint forces: Tony Blair reputedly told President Bush that Britain would 'be there' if the U.S. decided it had to take military action against Saddam

LETTER: July 2002. Tony Blair to George Bush (referred to in inquiry but not leaked)

Alastair Campbell told the inquiry that Blair's message was broadly: 'We share the analysis, we share the concern, we are going to be with you in making sure that Saddam Hussein faces up to his obligations and that Iraq is disarmed.'

Campbell added: 'If that cannot be done diplomatically and it is to be done militarily, Britain will be there. That would be the tenor of the communication to the president.'

MEMO: January 14, 2003 (referred to at inquiry but not released)

Lord Goldsmith gives Mr Blair a five-page draft legal opinion which says a further resolution specifically authorising the use of force is necessary.

MEMO: January 31, 2003. Sir David Manning to Tony Blair (partially leaked)

In the memo, paraphrasing Bush's comments at a meeting, Sir David noted: 'The start date for the military campaign was now pencilled in for March 10. This was when the bombing would begin.'

Towards a Theory of Conspiracy Theories

Cass Sunstein, confidante of Obama, Harvard Law professor, current head of the federal Office of Information and Regulatory Affairs, potential Supreme Court nominee - and the latest crusader against those dastardly conspiracy theories

Recently, there was quite a hullabaloo in the blogosphere over a reprehensible academic paper Sunstein co-wrote in 2008 (available for download here), which argued for a Cointellpro-type program of government infiltration of conspiracy theorists, online and in person. Given the incredible scope and flexibility of the powers of his office, as enunciated in this September 30, 1993 executive order signed by Clinton, his proposal should certainly give us pause.

His paper, "Conspiracy Theories," was originally scooped by Marc Estrin at Rag Blog, and covered in short order by Daniel Tencer at The Raw Story and Glenn Greenwald at Salon and pretty much went viral from there. Although Greenwald's piece was the most extensive, none of the reports really examined the paper in great detail.

I took the time to read the whole thing. I've also read the entire academic literature on conspiracy theory and written one of my masters theses on the topic at a Division I research university. If I have the stomach for it, I may offer a more detailed analysis of Sunstein's paper in a future post, but for now I'd like to offer something else.

More important than a detailed analysis of a single essay would be a sustained theoretical critique of the role of "conspiracy theory" in delegitimizing information contrary to the interests and consensus reality of the elite. None of the coverage of Sunstein's journal article offered this broader view. I would like to do so, by posting a revised version of something I posted here a few years back which, unfortunately, remains as timely as ever.

Contemporary America is of two minds regarding conspiracy theory - or "conspiranoia" as I like to call it, a term combining conspiracy and paranoia which I got from a book by Devon Jackson of the same name.

On one hand, it has become the default popular view, one of commodified skepticism towards history and government. It's a sentiment that has proliferated extensively since the 1960s, Watergate, and the Church Committee. With the collapse of the reassuring dualities of the Cold War in the early 1990s, it has culminated into an extremely pervasive apocalyptic teleology. It has become one of the leading intellectual leitmotifs of our time.

On the other hand, the disavowal of conspiranoia has also become an integral part of the conventional wisdom itself, a social technology of control that establishes the boundaries of "responsible discourse" by reflecting elite consensus on the fundamental nature of social reality, in accordance with the elite's own class interests. This makes for an incredibly effective means of establishing ruling class hegemony by controlling dissent, foreclosing alternatives, engineering support, and transmuting the interests of the ruling class into that of the nation as a whole.

As Gore Vidal once said "The way our ruling class keeps out of sight is one of the greatest stunts in the political history of any country" and conspiracy theory is one of their most potent methodologies.

In fact, one is apt to be labeled a conspiracy theorist for merely suggesting that there is a ruling class in this country that seeks to maintain hegemony, to say nothing of the idea that the ruling class might occasionally use conspiratorial methods. Rather than conspiracy theory, most media and intellectual gatekeepers prefer to view elite behavior through the lens of "somnambulist theory," "coincidence theory", "incompetence theory", or "spontaneity theory". No amount of intellectual gymnastics is spared to avoid arriving at the conclusion that the rich and powerful, like the rest of us, might possibly act in support of their own perceived best interests. This is, of course, in spite of a voluminous sociological literature on the power elite and "elite deviance" and a plethora of laws on the books against criminal conspiracy.

True freedom of mind - presumably the bedrock of the informed consent of the governed in a democracy - requires not only the negative absence of constraint but the positive presence of other alternatives. Even though the rich and powerful have repeatedly used conspiracy to get richer and more powerful, to mention this sociological fact immediately draws the most vicious criticism, including charges of conspiracy mongering, and many variations on superstition, cynicism, paranoia, hysteria, and primitivism.

Conspiranoia can and should be a tool of empirical explanation. It is possible to point fingers and name names. The powers that be, perhaps as few as thousands of people enslaving as many as six billion, act not in conspiracy but in tacit collusion fostered by the similarity of their backgrounds, calibrated at key forums and through key organizations in support of a global agenda of domination, economic plunder, and environmental devastation.

Ultimately, however, the appeal of conspiranoia is that of narrative itself: it's ability to explain, predict, motivate, and entertain. Although conspiranoia offers the aficionado an integrated worldview, a weltanschauung, it also provides more than that. When confronted with the potential evidence of conspiracy, one must ask, as in criminal trials: "Is there motive, means, and opportunity?" All too often there is, especially at the intersection of politics, law, high finance, intelligence, diplomacy, covert military operations, narco-trafficking, organized crime, and the media simulacrasphere.

Instead of the usual characterization of conspiracy theory as a branch of group psychopathology, "troubled minds looking for order in chaotic and rapidly changing times" as the academic literature so uniformly spins it, conspiranoia might be better and more accurately thought of as a populist fusion of life writing, historiography, and political science which provides explanatory narratives that void the epistemic warrant of the elite consensus on history, social reality, and the "conventional wisdom." This is a major development in the long tradition of popular resistance to state power and economic oligarchy, not of the right vs. left, but of the bottom vs. the top.

At its best, conspiranoia is a radical exercise of the skepticism and critical reason at the heart of the Enlightenment project. In this sense it represents a last-ditch effort by the supposed repositories of popular sovereignty - the people - to save liberal humanism and the Enlightenment from its demented doppelganger - the program of perpetual war for perpetual peace and the enslavement of the autonomous bourgeois subject under regimes of panoptic control managed by technocrats serving the super rich, using the powerful tools of the nation-state as they've evolved since the Peace of Westphalia in the 17th century.

Conspiranoia narratives could be empirical explanations of social reality, since it can easily be argued that, as Carl Oglesby put it in The Yankee and Cowboy War, "conspiracy is the normal continuation of normal politics by normal means...and where there is no limit to power, there is no limit to conspiracy." The knee-jerk denigration of such attitudes by the media and the academy, however, demonstrates that their disavowal has become a vital social technology of control in the late modern age.

With the collapse of the Soviet Union, virtually all pre-capitalist and anti-capitalist systems have been colonized by "global monetocracy", a transnational corporate socialism that socializes the costs and privatizes the profits. This is kleptocracy by any other name, albeit a far more sophisticated version than that practiced by hacks like Marcos, Duvalier, Mobutu, and their ilk.

Although seemingly at its moment of universal triumph, this system may in fact be teetering on the brink of economic, political, social, and environmental collapse. This collapse may even already be underway. It seems likely usher in an extremely reactionary, corporate-managed pseudo-populism and overt police state fascism in all of the core states of global capitalism - perhaps even a hybrid of revolution and civil war.

It is precisely the dramatically escalating accumulation of these fundamental contradictions within the global capitalist system that "coincidence theorists" try to deflect public attention away from with their hysterical vilification of conspiracy theories. Their relentless disparagement continues even though, ala Occam's Razor, conspiracy theories often provide the simplest, most rational explanation for much of history and current events.

The power elite deliberately obscure the structural limitations on free will (that they themselves largely created) to mask the sad fact that, as human civilization has evolved from slavery to feudalism to democracy, we have traded kings and tsars for presidents and prime ministers but the money power behind the scenes has remained the same. The king, the theocrat, and the money changers have conceded just enough to stave off revolution, and these small victories have only been won by long and arduous struggle.

Their regime of capital accumulation can only survive by feeding off the subject body and stupefying the subject mind with the myth of individual agency and the "society of the spectacle" while simultaneously doing everything in their power to ensure that this alleged agency can't be used in any meaningful way. In such an environment, denigrating conspiranoia becomes a means of cordoning off from the masses the fact that they are being lied to every day of their lives by the very authority figures they trust to give them the "good life," and that the consumerist hydrocarbon-based industrial civilization they live in is arguably psychopathic and quite possibly in terminal decline.

While the provisional government of politicians does the lying, they do so in the service of a permanent government above and behind political power, a secular oligarchy working in tacit collusion. In America they are the great commercial dynasties, the Fortune 500 companies and their lobbyists, the media simulacrasphere, the civil and military services, the large research universities, law firms, charitable foundations, and their ilk.

They hire the politicians and frame the boundaries of the politicians' agenda - even the boundaries of "reasonable" political discourse itself. They authorize the production of regular election pageants to protect the brand name of American democracy. They convince a large enough portion of the general population that the system still works, so that the machinery of oppression, theft, enslavement, murder, and incarceration can continue without interruption.

This oligarchy makes effective use of such groups and forums as the Bilderberg Group, World Bank, International Monetary Fund, World Economic Forum at Davos, Bank of International Settlements, World Trade Organization, Council of Foreign Relations, Trilateral Commission, Bohemian Grove, Group of Eight, Trans-Atlantic Business Council, and other organizations to calibrate their rhetoric, achieve consensus, and even set policy superceding that of sovereign governments. This isn't done in singular smoky star chambers, as the straw man argument against conspiracy theories routinely and condescendingly jokes.

Instead, there are many camps within this oligarchy. Sometimes they compete, sometimes they cooperate, but all are unified by a miasmic group-think that stems from the similarity of their backgrounds, class interests, and institutional positions, and their sensitivity to the behavioral cues given off by the institutional structures within which they seek to advance. Pursuing a misguided sense of their own self interest, they pursue the interests of the global "capitalist" system as well.

As the key nations of transnational corporate imperialism degenerate into police states, they slowly strip citizens of their rights by periodically manufacturing crises to enact the Hegelian dialectic of "crisis-response-resolution," with each new "resolution" bringing them greater control and pushing the world's resources into what George H.W. Bush has called "higher, tighter, and righter hands."

Although conspiranoiacs exist in great variety, many share a belief in the rough outline of this dystopian nightmare. If true, it is the truth which cannot be spoken. For that reason, the media and academic gatekeepers of "credible" information will continue to dismiss anything that challenges the conventional wisdom as a "conspiracy theory" until some catalyst finally reveals enough of the horrible truth to enough people, facilitating a paradigm shift of world historical importance, a tipping point, the 100th monkey effect.

The ills of society can neither be ameliorated nor even adequately described by means of the law alone. Nevertheless, progressive efforts to ameliorate these ills cannot succeed without committed work in the legal field. However, such work will be necessarily defensive in posture until such time as substantial extraparliamentary pressure is brought to bear on the system by means of "either grassroots citizen participation in credible progressive projects or rebellious acts of desperation that threaten the social order," as one of America's greatest public intellectuals, Cornel West, put it.

With adequate reach into a broad enough segment of the general population by leaking past the media oligarchy, and armed with adequate credibility by weeding itself of the pervasive disinformation that so often taints it, conspiranoiac analysis has the potential to precipitate and consolidate a very significant portion of that extraparliamentary pressure of which West speaks.

I believe it was the inimitable psychonaut philosopher Terence Mckenna who said "Like it or not, the people of the fringe are in an apocalyptical struggle: either the elite techniques of control will be perfected to the level where dissent can be abolished, or heretics will mutate to some level of consciousness where they can do holy and miraculous works to resurrect the old dream of freedom for all."

Although this may seem a millennial hope, it may also be a cogent empirical analysis of a decisive historical crossroads, and certainly a large number of us have our eyes on December 21, 2012. In any event, until our individual consciousness (and our collective unconscious) is liberated, and we can finally establish abiding regimes of peace, social justice, and sustainability, as Rousseau said "Man is born free, yet he is everywhere in chains."