Thursday, July 22, 2010

Ben Stein: The Unemployed Are People With ‘Unpleasant Personalities…Who Do Not Know How To Do A Day’s Work’

Today, the Senate extended unemployment benefits for millions of jobless Americans. Despite the terrible shape of the economy, conservatives resisted extending unemployment insurance for weeks for Americans who can’t find work, launching a filibuster to prevent a vote on the benefits.

Writing at the American Spectator yesterday, former Nixon speechwriter and TV personality Ben Stein downplayed the suffering unemployed Americans are experiencing by writing that the people who are unemployed right now are “generally people with poor work habits and poor personalities.” He claims the unemployed are Americans with “unpleasant personalities…who do not know how to do a day’s work“:

The people who have been laid off and cannot find work are generally people with poor work habits and poor personalities. I say “generally” because there are exceptions. But in general, as I survey the ranks of those who are unemployed, I see people who have overbearing and unpleasant personalities and/or who do not know how to do a day’s work. They are people who create either little utility or negative utility on the job. Again, there are powerful exceptions and I know some, but when employers are looking to lay off, they lay off the least productive or the most negative. To assure that a worker is not one of them, he should learn how to work and how to get along — not always easy.

Of course, saying that the 15 million Americans who are unemployed right now are “generally” people with “poor work habits” is as offensive as it is wrong. The current recession is a global phenomenon caused by the collective bad behavior of the world’s largest financial institutions. Before the recession, the unemployment rate hovered around six percent; it is ludicrious to say that millions of Americans suddenly got lazier and less able to work within the span of a few months.

Unfortunately, Stein is a widely respected voice on the American right who regularly appears on cable news to offer his thoughts on politics and policy. Using the Critical Mention media search engine, ThinkProgress finds that the name “Ben Stein” was mentioned 64 times in major television media networks within the past thirty days alone.

Bernanke Vows Fed Will Act If Uncertain Recovery Falters

Federal Reserve Chairman Ben Bernanke said on Wednesday the U.S. economy faces "unusually uncertain" prospects, and that the central bank was ready to take further steps to bolster growth if needed.

"Even as the Federal Reserve continues prudent planning for the ultimate withdrawal of monetary policy accommodation, we also recognize that the economic outlook remains unusually uncertain," Bernanke told the Senate Banking Committee.

"We remain prepared to take further policy actions as needed to foster a return to full utilization of our nation's productive potential in a context of price stability."

Bernanke, delivering the central bank's semiannual report to Congress on monetary policy, said Fed officials believe the U.S. economy is still on a path to recovery.

"Although fiscal policy and inventory restocking will likely be providing less impetus to the recovery than they have in recent quarters, rising demand from households and businesses should help sustain growth," Bernanke said.

For now, he said the Fed expects economic conditions will warrant an exceptionally low benchmark federal funds rate for an "extended period" — repeating a vow the central bank has kept in place for more than a year.

Bernanke stopped short of describing what steps the Fed might take if growth were to falter. Analysts say the central bank could resume asset purchases or lower the rate it pays banks to park their excess reserves at the Fed.

"The testimony was not particularly optimistic," said Lawrence Glazer, managing partner of Mayflower Advisors in Boston. "It implied that the Fed had a relatively cloudy view of the future."

Stocks turned lower to trade down modestly after the testimony was released, while the dollar extended losses versus the yen and U.S. Treasuries rallied, with the 30-year bond gaining a full point.

Stocks had risen on Tuesday in part on speculation the Fed could ease monetary conditions further.

After emerging from its longest and deepest downturn since the Great Depression, the U.S. economy began expanding again about a year ago. It grew at an annualized 2.7 percent in the first quarter.

But stubbornly high unemployment, a fresh drop in housing activity and a slowdown in manufacturing have raised fears of a double-dip recession.

In response to the financial crisis and deep recession, the Fed slashed interest rates to near zero and bought more than $1.5 trillion in mortgage and Treasury bonds.

Bernanke spent much of his testimony reviewing tools the Fed has at its disposal to remove the extraordinary monetary stimulus pumped into the economy during the 2007-2009 crisis.

He said there was broad agreement among Fed officials that asset sales will eventually play a role in withdrawing some of that accommodation. But he also noted that any such sales would be flagged well in advance.

Bernanke said a weak job market will likely remain a drag on consumer spending, and said it would take a long time before the economy can restore the nearly 8.5 million jobs lost in 2008 and 2009.

Against that backdrop, Bernanke indicated inflation is not a concern, and is unlikely to become a problem any time soon.

He said Fed policymakers "expect continued moderate growth, a gradual decline in the unemployment rate, and subdued inflation over the next several years."

Anxiety over high debt levels in Europe have added an important element of uncertainty to the global economic recovery. Bernanke said such worries had driven U.S. stock prices lower and corporate credit premia higher.

He argued the Fed's reopening of foreign exchange swap lines with overseas central banks has helped eased pressures in interbank lending and kept credit flowing in the U.S. financial system.

© 2010 Reuters. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters.

Cartoon of the Week: Obama and Helen Thomas (MUST SEE)

US Professors Raise Doubts About Report on South Korean Ship Sinking

South Korean Internet-savvy citizens, such as bloggers, Twitter users and online media reporters, who are invited by the Defense Ministry, visit the wreckage of a warship that the government claims was sunk by a North Korean torpedo in March.
Photo: AP

South Korean Internet-savvy citizens, such as bloggers, Twitter users and online media reporters, who are invited by the Defense Ministry, visit the wreckage of a warship that the government claims was sunk by a North Korean torpedo in March, at the Second Fleet Command of Navy in Pyeongtaek, south of Seoul, South Korea, 08 Jul 2010.

A new study by U.S. researchers raises questions about the investigation into the sinking of a South Korean navy ship. International investigators blamed a North Korean torpedo, raising tensions on the Korean peninsula.

Researchers J.J. Suh and Seung-Hun Lee say the South Korean Joint Investigation Group made a weak case when it concluded that North Korea was responsible for sinking the Cheonan.

Speaking in Tokyo Friday, the two said the investigation was riddled with inconsistencies and cast "profound doubt" on the integrity of the investigation. "The only conclusion one can draw on the basis of the evidence is that there was no outside explosion," Suh said. "The JIG completely failed to produce evidence that backs up its claims that there was an outside explosion."

Suh is an associate professor in international relations at Johns Hopkins University in the United States, where he runs the Korean studies program.

International investigators said in May that an external explosion caused the South Korean ship to sink last March, killing 46 sailors. The report said a North Korean-made torpedo caused the explosion.

Suh and Lee the cracked portion of the bottom of the ship does not show the signs of a large shock that are usually associated with outside explosions. They add that all the ship's internal parts remained intact and few fragments were recovered outside the ship.

"Almost all parts and fragments should've been recovered within about three to six meters within where the torpedo part was discovered," Lee says, "The fact that only the propeller and the propulsion part was discovered doesn't make any sense to me."

Lee is a professor of physics at the University of Virginia in the United States. Lee also points to a blue mark on a fragment of the torpedo to question the validity of the study. South Korean scientists say that part of the torpedo was marked "number one" in Korean, with a blue marker.

Suh and Lee say the writing would not have survived the intense heat of an explosion. "This can not be taken as evidence. Because any Korean, North and South, can write this mark," Suh said. "Also, it does not make sense that this blue ink mark could survive so freshly when the paint all around was all burned at the explosion."

Both researchers say their findings do not prove that North Korea did not sink the Cheonan. But they say it is irresponsible for the South Korean government to reach its conclusions based on an inconclusive study.

They are calling for a new international investigation to re-examine the Cheonan's sinking. They also want the United Nations Security Council to pressure the South Korean government and request an "objective and scientific" report before the council deliberates on the incident.


What can I say; here we go again!

I hardly need to go down the list of lies used to start US wars. We have been though that over and over again.

Nor do I need to elucidate on the many reasons why the US Government is in desperate need for yet another war with which to scare the American people into acceptance of more takes and fewer rights and freedoms.

Anyone with half a brain realizes that the US Government, unable to gain support for an invasion of Iran, has changed gears and decided that North Korea will be the next step towards World War III.

Here is the big lie...

Let us start with a cloned copy of the official South Korean website detailing the sinking of the Cheosan.

From that website we get the following picture of the remains of a torpedo dredged from the bottom of the ocean.

The official claim that North Korea fired this torpedo at a South Korean warship is based on the following blueprint of a North Korean torpedo claimed to be the weapon recovered from the ocean floor.

There are several differences between the torpedo plans and the actual torpedo recovered from the floor of the ocean. But I am going to focus on just one.

Take a close look where the tail cone assembly (indicated by the bulkhead at the leading edge of the fins) attaches to the torpedo main hull. A major component of all modern torpedoes are the fin actuators. These are the small motors that adjust the rudder and dive planes of the torpedo in order to maintain the intended depth and course to target.

Note that the blueprints of the North Korean torpedo show these actuators forward of the tail cone assembly, that is to say in front of the bulkhead that marks where the fin assembly attaches to the torpedo.

Now let us look at the torpedo actually recovered from the bottom of the ocean near where the Cheosan was attacked.

Note that the recovered torpedo these actuators are built INSIDE the tail cone assembly, that is to say to the REAR of the bulkhead that marks where the fin assembly attaches to the torpedo.

And again, as seen in the official released photo of the recovered torpedo.

In short, the torpedo recovered from the ocean where Cheosan was attacked is NOT the same torpedo shown in the North Korean plans. As I stated above, there are additional differences as well between the blueprints and the actual torpedo, but the actuators are the clincher.

The torpedo recovered fronm the oceasn where the Cheosan was sunk is not the North Korean torpedo shown in the blueprints.

Are U.S. Taxpayers Funding Empire Building With Costa Rica?

One would think that America is experiencing Boom Times with the way their government is throwing around money lately. The recent announcement that a flotilla of warships and troops will be sent to Costa Rica would ordinarily be laughable for its wastefulness, but with America experiencing an unemployment rate north of 20% and the median duration of unemployment at the highest in the last 50 years, this should be no laughing matter.

Many Americans do not know much about Costa Rica, its history, or its current political landscape. It might be worth knowing exactly how and where American tax dollars are being spent. Here are some basic facts about Costa Rica:
  • Costa Rica is a democratic republic with a very strong system of Constitutional checks and balances.
  • Costa Rica does not have a military; it was abolished in 1948.
  • Recent president, Oscar Arias, was a Nobel Peace Prize winner in 1987.
  • Costa Rica consistently ranks as one of the happiest places on Earth according to many polls, including the first ever "happiness poll" conducted by Gallup, where it was determined to be #1 in The Americas.
In other words, Costa Rica's lack of a military culture has been enshrined, and is part and parcel of their overall happiness. Forty-six warships, 200 helicopters, and 7000 troops being sent to patrol the coastal waters of Costa Rica sends the world a false message that Costa Rica is in some way needy of this massive loan of the American military. Furthermore, the entire region is moving away from neoliberalism, and toward solidarity, in an attempt to build a sovereign Latin America.

We have to assume that Costa Rica's welcoming support of the American military is likely to fan regional tensions, at the very least. Or, could that be the reason itself for such a move? In a comprehensive article by Mark Vorpahl, writing for Global Research, he points out that such an excessive amount of military in order to "combat drug trafficking" or "offer humanitarian aid" to a country the size of Rhode Island can hardly be justified in and of itself. Much more likely is that this is regional in scope and is a U.S. intimidation force, rather than a humanitarian mission.

Vorpahl asserts that the U.S. is determined to return to the Monroe Doctrine principles which led to the overthrow of popular governments throughout Latin America. He states the results:
Therefore, the U.S. Empire builders could use their political and economic might alone to subjugate these neo-colonies to a very profitable neoliberal agenda. This agenda included allowing U.S. corporations easy access to pillage these nations’ public sectors through privatization, letting multi-national corporations overrun these nations’ local markets and farms through the elimination of trade barriers, and increasing the exploitation of their workers and the devastation of their natural resources by tossing out national labor and environmental standards. Because of the profits enjoyed by a few as a result of these measures, they carried the day, though they, in turn, created a simmering spirit of rebellion in the semi-colonies' peasantry and workers that would inevitably find expression.
It is true that Costa Rica is in a precarious geographical location amid other historically less peaceful (and much poorer) nations, but this is nothing new. It seems that the most likely scenario is that America would like to take the Drug War show to a new area of the high seas, and they have found a convenient headquarters for operations. Geopolitics notwithstanding, the financial cost to America should be noted. America is already embroiled in two major wars; has military bases all over the planet; and has a true disaster spreading along its own coast, not to mention the elephant in the living room of a looming second Great Depression.

As a frequent visitor to Costa Rica, I can only add that if the Costa Rican government is allowing its country to be the staging ground and corporate headquarters for empire building in Latin America, they should be called on it. If the Costa Rican people decide to abandon their dedication to peace, and the absence of a military, by allowing this violation of their sovereignty and Constitution, they are truly misguided.

Polls show that most Americans do support spreading the idea of democracy, but do not agree with empire building. If the American people do not voice their outrage over this, and the abject wastefulness of their tax dollars during a time of more pressing crises, they are again proving to the world who really has the power in America.

RV dealers concerned as more FEMA trailers head for auction

Dozens of trailers, previously owned by FEMA, are scheduled for auction this week in North Augusta. Local R-V dealers say the market is now 'flooded' with the potentially dangerous trailers, and they want consumers to do their research.

News 12 This Morning Exclusive Investigation

NORTH AUGUSTA, SC-- Dozens of trailers, previously owned by FEMA, are scheduled for auction this week in North Augusta. Local R-V dealers say the market is now 'flooded' with the potentially dangerous trailers, and they want consumers to do their research.

Earl Allen, of CSRA Camperland, says the trailers are simply not designed for recreational travel, even though they 'are often sold that way.' Most of the FEMA units, he adds, do not have on-board water and waste storage tanks. Without those tanks, many state parks will not allow the campers to be used.

The trailer auction is completely legal, and actually facilitated by government wholesalers. However, many of the units have been stored in the gulf coast since 2005, and may contain chemical and mold dangers, government reports suggest (see links below).

News 12 was invited to view the trailers during a previous auction, and we did notice several areas of mold and rot within the walls of the trailers. Not all units, however, showed outward signs of damage.

"I'd say 90 percent of these units have some sort of damage on the roof, that is already causing rot, if not, they soon will" says Allen. "We had a customer come in requesting that we install an awning on his (FEMA) trailer, and we discovered that the roof was rotted in places. We had to tell him" he says.

The trailers auction and resale for about 2-thousand to 6-thousand dollars each, lot owners say. At least one used car dealer, who bought two of the units, admits they have been 'difficult to resale'. The models, and production year of the trailers being sold at this local auction, match those named in government reports by the CDC.

Allen says the professional association that represents most of the R-V dealers in our area, protested the sales before government leaders. Meanwhile, this latest auction is scheduled for this week, with similar auctions happening in several other regional cities.

Police violently smash mothers head onto the road nearly killing her

Click this link .....

J&J cuts forecast, discloses grand jury probe

Johnson & Johnson (NYSE: JNJ) says it's been subpoenaed by a federal grand jury and is cooperating in an investigation into the series of high-profile recalls of its consumer drugs. And it's facing other legal actions stemming from those recalls, including lawsuits against its McNeil Consumer Healthcare unit and ongoing government probes, CNN Money reports.

Meanwhile, the company offered its own estimate of its ability to weather that recent spate of recalls and high-profile manufacturing snafus. J&J cut its profits forecast for the year to $4.65 to $4.75 per share, down from the $4.80 to $4.90 it had predicted in April. The company says part of that decrease stems from currency effects. But it also cited those recalls--and the shutdown of a key consumer-drugs factory, which is keeping a slew of top products such as Tylenol and Motrin off the shelves.

Meanwhile, the company met analyst expectations for second-quarter adjusted earnings at $1.21 per share, or $3.45 billion in profits. But its worldwide pharma sales grew by less than 1 percent, and that embattled consumer-drugs segment saw sales fall more than 5 percent to $3.6 billion.

We'll be interested to see what J&J execs say during their earnings call with analysts. It will be the first time CEO Bill Weldon (photo)has been open for questions since the huge children's drug recall was announced back in June. In a statement, he says, "Remedial actions to address the product quality issues at McNeil Consumer Healthcare are ongoing and of high importance." We'd like more details on those actions--and on the new grand jury subpoena. We're sure you do, too.

- check out the J&J release
- get more from CNN Money
- see the MarketWatch news
- read the article from Reuters

ALSO: J&J says Ian E.L. Davis, a former chairman of international consulting firm McKinsey & Co., has been named to its board of directors. Report

Homeland Security for Whom?

The Washington Post has published a splashy exposé about the mammoth "homeland security" intelligence empire that now burdens the United States, financially and ideologically.

As usual, however, there is no real historical context. And that lack of context is part of the story – not just the current dimensions of the empire.

I wrote the following article for Penthouse in the summer of 2003. It was reprinted by CounterPunch later that summer.

At the time I said: "This homeland security boondoggle is the biggest reorganization of the U.S. government in 50 years. It might even bankrupt the country and, perhaps intentionally, throw it into a Depression. That remains to be seen. What is certain is that at a cost of $50 billion in taxpayer's money, the homeland security infrastructure will provide Bush with 170,000 political cadres, and the internal security he needs to assure the continuity of his political power indefinitely. Except for providing Bush with political internal security, there is no need for the Department of Homeland Security; it is a Trojan Horse through which Bush will unleash his ideological storm troopers and exploit his ill-gotten power to achieve permanent political dominance."

I put the blame on "Bush" at the time (and the numbers have varied) but it's really the national security state that's to blame for the near Depression the homeland security state (financially and ideologically) has caused. And of course the Washington Post is part of the national security state – that secret group of people who control America through secret deals – the type of secret deals that enable Washington Post reporters' access to anonymous CIA officers.

Don't forget – there is always a quid pro quo for that type of access, even in today's exposé.

And it is that national security state in its entirety that provides "their" empire with built-in security. Political Internal Security.

As pundits rush to comment on this "revelation," don't forget that it was utterly predictable.

And you know what that means....

Homeland Security for Whom?
Are Bush, Ashcroft, and Wolfowitz Protecting America or Their Own Regime?

by Douglas Valentine

Adapted from the July 2003 issue of Penthouse Magazine

"The implication or latent threat of terror was sufficient to insure that the people would comply."

~ William Colby, creator of the CIA's Phoenix Program, which targeted Vietnamese leaders for assassination during the Vietnam War

For those of you believe the war on terror and the violent occupation of Iraq will ensure world peace, you've got another thing coming; and that thing is the illegitimate Bush Regime's homeland security infrastructure.

Let me state the point of this article up front: The war on terror, and its "homeland security" counterpart, are flip sides of the same coin. They are the same ideology applied to foreign and domestic policy. But like CIA agent Alden Pyle in The Quiet American, their evil intention is wrapped in a complex matrix of transparent lies. Pointedly, that evil intention is to provide the Bush Regime with political internal security at home, thus enabling it to plunder the world with impunity.

The foreign policy aspect of this synthesis was promulgated on September 20, 2002 in the "The National Security Strategy of the United States" (a.k.a. the Bush Manifesto) in which the Bush Regime confers upon itself the divine right to devastate any nation it dislikes, or has vast oil fields or other natural resources that it covets. This first-degree-murder strategy makes about 70 percent of Americans feel good about Bush. But Bush has an insidious ulterior motive, and if these feel-good Americans were to read the fine print of his Manifesto, they would realize that by generating more human misery around the world, the eternal war on terror will create more dissenters at home, and thus provide Bush with the mandate he needs to impose a de facto military dictatorship, as prescribed in his domestic policy statements: the Homeland Security, Patriot, and Domestic Security Enhancement Acts.

Just as waging war around the world is popular, so too will be suppressing domestic dissent. For example, Fox News Channel's Bill O'Reilly recently had to defend himself when he said war protesters were "un-American." His producers made him do some fast backpedaling, but the Big Mouth was expressing the true feelings of most of his listeners. The airwaves and editorial columns bombard the public with the Bill O'Reilly message, and that is how peace activists go from being bad Americans to being enemies of the state. And that is how the war on terror translates into a homeland security infrastructure that suppresses dissent.

The Shell Game

Homeland Security is a euphemism for internal security, but that phrase has the nasty ring of McCarthyism to it, and the anti-Communist witch-hunts of the 1950s, led by FBI Director J. Edgar Hoover and racist Senator James Eastland's Internal Security Subcommittee. Before the neo-cons got hooked on terror, America's hawks were obsessed with Godless Communism. Hoover devoted his life to destroying every Communist in America, while the Dulles brothers (CIA Director Allen and Secretary of State John) harnessed the mania and used it as a convenient pretext for Cold War foreign intervention, and laid the foundation stones for the American empire after World War II. In the same way, Bush's anal obsession with terror is the new contrived pretext for solidifying world domination. But as Hoover, Eastland, and the Dulles' knew, without political internal security, Bush cannot wage war abroad, with all the economic benefits that entails.

So Bush, with the help of Joe Lieberman, the Senator from Israel, created the Department of Homeland Security to pacify (a euphemism for terrorize) the American people into submission through a number of ploys. This homeland security boondoggle is the biggest reorganization of the U.S. government in 50 years. It might even bankrupt the country and, perhaps intentionally, throw it into a Depression. That remains to be seen. What is certain is that at a cost of $50 billion in taxpayer's money, the homeland security infrastructure will provide Bush with 170,000 political cadres, and the internal security he needs to assure the continuity of his political power indefinitely. Except for providing Bush with political internal security, there is no need for the Department of Homeland Security; it is a Trojan Horse through which Bush will unleash his ideological storm troopers and exploit his ill-gotten power to achieve permanent political dominance.

And he is creating this police state through terror. As the Homeland Security web site assures us, the threat of terrorism "is a permanent condition" that "requires our country to design a new homeland security structure."

Terror as an Organizing Principle of Society

The underlying principle of homeland security (and the war on terror) is that terror is an organizing principle of society. This includes every type of terror, from the shock and awe bombs that liberated Baghdad, to the collective punishments Israel used to crush the Palestinian soul. It's armed propaganda in the form of National Guardsmen eye-balling us at airports, and it's the greatest psywar campaign ever waged, in the form of red white and blue color-coded warnings of terror attacks that never occur, and unsubstantiated reports brought to you by government stenographers at network news.

Terror is the underlying concept. In "Metaphoric Entrapment In Time," researcher Anthony Judge tells how the new homeland security infrastructure is actually an act of "structural violence."

"Personal violence is for the amateur in dominance," Judge notes, quoting two-time Nobel Prize winner Johan Galtung, but "structural violence is the tool of the professional. The amateur who wants to dominate uses guns; the professional uses social structure. The legal criminality of the social system and its institutions, of government, and of individuals at the interpersonal level is tacit violence. Structural violence is a structure of exploitation and social injustice."

Now that the Department of Homeland Security has been voted into law, Bush has laid the groundwork for America's new legally criminal social structure, which exploits on both personal and professional levels. This confluence blesses Bush with omnipotence. He is all-powerful. As he said before sacrificing the Iraqis on the altar of his apotheosis: "We have concluded that tomorrow is a moment of truth for the world."

Delusions of grandeur? A messiah syndrome? Penis envy? What gives?

Justice as Terror

Administrative detention is the extralegal nail upon which the forthcoming legally criminal homeland security structure hangs. It is a neat way of avoiding the Bill of Rights and the Geneva Conventions by creating "crimes of status."

Administrative detention was first used by the CIA in the Vietnam War through the notorious Phoenix "assassination" Program, and was applied against Communists, Nationalists, and anyone else opposing the puppet US puppet regime, just as CIA death squads are operating now in Afghanistan and Iraq. Sympathizing with the Communists was a crime of status, as was advocating peace.

Administrative detention is structural violence for the professionals. At the personal level, the terror as an organizing principle of society relies on selective terror, which means destroying one's political opposition through acts of terror directed at individuals. It derives from the Eye of God technique, which plays on primitive fears of an all-seeing cosmic Eye of God that sees into your mind. It was used in World War One by morale officers who sent pilots in small aircraft to fly over enemy camps to call out the names of individual soldiers. CIA psywar expert Ed Lansdale, Graham Greene's model for Alden Pyle in The Quiet American, used this technique in the Philippines in the early 1950s. At night a psywar team would creep into town and paint an eye (like the one that appears atop the pyramid in the Great Seal of the United States) on the wall of a house facing a suspected Communist or Communist sympathizer.

In South Vietnam the Eye of God trick took a ghastly twist. CIA officer Pat McGarvey recalled to Seymour Hersh that "some psychological warfare [psywar] guy in Washington thought of a way to scare the hell out of villagers. When we killed the VC there, they wanted us to spread eagle the guy, put out his eye, cut a hole in the back [of his head] and put his eye in there. The idea was that fear was a good weapon." Likewise, ears were cut off corpses and nailed to houses to let the people know that big brother was listening as well. When Viet Cong leaders were found, Phoenix teams murdered and mutilated them along with their families and neighbors as a means of terrorizing the neighboring population into a state of submission. Such horrendous acts were, for propaganda purposes, often made to look as if they had been committed by the enemy. To spread the word that everyone was a potential victim, CIA psywar posters pictured a Phoenix with a blacklist trailing from its beak and a snake (i.e. a Communist) grasped in one of its talons. The message was that the omnipotent CIA selectively snatches its prey, in the most hideous way.

The Bush Regime is locked into this method of selective terror. They want you to think they know everything about you: if you've been bad or good, so to speak. Just remember what happened to Uday Hussein and his brother Qusay, and all the other Iraqis featured on the CIA's popular death cards, which are advertised on the Internet.

The modern manifestation of selective terror is the computerized blacklist – the greatest blackmail scheme ever invented: if you don't do what Bush and his clique want, your name pops up and you're suppressed. Be forewarned, the Bush Regime's blacklists include the INS/State Department's TIPOFF; CAPPS II, which uses credit information and secret databases to assess a person's security risk level each time he or she flies; the "No-Fly" blacklist of peace activists, distributed to airlines by the FBI and the Transportation Security Administration; and local blacklists like the one kept by the Denver police department. You know about these lists. You just don't know about the secret ones, the Bush Regime's enemies list of its most powerful domestic political opponents.

Administrative detention and selective terror work in tandem and depend on informant and surveillance programs that identify, in homeland jargon, "terrorist surrogates" at the grassroots level of society. (Attorney General John Ashcroft's Terrorism Information and Prevention System, a.k.a TIPS, was the short-lived prototype.) This is how it happens: on the basis of a false accusation made by an anonymous homeland informant, counter-terror teams will arrest a terrorist surrogate, detain the person indefinitely under administrative detention laws in an interrogation center until he or she dies or defects, or is sent to a military tribunal for disposition. Disposition means permanent detention in some perverse torture chambers like the ones in Guantanamo Bay, Cuba. Ultimately, the Domestic Security Enhancement Act will allow Ashcroft to secretly incarcerate and deport U.S. citizens without any thought of ensuring them due process of law.

Check out what happened to José Padilla.

To summarize so far: Blanket surveillance, blacklists, arrests on the word of anonymous informants, the absence of due process through extralegal administrative detention procedures, military tribunals, incarceration, and deportation are the instruments of the homeland security infrastructure, which will coordinate all existing U.S. intelligence, police, and military units in the attack on terrorists and their surrogates.

Ensuring Political Security

Bush is about to devour his domestic enemies at both the tactical (personal) and strategic (professional) levels. Upper echelon enemies will be dealt with by the Homeland Security Council, which Bush chairs, and which does not appear on any organizational chart. It sets policy for a secret political warfare program. It is the greatest danger facing America today. Like the anthrax letters mailed to Democratic senators, it takes only a few "black propaganda" operations to suppress the leaders of the political opposition. Private contactors may carry out executive actions (what the Israelis fondly refer to as "targeted kills") issued by this all-powerful Board of Directors, as they are not accountable to Congress. Or Bush will employ political action squads from the Terrorist Threat Integration Center, which consists of the FBI and CIA's terror experts, and reports only to Bush.

Tactically Bush will neutralize opponents through the Department of Homeland Security, which consists of four directorates: Information Analysis and Infrastructure Protection, Science and Technology, Border and Transportation Security, and Emergency Preparedness and Response. The all-important Office of Intelligence, consisting of about 1000 analysts from dozens of agencies, is cloistered within the Directorate of Information Analysis and Infrastructure Protection. This Office, insofar as it will coordinate the other directorates in terror operations, is the nerve center of the DHS political internal security infrastructure.

The Office of Intelligence will manage the CIA's domestic action squads, interrogation, and informant programs, and will wag the homeland security dog by coordinating all in-coming intelligence, and then sending out warnings to state, local and private sector officials. Employees from the CIA's Counter-Terror Center will fill the most important positions within the Office of Intelligence, and will plan daily operations in conjunction with fellow CT Center officers posted within 93 Justice Department terrorism task forces run around the country. With the latest electronic surveillance gadgets available to them, they will reach into every corner of society, including our homes, workplaces, public facilities and computers, to sniff out terrorist surrogates and launch preemptive attacks to neutralize them before they activate.

If you don't believe that the blossoming homeland security infrastructure is already providing political internal security, consider that hundreds of businesses and institutions across the country have already been placed on the CIA's Watch List. According to Bob Woodward of the Washington Post, one Bush official said that merely being on the list "could destroy the livelihood of all those organizations...without a bomb being thrown or a spore of anthrax being released."

Elizabeth Becker of the New York Times reported several months ago that "the leaders of many federal departments and agencies have been scrambling to figure out... how they can influence the outcome [of the impending Department of Homeland Security] without appearing disloyal."

And James Bamford noted that "pressure has been building on the intelligence agencies to deliberately slant estimates to fit a political agenda," and "a growing number of military officers, intelligence professionals and diplomats ...charge that the administration squelches dissenting views."

This is the maximum danger of homeland security, and what it boils down to mandatory self-censorship. Already we passively permit hooded paramilitary policemen with automatic rifles to search our cars, without probable cause, for Osama bin Laden and Saddam Hussein. These policemen are helping us, right? They would never turn their guns on us, right?

As stated in a CIA terrorist training manual that came to light almost 20 years ago, "Implicit terror always accompanies weapons, since the people are internally "aware" that they can be used against them."

This is what William Colby was talking about when he was quoted in the prologue to this article as saying, "The implication or latent threat of terror was sufficient to insure that the people would comply."

Creating the Political Cadres

Neo-con Michael Ledeen, a certified homelander, rationalized the use of terror as an organizing principle of society when he said, "New times require new people with new standards." According to Ledeen, these new people have the will power to "stamp out" the "corrupt habits of mind" manifest in the thoughts or actions of anyone who opposes Bush Regime aggression. Says Ledeen, "The entire political world will understand it and applaud it. And it will give [Homeland Security] a chance to succeed, and us to prevail."

On the international scene, these "new people" illegally invaded Iraq, formed a puppet regime of supplitiefs, stole the nation's oil and are putting the profits in their own pockets, and are now assassinating and otherwise terrorizing, through an updated Phoenix Program, any political opposition, in what amounts to mass murder.

Information management is key in creating the "new people" who will organize the new criminal homeland social structure, and make it appear legal, moral and most importantly, popular. The first step in manufacturing these robots is through motivational indoctrination, which is based on the principle that people will do anything you ask of them if you make them feel special. In return for adopting the right attitude, a successful career is offered. Several alumni from the CIA's Phoenix Program already enjoy important top homeland security posts, like Major General Bruce Lawlor, Chief of Staff of the Department of Homeland Security, and Roger Mackin, the CIA officer in charge of the Department's counter-narcotics center. From mid-1967 until mid-1968, Mackin ran the Phoenix Program in Da Nang City, and managed its Intelligence and Operations Coordination Center – the organizational model for the Department of Homeland Security. Mackin is also touted as the CIA officer who nailed Colombian drug smuggler Pablo Escobar in a typical Phoenix assassination operation in December 1993.

CIA psywar experts like Lawlor and Mackin will motivationally indoctrinate the 170,000 some odd homeland security personnel to wage political warfare. A training manual on the subject was reprinted in the early 1980s by a former Phoenix officer who got caught up in the Reagan Regime's illegal Contra War. Titled Psychological Operations in Guerrilla Warfare, it states that "the human being should be considered the priority objective in a political war. And conceived as the military target of guerrilla war, the human being has his most critical point in his mind. Once his mind has been reached, the 'political animal' has been defeated, without necessarily receiving bullets."

Having been politically and motivationally indoctrinated, Critical Infrastructure and other homeland personnel will spy on colleagues who may inadvertently or maliciously serve as terrorist surrogates by publicly or privately revealing information about homeland infrastructure vulnerabilities, such as power grids or computer systems. These cadre will covertly identify and watch terrorist surrogates until it becomes necessary to expose the surrogates in the media. No one will want to be identified, even falsely, as an inadvertent or malicious terrorist surrogate, knowing that they are subject to being "stamped out," as Michael Ledeen suggests. In this way the Bush Regime is organizing its political cadre – Ledeen's "new people" who have been psychologically defeated by the implicit terror around them and, having reverted to the same infantile state of mind occupied by President George W. Bush, have embraced the Fascist principles they've been subliminally indoctrinated with for years through the corporate propaganda machine.

These "new people" are fast joining front organizations like the Freedom Corps, the Citizen Corps, Community Emergency Response Teams (which will train kids at school to prepare for the disasters the Bush Regime will surely visit upon America); the Neighborhood Watch Program that will allow the Bush Regime to detain its drunk and disorderly political opponents as terrorist surrogates; and the Medical Reserve Corps (MRC), through which enfranchised doctors will monitor patients within the faltering health care system.

Within these front groups are cadres trained "in techniques of persuasion over control of target groups" to support the Bush Regime. In the forthcoming national emergency, these cadres will be mobilized, will attend mass meetings, carry placards, shout slogans as part of a Popular Information Program, appeal to our cultural beliefs through Michael Savage-style radio shows, teach classes on correct thinking, organize subtle but massive screening operations designed to generate defectors, who will in turn to denounce former comrades who spoke ill of the Bush Regime. They will intervene with "problem individuals," and everywhere encourage their neighbors to report the activities of terrorist surrogates by dropping a note addressed to the police in local mailboxes. It's not hard to imagine a few of the most highly motivated cadres getting carried away, grabbing ropes, and forming lynch mobs.

Only five percent of the people need to be organized in this fashion for Bush to wield control over the indifferent ninety percent, and defeat the five percent that form the political resistance. This is why psychological operations are the Bush Regime's No. 1 priority. Case in point: when Bush publicly announced the Department of Homeland Security on 6 June 2002, he stated that the organization's primary mission was to "mobilize and focus... the American people "to accomplish the mission of attacking the enemy where he hides and plans." By which he means his political opponents.

Psywar experts prize "compromise and discreditation" operations like the one the FBI used against Martin Luther King before he was assassinated. Information about his extramarital affairs was leaked, and he was sent a message with the suggestion that he should commit suicide. "There is only one way out for you," the forged document read. "You better take it before your filthy, abnormal, fraudulent self is bared to the nation." Forged documents like the one used against King are an important facet of political blackmail, and are also used to justify false arrests or conceal illegal operations. We have already seen Network News broadcast "edited" videotapes of Osama bin Laden and, in the Afghanistan war, captured (perhaps forged) documents were routinely used as a form of black propaganda to justify military actions that resulted in "collateral" damage.

The greatest example, of course, is Bush's criminal and impeachable use of forged documents to justify the illegal invasion of Iraq. This was an act of treason by the President of the United States, and yet within the new legally criminal homeland security structure, it is business as usual.

We can expect a slew of false rumors from low-level homeland cadre, designed to ruin the reputations of politically incorrect families in their villages and towns, especially environmentalists who pose a threat to Critical Infrastructure corporations. The paranoia that currently infects the Arab-American community will spread until no one is sure who is a spy for the Thought Police. When the national emergency arrives, most likely the forthcoming depression, and the homeland security infrastructure goes on Red Alert, midnight arrests and disappearances into administrative detention centers will become commonplace. Amid the confusion, the CIA will form special units within the 93 terrorism task forces around the country, and other unilateral Phoenix Program-style hit teams will operate under cover of the security forces at their disposal.

The clincher is when the definition of a terrorist surrogate is expanded to include people deemed dangerous to the Public Order, at which point any person can be arrested on criminal charges for political offenses. No specific charge is required; a homelander like Ledeen or Bill O'Reilly will simply accuse someone of disturbing the peace or being un-American The definitions of sedition and treason will grow to include disseminating information about government corruption, or undermining the will of the State by challenging its authority. Calling for civil disobedience will be a really scary threat to the homeland. Cadre in the Office of Cyberspace Security will expose you as a terrorist surrogate for sending sarcastic or satirical emails. How can you prove you were only joking when you blamed Bush for the terror attacks on the World Trade Center, and said Cheney's refusal to investigate proves that Bush did it?

Ultimately, every town will form a Homeland Committee, chaired by a Bush Regime operative who will process confidential reports from concerned citizens about the activities of peaceniks, or people they don't like for personal reasons, such as business competitors. These reports will pass through an ideological filter as they work their way up to the Office of Intelligence and the Terrorist Threat Integration Center, where motivated CIA officers will gleefully pull the plug on environmentalists, people espousing national health care, and anyone challenging to the Bush Regime and the internal security forces that are firmly in its grip.

Beware. Ashcroft has vowed to "employ new tools that ease administrative burdens." However benign he might think he means this, these new tools can allow the government to wage political warfare through implicit and explicit terror. And the government can do it! The Geneva Conventions guarantee protection to civilians in time of war, but do not prohibit a state from interning civilians or subjecting them to emergency detention when such measures are necessary for the security or safety of the state. In this way indefinite detention, torture and summary execution, all carried out without previous judgment pronounced by a regularly constituted court, are perfectly legal, because they are the result of "administrative procedures" and do not involve a "criminal sentence."

This is what Israel is done to the Palestinians, and this is what the Bush Regime has in store for America through its eternal war on terror: that sad obsession with dominance, itself a sad projection of Bush's feelings of inadequacy, most likely brought upon by his domineering mother Barbara.

July 21, 2010

Bernanke: Recovery 'unusually uncertain'

Washington ( -- Federal Reserve Chairman Ben Bernanke warned Congress Wednesday that the economic outlook remains "unusually uncertain," but stopped short of revealing what the Fed might do to sustain the shaky U.S. recovery.

There had been growing expectations on Wall Street that the Fed chairman would give a clearer signal about additional steps the central bank might take to spur the economy in the face of growing weakness.

Instead, his semi-annual testimony offered little new policy direction, focusing on expectations that economic growth would allow the Fed to eventually pull money out of the system and raise short term rates, as the economy improves.

And while he acknowledged growing signs of weakness in the recovery, he gave a vote of confidence that the economy would avoid falling into another recession in the near term.

"We don't think a double-dip [recession] is a high probability," he said.

Some economists have questioned whether the Fed has run out of options by keeping rates near 0% for the last 18 months.

Bernanke said the Fed still has tools necessary to spur growth, even with interest rates unable to go any lower. But he gave few details about what the Fed might do if it decides the economy needs more help.

"We have not come to the point where we can tell you precisely what the leading options are. Clearly each of the options have potential drawbacks," he said in response to questions. "They're not going to be the conventional options. We need to look at them carefully to make sure we're comfortable with any steps that we take."

He said the Fed could change its statements in order to give confidence to markets about future growth.

And he said the Fed could try to encourage banks to reduce the cash they are holding, which would pump more money into the economy. To do this, the Fed could lower the interest it now pays on the reserve accounts banks have on deposit with the 12 regional Federal Reserve banks. Currently, the Fed only pays 0.25%. Despite that low rate, banks collectively have about $1 trillion in excess reserves in those accounts.

U.S. stocks, which had been little changed before his 2 p.m. ET testimony, fell sharply once his remarks were released, with the Dow Jones industrial average and the Standard & Poor's 500 index both closing off more than 1%.

"Anyone hoping for a signal that the Fed was preparing to provide some further monetary stimulus to boost the flagging U.S. recovery would have been sorely disappointed," said Paul Ashworth, senior U.S. economist for Capital Economics.

"The bottom line is that monetary policy isn't going to be loosened; the best that can be said is that it isn't going to be tightened for several years either."

Senate Banking Committee Chairman Chris Dodd, D-Conn., seemed to be one of those pressing for additional action, stating in his opening remarks, "It appears the economy is in need of additional help."

But Republicans on the committee questioned Bernanke about the threats posed by both the government's growing deficits. Bernanke repeated his earlier comments that the deficits are "unsustainable."

Bernanke says that despite growing signs of weakness in the nation's economic recovery, he and other top Federal Reserve officials still expect "continued moderate growth, a gradual decline in the unemployment rate, and subdued inflation over the next several years."

However, the Fed chairman says that unemployment will drop more slowly than was predicted earlier this year. And while not mentioning the possibility of a double dip recession in his remarks, he said the Fed also sees the risks for growth as "weighted to the downside."

"In all likelihood, a significant amount of time will be required to restore the nearly 8.5 million jobs that were lost over 2008 and 2009," he said. And he emphasizes the "exceptional near-term hardships" on workers and their families, as well as the potential erosion of skills and possible long lasting effects on employment and earnings prospects.

One other factor underlying the weaker outlook, says Mr. Bernanke, is that although financial conditions have improved significantly, they have become "less supportive of economic growth in recent months." He cites the situation in Europe as one contributing factor.



The following excerpt is from the 1998 Senate Budget Committee session. Note the underlined portions.


U.S. FEDERAL RESERVE BOARD CHAIRMAN ALAN GREENSPAN: .....making sure that surplus is there.

U.S. SENATOR ERNEST F. HOLLINGS (D-SC): Yeah, making sure that surplus is there. I'm telling you, Dr. Greenspan, that's music to my ears.

GREENSPAN: Well, I remember you taking this song a long way over recent years, and I must say, Senator, a number of us were skeptical that was even discussable, figuring we would never get to unified surplus that we said which you were preaching was very interesting, scientifically sound, but unrealistic. I apologize.

HOLLINGS: Well that's all right, because your Greenspan Commission report in section 21 says just exactly what you're saying here. That was in 1983; here now, in 1999, on page two, "simply put, enough resources must be set aside over a lifetime of work to fund retirement consumption." Now that section 21 said set it aside. President Bush, in section 13 3 01 on November the 5th, 1990 signed that into law. And we making headway. Let's understand, though, that we're still running deficits. 'Cause I'm not going along with this monkeyshine about unified. 'Cause unified is not net, the debt still goes up, is that correct?

GREENSPAN: If you' depends on whether or not you wish to create the savings...

HOLLINGS: I'm not asking what you're trying to create. The simple fact is the debt has been going up at least $100 billion for the last several years.

GREENSPAN: Outside, on budget, that is correct.

HOLLINGS: That's right, on budget, you're spending a hundred billion more than you're taking in.


HOLLINGS: And this president's budget spends another hundred billion more than we take in.

GREENSPAN: I haven't seen it yet.

HOLLINGS: You haven't seen it? You're testifying about it now.

GREENSPAN: I haven't seen the budget. You haven't seen it either.

HOLLINGS: Well, you know his plan. Look you think he's going to spend less than a hundred billion more?

GREENSPAN: I will wait to see what the numbers look like.

HOLLINGS: Well, the truth is...ah, shoot, well, we all know there's Washington's math problem. Alan Sloan in this past week's Newsweek says he spends 150%. What we've been doing, Mr. Chairman, in all reality, is taken a hundred billion out of the Social Security Trust Fund, transferring it over to the spending column, and spending it. Our friends to the left here are getting their tax cuts, we getting our spending increases, and hollering surplus, surplus, and balanced budget, and balanced budget plans when we continue to spend a hundred billion more than we take in.

That's the reality, and I think that you and I, working the same side of the street now, can have a little bit of success by bringing to everybody's attention this is all intended surplus. In other words, when we passed the Greenspan Commission Report, the Greenspan Commission Report only had Social Security in 1983 a two hundred million surplus. It's projected to have this year a 117 million surplus. I've got the schedule, I'll ask to put in the record the CBO report: 117, 126, 130, 100, going right through to 2008 over the ten year period of 186 billion surplus. That was intended; this is dramatic about all these retirees, the baby boomers. But we foresaw that baby boomer problem, we planned against that baby boomer problem. Our problem is we've been spending that particular reserve, that set-aside that you testify to that is so necessary. That's what I'm trying to get this government back to reality, if we can do that.

We owe Social Security 736 billion right this minute. If we saved 117 billion, we could pay that debt down, and have the wonderful effect on the capital markets and savings rate. Isn't that correct? Thank you very much, Sir. Thank you, Mr. Chairman.


It should be obvious from the above that the government has for decades been taking the money intended to pay Social Security benefits and spending it as general revenue. The Social Security trust fund is filled with Government IOUs, and those people who insists Social Security is solvent are operating in the faith that T-bills are always good, because the taxpayer can always be forced to redeem them.

But there is a problem. There are so many T-bills in the Social Security fund that when the baby-boomers start applying for benefits, the sudden surge of T-bills being presented for payment would collapse the Federal System, because there are not enough young taxpayers to carry the extra load.

Regardless of the mechanism, the bottom line is that the government looted the retirement funds of Americans, and that means one of two things has to happen (and maybe even both). Either Americans will be taxed twice for the same benefits, or the benefits will be cut.

Obama Mortgage Plan May Fuel Wave of Foreclosures

The Obama administration's effort to help those at risk of losing their homes is failing to aid many and could spur a rise in foreclosures that would further depress the housing industry.

More foreclosures would force down home prices and that would deter already-ailing homebuilders from starting new projects.

As a result, the economic rebound could suffer. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes paid to local and federal authorities, according to the National Association of Home Builders.

"Foreclosures hold down the pricing for everybody," said Marty Mitchell, vice chief executive officer of Mitchell & Best Home Builders in Rockville, Md. "As a builder, we have to be cognizant of foreclosures, if there are more coming along, because it affects pricing across the board."

Home construction plunged in June to the lowest level since October, the Commerce Department said Tuesday. Driving the decline was a more than 20 percent drop in condominium and apartment construction, a small but volatile portion of the housing market. Construction of single-family homes, the largest part of the market, was essentially flat.

Applications for building permits, a sign of future activity, were up slightly. But that was also the result of the volatile apartment market.

The home construction report was released one day after the National Association of Home Builders said its monthly reading of builders' sentiment about the housing market sank to the lowest level since March 2009.

"We're going to see very minimal new construction until the stream of foreclosures has ended," said Jack McCabe, a real estate consultant in Deerfield Beach, Fla.

The glut of homes being sold at foreclosure or as short sales — when a bank agrees to accept less than the total mortgage amount — could rise even faster in the months ahead.

More than 40 percent of the 1.3 million homeowners enrolled in the Obama administration's mortgage relief effort have fallen out of the program, the Treasury Department said Tuesday.

"The program really hasn't helped a lot of people, or at least not nearly as many had been hoped for," said Mark Zandi, chief economist at Moody's Analytics. He predicts that about 2 million homes are likely to be sold over the next 12 to 18 months as foreclosures or short sales.

Many borrowers have complained that banks often lose their documents and then claim borrowers did not send back the necessary paperwork.

The banking industry said borrowers weren't sending back the necessary paperwork. They also have accused the Obama administration of initially pressuring them to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out.

Obama officials dispute that they pressured banks and they defend the program. Lenders are making more significant cuts to borrowers' monthly payments than before the program was launched. And eight of the largest mortgage companies in the program have offered alternative programs to 45 percent of those who fell out of the program.

The government's program "only reflects a portion of what's happening in the broader marketplace," said Raphael Bostic, an assistant secretary at the Department of Housing and Urban Development.

While developers have cut back on construction and the number of new homes on the market has fallen dramatically, they still must compete against foreclosed homes.

Builders are adjusting by adopting a new sales pitch. Many are emphasizing the simplicity of buying a new home, compared with the bureaucracy involved with purchasing a short sale or the expense of repairing a foreclosed property.

Yet even as they discourage buyers from looking at distressed properties, some builders see financial opportunity in that market. Luxury homebuilder Toll Brothers Inc. said this week it would form a new subsidiary that will invest in distressed real estate, buying up distressed loans or unfinished developments and possibly selling them to other builders.

Evan Cramer, development manager at Southeast Capital Management in Atlanta, said his company is pursuing a similar strategy. Through buying up bad real estate development loans at a discount and selling undeveloped lots to builders, his company figures it can turn a profit.

"If you can sell a home for under $200,000, there's still a good amount of demand," he said.

The rate of home building is still up about 15 percent from the bottom in April 2009, though it's down 76 percent from the last decade's peak in January 2006.

New home sales in May dropped 33 percent to the slowest pace in the 47 years records have been kept. The drop-off came immediately after the tax incentives to sign a contract on a home ended on April 30.

Builders may be turning their attention away from new projects to complete those already in progress. Housing completions rose 26.2 percent in June. Some economists said that could be a positive sign that the market may have reached the bottom.

But Mitchell said many are focusing on existing projects because they can't get financing for new ones.

"Banks just don't want to get involved with any new real estate deals whatsoever," he said. "Particularly for the private builders, the only choice you have is to build out the projects that you're in."

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

Thanks To Fannie And Freddie, Bailout Tab Hits $3.7 Trillion

Remember when the bailout was going to cost $700 million?

Yeah, not so much.


Increased housing commitments swelled U.S. taxpayers' total support for the financial system by $700 billion in the past year to around $3.7 trillion, a government watchdog said on Wednesday.

The Special Inspector General for the Troubled Asset Relief Program said the increase was due largely to the government's pledges to supply capital to Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) and to guarantee more mortgages to the support the housing market.

Of course, Fannie and Freddie went completely untouched in financial reform.

The Scariest Unemployment Graph I've Seen Yet

median longterm unemployment.png The median duration of unemployment is higher today than any time in the last 50 years. That's an understatement. It is more than twice as high today than any time in the last 50 years.

OK, you're saying, but what does this mean? Does it mean we must increase the duration of unemployment benefits to protect this new class of unemployed, or does it mean we need to stop subsidizing joblessness? Does it mean we need to expand federal retraining programs, or does it mean federal retraining programs aren't working? Does it mean we need more stimulus, more state aid, more infrastructure projects, more public works ... or does it mean it's time to stop everything, stand back and let business be business?

You're going to find smart people make a case for all six of the above public policy directions. (I tend to side with the first of each coupling.) It's hard to know for sure how to design public policy for historically unique crises precisely because they are historical orphans, without precedent to show us the right way from the wrong.

One of my first reactions to this graph was: Surely this is why we don't have to worry about inflation for a very, very long time. However, here's evidence that despite the historically inverse relationship between inflation and joblessness, "the long-term unemployed put less downward pressure on inflation." Ultimately, this is a graph that should humble policy makers more than it should scare them into confidently arguing they know exactly how to fix it.

The Scariest Unemployment Graph I've Seen Yet

median longterm unemployment.png The median duration of unemployment is higher today than any time in the last 50 years. That's an understatement. It is more than twice as high today than any time in the last 50 years.

OK, you're saying, but what does this mean? Does it mean we must increase the duration of unemployment benefits to protect this new class of unemployed, or does it mean we need to stop subsidizing joblessness? Does it mean we need to expand federal retraining programs, or does it mean federal retraining programs aren't working? Does it mean we need more stimulus, more state aid, more infrastructure projects, more public works ... or does it mean it's time to stop everything, stand back and let business be business?

You're going to find smart people make a case for all six of the above public policy directions. (I tend to side with the first of each coupling.) It's hard to know for sure how to design public policy for historically unique crises precisely because they are historical orphans, without precedent to show us the right way from the wrong.

One of my first reactions to this graph was: Surely this is why we don't have to worry about inflation for a very, very long time. However, here's evidence that despite the historically inverse relationship between inflation and joblessness, "the long-term unemployed put less downward pressure on inflation." Ultimately, this is a graph that should humble policy makers more than it should scare them into confidently arguing they know exactly how to fix it.

Report: Tab for 'War on terrorism' tops $1 trillion

Workers continue construction on the World Trade Center site in July 15, 2010 New York City.
Workers continue construction on the World Trade Center site in July 15, 2010 New York City

Washington (CNN) -- The United States has spent more than $1 trillion on wars since the September 11, 2001, terror attacks, a recently released Congressional report says.

Adjusting for inflation, the outlays for conflicts in Afghanistan, Iraq and elsewhere around the world make the "war on terrorism" second only to World War II.

The report "Cost of Major U.S. Wars" by the Congressional Research Service attempts to compare war costs over a more than 230-year period -- from the American Revolution to the current day -- noting the difficulties associated with such a task.

Since the the 9/11 terror attacks, the United States has spent an estimated $1.15 trillion. World War II cost $4.1 trillion when converted to current dollars, although the tab in the 1940s was $296 billion.

World War II consumed a massive 36 percent of America's gross domestic product -- a broad measurement of the country's economic output. The post-9/11 cost of the conflicts is about 1 percent of GDP.

Comparisons of costs of wars over a 230-year period, however, are inherently problematic, the report says.

"One problem is how to separate costs of military operations from costs of forces in peacetime. In recent years, the DOD (Department of Defense) has tried to identify the additional 'incremental' expenses of engaging in military operations, over and above the costs of maintaining standing military forces."

"Figures are problematic, as well, because of difficulties in comparing prices from one vastly different era to another," according to the report. "Perhaps a more significant problem is that wars appear more expensive over time as the sophistication and cost of technology advances, both for military and for civilian activities."

The costs associated with the "war on terrorism" could still go much higher.

A Congressional Budget Office estimate from 2007 said the cost of the wars in Afghanistan and Iraq could total $2.4 trillion by 2017, more than double the current amount.

Madoff Trustee Sues 25 Fairfield Greenwich Affiliates

The trustee for convicted Ponzi scheme operator Bernard Madoff's firm sued more than two dozen affiliates of Fairfield Greenwich Group and its founding partners late Tuesday, saying they wrongly enriched themselves from the fraud.

The amended complaint, filed by court-appointed trustee Irving Picard, adds 25 Fairfield Greenwich affiliates and 19 individuals as defendants, including Walter Noel and two other founding partners. Mr. Picard previously sued three Fairfield Greenwich hedge funds, which served as feeder funds to Mr. Madoff.

The complaint, filed in federal bankruptcy court in Manhattan, alleges the Fairfield Greenwich affiliates and the individual defendants had "actual and constructive knowledge" of Mr. Madoff's fraud and "generally looked the other way" in the interest of profit. Fairfield Greenwich is believed to be the largest feeder to Mr. Madoff.

"The defendants were not victims," the lawsuit said. "They were enablers. They were facilitators. They deepened the pain of Madoff's customers and their own investors. The effect of their actions was a catastrophic continuation of the Ponzi scheme, the worsening of the (Bernard L. Madoff Investment Securities LLC's) insolvency and billions of dollars in additional damages."

Mr. Madoff, 72 years old, admitted in March 2009 to running a decades-long Ponzi scheme that bilked investors out of billions of dollars. He is serving a 150-year sentence in a federal prison in North Carolina.

The complaint alleges more than $1 billion was transferred from the three Fairfield Greenwich feeder funds to other affiliates as management, performance and administrative fees. Mr. Picard is seeking more than $3.6 billion in damages.

In a statement, Fairfield Greenwich said the trustee's new complaint is "replete with false, misleading and rehashed accusations." The company said it was in the middle of good-faith negotiations with the trustee and other parties and found the filing at this time "incomprehensible." The company said it has cooperated fully with the trustee and remains willing to work toward a settlement.

"We are outraged that Mr. Picard has chosen to characterize a number of so-called 'red flags'—warning signals apparent only in hindsight—as evidence that Fairfield Greenwich participated in the Madoff fraud," the company said. "We reject absolutely the allegation that Fairfield Greenwich or any of its executives or employees was aware of the fraud or in any way abetted it."

Fairfield Greenwich said it made good-faith efforts to monitor and safeguard its investments with Mr. Madoff and has cooperated in probes by the Securities and Exchange Commission and other regulators.

In September, the company agreed to pay $8 million to settle civil fraud charges by Massachusetts Secretary of State William Galvin. The settlement covered about 15 Massachusetts investors who lost money in the scheme.

Fairfield Greenwich said its principals invested alongside their clients and suffered more than $70 million in losses in the Madoff fraud.