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Is The Bailout Needed? Many Economists Say 'No'
WASHINGTON - A funny thing happened in the drafting of the largest-ever U.S. government intervention in the financial system. Lawmakers of all stripes mostly fell in line, but many of the nation's brightest economic minds are warning that the Wall Street bailout's a dangerous rush job.
President Bush and his Treasury secretary, former Goldman Sachs chief executive Henry Paulson, have warned of imminent economic collapse and another Great Depression if their rescue plan isn't passed immediately.
Is that true?
"It's more hype than real risk," said James K. Galbraith, a University of Texas economist and son of the late economic historian John Kenneth Galbraith. "A nasty recession is possible, but the bailout will not cure that. So it's mainly relevant to the financial industry."
The Paulson plan will get some bad assets off the balance sheets of troubled Wall Street institutions and commercial banks. That may help thaw the lending freeze.
But it wouldn't reduce the crush of homes in or near foreclosure, said Simon Johnson, a professor at the Massachusetts Institute of Technology. That's a problem that will surely grow worse if the U.S. economy enters recession, leading to greater job losses, which feed a vicious downward spiral of even more foreclosures and defaults on car loans and credit-card debt.
Americans are spooked by talk that financial Armageddon awaits.
The global financial system nearly melted down last week when investors pulled out en masse from money market funds and the short-term debt markets that help corporate America fund its day-to-day needs.
These traditionally have been viewed as safe investments for ordinary Americans, so the flight from them struck fear in the hearts of policymakers.
Few economists, including Galbraith, are willing to discount completely the chance of a financial collapse, given the turmoil in credit markets and banking.
"My sense is it will delay a disaster, given that you only have three months left in this administration. But it will not cure the problem in the (financial) industry or prevent the shakeout and downsizing of the industry," Galbraith said.
Many lawmakers also expressed skepticism.
Coming out of the White House on Thursday, the ranking Republican on the Senate Banking Committee, Alabama's Richard Shelby, held up what he said was a five-page list of economists opposing the rescue plan.
"This is not me. This is economists at Harvard, Yale, MIT, University of Chicago, our leading universities," an exasperated Shelby told reporters. He called the administration plan "flawed from the beginning."
Johnson, a former assistant director of research for the International Monetary Fund, said: "I think the main problem is what they have on the table is not truly comprehensive, and I think it's probably not decisive for that reason."
With the problems in money market funds and the fact that banks have stopped lending to each other except at high rates, the global financial system is as weak as it has been in modern times, he said.
"It's a very dangerous situation. I would not recommend doing nothing. The world financial markets were in cardiac arrest last week," Johnson said.
What Congress and the administration failed to do, Johnson said, is develop a mechanism to quickly modify distressed mortgages and prevent even more empty homes from being dumped into real-estate markets in freefall. The plan also doesn't help banks bring in new capital to boost lending; instead many are sitting defensively on their reserves to offset expected loan defaults.
"I think the rush that happened this week is unfortunate," Johnson said. "I don't think it is enough."
Another doubter of the Great Depression theme is Kenneth Rogoff, a Harvard University economics professor, who thinks the intervention may prevent or delay the necessary failure of weak financial institutions.
"It is time to take stock of the crisis and recognize that the financial industry is undergoing fundamental shifts, and is not simply the victim of speculative panic against housing loans," he wrote in a syndicated column. "Certainly better regulation is part of the answer over the longer run, but it is no panacea. Today's financial firm equity and bond holders must bear the main cost, or there is little hope they will behave more responsibly in the future."
Some analysts think the most important steps to avoid another depression may have already occurred without the $700 billion bailout.
"Last week we came real close to a financial economic meltdown because of the run on money market funds, resulting from the bankruptcy of (investment bank) Lehman Brothers, and I think insuring the money-market funds was enough," said Ed Yardeni, a veteran Wall Street analyst. Last week the Treasury announced a $50 billion insurance plan for money market funds, which restored confidence in them. "It wasn't necessary to move to Plan B."
Doubting the financial Armageddon scenario, Yardeni said another measure that could have the same effect as the $700 billion rescue plan is simply to change accounting rules for bad assets - mostly bonds with mortgages as their collateral.
Right now, banks and others with this toxic debt by law must write down losses every quarter. They are forced to put a present-day value on these assets. Yardeni thinks suspending this rule could do the job without taxpayer money.
"There are quite a few of us who think that could have stabilized the situation quite effectively," he said, adding, "I think it (the bailout) was rushed, and certainly we didn't give other reasonable, cheaper alternatives a chance. But at this point it is what it is, and we all have to pray that it works."
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85 Comments so far
Show AllLet it all crash. That way, there will never be another Republican administration. Wall Street millionaires and billionaires will no longer control this nation, the President, and the US Congress. And, there will not be any more unnecessary wars of choice costing trillions of dollars.
Letting it crash is fine. The problem is that after the crash the system has to be replaced by something. I suggest we replace capitalism with socialism. Stability and equality can only come about through the democratic control of the economic system. The working class will need to replace the dictatorship of the capitalist class (the existing structure) with a dictatorship of the working class that will prevent the moribund capitalist class from ever again taking control of the world. Chavez has the answers and that's why the right wingers point at him as being such a threat to American "freedom" to exploit the world.
Would you borrow money to lend to your boss so he/she could bail out another business that is failing because of mismanagement?
in truth.. it is simply george's way to give all his buddies one last gorging at the public purse.
where is the conflict of interest ?.. does paulson not own stock in these very companies they are bailing out?.. how about Bernaky(sp?)?,.. how much "stock" conflict does he own?
people lets not fall for this scam, please!
I read that Paulson owns 323.5 million in Goldman stock. Would that have anything to
do with his eagerness to bail them out?? Nahh, he's thinking only about the small
investors. I'm sure Bush, Congress, and the Fat Cats all have OUR best interests in
mind. LOL
This bailout is classic shock-doctrine stuff. I have read better alternatives in the op-ed columns this past week--Galbraith, Stiglitz, Greider, etc.--not to mention Buffet's alternative-by-example, i.e., a $5 billion investment in preferred shares of Goldman Sachs. But Congress has proved itself beautifully gullible so many times over the past 7 years that the temptation to try it on again has proved irresistible to Paulson and Bernanke. So go for it, suckers!
It's likely they will push this through by Sunday. The content matters little, as Bush will add a signing statement and change the meaning to fit his WS cronies greedy desires. WE must all make immediate plans to march on DC...no excuses..retake our country. If you are too busy trying to survive, get some help from a neighbor...a ride or whatever...help each other. Determine what your country means to you. If you cannot do this, just sit back and take your medicine and put the final shovel-full of dirt over the grave-hole of the US. This is the last straw. Whomever controls the treasury controls the corporation/country.
"Americans are spooked by talk that financial Armageddon awaits."
Fear. Works every time. Especially in this country which likes to think of itself in heroic pulp novel terms but in reality, after 30 years of being humiliated by bandits who look like nerds and having their pockets picked, can only be compared to the sour drunk at the end of the bar, muttering to himself, hunched over his 13th Jack Daniels, ready, willing and able at the slightest provocation to tear the place apart.
And that sour drunk just lost his job and house and now someone in the bar is attempting to pick his pocket. BAD MOVE!
Submitted for your consideration: an edited comment written July 19, 2008, to a Glenn Greenwald article on Salon.com taking note of the prevailing view of Democratic party leaders and advisors, e.g. Chuck Schumer, Harold Ford, and Obama advisor Professor Cass Sunstein, opposing the deeply-held conviction that Bush maladministration officials should be diligently prosecuted, and that especially Democratic politicians should rigorously defend civil liberties and the rule of law.
[See: http://tinyurl.com/4cruww ]
I believe that my argument, though expressed in a different context, illuminates the response of the Congressional leadership of both parties to the self-created Wall Street crisis and the prospective "bailout". It's not a coincidence that Chuck Schumer and Barney Frank get dishonorable mention in both areas. My expectation is that the bailout will essentially occur, superficially modified to appease an outraged public. That is, I expect the staggering figure of a $700 billion ransom will be abandoned, that the politicians will attach cosmetic strings in the form of seemingly strict oversight and modest "punitive" measures, and that We the People will be further placated by being tossed a few bones of limited and superficial relief.
Paulson and Bernanke-- but not Greenspan, I think-- will be smacked around a little (more), just as cops smack around a narc during a bust to ensure that the narc retains his street cred. The eventual shakedown of the kleptocratic fat cats will occur for the same reasons. They may squeal like stuck pigs if and when it happens, but they'll roll with it-- they know a little public shaming and a few bruises is part of the deal, and well worth the price.
_____________________________________________
Captain Renault: Oh no, Emil, please. A bottle of your best champagne, and put it on my bill.
Emil: Very well, sir.
Victor Laszlo: Captain, please...
Captain Renault: Oh, please, monsieur. It is a little game we play. They put it on the bill, I tear up the bill. It is very convenient.
-- Casablanca (1942)
_____________________________________________
The appalling, unconscionable circumstance of a political elite class, lawmakers and political executives alike, collusively creating a self-serving bubble of legal immunity for their official acts is another consequence of the transformation of national politics into a para-corporate service delivery system. It's cronyism writ large-- so large that it's apparently gone right over We the People's heads.
[I] repeat my view that our political process has slowly transmogrified in plain sight from an imperfect and flawed system predicated on ethical, principled conduct, or at least conduct amenable to ethical and principled behavior, into, well... Organized Crime.
My opinions began crystallizing around small and seemingly-trivial phenomena: Congressmen like John Conyers, David Obey and Barney Frank, still viewed by Democratic loyalists as "good guys" who work(ed) hard to support the common citizen against depredations by the rich and powerful, began responding with naked superciliousness, arrogance, and hostility to those all-important attempts to hold their cloven hooves to the fire on issues like ending the invasion and occupation of Iraq and Afghanistan, and impeaching the Misfeasor(s) in the Executive Branch. [...]
[A]fter considering incidents like these, it flashed upon me that these politicians sounded very much like mere technocrats: corporate middle managers or executives denouncing unhappy shareholders as clueless amateurs who didn't understand the system, the way government "really" works. In each case, the politicians were obviously personally affronted and infuriated that their putatively honorable and skillful performances as professional power-brokers were not respected and applauded by even their supporters-- who had, somehow, suddenly become an ignorant and preposterous rabble of critics.
And their outbursts-- including Conyers' twinkle-eyed understated outbursts-- invariably boiled down to declarations that the business of Congress is business. Not just in the narrow sense of acquiring, accounting and disbursing revenue, but in the broader sense of Taking Care of Bidness by ensuring that the quotidian wheeling and dealing proceeds with bipartisan comity. In their collective view, it would behoove the few noisy citizen nobodies swarming around them like gnats to stay the hell home or immerse themselves into the entry-level business of the existing duopolistic political process. In short, the grown-ups need to talk-- so buzz off and become a "stakeholder" in R&D Enterprises, where everyone has a share!
Sure, arguably politics has always been about the benjamins, before and since Franklin, Benjamin's lifetime. But my point is that high office now requires each individual office-holder to function as a wholly-owned subsidiary, preoccupied with managing and enhancing money streams to guarantee that they'll keep their place in the Going Concern of politics. Didn't someone say that the love of money is the root of all evil? [E]lected politicians from both sides of the duopoly, ostensibly beholden to We the People as defined in the Constitution, instead pass Through the Looking Glass and become a protected elite class of technocrats-- a neo-feudal aristocracy dividing citizen from politician as the serf was divided from the lord of the manor.
It's economic Might Makes Right, and overlords naturally are accorded a droit de seigneur-- a legal license to murder, rape, and pillage the lower classes with impunity, as long it doesn't infringe on their peers and allies.
good post. thanks
To Little Brother:
Well written piece with many good points. The last sentence of the piece also applies to the relatively new global elite class of foreign "free trade" plutocrats acting on our domestic model who apply the same attitudes and abuses toward their own lower classes. India and China both have some real large scale horror stories from the past 5 years as their rising WTO-enabled middle-classes are now pitted against the lower- classes and their environments rapidly decline.
Congress does not fear the people. Put the fear back in them!
james mathers sez that Paulson is a turkey, and his posse's chicken. they are all in the soup. but thats what you get when you bust a jack move to save the second tier of a pyramid scam.
Its the scramble... by the time it hits main street we're not even thinking about saving our assets. too late for that.
"Right now, banks and others with this toxic debt by law must write down losses every quarter. They are forced to put a present-day value on these assets. Yardeni thinks suspending this rule could do the job without taxpayer money."
So estimating the value of this worthless crap on a daily basis is worse than estimating the value of this worthless crap on, say, a yearly basis? Either way, it's still crap. (Remember lipstick on a pig?) These crises that are now coming on almost a daily basis prove that capitalism cannot be trusted to regulate itself, that instead we need a lot, A LOT, of regulation and oversight and that perhaps capitalism itself is fundamentally flawed. The revolution will come when it collapses in on itself and the average person can no longer get by on government promises of, "This time we will do what's right. We guarantee it!" Let the collapse come, even though I and others who are poverty stricken are most likely to suffer. At least then, there is a chance of a better future.
Me too - same passage. Seems you can be opposed to the bailout for a lot of reasons, some of them wrong. Less regulation and more "ignore"-ance is a bad idea.
Its going to crash no matter what we do. The millions of dollars in golden parachutes doesn't allow much left for the public to deal with the center of our cash crunch, foreclosure. Just by limiting the revolving homeowner interest rates to something affordable would drop the foreclosure rates. It would put a little pinch on the banks but not too much they couldn't handle it, the money would still be coming in, not defaulting. Its simple oversight that could free us, like a railing so we don't fall down the stairs. The drive for high returns is what is killing us. Lets try "stable" returns.
Where are our minutemen?
The biggest crooks in wall street have been on the banking committees for years. Its no wonder we are in the place we are in.
Thanks Kevin. Good overview. Good analysis. thanks
Without a complete undoing of Reagan's Alzheimer's economics policies, nothing done at this point will matter. You can't keep on giving more and more to the ones who arelady have too much and starving everyone else and think that the shit won't hit the fan. It's hitting it now. Reaganomics has got to be sent to the trashheap of history to which it should have been sent 2 1/2 decades ago.
The same thing was tried back in the early part of the ccentury. It gave us the great depression. It's now been tried again. It brought us $10 Trillion in debt and a financial market that thought it was in a casino where it couldn't lose. It then placed all it's debt on US. It gave us a country that can't and won't pay it's debts, and a republican party that thinks that defecits just don't matter. Well, they don't matter to those who will never have to pay them back, that is for sure, and they know they won't have to. WE will.
Reaganomics is a scam, has been a scam, and always will be a scam. It needs to be completely repudiated and sent away to never darken our door again.
I'm torn between being glad that these economists have made the declaration that they have, and being incensed that they didn't point out that Reaganomics is a sham over 25 years ago. Why didn't they bring up the complete disasters that happened every time thins kind of BS has been tried before back then? Why are they waiting for now to say it? And why aren't they demanding that it be changed? Why aren't they pointing out that "trickle down" is nothing but thievery? Until they do, I don't really trust them or their judgement.
Yep! And its because up to now its been far too profitable for any of these guys to mention that trickle down really doesn't.
The term "bail out" is a nautical term referring to bailing water out of a leaking ship. Later it also referred to fighter pilots "bailing out" of an aircraft about to go down. I say let the whole thing sink. I don't like to see people suffer but I think some serious trimming of fat is needed. Let it collapse, we can rebuild with more integrity.
I don't like to see people suffer but I think some serious trimming of fat is needed. Let it collapse, we can rebuild with more integrity.
I hope you are excluding CEO, COO, CFO and upper management types from that suffering. It won't collapse but we can certainly trim a lot of fat (and fatheads) from the system.
I referring to the increasing numbers of homeless in my area and to those who are about to lose homes, jobs, retirement savings, etc. As we are now starting to see, people are waking up to the fact that they have been victims of a massive theft. I don't want to see just temporary fixes, some sort of snowjob, convincing us that "all is well", allowing the thieves to continue their ways. Unfortunately, it may need to get much worse before there is a complete overhaul. Old habits die hard.
"It's more hype than real risk," said James K. Galbraith, a University of Texas economist and son of the late economic historian John Kenneth Galbraith. "A nasty recession is possible, but the bailout will not cure that. So it's mainly relevant to the financial industry."
This statement I believe sums up the whole truth of the situation.
The need to reregulate is ther only real crisis here.
All of the comments that I've seen so far on this thread have a great deal of validity and I agree with most of them.
However, as I've pointed out previously, both Democrats and republicans in Congress know that the corporate media is shielding them from the wrath of the general public by keeping the truly sordid details of this giveaway from view.
Until we find a way to educate the public that circumvents the right-wing corporate stranglehold on our media, nothing can be done about this travesty or any other.
q
We must be our own media. Spread the word on the web....use your car as a billboard...hand out flyers....check with your local cable provider for public access information...get creative.....
There is no way that the standard of living will stay the same here in US from now onwards. Not with the ballooning burden of individual and national debt. The easy credit that masked sustained reduction of wages and standard of living is over. The question then is whether the masses will be ready accept a society in which 2% of the population is super rich while most subsist from hand to mouth or on credit cards. You never know, maybe a $600 stimulus check borrowed from China will quiet us down for a while.
They knew this was coming and did nothing to head it off. The bailout package was in the planning stages for months as per the Administrations own words. Brokerage houses knew this would lead to a financial crisis but persisted anyways because profits were to be made.
Think of 9/11 and all the foreknowledge that was admitted to the Public and the rational mind can only believe it was allowed to happen so that certain vested interests could advance policies they had long sought to implement.
I believe very much the same happened here. If one looks back there were a number of signals that this day of reckoning was coming and that a crisis would be MANUFACTURED in order to achieve a given goal.
9/11 and the use of it to all but suspend the Constitution and wage illegal wars was a sort of dress rehearsal and it worked. The people bought it.
Now they have a way of stealing 700 billion dollars. Get this passed an in a few years time it will become necessary to cut back on Social Security and other social spending programs, while at the same time ramp up Military spending to keep ever more enemies at bay.
There are two ways of looking at how this latest crisis came about.
1>It was due to negligence and incompetence. The people in charge were well meaning but simply ignorant of the consequences of their actions.
2>It was deliberate. It was a manufactured Crisis.
You could add point number 3. Bush waited until Congress was ready to go into recess before asking for the money. He demanded that the money be handed over immediately and reminded Congress that they would not be able to leave town until they agreed. The timing was deliberately set up. Had the issue come up earlier, Congress would be a better position to debate it.
I hadn't considered GW's "deliberately" theory until now. Bush got quite a few bad laws approved over the last seven years by forcing them on a recess-bent congress. The biggie - the unconstitutional War Powers Act in which congress sold their Constitutional right to declare war to Bush so they could get home and worry about how to get some Homeland Security money for their al-Qaeda-targeted little dorps.
The Bailout Is Needed to hyperinflate the Bushbuck puting Zimbabwe to shame.
The Boyers get the gold and the Boomers retire on Monopoly money.
But even this author isn't calling for the obvious first step: "our" government must do what We The Taxpayers must do when new expenses are incurred - we review our budgets and make sacrifices to cover the new costs. Cable TV? Gone. Cell phone? Gone. Restaurant visits? Nixed. Movies? Maybe next year. Etc.
The bank robbers need more cash, We The Taxpayers don't have it, and printing it is a bad idea all around. What to do? Find it.
Take $200 billion right off the top of the just-passed $1 trillion Pentagon budget.
Collect all hidden corporate/personal taxes - off-shore, etc, then close all tax loopholes, incl. off-shore shelters altogether. That's another $100 billion easy.
Demand immediate oil company royalty payments be brought up to current - another easy $100 billion (based on public reports).
Close 500 military bases and golf courses worldwide - $200 billion; sell/lease the bases and courses - $50 billion; cancel as many private military contracts as possible and let the troops do the work - another $100 billion.
There ya have $750 billion the bank robbers may now borrow, and a sharp team of bean counters could surely find another $3-500 billion to cut and put to better use. (For example - sick the IRS on the top 1%. Fear alone will result in most coughing up their fair share. Did the Forbes 400 Billionaires pay even the average tax rate of 25% to the tune of $100 billion? No? Well, it's time to write the check.)
Sadly, the only debate we're suffering is HOW to SPEND more money we don't have, when we should be using this moment to re-prioritize...
All good suggestions. Militarism is draining us too. We should start no new wars, such as with Russia, Iran or Pakistan.
We can do more for our security by spending all this money responsibly on making the earth a cleaner, fairer and more peaceful place.
Joe
Brilliant. We should all memorize this list and point it out to all who are complaining about this bailout. Which is everyone I know.
Good article and comments from many including Thomas More and Little Brother.
I thank these economists including Galbraith for speaking up. In such as serious matter, we need sober second opinions. We need to break the wall of agreement that we must fork money over to these culprits without asking questions. The two candidates seem to have accepted the basic premise, with a few modifications.
Most of us can recognize a robbery, but it is helpful to get some expert confirmation that there are other ways to approach this crisis, up to and including watch and wait. Perhaps the money would be better spent giving loans to legitimate small businesses who cannot get any credit in this atmosphere.
The only thing that seems urgent is the thousands of daily foreclosures. There needs to be a moratorium of foreclosures and a one by one review. Lapses can be forgiven and mortgages can be re-negotiated to partially recoup losses and keep people in their homes. In the tradition of micro-economics, this seems to be a better credit risk than giving more money to the big time scammers.
Unfortunately events are moving toward a fait accompli, but the pressure has to be there. If we taxpayers pay,
We must get detailed information about what we are buying
We must get value - good stocks as well as the dregs, profits as well as losses
We must know the terms of repayment. That can include some giving back of CEO pay.
We must not pay everything up front, but in installments based on performance
We must have some collateral from the recipients of the loans (they still have lots of stuff)
We must include some direct assistance with mortgages and job losses resulting from this massive fraud.
We must get re-instatement of sensible regulations
Joe
Investors are not willing to touch the toxic debts so the public purse needs to essentially give money away so that the practices that led to this mess in the first place can go on?
There is plenty of liquidity per se in the system , look at the day the price of oil spiked $25.
If the world doesn’t trust the US system of highly leveraged assets based on compounded debt, isn’t it hight time the fundamentals of the system are changed?
Our well oiled reps should just say no to the give away or at least feign more sympathy for us riffraff.
Companies can raise equity by stopping dividends or obscene fraud based bonuses.
Another huge ripoff, a gift to Bush's base (the haves and the have-mores) on the same monstrous scale as Bush's lie-based Iraq War. At least fewer innocents may die, at least directly.
But then Bush is involved here. Looking for the lie should be a given.
Yup, it's an effort to scare the horses. They want to start a stampede (that's the bailout bill). When the dust clears, we'll have none of what's needed to fix our economy or fix the practices that got us to this point. What we will have is a finger in the dike, which will get pulled with the change in administration next January. The barons of Wall St. will stroll away over the next four months with their pockets stuffed with their socialized loss prevention insurance checks and we taxpayers will be the suckers who signed on the dotted line. The conservative Republicans oppose the bailout for all the wrong reasons, but in this case, I hope their recalcitrance keeps it from passing.
There 'they' go again - ominous overtones of another 'mushroom cloud' to scare us all into supporting their agenda.
How does it go again?
You can fool some of the people all the time, all the people some of the time, but you can't fool all the people all the time. Can they?
Or, oh yeah, fool me once... can't get fooled again! LOL
You can scare into submission some of the people all the time, all of the people some of the time, and Democrats everytime.
Listened to one of Obama's sheep from Obama HQ, on the phone with me yesterday explaining how this corporate theft was needed to "save the country".
Obama is an absolute waste of time. The only "change" he brings is liberal sounding rhetoric with his right wing actions
That's right, Obama is behind it all - he's the one proposing and pushing this bailout through. He's responsible for the deregulation, irresponsible investing, and ominous urgency now at hand. And all this, with his lack of experience of accomplishing anything else in Washington. Man, is that an amazing feat or what! Anyone capable of pulling that off definitely deserves to be president. That's for damn sure!
The sad joke and pathetic waste of time is your hateful close-minded BS, that has nothing to do with whether the bailout is valid as proposed, or any sincere discussion of the actual causes and people responsible for the mess in the first place.
Boy you sure killed that Strawman dead!
You need a debate about whether or not the bailout is vaild ?
bbbbaaaaaaahhhh
When Congress approves this plenary,criminal, bailout; then I propose that every single taxpaying, American that will be forced to pay for this egregious bail out, should start a class action legal suit against the punic, bankers and speculators on Wall Street and the people in Congress that voted for it!
Robert Fisk's World: Bush rescues Wall Street but leaves his soldiers to die in Iraq
Until the elections, the people in the Middle East are yesterday’s men
Saturday, 27 September 2008
It was a weird week to be in the United States. On Tuesday, secretary of the treasury Henry Paulson told us that "this is all about the American taxpayer – that's all we care about". But when I flipped the page on my morning paper, I came across the latest gloomy statistic which Americans should care more about. "As of Wednesday evening, 4,162 US service members and 11 Defence Department civilians had been identified as having died in the Iraq war." By grotesque mischance, $700bn – the cost of George Bush's Wall Street rescue cash – is about the same figure as the same President has squandered on his preposterous war in Iraq, the war we have now apparently "won" thanks to the "surge" – for which, read "escalation" – in Baghdad. The fact that the fall in casualties coincides with the near-completion of the Shia ethnic cleansing of Sunni Muslims is not part of the story.
Indeed, a strange narrative is now being built into the daily history of America. First we won the war in Afghanistan by overthrowing the evil, terrorist-protecting misogynist Islamist crazies called the Taliban, setting up a democratic government under the exotically dressed Hamid Karzai. Then we rushed off to Iraq and overthrew the evil, terrorist-protecting, nuclear-weaponised, secular Baathist crazies under Saddam, setting up a democratic government under the pro-Iranian Shia Nouri al-Maliki. Mission accomplished. Then, after 250,000 Iraqi deaths – or half a million or a million, who cares? – we rushed back to Kabul and Kandahar to win the war all over again in Afghanistan. The conflict now embraces our old chums in Pakistan, the Saudi-financed, American-financed Interservices Intelligence Agency whose Taliban friends – now attacked by our brave troops inside Pakistani sovereign territory – again control half of Afghanistan.
We are, in fact, now fighting a war in what I call Irakistan. It's hopeless; it's a mess; it's shameful; it's unethical and it's unwinnable and no wonder the Wall Street meltdown was greeted with such relief by Messrs Obama and McCain. They couldn't suspend their campaigns to discuss the greatest military crisis in America's history since Vietnam – but for Wall Street, no problem. The American taxpayer – "that's all we care about". Mercifully for the presidential candidates, they don't have to debate the hell-disaster of Iraq any more, nor US-Israeli relations, nor Exxon or Chevron or BP-Mobil or Shell. George Bush's titanic if mythical battle between good and evil has transmogrified into the conflict between good taxpayers and evil bankers. Phew! No entanglement in the lives and deaths of the people of the Middle East. Until the elections – barring another 9/11 – they are yesterday's men and women.
But truth lurks in the strangest of airports. I'm chewing my way though a plate of spiced but heavy-boned chicken wings – final proof of why chickens can't fly – at John Wayne airport in Orange County (take a trip down the escalator and you can actually see a larger-than-life statue of the "Duke"), and up on the screen behind the bar pops Obama himself. The word "Change" flashes on the logo and the guy on my left shakes his head. "I got a brother who's just come back from Afghanistan," he says. "He's been fighting there but says there's no infrastructure so there can be no victory. There's nothing to build on. We're not wanted." At California's San Jose University, a guy comes up and asks me to sign my new book for him. "Write 'To Sergeant 'D'," he says with a sigh. "That's what they call me. Two tours in Iraq, just heading out to Afghanistan." And he rolls his eyes and I wish him safe home afterwards.
Of course, the Israeli-Palestinian conflict no longer gets a look into the debate. McCain's visit to the Middle East and Obama's visit to the Middle East – in which they outdid each other in fawning to the Israeli lobby (Obama's own contribution surely earning him membership of the Knesset if not entry to the White House) – are safely in the past. Without any discussion, Israeli and US officials held a three-day security-technology forum in Washington this month which coincided with an equally undebated decision by the dying Bush administration to give a further $330m in three separate arms deals for Israel, including 28,000 M72A7 66mm light anti-armour weapons and 1,000 GBU-9 small diameter bombs from Boeing. Twenty-five Lockheed Martin F-35 fighter jets are likely to be approved before the election. The Israeli-American talks were described as "the most senior bilateral high-technology dialogue ever between the two allies". Nothing to write home about, of course.
Almost equally unreported in major US papers – save by the good old Washington Report – was a potential scandal in good old Los Angeles to which Mayor Antonio Villaraigosa recently returned after a $225,000 junket to Israel with three council members and other city officials (along with families, kids, etc). The purpose? To launch new agreements for security at Los Angeles international airport. Council members waffled away on cellphones and walked out of the chamber when protesters claimed that the council was negotiating with a foreign power before seeking bids from American security services. One of the protesters asked if the idea of handing LAX's security to the Israelis was such a good idea when Israeli firms were operating security at Boston Logan and Newark on 9/11 when a rather sinister bunch of Arabs passed through en route to their international crimes against humanity.
http://www.independent.co.uk/opinion/commentators/fisk/
All part of the BushTeam scheme/scam to empty US treasury so that the US government cannot pay for anything except the US military.
We are at the end of our history!
Dr Wu, the last of the big-time thinkers
I'd say this most recent giant war spending bill should be the final nail in the bail-out's coffin, but I doubt it.
These fat cat bandits didn't mention that the $700 billion bailout includes foreign banks, did they. And didn't Bush's tax cuts cause the financial meltdown the U.S. is in now? McCain = More of the Same.
McCain said a week and a half ago that the U.S. was in good shape financially. Do we really want an incompetent, uninformed person like that in the White House? He could hardly contain his anger last night during the debates -- what a sight to see him clenching his golf-ball cheeks/jaw, smirking, scowling, trying to contain his giggles, eyes on fire like he wanted to kill........what a psycho.
A poster above said:
"Reregulation is the only problem, here."
Okay. But that's an efficient, not a sufficient, truth.
No meaningful [re]regulation will happen unless the broad public better understands why it's needed, and then demands it.
With dereg McCain currently holding his political own, and even gaining against merely-modestly proreg Obama (this, despite all that's happened and happening), the public is still light years away from the needed political will.
Broad-based political will being the sufficient truth.