Wednesday, February 10, 2010

Obama effectively ends U.S.-manned space flight

“We choose not to go to the moon. We choose not to go to the moon in the foreseeable future and not to do the other things, not because they are hard, but because they are expensive, because that goal will serve only to waste our energies and skills, because that challenge is one that we are unwilling to pay for, one we are unwilling to continue, and one which we intend to abandon…”

Of course, I’m paraphrasing the speech that, nearly 50 years ago, set the lunar dream in motion.

With mere words, John F. Kennedy placed his nation on a path that would lead it to accomplish the greatest feat in human history. As a direct result of JFK’s inspiration, the United States has landed on the moon seven times. Brave men with manly names like Buzz, Conrad, Shepard, Harrison and Armstrong took flight aboard craft like Eagle, Intrepid, Antares and Challenger. Each time, the world watched, dreamed, and cheered. In the years since the Apollo program ended, the missions have taken on nearly legendary status, leading the disillusioned to the idiotic notion that such an undertaking was simply too massive to have been real. It wasn’t. It just took one man with vision, a person who actually believed that America could achieve the impossible, to articulate a dream.

Shortly before George W. Bush left office, he created the Constellation program and we began the adventure again. We were to reach the Moon’s surface by 2020.

Unfortunately, with the stroke of the budgetary pen, President Barack Obama has gutted NASA’s budget, ending the nascent moon mission and pounding a major nail into the coffin of U.S.-manned space exploration. The space shuttle program has only five more missions before its retirement. After that, Americans will reach the International Space Station aboard Russian Soyuz capsules until 2020. Beyond that, there are no plans for Americans to return to space. Don’t worry, though, Obama assures us that NASA will have enough cash to keep doing research into the bogus science of man-made global warming.

As the president said during a speech last week, there will still be funding for what he termed “programs I care about.”

Since the moon shot is obviously not something that captures the current presidential imagination, it’s gone—sacrificed to the laughable notion of fiscal responsibility within the largest, most bloated, irresponsible budget in history. Instead, Obama has taken $6 billion from NASA, one-third of its 2009 budget, and offered it to private companies to encourage their space initiatives. Rather than do something that inspires pride in their country’s ambition, Americans will be able to watch as corporations line up to kiss the federal ring, grab some tax dollars, and spend it on low-end rockets that will push the wealthy into orbit for a few seconds at a time. Here’s hoping they’ve unionized, helped get the president elected, or promised some sort of future campaign donation kickback, because, as we’ve seen with the government auto takeover, Obama doesn’t embrace the private sector unless it benefits Democrats directly.

Americans will also be able to enjoy the view as China pursues its own lunar dreams, since the Chinese National Space Agency has managed to find the enthusiasm Obama lacks. If things continue as it appears they will, the next two decades will see the CNSA emerge as the global leader in manned spaceflight, likely achieving their goal of reaching the moon sometime between 2020 and 2025.

In the end, the most disturbing thing about the president’s decision to eviscerate NASA is that it accomplishes absolutely nothing. If it somehow fixed his massive budgetary problems, there might be a justification. Sadly, it doesn’t. His budget still creates a trillion dollars of new debt, per year, for the next 10 years. The money he’s taken from the space program does nothing to stem the tide of red ink, will serve to increase unemployment, and fails, in every way, to advance the American cause. So why are we choosing this course?

Imagine how different the world would be if JFK had gone to Rice Stadium in 1962, stood before that crowd, and opted to squash the concept of American exceptionalism in favor of a negligible, short-term, financial gain. Obama has done just that, embracing instead the failed ideology of Walter Mondale, who once said NASA was “a waste of money that would be better spent on welfare.”

If Democrats were smart, they’d ignore Mondale in favor of their flawed forebear, Lyndon Johnson, who said “I do not believe that this generation of Americans is willing to resign itself to going to bed each night by the light of a communist moon.” It was true then, and it still rings true today.

Perhaps there’s still some hope. Maybe Congress will do the right thing and reject this nonsense. If not, President Obama’s most prominent legacy may be the Democrat PR disaster of a Chinese flag planted at Tranquility Base—a nightmare scenario, at least to those of us who still believe in the inherent greatness of this nation.

Robert Laurie writes a daily political commentary blog, The Robalution. Robert holds a degree in English from Wayne State University, and has worked in advertising as a graphic designer and copy writer.

China PLA officers urge economic punch against U.S.

Members of the Chinese People's Liberation Army (PLA) Air Force Aviation stand at attention during a training session at the 60th National Day Parade Village in the outskirts of Beijing, September 15, 2009. REUTERS/Joe Chan

BEIJING (Reuters) - Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan.

The calls for broad retaliation over the planned U.S. weapons sales to the disputed island came from officers at China's National Defence University and Academy of Military Sciences, interviewed by Outlook Weekly, a Chinese-language magazine published by the official Xinhua news agency.

The interviews with Major Generals Zhu Chenghu and Luo Yuan and Senior Colonel Ke Chunqiao appeared in the issue published on Monday.

The People's Liberation Army (PLA) plays no role in setting policy for China's foreign exchange holdings. Officials in charge of that area have given no sign of any moves to sell U.S. Treasury bonds over the weapons sales, a move that could alarm markets and damage the value of China's own holdings.

While far from representing fixed government policy, the open demands for retaliation by the PLA officers underscored the domestic pressures on Beijing to deliver on its threats to punish the Obama administration over the arms sales.

"Our retaliation should not be restricted to merely military matters, and we should adopt a strategic package of counter-punches covering politics, military affairs, diplomacy and economics to treat both the symptoms and root cause of this disease," said Luo Yuan, a researcher at the Academy of Military Sciences.

"Just like two people rowing a boat, if the United States first throws the strokes into chaos, then so must we."

Luo said Beijing could "attack by oblique means and stealthy feints" to make its point in Washington.

"For example, we could sanction them using economic means, such as dumping some U.S. government bonds," Luo said.

The warnings from the PLA come after weeks of strains between Washington and Beijing, who have also been at odds over Internet controls and hacking, trade and currency quarrels, and President Barack Obama's planned meeting with the Dalai Lama, the exiled Tibetan leader reviled by China as a "separatist."


Chinese has blasted the United States over the planned $6.4 billion arms package for Taiwan unveiled in late January, saying it will sanction U.S. firms that sell weapons to the self-ruled island that Beijing considers a breakaway province of China.

China is likely to unveil its official military budget for 2010 next month, when the Communist Party-controlled national parliament meets for its annual session.

The PLA officers suggested that budget should mirror China's ire toward Washington.

"Clearly propose that due to the threat in the Taiwan Sea, we are increasing military spending," said Luo.

Last year, the government set the official military budget at 480.7 billion yuan ($70.4 billion), a 14.9 percent rise on the one in 2008, continuing a nearly unbroken succession of double-digit increases over more than two decades.

The fresh U.S. arms sales threatened Chinese military installations on the mainland coast facing Taiwan, and "this gives us no choice but to increase defense spending and adjust (military) deployments," said Zhu Chenghu, a major general at China's National Defence University in Beijing.

In 2005, Zhu stirred controversy by suggesting China could use nuclear weapons if the United States intervened militarily in a conflict over Taiwan.

The United States switched official recognition from Taiwan to China in 1979. But the Taiwan Relations Act, passed the same year, guarantees Taiwan a continued supply of defensive weapons.

China has the world's biggest pile of foreign currency reserves, much of it held in U.S. treasury debt. China held $798.9 billion in U.S. Treasuries at end-October.

But any attempt to use that stake against Washington would probably maul the value of China's own dollar-denominated assets.

China has condemned previous arms sales, but has taken little action in response to them. But Luo said the country's growing strength meant that time has passed.

"China's attitude and actions over U.S. weapons sales to Taiwan will be increasingly tough," the magazine cited him as saying. "That is inevitable with rising national strength."

(Editing by Jeremy Laurence)

The Bankrupt PIGS of Europe

(Editor’s note: The European Union's government-backed lender says it cannot bail out Greece or any other European country that can't pay its debts, the Associated Press reported. The European Investment Bank said in a statement Tuesday that it could "only finance economically viable projects" and that its rules would not allow it help an EU nation cover a budget deficit.)

They are called the PIGS—Portugal, Ireland, Greece, Spain. What they have in common is that all are facing deficits and debts that could bring on national defaults and break up the European Union.

What brought the PIGS to the edge of the abyss?

All are neo-socialist states that provide welfare for poor people, generous unemployment, universal health care, early retirement and comfortable pensions. Most consume 40 percent to 50 percent of their gross domestic product annually, a crushing burden on the private sector.

Dying populations is a second cause. After two world wars, the Europeans lost their faith and embraced hedonism and materialism, la dolce vita. Large families fell out of favor. Women put off marriage and babies, and went to work. Birth control and abortion were made readily available in every country and, if not, just across the border.

For 30 years, the fertility rate of Europe has been below the 2.1 children per woman necessary to replace a population. In Russia and Ukraine, a million people disappear yearly. In Western Europe, the passing of the native-born goes on quietly, as Third World peoples come to fill the empty spaces left by the aborted and unconceived.

Turks are in Germany. Pakistanis, Indians, Arabs and Caribbean peoples are in Britain. Algerians, Tunisians and Moroccans occupy the southern coast of France and the banlieues around Paris.

These newcomers have neither the education nor skills of the Europeans. Hence, they earn less and contribute less in taxes, but consume more per capita in social benefits.

As the number of young entering the European labor forces shrinks, the number of seniors and aged grows. And thanks to advances in medicine, these retirees live lengthening lives. Thus the burden of pensions and health care grows steadily and the need for higher taxes and larger worker contributions increases.

Then there is globalization. In Europe, wages and taxes are high, regulations heavy, unions strong, and lawyers ubiquitous. Manufacturers, to cut costs, have been outsourcing production to where the labor is cheap and abundant, the unions are nonexistent or weak, and health, safety and environmental regulations are lax. Welcome to China.

Greece is the first European nation to hit the wall. As an EU member state, she is obligated to keep her deficit to 3 percent of GDP. But this year’s is 12.7 percent, and Athens needs to issue $75 billion in bonds alone to finance the deficit and roll over debt.

The markets, however, are rating Greek bonds as risky bonds. To borrow, Athens must pay more than twice the interest rate Germany pays. Faced with strikes by public employees and students, Athens appears to lack the political will to make the cuts necessary to bring the budget back toward balance.

As Portugal, Ireland and Spain gaze on, Greece approaches a moment of truth. Should she default, their bonds, too, will plunge in value out of fear of a copycat default, and the interest rate they pay would also rise. They, too, might then take the Argentine road.

The EU’s crisis would then be like a crisis in the United States should California default on its state bonds and interest rates on other municipal bonds surged to double digits. Is there a way out?

One option is for the EU to bail out Greece with a huge loan. But if Greece cannot meet her debt obligations now, how could she pay back the loan? And if the EU cannot compel Greece to make deep budget cuts today, what leverage would the EU have after bailing out Athens and removing today’s pressure on the government?

A second option is to call in the International Monetary Fund, which imposes tough conditions on nations receiving IMF loans—the Third World therapy. But problems would arise here, too.

First, it would be an admission that the EU cannot manage its own household. Second, the largest contributor to the IMF is Uncle Sam.

Why should America bail out Greece, when the EU is larger and richer and did not help bail out California in 2009? The stimulus bill did that in 2009, to which Europe contributed nothing. Where Greece is at today, however, we shall all arrive tomorrow.

In every Western nation, government is growing beyond the capacity of taxpayers to bear. Deficits and debt are surging. Not enough children are being born to replace parents. The immigrant poor who consume more than they contribute are coming to take the empty places. Seniors and elderly are growing as a share of the population. Companies are saying goodbye to the West and moving offshore to low-wage lands.

The West begins to look like yesterday, while the East begins to look like tomorrow.

The West is approaching a crisis of solvency and of democracy. We shall see if democracy, which grew popular lavishing benefits upon all, is strong enough to start clawing them away. Or will democracy try to keep piling the burden on the producers until they rebel or depart?

Intelligence Agencies Nixed State Department Move to Revoke Bomber's Visa

Antifascist Calling... , February 8, 2010

Rightist demagogues, as they are wont to do, prattle-on how they, and they alone, can "keep America safe"--by shredding the Constitution.

Waging a decades-long psychological war against the American people, corporatist thugs embedded within the National Security State assure us that secrecy, deceit and imperial adventures that steal other peoples' resources are the one true path to national prosperity and universal happiness.

But what happens when those charged with protecting us from attack, actually aid and abet those who would kill us, and then handsomely profit from our slaughter in the process?

During a January 27 hearing of the House Committee on Homeland Security, Under Secretary of State for Management, Patrick F. Kennedy, testified that the visa of accused bomber, Umar Farouk Abdulmutallab, wasn't revoked at the specific request of secret state agencies.

Kennedy, a Bushist State Department holdover, was the former Director on National Intelligence for Management and headed the transition team that set up the Office of the Director of National Intelligence in 2005 under former Ambassador to Iraq, John D. Negroponte, a veteran of U.S. covert operations since the Vietnam war.

Given the avalanche of media interest, fueled by Fox News and the editorial pages of The Wall Street Journal, whether or not the suspect should have been read his Miranda rights, the only coverage of the hearings that reported Kennedy's explosive testimony, was a brief article in the Detroit News.

Claiming that "revocation action would've disclosed what they were doing," Kennedy said that allowing the alleged terrorist to keep his visa would have "helped" federal investigators take down the entire network "rather than simply knocking out one solider in that effort."

A "soldier" (indicted criminal) who would have murdered 300 air passengers if the detonator concealed in his underpants hadn't serendipitously failed to explode the device.

As Alex Lantier wrote February 3 on the World Socialist Web Site, the latest in a series of significant revelations "has been buried by the media." The socialist critic avers: "As of this writing, nearly a week after the hearing, the New York Times, Wall Street Journal, Washington Post and Los Angeles Times have published no articles on the subject. Nor have the broadcast or cable media reported on it."

Lantier charges that "despite--or perhaps more accurately, because of--the fact that this information exposes the official government story of the near-disaster to be a lie" the corporate media is fully complicit in the cover-up.

Weeks after the incident, it is now clear that intelligence agencies did far more than simply "watch" a potential terrorist. That they gave Abdulmutallab a leg up, bypassing airline security systems put in place after 9/11 that would have prevented him from boarding that plane, is also crystal clear.

The question is: was a reckless calculation made that gambled the lives of 300 air passengers for ruthless political purposes? If so, was it designed to destabilize the Obama government, thereby binding it ever-closer to a permanent, unelected, security apparatus that feathers its nest by serving the only constituency that matters--giant energy firms, defense-related corporations and those who finance them?

Is this scenario being played out in Washington where Republican right-wingers like Senators Susan Collins (ME), Tom Coburn (OK), John McCain (AZ), John Ensign (NV) and Lindsey Graham (SC), but also neocon Democrats such as Joseph Lieberman (ID-CT), demand that the accused be turned over to the military for "special handling," thereby ratcheting-up pressure for increased domestic repression?

Just as pertinently, is this what White House insider Richard Wolffe meant when he said on MSNBC's Countdown with Keith Olbermann January 4 that the "president is leaning very much towards thinking this was a systemic failure by individuals who maybe had an alternative agenda." (emphasis added)

For weeks now, the Obama administration and the media have played the same broken record: despite overwhelming evidence to the contrary, a multitude of security agencies, ranging from the CIA, the FBI, the National Counterterrorism Center (NCTC), a satrapy of the Office of the Director of National Intelligence (ODNI), the National Security Agency and the Department of Homeland Security, "failed to connect the dots."

But as I have documented in previous reports, most recently on January 22, citing multiple domestic and foreign intelligence warnings, including a walk-in interview at the U.S. Embassy in Abuja, Nigeria's capital, by the suspect's own father, a former top official in the Nigerian government, consular officials and CIA officers passed the warning up the food chain--where it sat.

Abdulmutallab on the CIA and NCTC's Radar

The revelation that various agencies of America's shadow government made a deliberate decision that allowed Abdulmutallab to board Flight 253 is more extensive than previously disclosed.

Newsweek revealed February 2 that "a single intelligence community database operated by the CIA, known by the code name 'Hercules'," held all the "'bits and pieces' of intelligence that White House officials believe could have led U.S. authorities to Umar Farouk Abdulmutallab before last December 25."

However, even though the agencies had assembled information on the suspect in a single computer system where it was readily accessible to analysts, anonymous "intelligence officials" told journalist Mark Hosenball that "all source" analysts at CIA and NCTC "which both had access to 'Hercules,' were unable to assemble the intelligence scraps in time to prevent Abdulmutallab from boarding his Christmas Day flight from Amsterdam to Detroit with a bomb hidden in his underpants."

The unnamed officials told Hosenball that the failure to stop the suspect "validates assertions by White House and congressional investigators that the alleged lapses in the handling of intelligence related to Abdulmutallab did not stem from a failure of sometimes turf-conscious spy agencies to share information with each other."

"Instead," Newsweek reports, "they point to the intelligence analysis carried out by the CIA and NCTC."

As I previously reported, citing a January 18 investigation by The New York Times, the National Security Agency "learned from a communications intercept" that a man named "'Umar Farouk'--the first two names of the jetliner suspect, Umar Farouk Abdulmutallab--had volunteered for a coming operation." Additional NSA intercepts in December "mentioned the date of Dec. 25, and suggested that they were 'looking for ways to get somebody out' or 'for ways to move people to the West,' one senior administration official said."

Running for cover, an intelligence official told Newsweek: "The volume of any database doesn't matter much. That, by itself, doesn't get you anywhere." An interesting spin, when one considers the multibillion dollar expansion by NSA, as investigative journalist James Bamford reported last November.

The official continues, "Nor does the mere fact that the NCTC and the CIA have shared access to material. The key is knowing what to look for, how to bring together different bits and scraps of information that--on the surface and in an ocean of data--don't appear to be connected." Conversely, knowing which "bits and scraps" to ignore from a parapolitical perspective, may have played an equally critical role in a presumed analytical "lapse."

"This is hard stuff," the anonymous source pontificates. "It's not a case of punching in a couple of search terms, sitting back, and waiting for enlightenment. Once you know the answer, it seems easy. But in real life, you don't get the answer ahead of time."


To the contrary, as with the September 11, 2001 hijack team, the Flight 253 affair seems to indicate that the decision to allow Abdulmutallab to board the plane was a political, not a law enforcement decision that led analysts not to "connect" more than a few of the "dots."

As we now know, prior to 9/11, the Pentagon's Able Danger unit had amassed terabytes of data on al-Qaeda sleeper cells in the United States. According to published reports, the unit had obtained detailed information on ringleader, the drug-addled Mohammed Atta, and other members of the suicide squad. Yet just scant months before the atrocity, the unit was shuttered and the data destroyed.

Corporate media and the 9/11 Commission have advanced two contradictory propositions on Able Danger's demise: the Pentagon unit hadn't gathered intelligence on Atta and claims to contrary were overblown or they illegally obtained information on ordinary Americans and were shut down for inadvertent spying.

However as researcher Paul Thompson revealed in The Terror Timeline, Able Danger had identified Americans, only they were the wrong Americans. According to Thompson, the unit pegged "future National Security Adviser and Secretary of State Condoleezza Rice, former Defense Secretary William Perry, and other prominent Americans as potential security risks" over their illicit dealings with foreign governments.

How's that for an inconvenient truth!

As with earlier warnings of impending terrorist strikes, political efficacy trumped the safety and security of the American people. This is underscored by January 20 testimony by NCTC Director, Bushist embed Michael E. Leiter, before the Senate Homeland Security and Governmental Affairs Committee.

CongressDaily revealed that Leiter told the senators, "I will tell you, that when people come to the country and they are on the watch list, it is because we have generally made the choice that we want them here in the country for some reason or another."

Journalist Chris Strohm disclosed that intelligence officials "acknowledged the government knowingly allows foreigners whose names are on terrorist watch lists to enter the country in order to track their movement and activities," a fact now confirmed by Patrick F. Kennedy's January 27 testimony before the House Committee.

Similar to the Detroit News report on Kennedy's admission, to date, not a single media outlet picked-up the trail and investigated CongressDaily's chilling disclosure.

Burying the Evidence, "Moving On"

Corporate media are chock-a-block with reports of efforts by right-wing Republicans and some Democrats to brand the Obama administration as "soft on terrorism."

As readers are well aware, Antifascist Calling doesn't carry water for the Obama administration; a government that has rightly been characterized as a slick makeover of the previous regime. However it must be acknowledged, unlike Bushist torture freaks, in Abdulmutallab's case constitutional norms were followed and a criminal suspect lawfully charged for an egregious act.

In "new normal" America however, not disappearing a suspect into a gulag, subject to tender ministrations by "enhanced interrogation" specialists (torturers) is viewed as a bad thing in our debased political culture.

Meanwhile media stenographers scrupulously ignore, with a single-mindedness one has come to expect from totalitarian regimes, considerable evidence that elements of the intelligence-security apparatus could be charged as accessories before and after the fact with Abdulmutallab's alleged offense.

In his prepared statement to the House Committee, Kennedy asserted that "following his father's November 19 visit to the Embassy, we sent a cable to the Washington intelligence and law enforcement community through proper channels (the Visas Viper system) that 'Information at post suggests [that Farouk] may be involved in Yemeni-based extremists.' At the same time, the Consular Section entered Abdulmutallab into the Consular Lookout and Support System database known as CLASS."

When it was discovered that officials in Abuja had misspelled the suspect's name "information about previous visas issued to him and the fact that he currently held a valid U.S. visa was not included in the cable."

Despite the misspelling however, "the CLASS entry resulted in a lookout using the correct spelling that was shared automatically with the primary lookout system used by the Department of Homeland Security (DHS) and accessible to other agencies."

In other words, even though the initial Embassy cable misspelled Abdulmutallab's name, the "lookout" notification sent out to intelligence agencies, specifically DHS, should have warranted further action. And it also appears that initially it did.

As both the Los Angeles Times and CongressDaily reported, Customs and Border Protection agents obtained the suspect's name from the Terrorist Identities Datamart Environment or TIDE database, maintained by the NCTC and planned to question Abdulmutallab when Flight 253 landed in Detroit on arrival from Amsterdam.

However, as CongressDaily subsequently revealed, CBP agents "had information about alleged terrorist Umar Farouk Abdulmutallab three days before his departure" and not during the flight as the Los Angeles Times report initially suggested.

As we now know, information fed to NCTC's database contained specific warnings from the State Department--as did the CIA's "Hercules" system as Newsweek reported, and "that White House officials believe could have led U.S. authorities to Umar Farouk Abdulmutallab before last December 25," according to the newsmagazine's anonymous sources.

Why did the State Department fail to revoke the accused terrorist's visa?

When questioned by Committee Chairman Bennie Thompson (D-MS), Kennedy told the panel, "We will revoke the visa of any individual who is a threat to the United States, but we do take one preliminary step."

Kennedy explained, "We ask our law enforcement and intelligence community partners, 'Do you have eyes on this person and do you want us to let this person proceed under your surveillance so that you may potentially break a larger plot?'"

The Undersecretary added: "And one of the members [of the intelligence community]--and we'd be glad to give you that [information] ... in private [closed session]--said, 'Please, do not revoke this visa. We have eyes on this person. We are following this person who has the visa for the purpose of trying to roll up an entire network, not just stop one person.'"

In other words, despite multiple sourced reports from American and overseas security agencies that Al-Qaeda in the Arabian Peninsula (AQAP) was planning to launch an attack, probably on Christmas Day, deploying an asset identified by NSA intercepts as a "Nigerian" named "Umar Farouk," high-level intelligence officials, claiming to have "eyes" on the alleged AQAP operative, a suspected suicide bomber to boot, allowed him to board an airliner packed with nearly 300 passengers and crew.

In a prepared statement to the Committee, NCTC Director Leiter said, "Let's start with this clear assertion: Umar Farouk Abdulmutallab should not have stepped on that plane. The counterterrorism system failed and we told the President we are determined to do better."

However, neither House Committee members, nor the corporate media which suppressed the story entirely, challenged Leiter's statement of a week earlier when he testified before a Senate panel that intelligence agencies allow watch listed terrorists to enter the country "because we have generally made the choice that we want them here in the country for some reason or another."

If Leiter's testimony was taken under oath, he should be brought up on charges of perjury since he next asserted that "Intelligence Community analysts who were working hard on immediate threats to Americans in Yemen did not understand the fragments of intelligence on what turned out later to be Mr. Abdulmutallab, so they did not push him onto the terrorist watchlist."

This claim, as with practically all the "facts" released to the American people by the White House, Congress or by the secret state agencies themselves, is a rank mendacity.

As Newsweek's unnamed sources claim, CIA and NCTC analysts did have access to an "intelligence community database," "Hercules," and that it held all the available data on Abdulmutallab and "validates assertions by the White House and congressional investigators" that the failure to stop the bomber were not due to bungled efforts "to connect the dots."

As I reported last month, during a December 22 meeting at the White House, President Obama was briefed by top officials from the CIA, FBI, and Department of Homeland Security "who ticked off a list of possible plots against the United States and how their agencies were working to disrupt them," as The New York Times disclosed January 18.

Last month, Newsweek reported that "intelligence analysts had 'highlighted' an evolving 'strategic threat'," and that "'some of the improvised explosive device tactics AQAP might use against U.S. interests were highlighted' in other 'finished intelligence products'."

"Finished intelligence products" on an evolving plot to destroy an airliner are hardly "fragments," as Leiter deceitfully testified to the House Committee. Cheekily, NCTC's head honcho falsely claimed that his agency, the recipient of billions of dollars in taxpayer largesse, "did not correlate the specific information that would have been required to help keep Abdulmutallab off that Northwest Airlines flight."

Citing the need to "improve" intelligence capabilities by accelerating "information technology enhancements, to include knowledge discovery, database integration, cross-database searches, and the ability to correlate biographic information with terrorism-related intelligence," Leiter implies that billions more in handouts to security contractors are needed to "solve" the problem.

This from the Director of an agency that under his watch wasted more than $500 million on its flawed Railhead project to "upgrade" the TIDE database, an initiative "crippled by technical failures and contractor mismanagement," as the Project on Government Oversight (POGO) and congressional investigators revealed back in 2008.

Contractor hanky-panky aside, the problem is not one of technical "upgrades" to an agency that seems more concerned with facilitating the entrance of terrorists into the country "for some reason or another" than stopping them.

Rather, it is imperative that the American people demand that Congress and the Executive Branch, which in theory, controls the gaggle of alphabet-soup satrapies in cahoots with the most rotten and predatory sectors of the U.S. ruling class, clean house and bring to book, the rightist elements aligned with the petroleum-intelligence nexus who continue to deploy terror gangs such as al-Qaeda as strategic assets.

That they do so regardless of the cost, to the American people and to the victims of illegal U.S. wars and occupations, is a sign that the system, verging on bankruptcy will soon veer even further out of any effective democratic control.

How else can one interpret Director of National Intelligence, Dennis C. Blair's chilling assertion to the Senate Committee on Intelligence that he was "highly certain" that al-Qaeda "or one of its affiliates" will attempt a large-scale attack on American soil within the next six months," as The New York Times reported.

"We judge that al Qaeda maintains its intent to attack the homeland, preferably with a large-scale operation that would cause mass casualties, harm the U.S. economy or both," Blair wrote in his annual threat assessment to the Senate Intelligence Committee.

As investigative journalist Russ Baker wrote in his essential book, Family of Secrets, "Authoritarianism thrives in a climate of fear, and the [Bush] administration invoked fear continually. But when it came to security, there was the usual exemption for large corporate entities [and] the tattoo of terror was relentless, especially during the political high season."

Not much has changed since Barack Obama became president. Many of the same dodgy players who ramped-up production lines at the fear factory for the Bush/Cheney team are still in place, doing what they do best: hitting the corporate "sweet spot" for their clients in the Military-Industrial-Security-Complex.

In the weeks since the attempted destruction of Flight 253, one thing is certain: the White House, Congress, the intelligence agencies and their handmaidens, the corporate media, are participating in a massive cover-up.

And as we enter the "political high season," what might come next is anyone's guess.

Wars Sending U.S. Into Ruin

Obama the peace president is fighting battles his country cannot afford

U.S. President Barack Obama calls the $3.8-trillion US budget he just sent to Congress a major step in restoring America’s economic health.

In fact, it’s another potent fix given to a sick patient deeply addicted to the dangerous drug — debt.

More empires have fallen because of reckless finances than invasion. The latest example was the Soviet Union, which spent itself into ruin by buying tanks.

Washington’s deficit (the difference between spending and income from taxes) will reach a vertiginous $1.6 trillion US this year. The huge sum will be borrowed, mostly from China and Japan, to which the U.S. already owes $1.5 trillion. Debt service will cost $250 billion.

To spend $1 trillion, one would have had to start spending $1 million daily soon after Rome was founded and continue for 2,738 years until today.

Obama’s total military budget is nearly $1 trillion. This includes Pentagon spending of $880 billion. Add secret black programs (about $70 billion); military aid to foreign nations like Egypt, Israel and Pakistan; 225,000 military “contractors” (mercenaries and workers); and veterans’ costs. Add $75 billion (nearly four times Canada’s total defence budget) for 16 intelligence agencies with 200,000 employees.

The Afghanistan and Iraq wars ($1 trillion so far), will cost $200-250 billion more this year, including hidden and indirect expenses. Obama’s Afghan “surge” of 30,000 new troops will cost an additional $33 billion — more than Germany’s total defence budget.

No wonder U.S. defence stocks rose after Peace Laureate Obama’s “austerity” budget.

Military and intelligence spending relentlessly increase as unemployment heads over 10% and the economy bleeds red ink. America has become the Sick Man of the Western Hemisphere, an economic cripple like the defunct Ottoman Empire.

The Pentagon now accounts for half of total world military spending. Add America’s rich NATO allies and Japan, and the figure reaches 75%.

China and Russia combined spend only a paltry 10% of what the U.S. spends on defence.

There are 750 U.S. military bases in 50 nations and 255,000 service members stationed abroad, 116,000 in Europe, nearly 100,000 in Japan and South Korea.

Military spending gobbles up 19% of federal spending and at least 44% of tax revenues. During the Bush administration, the Iraq and Afghanistan wars — funded by borrowing — cost each American family more than $25,000.

Like Bush, Obama is paying for America’s wars through supplemental authorizations — putting them on the nation’s already maxed-out credit card. Future generations will be stuck with the bill.

This presidential and congressional jiggery-pokery is the height of public dishonesty.

America’s wars ought to be paid for through taxes, not bookkeeping fraud.

If U.S. taxpayers actually had to pay for the Afghan and Iraq wars, these conflicts would end in short order.

America needs a fair, honest war tax.

The U.S. clearly has reached the point of imperial overreach. Military spending and debt-servicing are cannibalizing the U.S. economy, the real basis of its world power. Besides the late U.S.S.R., the U.S. also increasingly resembles the dying British Empire in 1945, crushed by immense debts incurred to wage the Second World War, unable to continue financing or defending the imperium, yet still imbued with imperial pretensions.

It is increasingly clear the president is not in control of America’s runaway military juggernaut. Sixty years ago, the great President Dwight Eisenhower, whose portrait I keep by my desk, warned Americans to beware of the military-industrial complex. Six decades later, partisans of permanent war and world domination have joined Wall Street’s money lenders to put America into thrall.

Increasing numbers of Americans are rightly outraged and fearful of runaway deficits. Most do not understand their political leaders are also spending their nation into ruin through unnecessary foreign wars and a vainglorious attempt to control much of the globe — what neocons call “full spectrum dominance.”

If Obama really were serious about restoring America’s economic health, he would demand military spending be slashed, quickly end the Iraq and Afghan wars and break up the nation’s giant Frankenbanks.

Global Research Articles by Eric Margolis

Job Openings Plunged by One-Quarter Last Year

Job openings fell by nearly one-quarter last year as layoffs also soared

Finding a job got much tougher last year, as the number of available openings fell by nearly one quarter.

In this photo made Feb. 2, 2010, Stephanie Buckley, of Boston, left, has her resume reviewed by... Expand

At the same time, the unemployed population soared by more than one-third, leaving more laid-off workers competing for fewer jobs.

All told, there were 6.1 unemployed workers in December, on average, for every available position, according to Labor Department data released Tuesday.

That's a sharp increase from 3.4 jobless workers per opening in December of 2008, and much worse than the 1.7 unemployed people per opening in December 2007, when the recession began.

The economy grew in the second half of last year and gross domestic product, the broadest measure of output, rose by a healthy 5.7 percent in the fourth quarter.

That should lead to more hiring, but employers are reluctant to add jobs. Many companies are unsure about whether the recovery will continue, economists say, and how health care reform and other government policies will affect them.

"No business hires into uncertainty and right now there's too much uncertainty in the markets," said Harry Griendling, CEO of DoubleStar Inc., a consulting firm specializing in recruitment.

Much of the economy's recent growth stems from government stimulus and one-time factors such as restocking of inventories. As those supports evaporate, many analysts expect the economy to grow at a slower pace.

"Businesses can't look forward a quarter or two and say, 'I'm definitely going to be growing,'" Griendling said.

There were 2.5 million jobs available at the end of December, according to the Labor Department's Job Openings and Labor Turnover survey. That includes all jobs publicly listed by companies and government agencies.

That may seem like a lot given the severity of the recession, but that's down from 3.2 million in December 2008, a drop of 22.5 percent. And it's way below the 4.8 million openings that existed in June 2007, the peak reached before the recession.


World War

(Reuters) – China PLA officers urge economic punch against U.S.

Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan. Read More Here

(AntiWar) – AP Pulls Iran Nukes Story After Exposé

Associated Press issued a story yesterday (Monday) entitled “Iran moves closer to nuke warhead capacity.” It was full of inaccurate and misleading information implying that Iran had admitted trying to enrich weapons-grade nuclear material. The story appeared on a wide variety of media. Read More Here

(TheStar) – U.S. missile defence plans aimed at Russia, top military official says

U.S. missile defence plans are a threat to Russian national security and have slowed down progress on a new arms control treaty with Washington, Russia’s top military officer said Tuesday. Read More Here

(Reuters) – Italy says Iranian militia attacked its embassy

Italy said dozens of members of Iran’s hardline religious Basij militia had tried to attack its embassy in Tehran on Tuesday, but Iranian media described the incident as a student protest and did not mention any violence. Read More Here

(Haaretz) – Four things Netanyahu needs for an Israeli strike on Iran

To give the green light for a military strike against Iranian nuclear facilities, Prime Minister Benjamin Netanyahu requires evidence of a clear and present danger; the assurance of the Israel Defense Forces that it can do the job; domestic support; and also the consent of President Obama, who learned from his predecessors in the Bush family that you should only go to war in the Persian Gulf three years into your presidential term, after congressional elections. Tehran is in the crosshairs, but not before 2011. Read More Here

(Video) – Iran’s Nuclear Facilities: The Facts – Video Link Here

(IslamTimes) – ‘Iranian weapon ends Apache copters’ air supremacy’

A senior Iranian military official says Iran has developed a special weapon that can bring down Apache helicopters. Read More Here

(Film) – Iran is not the Problem

IRAN (is not the problem) is a feature length film responding to the failure of the American mass media to provide the public with relevant and accurate information about the standoff between the US and Iran, as happened before with the lead up to the invasion of Iraq. View Film Here

(ChristianScienceMonitor) – Most Iranians support Ahmadinejad and nuclear power, poll finds

Most Iranians support Ahmadinejad and the country’s nuclear program, even as they favor restoring diplomatic relations with the US. Read More Here

(CNSNews) – ‘Stop Sending Your Spies Here,’ Judge Tells China

With a message to Beijing to “stop sending your spies here,” a U.S. judge on Monday sentenced a Chinese-born former Boeing engineer to more than 15 years in prison for economic espionage and acting as an agent for China. Read More Here

(AsiaTimes) – Beijing beefs up cyber-warfare capacity

While the furor over cyber-attacks against Google has lapsed somewhat, the Sino-American confrontation over the larger issue of Internet security and global digital warfare is expected to intensify in the near future Read More Here

(Reuters) – US wants UN sanctions resolution on Iran within weeks

The United States wants the U.N. Security Council to approve a resolution within weeks, not months, laying the ground for new sanctions against Iran over its nuclear programme, the Pentagon said on Tuesday. Read More Here

(PressTV) – Leader says Iran stands tall in face of threats

Ahead of the anniversary ceremonies of the victory of the Islamic Revolution, its Leader said Monday threats against Iran emanate from the enemy’s inability to comprehend the divine roots of the Islamic Republic. Read More Here

(PressTV) – ‘Middle East will determine fate of the world’

Iranian President Mahmoud Ahmadinejad says the Middle East is the region that “will determine the fate of the world.”
“The Zionist regime and its allies are on the losing side, and the free nations’ resistance is empowered,” Ahmadinejad said in Tehran on Monday during a meeting with Popular Front for the Liberation of Palestine Secretary General Ramadan Abdullah Shallah. Read More Here

(LATimes) – U.S., EU castigate Iran for human rights abuses

The United States and the European Union on Monday condemned human rights abuses in Iran in the wake of the Islamic Republic’s announcement that it would expand its nuclear materials enrichment effort. Read More Here

New federal climate change agency forming

WASHINGTON – The Obama administration on Monday proposed a new agency to study and report on the changing climate.

Also known as global warming, climate change has drawn widespread concern in recent years as temperatures around the world rise, threatening to harm crops, spread disease, increase sea levels, change storm and drought patterns and cause polar melting.

Commerce Secretary Gary Locke and Jane Lubchenco, head of the National Oceanic and Atmospheric Administration, announced NOAA will set up the new Climate Service to operate in tandem with NOAA's National Weather Service and National Ocean Service.

"Whether we like it or not, climate change represents a real threat," Locke said Monday at a news conference.

Lubchenco added, "Climate change is real, it's happening now." She said climate information is vital to the wind power industry, coastal community planning, fishermen and fishery managers, farmers and public health officials.

NOAA recently reported that the decade of 2000-2009 was the warmest on record worldwide; the previous warmest decade was the 1990s. Most atmospheric scientists believe that warming is largely due to human actions, adding gases to the atmosphere by burning fossil fuels such as coal and natural gas.

Researchers and leaders from around the world met last month in Denmark to discuss ways to reduce climate-warming emissions, and a follow-up session is planned for later this year in Mexico.

"More and more people are asking for more and more information about climate and how it's going to affect them," Lubchenco explained. So officials decided to combine climate operations into a single unit.

Portions of the Weather Service that have been studying climate, as well as offices from some other NOAA agencies, will be transferred to the new NOAA Climate Service.

The new agency will initially be led by Thomas Karl, director of the current National Climatic Data Center. The Climate Service will be headquartered in Washington and will have six regional directors across the country.

Lubchenco also announced a new NOAA climate portal on the Internet to collect a vast array of climatic data from NOAA and other sources. It will be "one-stop shopping into a world of climate information," she said.

Creation of the Climate Service requires a series of steps, including congressional committee approval. But if all goes well, it should be finished by the end of the year, officials said.

In recent years, a widespread private weather forecasting industry has grown up around the National Weather Service, and Lubchenco said she anticipates growth of private climate-related business around the new agency.

While most people notice the weather from day to day or week to week, climate looks at both the averages and extremes of weather over longer periods of time. And understanding both weather and climate, and their changes, are vital to much of the world's economic activity ranging from farming to travel to energy use and production and even food shipments and disease prevention.

Atmospheric scientists have long joked that climate is what you expect and weather is what you get. But greenhouse warming is changing what can be expected from climate, and researchers are seeking to understand and anticipate the impacts of that change.


1,000 Architects & Engineers Call for a Real 9/11 Investigation

AE911Truth will hold a press conference on Friday, February 19, at 11:00 AM at the Marines Memorial Club and Hotel in San Francisco. We will announce and honor the milestone of our achievement of obtaining 1,000 architects and engineers (A/E's) petitioning for a real investigation into the destruction of the 3 World Trade Center skyscrapers.

Invitations are being sent to more than 400 local AIA members, to many local, national, and international media outlets, and to more than 15,000 petition signers and supporters from around the world.

The press conference will include a large-screen scrolling display of all 1,000 A/E's; statements by Richard Gage, AIA, founder of AE911Truth and several petition signers; and a short ten-minute presentation of "9/11: Blueprint for Truth" – the explosive evidence for the engineered destruction of the 3 World Trade Center skyscrapers. A press kit including the AE911Truth DVD will be made available to all attendees.

We will also be inviting various leaders in the 9/11 Truth movement to this milestone event. We are working with We Are Change and other 9/11 Truth organizations to deliver hardcopy
petition evidence press kits to every member of Congress.

A fund-raising and working luncheon will be held after the press conference in the hotel. It is open to all who RSVP to an imminent email invitation. Join us on February 19 in San Francisco to honor this remarkable achievement and meet some of those who have made AE911Truth one of the most respected voices in the 9/11 Truth movement.

Following the above events we will host a professional conference open to our architect and engineer petition signers. RSVP and join us from 2 p.m. to 6 p.m. for this critical get together of fellow professionals to further organize strategy for AE911Truth. We will be reviewing our existing evidence content and programs as well as employing our expertise and energy in amplifying and disseminating the AE911Truth message. Our goal: a real WTC investigation.

Mr. Gage, said "It's an extraordinary statement that more than 1,000 architects and engineers have put their credibility and reputations on the line to demand a new investigation into 9/11. Compare this number to a dozen or so that are willing to publicly support the official NIST findings. We expect big breakthroughs in 2010."

Michael Newman, NIST Media Relations, when asked if NIST had any comments on the fact that over 1,000 architects and engineers have signed the petition, said that "NIST stands behind its reports." Its position is the same as it always has been, and that "NIST saw no evidence of explosions or melted steel whatsoever."

NIST will have another wake-up call soon. The voices of thousands of petition signers of Architects & Engineers for 9/11 Truth and everyone who supports a new investigation grow louder and louder. Soon our irrefutable evidence in support of a new investigation will no longer be ignored. We now have the solid foundation of 1,000 A/E petitioners. We are launching the effort to force NIST to retract their flawed and fraudulent reports. Using all avenues available, whether through the Office of the Inspector General, or through Congressional investigations, factually correct findings based on the evidence must become the official position. The American public must come to see such public statements of denial by NIST as being totally unacceptable.

Global Research Articles by Architects & Engineers for 911 Truth

Marc Faber and Jim rogers Prague meeting 2010 part 1/5

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Obama year in review

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“The CIA Is Welcoming Itself Back onto American University Campuses”

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Censorship: Internet Takeover Has Begun

Click this link .......

No Exit in Sight for U.S. As Fannie, Freddie Flail

MCLEAN, Va.—When Charles E. Haldeman Jr. became Freddie Mac's chief executive officer in August, the ailing housing-finance giant had already consumed $51 billion of government money to stay afloat. It's likely to need even more.

Freddie's federal overseers nevertheless have instructed Mr. Haldeman to focus on something that isn't likely to make the bleak balance sheet look any better: carrying out the Obama administration plan to allow defaulted borrowers to hang onto their homes.

On a recent afternoon, employees at Freddie's headquarters here peppered Mr. Haldeman with concerns about the company's future. He responded that they were "fortunate" to have such a clear mission—the government's foreclosure-prevention drive. "We're doing what's best for the country," he told them.

Freddie and its larger rival, Fannie Mae, were among the first big financial institutions to receive massive federal bailouts after the financial crisis hit in 2008. Government officials have been racing to fix bailed-out car makers and banks and are pushing to reshape the financial-services industry. But Fannie and Freddie remain troubled wards of the state, with no blueprints for the future and no clear exit strategy for the government.

Nearly a year and a half after the outbreak of the global economic crisis, many of the problems that contributed to it haven't yet been tamed. The U.S. has no system in place to tackle a failure of its largest financial institutions. Derivatives contracts of the kind that crippled American International Group Inc. still trade in the shadows. And investors remain heavily reliant on the same credit-ratings firms that gave AAA ratings to lousy mortgage securities.

Fannie and Freddie, for their part, remain at the core of a housing-finance system that inflated a dangerous housing bubble. After prices collapsed, sending shock waves around the world, the federal government put America's housing-finance system on life support. It has yet to decide how that troubled system should be rebuilt.

On Dec. 24, Treasury said there would be no limit to the taxpayer money it was willing to deploy over the next three years to keep the two companies afloat, doing away with the previous limit of $200 billion per company. So far, the government has handed the two companies a total of about $111 billion.

The government is willing to tolerate such open-ended exposure for two reasons. First, it sees the companies as essential cogs in the fragile housing market. Fannie and Freddie buy mortgages originated by others, holding some as investments and repackaging others for sale to investors as securities. Together with the Federal Housing Administration, they fund nine in 10 American mortgages. Worries about potential insolvency would cripple their ability to fund home loans, which would hamstring the market.

Second, the companies are a convenient tool for the administration to use in its campaign to clean up the housing mess.

"We're making decisions on [loan modifications] and other issues, without being guided solely by profitability, that no purely private bank ever could," Mr. Haldeman said in late January in a speech to the Detroit Economic Club.

Besides playing a key role in the loan-modification program, Fannie and Freddie have jump-started lending by state and local housing-finance agencies by helping to guarantee $24 billion in debt. They also are lending support to the apartment sector by becoming the main funders of loans to builders and buyers of apartment buildings.

By using Fannie and Freddie for such initiatives, the White House doesn't have to go to Congress for funding. The Treasury and White House can simply issue instructions to Fannie and Freddie via their federal regulator, the Federal Housing Finance Agency, or FHFA.

The government is "running Fannie and Freddie as an instrument of national economic policy, not as a business," says Daniel Mudd, who was forced out as Fannie Mae's chief executive in September 2008 when the government took control.

Assistant Treasury Secretary Michael Barr says that because Fannie and Freddie are "owned by the taxpayers in the middle of the biggest housing crisis in 80 years," it would be unrealistic to expect the companies wouldn't be used to help stabilize the market. He says the administration's actions have been "prudent" and "consistent with taxpayer protection."

The companies are political lightning rods. The government's decision to absorb unlimited losses followed the Treasury's approval of multimillion-dollar pay packages for senior executives at each company. Republican critics have blasted those decisions, demanding investigations and pay cuts.

Massachusetts Democratic Rep. Barney Frank, a longtime supporter of the companies, said last month that ultimately they should be abolished and replaced with an entirely new housing-finance system. Last Thursday, he said he would convene a hearing next month to review the future of housing finance and the federal government's role in it

Some housing experts contend that prolonged government intervention will make it more difficult and costly to eventually wean the companies off government support. "The more aggressively we continue kicking the can down the road, the larger the losses become and the harder it becomes" to address the companies' future, says Joshua Rosner, managing director at investment-research firm Graham Fisher & Co.


Edward DeMarco, acting director of Fannie and Freddie's regulator, the FHFA, says efforts to modify loans and to stabilize the housing market ultimately will help the two companies' bottom lines. "The businesses are trying to mitigate the losses and remediate the problems that led to conservatorship in the first place," he says.

As mortgage delinquencies rise, Fannie and Freddie are required to set aside more capital to cover anticipated losses. Each quarter, if their revenues are insufficient to meet those financial needs, the Treasury has to kick in more money.

With delinquencies still rising, the outlook is grim. At Freddie, 3.87% of single-family mortgages were at least 90 days past due at the end of December, up from 1.72% a year earlier. Fannie is worse: 5.29% were 90 days past due in November, up from 2.13% a year earlier.

For decades, both Fannie and Freddie were highly profitable. The housing bust hit both hard, sharply reducing the values of the mortgages they guaranteed, along with their investment portfolios, which were stuffed with riskier loans.

By September 2008, their capital reserves were so depleted that the government seized control of both companies, using a legal process known as conservatorship. In exchange for injecting money, the government has received preferred shares that pay a 10% dividend, along with warrants to purchase up to 79.9% of the common stock of each company.

The Obama administration had said it would weigh in on how to revamp the companies when it released its proposed budget earlier this month. Instead, the budget contained only a single line about the companies' future, promising to "monitor the situation" and to "provide updates…as appropriate." That stance reflects policy makers' uncertainty about how to proceed and a lack of urgency about resolving the problem.

Lawrence Summers, the president's chief economic adviser, has said the companies shouldn't be run permanently by the U.S. or be allowed to "return to the failed model of the past, where Fannie and Freddie relied on an implicit government [debt] guarantee to borrow cheaply."

Some Republicans have said the government should play no role whatsoever in the companies in the future, meaning no implied debt guarantee and no government directives to support affordable housing. The other end of the spectrum would be to turn the companies into government agencies.

Many housing-industry leaders believe the eventual plan will fall somewhere in between. Housing-policy experts assembled by the Center for American Progress, a think tank that has provided the White House input on past policy and personnel decisions, recently proposed that Fannie and Freddie be transformed into two or more companies whose profits would be capped like those of public utilities. There would be explicit federal guarantees on certain mortgage-backed securities. The new entities would be required to ensure that mortgages are available to low-income borrowers.

Others have proposed turning the companies into cooperatives owned by lenders, but subject to strict regulation.


With the fate of the two companies now largely in the hands of the government, employees have shifted their attention to the administration's loan-modification effort, called Home Affordable Modification Program, or HAMP. It provides financial incentives for banks and other owners of mortgages to reduce monthly loan payments for at-risk borrowers. Fannie and Freddie's job is to oversee how loan servicers—the firms that collect monthly payments on mortgages—are working with homeowners on the front lines.

The program is off to a slow start. The administration said it would offer three million to four million borrowers the chance to modify loans. Through December, loan servicers have signed up 903,000 borrowers for trial modifications. Just 66,000 have received a permanent fix so far.

Both Fannie and Freddie have struggled at times to adjust to the new marching orders. Fannie has warned in financial filings that the modification program had shifted "significant levels of internal resources and management attention" from other parts of the business, which could lead to a "material adverse effect" on the business.

At Freddie, David Moffett, the chief executive who took over when the federal government assumed control, left last March after only six months, partly because it became clear that regulators would be calling the shots.

He says he and others warned administration officials that the loan-modification goals were unrealistic, that borrowers whose homes weren't worth what they owed were unlikely to take part, and that many participants would be likely to re-default within months. "They really didn't want our views," Mr. Moffett says.

Treasury's Mr. Barr says that isn't true. The Fannie and Freddie officials he worked with, he says, "were quite supportive of the program, of the structure and the basic design," and "were integral to the formulation."

Since then, Freddie has taken some heat for problems with part of the loan-modification drive. In an October report, the government said Freddie failed in its job as the program's auditor. Its task is to make sure loan servicers deal correctly with applications from borrowers for payment relief. Freddie says it has reassigned the vice president responsible for the effort.

Freddie's current chief executive, Mr. Haldeman, 61 years old, says it was immediately "very clear" to him that the loan-modification program was a top priority of the Obama administration. But the program isn't his only headache. As foreclosures mount, Freddie finds itself with title to more and more homes. The company wants to price them to sell, but doesn't want to put downward pressure on overall housing prices.

"Imagine having to keep the lawns mowed, the lights on, and the property secured for one house, let alone more than 40,000 homes all over the country," says Mr. Haldeman. "It's not an easy process."

John A. Koskinen, a turnaround specialist who became chairman of Freddie's board when the government stepped in, says that in all his years working for government agencies and troubled companies, "I've never been in one with as many challenges."

Last spring and summer, as interim CEO, he had to recruit executives to fill the top three jobs. Filling those jobs has put the company on firmer ground, he says, and having a clear mission—even a government-mandated one—is helping morale. "At least the getting yelled at by your neighbor in the grocery store is behind us," he says.

Loan standards today are tighter than they have been in decades. That means the default risk on loans guaranteed recently by Fannie and Freddie is much lower than it was a few years ago. But their mistakes during the housing boom are expected to continue burning holes in their balance sheets.

The Mortgage Bankers Association estimates that mortgage delinquencies won't peak any sooner than the middle of this year. At the current pace, around 6% of Fannie's loans and 4.9% of Freddie's are expected to go into default over the next 18 to 24 months, producing losses that would raise the price tag on Treasury's bailout to $175 billion, according to October estimates by investment bank Keefe, Bruyette & Woods Inc. The bank has since said that even that dire forecast is too optimistic.

Former FHFA head James Lockhart, the companies' top regulator until last August, says the U.S. is unlikely to ever fully recoup its investment in the two companies.

—Bob Davis contributed to this article.

Recession pushes teens, young adults to the edge

DETROIT - On one of the coldest days of the new year, Antonio Larkin found himself without a place to stay -- again.

So the 22-year-old called a familiar number and was greeted by a familiar voice: "You wait there. We'll be there to get you."

When outreach manager Stephanie Taylor and other staffers from Covenant House Michigan pulled up, Larkin was standing in the gray snow outside his ex-girlfriend's apartment building; his world's possessions in three, beat up travel bags.

Larkin is among the untold thousands of Detroit's teens and young adults struggling to get by in a disastrous economy that has left their families without jobs or homes. Making matters worse is the organizations that help them are grappling with tough financial issues of their own.

Some are cutting programs, others are scaling back on how many people they serve, but none of them is giving up.

"The neighborhoods we go in are the ones we know are very distressed ... burned buildings, abandoned buildings, areas that are high in crime," Taylor said. "Those kids need to know that we love them and we care about them and we're here to help them. We need to go into areas that others might be afraid to go in."

Covenant House serves youth between 13 and 22 and their contributions totaled $2.7 million in 2009 -- $1.6 million less than the $4.3 million raised in both 2008 and 2007. It has cut out some GED preparation courses, but continues to provide 75 emergency and transitional beds, officials said.

And then there's the kind of help they give to people like Larkin.

He first stayed there months ago, but was kicked out for disciplinary reasons. He then began "couch-surfing" -- staying with other relatives or friends.

The day he called Taylor at Covenant House, Larkin's girlfriend had kicked him out.

"If I only had stayed at Covenant House, I think my life would have been much better," Larkin said. Covenant House has been working to find him a new place to stay, but the resources out there aren't as plentiful as they were before the recession struck.

Other groups in the city are hurting, too.

A shelter for young girls has cut staff and reduced its beds from 30 to 20, said Lindsey MacDonald, fund development manager for Alternatives for Girls. Its annual dinner raised about $125,000 in 2006. That dropped to $87,000 two years ago, before plummeting to $34,000 in 2009.

Nationally, it's estimated that up to 1.5 million teens and young adults are homeless. There could be tens of thousands in Detroit because of the city's enormous economic and social problems, according to Wayne State University psychology professor Paul Toro.

Nearly one in three working-age adults is jobless in Detroit. Job cuts -- many tied to the failures of General Motors Corp, Chrysler LLC, Ford Motor Co. and other manufacturers -- have led to thousands of home foreclosures. The poverty rate is more than 33 percent and climbing.

The 84,000-student Detroit Public Schools projects it will serve 3,894 fitting the federal homeless classification by the end of the school year. That's up from 2,976 in 2008-2009, and 2,326 the year before, according to school district records.

Finding those teens and young adults can be tough, Toro said.

"Kids under 18 living on the streets in Detroit is very rare," he said. "You have to really look hard. You can go to other places, New York, Los Angeles, San Francisco and Seattle, and you can find them all over the place."

Instead of seeking out the few public shelters that cater to teens, most are dropping in on cousins, aunts and friends. When welcomes wear out, they move on to other sympathetic acquaintances.

Milwaukee, like Detroit, is another rustbelt city with a declining manufacturing base. The 83,000-student Milwaukee Public Schools is serving 2,100 homeless students, although that number is expected to rise by June, said Janis Shogren, district homeless coordinator.

Milwaukee Schools had 2,725 homeless students in 2008-2009, 2,378 the year before and 2,296 in 2006-2007.

"And that's only the tip of the iceberg. These are the families who come to our attention," Shogren said.

Baltimore City Public Schools, also similar to Detroit in size, has identified 1,057 homeless students so far this year. Last year, 1,357 were served. Those numbers only may be a third of the students who actually are homeless, said Louise Fink, director of Interagency Support for the Baltimore district.

"If mom's home is foreclosed and she moves across the street into an aunt's house, they are homeless," Fink said. "Students who want the kind of services we can give them, they will identify themselves. If they don't want our services, they don't bother."

The global warming guerrillas

Matt Ridley salutes the bloggers who changed the climate debate. While most of Fleet Street kowtowed to the green lobby, online amateurs uncovered the spin and deception that finally cracked the consensus

Journalists are wont to moan that the slow death of newspapers will mean a disastrous loss of investigative reporting. The web is all very well, they say, but who will pay for the tenacious sniffing newshounds to flush out the real story? ‘Climategate’ proves the opposite to be true. It was amateur bloggers who scented the exaggerations, distortions and corruptions in the climate establishment; whereas newspaper reporters, even after the scandal broke, played poodle to their sources.

It was not Private Eye, or the BBC or the News of the World, but a retired electrical engineer in Northampton, David Holland, whose freedom-of-information requests caused the Climategate scientists to break the law, according to the Information Commissioner. By contrast, it has so far attracted little attention that the leaked emails of Climategate include messages from reporters obsequiously seeking ammunition against the sceptics. Other emails have shown reporters meekly changing headlines to suit green activists, or being threatened with ostracism for even reporting the existence of a sceptical angle: ‘Your reportage is very worrisome to most climate scientists,’ one normally alarmist reporter was told last year when he slipped briefly off message. ‘I sense that you are about to experience the “Big Cutoff” from those of us who believe we can no longer trust you, me included.’

So used are greens to sycophancy in the television studios that when they occasionally encounter even slightly hard questions they are outraged. Peter Sissons of the BBC: ‘I pointed out to [Caroline Lucas of the Green party] that the climate didn’t seem to be playing ball at the moment. We were having a particularly cold winter, even though carbon emissions were increasing. Indeed, there had been no warming for ten years, contradicting all the alarming computer predictions... Miss Lucas told me angrily that it was disgraceful that the BBC — the BBC! — should be giving any kind of publicity to those sort of views.’

Of course, reporters have been going native for decades. The difference is that they cannot now get away with it. When acid rain was all the rage in the 1980s, I was a science editor and I relayed all sorts of cataclysmic predictions from scientists and greens about its effect on forests. (Stern magazine said in 1984 that a third of Germany’s forests were already dead or dying and that experts believed all — all! — its conifers would be gone by 1990.) Today, we know that these predictions were wildly wrong and that far from dying out, forests in Germany, Sweden and North America actually thrived during that decade. I should have been more sceptical.

Yet, this time round, despite 20 years of being told they were not just factually but morally wrong, of being compared to Holocaust deniers, of being told they deserved to be tried for crimes against humanity, of being avoided at parties, climate sceptics seem to be growing in number and confidence by the day. What is the difference?

In a word, the internet. The Climate Consensus may hold the establishment — the universities, the media, big business, government — but it is losing the jungles of the web. After all, getting research grants, doing pieces to cameras and advising boards takes time. The very ostracism the sceptics suffered has left them free to do their digging untroubled by grant applications and invitations to Stockholm. The main blog used by the Consensus,, exemplifies this problem, because it was set up by a PR company and is run by an employee of Nasa, who ties himself in knots trying to show that he does the blog in his spare time. It is also characterised by a tone of weary condescension and censoring of dissent that you do not find on most sceptic sites.

Contrast it with, a site founded in November 2006 by a former Californian television weather forecaster named Anthony Watts. Dedicated at first to getting people to photograph weather stations to discover how poorly sited many of them are, the site has metamorphosed from a gathering place for lonely nutters to a three-million-hits-per-month online newspaper on climate full of fascinating articles by physicists, geologists, economists and statisticians.

Or take a book published last month called The Hockey Stick Illusion by Andrew Montford, a rattling good detective story and a detailed and brilliant piece of science writing. Montford has never worked in the media. He is an accountant and science publisher who works from his home in Milnathort in Kinrossshire. He runs a blog called ‘Bishop Hill’.

Montford came to the subject in 2005 when he read a blog post by another amateur non-journalist named Tim Worstall, a scandium dealer who lives in Portugal (I am not making this up), who was in turn passing on news of another blogger’s work: Stephen McIntyre, a retired mining consultant and keen squash player in Toronto. Because he keeps catching errors in their work, McIntyre is the sceptic the climate scientists most love to hate, even though he is scrupulously polite and insists that the followers on his website,, are too. ‘A certain person’, the Climategate scientists called him in their emails, or ‘Mr Mc “I’m not entirely there in the head”’, or ‘the self-appointed Joe McCarthy of climate science’.

Notice that all of these sceptic bloggers are self-employed businessmen. Their strengths are networks and feedback: mistakes get quickly corrected; new leads are opened up; expertise is shared; links are made. Prejudice and ignorance abound too, but the good blogs get rewarded with scoops and guest essays so they tap into rich seams of knowledge. When Montford first ran his now classic post called ‘Caspar and the Jesus paper’, about the shenanigans the IPCC had to resort to in order to get a flawed paper rebutting McIntyre into the peer-reviewed literature in time to use it in their report, word of mouth caused interest in his website to explode.

Mcintyre’s forensic dissection of the Consensus papers puts cosy scientific peer review to shame. Digging deep into data and computer programs, he has found myriad mistakes in both the statistical technique and the data used to make the famous hockey stick graph, which purported to show that recent temperatures were unprecedented in level and rate of change. But he has also uncovered a mistake in data that conveniently prevented 1934 being warmer than 1998 in America; the splicing together of the records of two Antarctic weather stations as if they were one; the smoothing of sea-level rise in a way that conveniently concealed its recent deceleration; the use of a Swedish lake sediment series upside down so it showed recent warming instead of cooling; and most recently the reliance of an attempt to resuscitate the hockey stick on a ludicrously small sub-sample of just 12 Siberian larch trees. That last one came about when Montford spotted that a scientist who had been refusing McIntyre access to data for ten years had published in a journal with a strict policy of archiving data. Montford tipped off McIntyre, who asked the journal to force the scientist to release the data, which he eventually did.

‘It seems inconceivable to the commentariat,’ says Andrew Orlowski of the online newspaper of the IT industry, the Register, ‘that scientists have prejudices too, and that the publication process (peer review) is not some Kitemark of quality but is vulnerable to being hijacked.’ Chip Knappenberger, who blogs at, believes the rise of blogs as repositories of scientific knowledge will continue if the scientific literature becomes guarded and exclusive. ‘I can only anticipate this as throwing the state of science and the quest for scientific understanding into disarray.’

When Climategate broke, the mainstream media, like knights facing archers at Crécy, mostly ran dismissive pieces reflecting the official position of the Consensus. For example, they dutifully repeated the line that the University of East Anglia’s global temperature record was vindicated by two other ‘entirely independent’ records (from Nasa and NOAA), which was bunk: all three records draw from the same network of weather stations. Editors then found — by reading and counting the responses on their blog pages — that there was huge and educated interest in Climategate among their readers. One by one they took notice and unleashed their sniffing newshounds at last: the Daily Express went first, then the Mail and the Sunday Times, last week the Times and this week even the Guardian.

For those few mainstream journalists who had always been sceptical — like Christopher Booker — it must be a strange experience, like being relieved after living behind enemy lines. Who knows, one day even BBC News may ask tough questions. But it was the bloggers who did the hard work.

Matt Ridley’s book, The Rational Optimist, will be published in May.