U.S. unemployment is on the rise

U.S. unemployment is on the rise
As the nation’s economic situation continues to spiral down, more and more workers are losing their jobs. Nearly 600,000 jobs across the country were lost in January alone, sending the unemployment rate to 7.6 percent.

The national unemployment rate is expected to rise to 9 percent over the next six months.


Sad, Irrelevant People: "Tea Parties" Fizzle
So, remember just last week when derivatives-trader-turned-working-man-populist Rick Santelli delivered his infamous rant about Obama's housing and other economic plans? Remember when Andie Collier at Politico announced that Obama was in trouble because America was "a nation of Santellis" (presumably, good news for McCain)?



Remember all those "Chicago Tea Parties" Americans were supposed to participate in, taking out their righteous anger against Obama's anti-American economic plans? It was supposed to the be first wave of Americans taking to the streets against socialism, the birth of the New Minutemen. Michelle Malkin insists there's a growing tax revolt that "the MSM won't cover." It seems there was an army of angry citizens waiting to storm the barricades, holding "Obamination" signs and taking back the Republican Republic for sweet laissez-faire liberty.

Well, those were on for today. The protests received the assistance of numerous conservative organizations and their email lists, from The Heartland Institute to Americans for Tax Reform to the American Spectator, and were all scheduled to happen today, the 27th of February.

The results? Not so impressive.

Let's see...The Pittsburgh party was canceled due to rain. A whopping 79 people showed up today in Jacksonville, FL. Looks like maybe over a dozen showed up in Asheville, NC. Almost 10 people made it to the Buffalo, NY, protest. About 100 people throughout all of Los Angeles came out to Santa Monica Pier. All of about 300 people made it out throughout the entirety of Atlanta. 250 made it out to Dallas for the tea party there. 150 in Lansing. Looks like about 100 went to watch the Joe the Plumber and Michelle Malkin teabag fest in D.C. (if you had to retch, it's not my fault, just your dirty, dirty mind...)

The very best numbers these jokers managed to pull was 1,500 people in St. Louis (UPDATE: St. Louis wasn't anywhere close to 1,500; it was more like 400 if that--delusional, pathetic FAIL), and somewhere between 500-1,000 in Chicago--if reports from the organizers are to be believed.

The Benefits of Nuking Chicago

The Benefits of Nuking Chicago
Former UN Ambassador John Bolton believes the security of the United States is at dire risk under the Obama administration. And before a gathering of conservatives in Washington on Thursday morning, he suggested, as something of a joke, that President Barack Obama might learn a needed lesson if Chicago were destroyed by a nuclear bomb.

Appearing at the Conservative Political Action Conference (CPAC), the nation's largest annual conference of conservative activists, Bolton, one of the hardest hardliners of the George W. Bush administration, spoke at length about Obama's naiveté and how various nations – Russia, North Korea, Iran – will be exploiting the new president. The most dramatic moment of his speech may have been when he cracked a joke about the nuking of Obama's hometown.

"The fact is on foreign policy I don't think President Obama thinks it's a priority," said Bolton. "He said during the campaign he thought Iran was a tiny threat. Tiny, tiny depending on how many nuclear weapons they are ultimately able to deliver on target. Its, uh, its tiny compared to the Soviet Union, but is the loss of one American city" – here Bolton shrugged his shoulders impishly – "pick one at random – Chicago – is that a tiny threat?"

Bolton wasn't the only one who thought this was funny. The room erupted in laughter and applause. Was this conservative catharsis, with rightwingers delightfully imagining the destruction of a city that represents Obama?

Stimulus Profiteers

Watch Out for Stimulus Profiteers By Anthony Shorris, The Nation
With a slimmed-down but much-needed stimulus package now in place, and with a substantial portion of it still aimed at rebuilding America's aging infrastructure, we need to act sensibly as well as quickly and dramatically. Unless we ensure the program reflects the realities of the marketplace for construction services, we risk being unable to implement the programs we need, or worse, handing billions of taxpayer dollars over to stimulus profiteers.

Spending as much as the additional $150 billion for infrastructure that is included in the new legislation (still well below what is needed for the nation's aging systems and less than what many economists had hoped for) would still mean a substantial increase in total annual U.S. investment, potentially as much as a one-third hike in activity over the next year. The Congressional Budget Office reports total infrastructure spending as around $400 billion annually.

The bill requires that half the transportation projects be underway within a few months, so any sudden surge in demand for building of that size is going to run up against some serious limitations in the supply of construction services, at least over the short run. While commercial office building and home construction has certainly virtually collapsed, different kinds of builders handle these kinds of projects. When rising demand meets limited supply, the result can be higher prices, higher profits and potentially the very same kind of speculative bubble that served us so poorly in the high-tech and real estate sectors.

We've seen it before. In the New York region, a public and private sector construction boom in the years just before the crash drove building prices up by as much as 50 percent over three years. The same phenomenon was seen in markets as far away as Malaysia and China, and as close to home as Atlanta and Seattle before the global economy went into a nosedive.

The potential impact of a demand-driven surge gets pretty big pretty quickly. Unless we think hard about this, the sudden increase in demand for building will almost certainly begin to raise prices in the particular sectors involved with these kinds of projects. After all, there is no reason to believe there is enough idle capacity lying around to raise U.S. infrastructure spending by one-third within a year. Total U.S. unemployment is still under 8 percent -- a figure likely underestimated through the exclusion of many who have given up even looking or who are under-employed. Not many of those out of a job are skilled construction trades people who work on projects like these. Even if this increase in demand were to drive up prices by just 10 percent -- and we have experienced spurts in construction demand doing much more than that -- as much as $15 billion could be at stake, an amount that used to pass for a big number.

Publicly funded infrastructure projects are executed by private contractors; the larger the project, the more often they are run by large corporations, not all of them even based in the United States. Like other firms, these public works enterprises use the proceeds from the sale of their services to governments to pay their own workers, buy their materials and create profits for their owners and investors. When there is a surge in demand, these firms will certainly be able to raise their prices. The question is, where does the money go?

If higher construction prices go to pay construction workers, that's generally a good thing -- after all, the point of the stimulus is to inject money into our economy so more people can have jobs that pay better. The problem on the labor side is simply a shortage of skilled workers. The U.S. Labor Department should engage the major construction unions and public universities across the country right now in expedited programs to train current low-skilled workers to move into higher-skilled jobs, to quickly hire and train new workers where needed, and to retrain workers from other, related fields to be ready to handle big machinery of construction. Auto workers might be a good place to start. Former Labor Secretary Robert Reich has called for projects using stimulus dollars to be required to dedicate 20 percent of the jobs to long-term unemployed workers or those with incomes below 200 percent of the poverty level, and for states to use 2 percent of the money they receive to support training to help women, minorities and others often excluded from the construction workforce to benefit from the publicly funded boom.

But the higher prices charged by contractors could go elsewhere. If bids for construction work start coming in higher because prices for commodities like oil, cement or steel are rising, then the government must act; otherwise all we will be doing is transferring taxpayer dollars into the pockets of those who speculate in extractive industries through their investing in companies that sell raw materials. There are limited supplies of these materials, of course, and some increase in pricing appropriately reflects the cost of finding the additional raw materials we'll need, but there is risk here of real price-gouging. Even though price controls are generally an ineffective tool, during this stimulus effort the federal government should explore setting temporary caps on the prices of key raw materials or, at a minimum, creating a monitoring mechanism. The United States has tried such emergency interventions for gas prices or during wartimes, and if they are very brief and well-administered, they may be effective against profiteering.

This piece of the puzzle is not entirely a domestic matter, either. Other nations are also considering stimulus packages along these lines -- and we know that several EU and East Asian nations are doing just that -- then the international market for raw materials will be dramatically affected. The U.S. Trade Representative and the Commerce Department should be engaged with their counterparts overseas to make sure large portions of the entire global stimulus effort do not end up lining the pockets of those who own or speculate on raw material prices.

Finally, higher prices for construction could simply represent increased profits for the builders of these kinds of projects. Here again, the signs are already beginning to appear: market analysts are already advising "buys" on construction-related stocks. Government has already interceded in the operations of major segments of the U.S. economy as part of this emergency. In this case, monitoring to protect against profiteering is in order (or we could just let the taxpayer share in the upside they have helped create -- the government could require that construction companies profiting from federal stimulus dollars offer shares to the public sector).

These are not easy steps to take, but unless we act now, just as the stimulus begins, we risk re-learning the hard lessons of the first Wall Street bailout, when taxpayer dollars went into the pockets of those who knew how to play the game rather than into the paychecks and mortgages of their victims. We need to act quickly, boldly, and, just this once, wisely.

Are GOP Governors Who Turn Down Stimulus Money Unpatriotic?

Are GOP Governors Who Turn Down Stimulus Money Unpatriotic?
If someone questioned the patriotism of the Republican governors who have said that they will turn down portions of the federal stimulus money intended for their states, I would have a hard time arguing with them.

Hey, if the Republicans can accuse the Democrats of being unpatriotic when they were in the minority, isn't turnabout fair play? But, actually, the Democrats would have far more basis to make their charge than the Republicans ever did. During the second term of the Bush administration, Republicans often questioned the patriotism of Democrats who sought to have a timetable for troop withdrawals included in Iraq-funding legislation. The White House called the party "Defeatocrats" and accused Democrats of advocating "surrender dates." Such charges were quite disgusting, since, clearly, the Democrats in Congress were laying out a vision of what they thought was best for the United States, not trying to do harm to their own country. Providing a competing vision for the nation's best course of action is not unpatriotic, especially given that it was the disastrous policies and execution of the Bush administration in Iraq that cost the U.S. dearly, in lives lost, lives ruined, money wasted, and respect in the world squandered. Advocating a change was a patriotic thing to do.

The same logic does not apply to the Republican governors passing up money from the stimulus package. In doing so, they are affirmatively taking action that is not in the best interests of their constituents, all for political gain. For example, on Meet the Press yesterday, Gov. Bobby Jindal of Louisiana told David Gregory that he would turn down $100 million from the federal government to extend lapsed unemployment benefits for out-of-work Louisiana citizens. (A transcript of the show is available here.) Jindal claimed that to accept the money would require the state to raise taxes on businesses to fund the program after it expires in three years. Which is, of course, completely untrue, as Gregory pointed out, quoting the Democratic U.S. Senator from Louisiana, Mary Landrieu. Jindal responded that the word "permanent" was in the legislation, which meant he had to turn down the money.

This exchange demonstrated how dishonest and baldly calculating the Republican governors are in turning down federal stimulus money. With the economy in crisis (in January alone, nearly 600,000 jobs were lost, leaving the unemployment rate at 7.6 percent), Jindal's job isn't to play politics, it is to aid those in his state who are in trouble. He has an obligation to help his unemployed constituents who would have been saved, maybe from homelessness, maybe from hunger, by the extended benefits. States open and close programs all the time. Even if Jindal was right (which I doubt), that a "permanent" change was needed, what would stop the state from repealing the "permanent" change in three years through state legislative action? Is he really suggesting there is no way to undo the program, ever? And that it is good policy to allow his citizens to suffer needlessly?

If Jindal's game-playing wasn't so damaging to the people of his state, it would be entertaining in its transparency. But Jindal revealed how he views things, even if it was inadvertent, when he said, "My job is to represent Louisiana's taxpayers." No, Gov. Jindal, your job is to help all of your citizens, not just the ones currently paying taxes. When you throw in that virtually every Jindal answer defaulted to the right-wing talking point of him believing that lowering taxes is the way to get through the severe recession, there is no doubt what Jindal was up to. He was playing politics, branding himself and his party in an effort to return to power, all at the expense of the people of his state.

Average Americans and real-estate woes

“The Ponzi State”
ABSTRACT: A REPORTER AT LARGE about Florida’s real-estate market and the economic downturn. Writer visits a number of inland real-estate developments near Tampa, Florida. Developers there dreamed up instant communities, parceled out lots, and built look-alike two-story beige and yellow houses. The houses sold to some of the thousand or so people who moved to Florida every day. Now many are ghost subdivisions. In one community, Twin Lakes, property values dropped by more than a hundred thousand dollars in the past two years. Writer interviews Angie Harris, a Navy veteran and mother of five, who says of her neighbors, “It used to be people would wave. Now they don’t.” In another community, Hamilton Park, the writer interviews a woman named Lee Gaither, whose only income came from Disability payments. She was facing eviction and planned to sell many of her possessions on eBay. Florida is one of the places where the financial crisis began. Gary Mormino, a professor at the University of South Florida in St. Petersburg, tells the writer that, “Florida, in some ways, resembles a modern Ponzi scheme. Everything is fine for me if a thousand newcomers come tomorrow.” The state depends for revenue on real-estate deals and sales taxes. By 2005, the housing market in Florida was hotter than it had ever been. Flipping houses and condominiums turned into an amateur middle-class pursuit. Writer tells about Floridians with modest incomes who made money buying and selling real estate. Mentions one case in which a house appreciated in value by almost fifty per cent overnight. According to an investigation by the Miami Herald, government oversight of the real-estate market was so negligent that more than ten thousand convicted criminals got jobs in the mortgage industry. Flipping and fraud burst the bubble. But in places like Pasco County, it was the ordinary desire of ordinary people to buy their own home that turned things toxic. Tells about Anita Lux, who moved to Florida from Michigan with her husband, Richard. Gives a brief history of Cape Coral, Florida, which was first developed in the fifties by two businessmen from Baltimore. Writer interviews a number of Florida residents who have lost their jobs or homes. A Fort Myers real-estate agent named Marc Joseph tells the writer, “Greed and easy money. That was the germ.” By last year, the highest foreclosure rate in the country could be found in Fort Myers and Cape Coral. Mentions other indicators of the economic hard times, including the closure of auto dealerships and the theft of copper. Writer visits the office of Tampa’s mayor, Pam Iorio, who is determined to build a light rail system to revive the city’s fortunes. A number of people in Florida told the writer that the state needs a fundamental change in its political culture.

The Conservative Tea Party and the Facts

What Took So Long? Finally, Some Help For Homeowners
More than four months after the federal government claimed it was moving to address a mortgage crisis that threatened to take away the homes of millions of American families, steps are being taken to do just that.

All that was required was the exit of a president (George Bush) and a treasury secretary (Hank Paulson) who, in the best interpretation, were too economically inept to do what was needed, and, in the worst interpretation, used the crisis to steer hundreds of billions of dollars into the accounts of their buddies on Wall Street.

Whatever the cause of the delay, President Obama on Wednesday offered the response that was needed -- or, at the very least, a piece of the response that was needed.

The president proposes to take administrative actions to spend $75 billion of the Financial Stabilization Fund on facilitating modifications in existing loans and he wants to require lenders that are accepting tax dollars to adopt foreclosure prevention protocols to prevent unnecessary foreclosures.

These are meaningful steps.

Indeed, ACORN (Association of Community Organizations for Reform Now), the national organization that has been in the forefront of the struggle to keep working families in their homes -- and has taken a lot of hard hits in the media and Washington for doing so -- refers to Obama's move of Wednesday as "the first federal effort to fight foreclosures since the crisis that brought down the economy began two years ago."

The president's ambitious plan could help as many as nine million American families that are currently struggling to make mortgage payments or whose homes are now worth dramatically less than the amount they paid for them. The housing plan uses incentives to homeowners and lenders to ease and encourage the process by which home loans can be restructured or refinanced to avoid foreclosure.

"The plan I'm announcing focuses on rescuing families who have played by the rules and acted responsibly," says Obama, who added that the plan would do this "by refinancing loans for millions of families in traditional mortgages who are underwater or close to it; by modifying loans for families stuck in sub-prime mortgages they can't afford as a result of skyrocketing interest rates or personal misfortune; and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments."

That's the right sentiment, even if the precise strategy adopted by Obama tends to reward banks and bankers that acted irresponsibly. (More on savvier approaches in a moment.)

This is not a particularly new notion, however.

Federal Deposit Insurance Corporation (FDIC) chair Sheila Bair was promoting a plan to modify mortgages last fall.

Had the Bush White House and the Department of the Treasury listened to Barr -- and to members of Congress such as California Democrat Maxine Waters -- back then, hundreds of billions of dollars might have been saved. And the dollars that were spent might have actually gone to address the real crisis, as opposed to the demand from Wall Street for money to pay bonuses, bail out speculators and keep stockholders happy.

"In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to continue to deepen," Obama explained in Phoenix, where he announced his initiative. "But if we act boldly and swiftly to arrest this downward spiral, every American will benefit."

We should have acted "boldly and swiftly" -- and in a fiscally-responsible manner -- last fall. Hundreds of wasted billions later, we finally are. For that, Barack Obama and his administration deserve a good deal of credit -- just as George Bush and his administration deserve a great deal of blame.

The lesson is an important one.

Focus on the people who are hurting -- not the bankers who are threatening them -- first.

To do that, Ohio Congressman Marcy Kaptur and economist Dean Baker have some smart ideas. They argue that the proper role for the federal government is not to fund mortgage negotiations but to insist that banks -- many of which have already collected billions in taxpayer dollars -- carry them out.

Short of that step, ACORN head Bertha Lewis proposes a short-term ban on mortgage foreclosures during the period when the Obama administration is implementing its plan and seeking legislative approval for key components of it.

"With 8 to 9 million Americans on the verge of losing their homes in the next four years, the nation's housing crisis demands leadership commensurate with its enormous scale, and we got that today from the Obama Administration," says Lewis. "These effective sticks and carrots will do the job that the previous all-voluntary efforts have failed to do, and help prevent millions of unnecessary foreclosures once fully operational and enacted in law. Until that time, however, there should not be a single foreclosure on any family that could benefit from this comprehensive housing plan, so we need a thorough, binding moratorium."

Jesus and The Stimulus

American Issues Project Slams Stimulus Bill As Large
When the economy enters a recession, you lower interest rates. When monetary policy’s gone as low as it can, you try fiscal expansion. That means you need a deficit that’s large relative to the size of your economy. The US economy is about $13 trillion a year. Which is a very big number. Which means that to be a sizeable fraction of that number, you need another big number. Enter the American Issues Project to try to slam the stimulus as big:

After watching liberal allies of President Barack Obama flood the airwaves in support of the stimulus bill, a conservative third-party group is countering with a provocative new commercial using Jesus Christ to emphasize the scale of the $787 billion package.

The American Issues Project, which briefly aired a TV spot in last year’s presidential race, will go up on Friday with a TV spot that marks the dollars spent with the passage of time.

“Suppose you spent $1 million every single day starting from the day Jesus was born — and kept spending through today,” says the announcer as an image of the three wise men flashes on the screen. “A million dollars a day for more than 2,000 years. You would still have spent less money than Congress just did.”

Trying to check the math, 2,000 years times 365 days in a year = 730,000 days times $1 million a day equals $730,000,000,000. That is, indeed, a smaller number than the $787 billion size of the stimulus plan. Of course the actual spending in the package is worth hundreds of billions of dollars less than that since about a third of the total package is tax cuts. It’s been strange to see the GOP rail against the need for fiscal stimulus amidst an economic emergency, but their newfound habit of deciding that tax cuts are the same as new spending is genuinely weird. But be that as it may, Steve Benen observes that costing a lot is the purpose of the stimulus so it’s not clear what kind of sense this makes.

GOP Fighting For Money From Stimulus They Opposed

GOP Fighting For Money From Stimulus They Opposed
House Republicans, as a group, may take great pride in the goose egg they offered President Obama's stimulus package. But now the unanimous opposition is struggling to bring that money home.

Republicans will be working hard to make sure the money they opposed ends up benefiting their home districts, highlighting the political tightrope they walk in this economic crisis. The Democratic Congressional Campaign Committee is watching House Republicans -- and reading local media -- closely and is only too happy to highlight any happy talk about a stimulus Republicans voted against.

Back in his home district, Rep. Blaine Luetkemeyer (R-MO) found some nice things to say about the plan.

"Within the stimulus package there is some Pell Grant money, which is a good thing. It helps students be able to pay for their education and that's kind of a long term stimulus effect there. I mean obviously that's not gonna provide a job in the next 120, 180 days, but the ability of someone to get an education is an economic development tool," Luetkemeyer said at a local college. He was there, in another inside-outside Washington twist, to celebrate an earmark for a college building.

He lamented that there would be far fewer such earmarks in the future. "If they go back to the rules, it will make it very difficult to get earmarks through the next two years because number one we don't have any more money, we just blew it all on this stimulus package. Although, we're gonna have to print some more in order to be able to bail out the financial institutes and the automobile manufacturers," said Luetkemeyer.

Ken Spain, a spokesman for the National Republican Congressional Committee, said that the quotes aren't hypocritical, but rather demonstrate that Republicans did support a stimulus in general, just not the one Democrats presented to them.

"We would like to thank the DCCC for circulating these comments. They are proof-positive that Republicans stood willing and ready to support commonsense measures in the stimulus package until Nancy Pelosi unfortunately chose to undercut President Obama's message of bipartisanship by including absurd pork-barrel spending projects such as millions to protect a mouse in the San Francisco Bay, golf carts for government bureaucrats, and STD prevention funds. Republicans said 'yes' to a true stimulus package, but unanimously said 'no' to putting the politics of pork before the needs of the middle class," said Spain.

Rep. Don Young (R-AK) put out a press release saying that he "won a victory for the Alaska Native contracting program and other Alaska small business owners last night in H.R. 1, the American Recovery and Reinvestment Act."
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In California's Inland Empire, battered by the economic downturn, the mostly Republican delegation is happy the stimulus passed, too, according to local news reports.

"Even the Republican lawmakers who oppose the bill say such projects are needed in the region," the local paper reports.

"All along he has believed infrastructure spending, in particular, should provide a boost to the Inland Empire's economy," a spokesman to Rep. Jerry Lewis (R-CA) said.

Stimulus: Good Money After Bad

Stimulus: Good Money After Bad
The decisive deregulation that opened the door for the Wall Street swindlers was pushed through Congress by then-Sen. Phil Gramm, a Texas Republican. He was rabidly backed by Sen. John McCain, R-Ariz., whose support of deregulation dates back to his interventions on behalf of the savings and loan hustlers whose shenanigans foreshadowed the current Wall Street scandals. Yet McCain now faults Obama for acting boldly to deal with a similar but far larger mess. It is a tribute to Obama's leadership that he was able to get a much-needed bill passed in record time, thereby giving the millions of Americans now hurting a shot at recovery.

Key Republican governors, from Florida to California, know this, which is why they and many other governors who actually must address the needs of constituents have rallied to the president's side. "It really is a matter of perspective," Florida's Republican Gov. Charlie Crist noted recently after appearing with Obama in support of the stimulus plan, because it "helps us meet the needs of the people in a very difficult economic time."

Congressional Republicans, with the exception of that embarrassingly shrunken contingent of three moderates, will rue their legacy of deep indifference at a time of true national emergency, one that makes George W. Bush's far more costly war on terror now seem an absurdly irrelevant exercise. The financial impact on Wall Street from Al Qaeda's 9/11 attacks is small compared with the damage done by the bankers whom the Bush administration coddled and who laid waste to the entire financial system.

The Bush tax cuts for the wealthy combined with the trillions wasted on unnecessary military spending dwarf the costs of the Obama stimulus package. The money wasted in Iraq, a misguided nation-building effort that had nothing to do with the 9/11 terrorist attacks, was supported uncritically by the same Republicans who now heap such scorn on efforts to rebuild our own nation.

Media adopted GOP's inflated cost-per-job calculation for recovery bill

Wash. Times adopted GOP's inflated cost-per-job calculation for recovery bill

Summary: Echoing a GOP press release, The Washington Times asserted of the economic recovery bill: "[A]t [the Congressional Budget Office's] best-case scenario of 3.6 million extra jobs at its peak in 2010, that works out to nearly $220,000 per job." However, this claim disregards tangible benefits of the stimulus package besides job creation, and economists have estimated that given predicted economic growth the actual cost per job is less than $70,000.

Most want inquiry into anti-terror tactics

Most want inquiry into anti-terror tactics
Even as Americans struggle with two wars and an economy in tatters, a USA TODAY/Gallup Poll finds majorities in favor of investigating some of the thorniest unfinished business from the Bush administration: Whether its tactics in the "war on terror" broke the law.

Close to two-thirds of those surveyed said there should be investigations into allegations that the Bush team used torture to interrogate terrorism suspects and its program of wiretapping U.S. citizens without getting warrants. Almost four in 10 favor criminal investigations and about a quarter want investigations without criminal charges. One-third said they want nothing to be done.

CALLS TO MOVE ON: Even reversed, Bush policies divide

Even more people want action on alleged attempts by the Bush team to use the Justice Department for political purposes. Four in 10 favored a criminal probe, three in 10 an independent panel, and 25% neither.

The ACLU and other groups are pressing for inquiries into whether the Bush administration violated U.S. and international bans on torture and the constitutional right to privacy. House Judiciary Chairman John Conyers and his Senate counterpart, Patrick Leahy, have proposed commissions to investigate.

Asked Monday about Leahy's plan, President Obama said he would look at it. He added, "my general orientation is to say, let's get it right moving forward." Obama and Attorney General Eric Holder have declined to rule out prosecutions. Leon Panetta, named to head the CIA, said this month that CIA officers would not be prosecuted for harsh interrogations authorized by the Bush White House.

Leahy, D-Vt., this week proposed a "truth commission" to assemble facts. He said the panel could offer immunity from prosecution for everything but perjury. "We need to get to the bottom of what happened and why," he said.

Conyers, D-Mich., has called for a panel that would gather facts and make recommendations, and could possibly lead to prosecutions. "This isn't payback," he said. "We are getting things straightened out for the future."

Media Helps GOP "welfare" attack on economic recovery plan

Media wield GOP's "welfare" attack on economic recovery plan
On February 7, Jason DeParle published an essay in The New York Times highlighting a resurgence of the use of the word "welfare" among conservatives, this time to attack President Obama's economy recovery plan. Indeed, while economists agree that provisions in the legislation targeting needy people are among the most economically stimulative, Media Matters for America documents below the pervasiveness of what DeParle called the "weaponiz[ation]" of the "very word, welfare," in the media, particularly, but not exclusively on Fox News, to denounce the stimulus bill. While DeParle noted that the word "was weaponized last week," Media Matters noted frequent attacks in the media of Obama's tax plan as "welfare" prior to the November 2008 election, attacks that have continued from the beginning of this year.

As Media Matters has documented, economists, including Congressional Budget Office (CBO) director Douglas W. Elmendorf and Mark Zandi -- the chief economist and co-founder of Moody's Economy.com who was a McCain campaign economic adviser -- have stated that spending proposals that critics call "welfare" stimulate the economy effectively. In Zandi's words, "[A]id to financially-pressed state governments" is an "economically potent stimulus." H.R. 1, the House economic recovery bill, includes provisions that would grant such aid to states, including additional federal matching funds for Medicaid and the creation of an "Emergency Contingency Fund for State Temporary Assistance for Needy Families Programs." Similarly, economists have stated, in Elmendorf's words, that "[t]ransfers to persons" -- such as provisions in the bill that extend food stamps and unemployment insurance payments -- "would also have a significant impact on GDP." Elmendorf further stated: "Transfers also include refundable tax credits" -- such as the Making Work Pay credit included in H.R. 1 -- "which have an impact similar to that of a temporary tax cut."

As mentioned above, while DeParle noted that the word "was weaponized last week," conservatives did not rediscover the word last week. Before the election, Media Matters cited frequent attacks in the media of Obama's tax plan as "welfare." And from the beginning of this year, there have been numerous references in the media to "welfare" in the context of Obama's economic stimulus proposal. For example:

* During the January 6 edition of Fox News' Studio B, host Shepard Smith asked Sen. John Ensign (R-NV), the chairman of the National Republican Senatorial Committee: "Senator, the president-elect wants a big economic stimulus package ready to sign as soon as he take office. It's somewhere in the neighborhood of $800 billion over two years, $300 billion of that in what we're being told is middle-class and business tax cuts. Senator, I know we don't know the details yet, but $300 billion in tax cuts -- how do you cut taxes on people who don't pay taxes?" Ensign replied: "What they want to do is give tax credits. It's basically like a welfare payment because it's up above and beyond whatever taxes that they pay right now."

* During the January 7 edition of CNN's American Morning, CNN political contributor and former Republican National Committee official Tara Wall claimed: "Republicans are concerned about, and conservatives are concerned about, is not giving tax cuts to those -- to those who don't pay into the income tax system, which would essentially be more of what would be considered government welfare in some cases."

Pork or a chance to bring home the bacon?

Pork or a chance to bring home the bacon?
The new chairman of the Republican National Committee, Michael Steele, says "we don't" need a stimulus. The economy will recover on its own, he told Fox News, so what's the worry?

"I think if the government were to get out of the way and let the small business community and corporations of America weed themselves through this process, it's survival of the fittest," Steele said.

To most people mindful of the results of the recent presidential election, not to mention the last two congressional elections, Steele's pronouncements might seem incomprehensible, especially in light of the latest economic news: the U.S. economy is likely to register another half a million jobs lost in January, and possibly another one to two million in the next few months. Meanwhile, TimeWarner announced on Wednesday a fourth quarter loss of 16 billion. But Republicans have somehow managed to put the Obama administration on the defensive -- the "stimulus" bill is now a "spending" bill, and efforts to create jobs quickly are derided as pork.

By every available indicator, the economy is caught in a vicious liquidity trap, in which collapsed spending is causing further business retrenchment, leading to more layoffs, and even less spending. The U.S. may well have engaged in an unsustainable debt-fueled consumption binge for decades, but now there's a real danger that the pendulum has swung too far in the other direction. If government "were to get out of the way now" the human suffering will be extreme.

So how is it that Republicans can lose elections and win the war on rhetoric? Because one man's pork is another woman's opportunity to bring home some desperately needed bacon.

For example, in Berkeley, Calif., my home town, city leaders met on Monday to discuss possible projects that would qualify for federal funding that may be disbursed in block grants to states and local governments. One possibility, reported the Daily Californian, was the city's plan for a Zero Waste Facility:

Councilmember Gordon Wozniak said the city's Zero Waste Facility will likely receive funds because of its sustainable practices and project readiness.

"We already had consultants, design work, specifications. That's something with a fair amount of thinking already," Wozniak said.

Meanwhile, the Wall Street Journal reports that the national list includes such things as a 36-hole Frisbee golf course in Austin, Texas, and a "3 million dollar environmentally friendly clubhouse" for a municipal golf course in Lincoln, Nebraska.

I can well see how there would be differing views on how these projects rate on the pork scale. My own ranking would put advanced recycling facilities above Frisbee and golf. How can you not like a "shovel-ready" project that will help us avoid digging more landfills? But anything that employs workers will provide some kind of stimulus to the economy, and if you believe, as many people do, that the economy is teetering on the brink of a really severe meltdown, than the emphasis should be on delivering a speedy jolt to the economy, rather than refighting rhetorical battles that should have been settled by the last couple of elections.

Besides, more people should be playing Frisbee. It's good for you.

Iraq's Gravedigging Industry Is at 100% Full Employment

Iraq's Gravedigging Industry Is at 100% Full Employment
Amidst the soaring unemployment in Iraq, the gravediggers have been busy. So busy that officials have no record of the number of graves dug; of the real death toll, that is.

"I've been working here four years," a gravedigger who gave his name as Ali told IPS at the largest cemetery in Baghdad, a sprawling expanse in the Abu Ghraib section of the capital city. "In 2006 and some of 2007, we buried 40- 50 people daily. This went on for one-and-a-half years.

"Twenty-five percent of these were from violence, and another 70 percent were killed by the Mehdi Army (the militia of Shia cleric Muqtada Al-Sadr)." Only a few appeared to have died from natural causes.

"Most of the dead were never logged by anyone," Ali said, "because we didn't check death certificates, we just tried to get the bodies into the ground as quickly as possible."

Military Families Still Pay The Price
Do you know that a US serviceman or woman still is killed every other day in Iraq? That an Iraq War veteran takes his or her own life nearly every day?

The people I spent this weekend with in Washington, DC know these facts, up close and personal.

We are the members of Military Families Speak Out (www.MFSO.org). We keep “speaking out,” but it seems like no one is listening anymore. Our soldiers languishing in Iraq are forgotten amidst news of bailouts, economic stimulus packages, and talks of escalation in Afghanistan.

We came from across the US – from California, Oregon, Washington, Montana, Texas, Arkansas, Missouri, Louisiana, Alabama, Wisconsin, Illinois, Maryland, Virginia, New Jersey, New York, Rhode Island, Massachusetts, and other places I can’t recall.

We held a briefing downtown for the media and Congress. Practically no one came.

We walked in solemn procession from Arlington Cemetery to the White House, carrying flowers for all the Iraqi dead, US military casualties, and surviving veterans. No one came.

It wasn’t a protest or demonstration. It was a gathering. It felt more like a small church meeting than a political event. People told stories about their loved ones who served or are still serving in Iraq.

One man told of having to cut his son down from the rafters in their home where he hung himself to death, another victim of untreated PTSD. The night before his death, his son asked this man to hold him in his arms. The father rocked him in his lap. The next morning, he held his dead body on his lap. The government does not recognize them as a Gold Star family because their son did not die in the war.

Then there was the young veteran who told of having to photograph dead bodies every day as part of his job in military intelligence. He described what it felt like when he unearthed his first mass grave. Images that will remain seared in his consciousness for the rest of his life.

Bees, Republicans and the stimulus plan

Bees, Republicans and the stimulus plan
This isn't radical thinking. It's endorsed by, among others, Martin Feldstein, who was Ronald Reagan's chief economic advisor and is consistently voted by his peers as the Economist Least Likely to be Mistaken for a Democrat. Feldstein opposes most of the tax cuts favored by the GOP, especially business tax cuts. To be fair, he isn't entirely enamored of President Obama's proposal -- he thinks it should spend more on programs that will produce more short-term employment and less on open-ended programs.

Yet the plan before the Senate includes hundreds of billions of dollars in near-term programs and projects. There's $90 billion for school construction and renovation and educational grants and $79 billion for state educational programs, most of which would be spent within two years. Of the $27 billion for highway construction, most would be spent within four years.

The bill also appropriates billions for the kind of forward-looking projects we've neglected during the last two decades, such as broadband infrastructure, water and anti-pollution programs, and alternative energy research, which will produce long-term economic benefits for the entire country.

Is it possible to slip pork into a bill this massive? Well, duh. But pork is often in the eye of the beholder. House Republicans this week released a list of $19 billion in provisions they called "wasteful" (i.e., 2% of the total package). But the list includes numerous projects that many Americans would support and that would plainly stimulate our limping construction and manufacturing sectors. For example, the purchase of new computers and vehicles for federal agencies, the building of fire stations and other public facilities, and the upgrade of rail lines.

Is this the best the GOP can come up with? Or are Republicans just determined to undermine the recovery effort? It's hard to disagree with Obama's complaint that "modest differences" over the package are being inflated to stall the whole program.

That brings us to McConnell and his problem with "honeybee insurance." It turns out that the Senate minority leader took his cue from Neil Cavuto of Fox News, who has been carrying on about the topic for more than a week. Their campaign was joined Tuesday by Sen. David Vitter (R-La.), who stood on the floor of the chamber challenging "any member to come and explain what that provision was."

I'm no senator, but I'm pleased to inform Vitter that it is, in fact, a disaster insurance program for all livestock producers. Beekeepers obviously would be minor beneficiaries next to, say, cattle ranchers, so it's a tad bit dishonest to label the whole program "honeybee insurance."

The provision simply continues a program enacted by Congress last year, overriding a veto by President Bush. In other words, the Senate voted on it twice in 2008 -- once to enact and once to override. Connoisseurs of political comedy will see the punch line coming: McConnell and Vitter voted yea both times.

So it turns out that McConnell isn't really against honeybees. He's only using them to pretend that he's got a principled objection to a stimulus plan aimed at pulling the country out of the most severe recession in decades.

Senate Conservatives Propose $3.1 Trillion ‘Stimulus Plan,’ Three Times More Costly Than Obama’s Plan

Senate Conservatives Propose $3.1 Trillion ‘Stimulus Plan,’ Three Times More Costly Than Obama’s Plan
In a press conference this morning, Sen. Mitch McConnell (R-KY) discussed his objections to President Obama’s stimulus package currently before the Senate. McConnell expressed his concerns over the long term cost of the plan, because “we are already looking at, before we even do this, at over a trillion dollar deficit for this year”:

Most of my members believe that we could pass a very robust stimulus for less than the amount currently before us. We have been throwing figures around like it was paper money. We are already looking at, before we even do this, at over a trillion dollar deficit for this year. We all agree that we need to do something, but I don’t think we should not just completely act like the amount is irrelevant.



McConnell is not alone in trotting out this argument. Sen. Jim DeMint (R-SC) has also railed against increasing the deficit to pay for measures that won’t act as effective economic stimulus, saying that the current stimulus plan is “arrogantly indifferent to economic reality.”

The only comprehensive alternative being offered by Senate conservatives is DeMint’s “American Option: A Jobs Plan That Works,” a series of permanent tax breaks for corporations and wealthy Americans. A new analysis from the Center for American Progress Action Fund finds that the DeMint plan would cost over $3.1 trillion over ten years — more than three times the amount of President Barack Obama’s plan — and be largely ineffective at creating jobs.

Wall Street Journal Flops On New Deal History

The right-wing New Deal conniption fit
The latest salvo came Monday morning in a piece by two economists, Harold L. Cole and Lee. E. Ohanian: "How Government Prolonged the Depression."

Defenders of the New Deal will find much to argue with in Cole and Ohanion's account, but for simplicity's sake, I am going to zero in on just one point -- the impact of the New Deal on unemployment.

Cole and Ohanian:

The goal of the New Deal was to get Americans back to work. But the New Deal didn't restore employment. In fact, there was even less work on average during the New Deal than before FDR took office.

How can one make this claim? Unemployment reached 25 percent in the Great Depression, and fell steadily until World War II (although there were some bumps up along the way). Ah, but the revisionist position is that unemployment did not fall as much as it should have. And this argument is based on an interesting interpretation of the available data. As Amity Shlaes, currently the premier anti-New Deal historical revisionist writing for a popular audience, explained proudly in her own Wall Street Journal opinion piece in November, "The Krugman Recipe for Depression," a necessary step is to not count as employed those people in "temporary jobs in emergency programs."

That means, everyone who got a job during the Great Depression via the Works Progress Administration (WPA) or Civilian Conservation Corps (CCC), or any other of Roosevelt's popular New Deal workfare programs, doesn't get counted as employed in the statistics used by Cole, Ohanian and Shlaes.

Let us reflect, for a moment, on what the men and women employed by those programs achieved (aside from earning cash to buy food and pay for shelter, of course). In his paper, "Time for a New, New Deal," Marshall Auerback (pointed to by economist James Galbraith) summarizes:

The government hired about 60 per cent of the unemployed in public works and conservation projects that planted a billion trees, saved the whooping crane, modernized rural America, and built such diverse projects as the Cathedral of Learning in Pittsburgh, the Montana state capitol, much of the Chicago lakefront, New York's Lincoln Tunnel and Triborough Bridge complex, the Tennessee Valley Authority and the aircraft carriers Enterprise and Yorktown.

It also built or renovated 2,500 hospitals, 45,000 schools, 13,000 parks and playgrounds, 7,800 bridges, 700,000 miles of roads, and a thousand airfields. And it employed 50,000 teachers, rebuilt the country's entire rural school system, and hired 3,000 writers, musicians, sculptors and painters, including Willem de Kooning and Jackson Pollock.

In other words, millions of men and women earned a living wage and self-respect and contributed mightily to the national infrastructure. But, according to the statistics as interpreted on the Wall Street Journal editorial page, they were unemployed.

What Cooked the World's Economy?

What Cooked the World's Economy?
It wasn't your overdue mortgage.
By James Lieber
You're astonished and possibly ashamed that mutant financial instruments dreamed up in your great country have spawned worldwide misery. You can't comprehend, much less trim, the amount of bailout money parachuting into the laps of incompetents, hoarders, and miscreants. It's been a tough century so far: 9/11, Iraq, and now this. At least we have a bright new president. He'll give you a job painting a bridge. You may need it to keep body and soul together.

The basic story line so far is that we are all to blame, including homeowners who bit off more than they could chew, lenders who wrote absurd adjustable-rate mortgages, and greedy investment bankers.

Credit derivatives also figure heavily in the plot. Apologists say that these became so complicated that even Wall Street couldn't understand them and that they created "an unacceptable level of risk." Then these blowhards tell us that the bailout will pump hundreds of billions of dollars into the credit arteries and save the patient, which is the world's financial system. It will take time—maybe a year or so—but if everyone hangs in there, we'll be all right. No structural damage has been done, and all's well that ends well.

Sorry, but that's drivel. In fact, what we are living through is the worst financial scandal in history. It dwarfs 1929, Ponzi's scheme, Teapot Dome, the South Sea Bubble, tulip bulbs, you name it. Bernie Madoff? He's peanuts.

Credit derivatives—those securities that few have ever seen—are one reason why this crisis is so different from 1929.

Derivatives weren't initially evil. They began as insurance policies on large loans. A bank that wished to lend money to a big, but shaky, venture, like what Ford or GM have become, could hedge its bet by buying a credit derivative to cover losses if the debtor defaulted. Derivatives weren't cheap, but in the era of globalization and declining American competitiveness, they were prudent. Interestingly, the company that put the basic hardware and software together for pricing and clearing derivatives was Bloomberg. It was quite expensive for a financial institution—say, a bank—to get a Bloomberg machine and receive the specialized training required to certify analysts who would figure out the terms of the insurance. These Bloomberg terminals, originally called Market Masters, were first installed at Merrill Lynch in the late 1980s.

Subsequently, thousands of units have been placed in trading and financial institutions; they became the cornerstone of Michael Bloomberg's wealth, marrying his skills as a securities trader and an electrical engineer.

It's an open question when or if he or his company knew how they would be misused over time to devastate the world's economy.

Fast-forward to the early years of the Clinton administration. After an initial surge of regulatory behavior in favor of fair markets, especially in antitrust, that sort of behavior was abandoned, and free markets triumphed. The result was a morass of white-collar sociopathy at Archer Daniels Midland, Enron, and WorldCom, and in a host of markets ranging from oil to vitamins.

This was the beginning of the heyday of hedge funds. Unregulated investment houses were originally based on the questionable but legal practice of short-selling—selling a financial instrument you don't own in hopes of buying it back later at a lower price. That way, you hedge your bets: You cover your investment in a company in case a company's stock price falls.

But hedge funds later diversified their practices beyond that easy definition. These funds acquired a good deal of popular mystique. They made scads of money. Their notoriously high entry fees—up to 5 percent of the investment, plus as much as 36 percent of profits—served as barriers to all but the richest investors, who gave fortunes to the funds to play with. The funds boasted of having genius analysts and fabulous proprietary algorithms. Few could discern what they really did, but the returns, for those who could buy in, often seemed magical.

Insider Recounts Hunt for Hussein's Weapons

Insider Recounts Hunt for Hussein's Weapons

Duelfer portrays the United States as a lumbering superpower whose top policymakers, particularly in the White House and the Defense Department, lacked any basic understanding of Iraq's history, motives and leaders. But he says Iraq also routinely misread American intentions and overestimated the capability of U.S. intelligence. He says that according to an Iraqi government account, Hussein once asked his top commanders if Iraq had any hidden weapons he didn't know about.

The book tracks Duelfer's political journey from his days as an obscure State Department official in the Reagan administration who organized arms shipments to Chad during its struggle against Libya.