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Ethiopia/Kenya: Account for Missing Rendition Victims

October 3, 2008

Secret Detainees Interrogated by US Officials Are Still in Custody

Source: Human Rights Watch

(Washington, DC, October 1, 2008) – At least 10 victims of the 2007 Horn of Africa rendition program still languish in Ethiopian jails and the whereabouts of several others is unknown, Human Rights Watch said in a report released today. Several of the detained men were interrogated by US officials in Addis Ababa soon after they were secretly transferred from Kenya to Somalia, and then to Ethiopia in early 2007.

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Related Material

“Why Am I Still Here?”: The 2007 Horn of Africa Renditions and the Fate of Those Still Missing
Report, October 1, 2008

Interview with Jennifer Daskal about renditions in the Horn of Africa on PRI’s The World
Web Site, October 1, 2008

Interview with Jennifer Daskal about renditions in the Horn of Africa on WNYC’s Leonard Lopate Show
Web Site, October 2, 2008

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The 54-page report, “‘Why Am I Still Here?’: The Horn of Africa Renditions and the Fate of the Missing,” examines the 2007 rendition operation, during which at least 90 men, women, and children fleeing the armed conflict in Somalia were unlawfully rendered from Kenya to Somalia, and then on to Ethiopia. The report documents the treatment of several men still in Ethiopian custody, as well as the previously unreported experiences of recently released detainees, several of whom described being brutally tortured.

“The dozens of people caught up in the secret Horn of Africa renditions in 2007 have suffered in silence too long,” said Jennifer Daskal, senior counterterrorism counsel at Human Rights Watch and author of the report. “Those governments involved – Ethiopia, Kenya and the US – need to reverse course, renounce unlawful renditions, and account for the missing.”

In late 2006, the Bush administration backed an Ethiopian military offensive that ousted the Islamist authorities from the Somali capital Mogadishu. The fighting caused thousands to flee across the border into Kenya, including some who were suspected of terrorist links.

Kenyan authorities arrested at least 150 men, women, and children from more than 18 countries – including the United States, the United Kingdom, and Canada – in operations near the Somali border and held them for weeks without charge in Nairobi. In January and February 2007, the Kenyan government then rendered dozens of them – with no notice to families, lawyers or the detainees themselves – on flights to Somalia, where they were handed over to the Ethiopian military. Ethiopian forces also arrested an unknown number of people in Somalia.

Those rendered were later transported to detention centers in the Ethiopian capital Addis Ababa and other Ethiopian towns, where they effectively disappeared. Denied access to their embassies, their families, and international humanitarian organizations such as the International Committee of the Red Cross, the detainees were even denied phone calls home. Several have said that they were housed in solitary cells, some as small as two meters by two meters, with their hands cuffed in painful positions behind their backs and their feet bound together.

A number of prisoners were questioned by US Central Intelligence Agency and Federal Bureau of Investigation agents in Addis Ababa. From February to May 2007, Ethiopian security officers daily transported detainees – including several pregnant women – to a villa where US officials interrogated them about suspected terrorist links. At night, the Ethiopian officers returned the detainees to their cells.

“The United States says that they were investigating past and current threats of terrorism,” Daskal said. “But the repeated interrogation of rendition victims who were being held incommunicado makes Washington complicit in the abuse.”

For the most part, detainees were sent home soon after their interrogation by US agents ended. Of those known to have been interrogated by US officials, just eight Kenyans remain. (A ninth Kenyan in Addis Ababa was rendered to Ethiopia in July/August 2007, after US interrogations reportedly stopped.) These men, who have not been subjected to any interrogation since May 2007, would likely have been repatriated long ago but for the Kenyan government’s longstanding refusal to acknowledge their claims to Kenyan citizenship or to take steps to secure their release.

Human Rights Watch recently spoke by telephone to several of the Kenyans in detention in Ethiopia, many of whom complained of physical ailments and begged for someone to help get them home. Although Kenyan Prime Minister Raila Odinga made a campaign pledge to help repatriate these detainees, little progress has been made to date. In mid-August 2008, Kenyan authorities visited these men for the first time. The officials reportedly told the detainees they would be home within a few weeks, but more than a month and a half has now passed.

“The previous Kenyan government deported its own citizens and then left them to rot in Ethiopian jails,” Daskal said. “The new Kenyan government should reverse course, bring these men home, and show that it is not following the same shameful path as the old.”

The Ethiopian government also used the rendition program for its own purposes. For years, the Ethiopian military has been trying to quell domestic Ogadeni and Oromo insurgencies that receive support from neighboring countries, such as Ethiopia’s archrival, Eritrea. The Ethiopian intervention in Somalia and the multinational rendition program provided them a convenient means to gain custody over people whom they could interrogate for suspected insurgent links. Once these individuals were in detention, Ethiopian military interrogators and guards reportedly subjected them to brutal beatings and torture.

Detainees said Ethiopian interrogators pulled out their toenails, held loaded guns to their heads, crushed their genitals, and forced them to crawl on their elbows and knees through gravel. Several reported being beaten to the point of unconsciousness.

The Human Rights Watch report calls upon the Ethiopian government to immediately release the rendition victims still in its custody or prosecute them in a court that meets basic fair trial standards. It also urges the Kenyan government to take immediate steps to secure the repatriation of Kenyan nationals still in Ethiopian custody, and the US government to withhold counterterrorism assistance from both governments until they provide a full accounting of all the missing detainees.

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How the Media Sold Their Souls to Wall Street

October 3, 2008

Published on Thursday, October 2, 2008 by The Huffington Post

by Josh Silver

If you are like me, the pundits, and 99.9% of the American public, you really don’t know much about economics. And despite Monday’s refreshing moment of rebellion in the Congress, in all likelihood the House and Senate will pass a modified version of the $700 billion handout this week to fat cat Wall Street financiers.

The likely result, according to Nobel economist Joseph Stiglitz: “The unemployment rate will still increase, growth will remain anemic, house prices will continue to fall, the number of houses in foreclosure will continue to rise, credit will be harder to get, states and localities will remain in a fiscal crisis, and there will be cutbacks in basic public services. …. Our living standards in the future will be lower than they otherwise would have been. ”

Here’s the problem: None of us really know that the hell is going on, and what the largest financial bailout in the history of our nation would actually achieve. Based on McCain and Obama’s hasty support of the bailout, it would seem they are both too far under the thumb of Wall Street to look at viable alternatives to an unprecedented handout to the same reckless bankers who got us into this mess.

And like they did in the run-up to war in Iraq and the passage of the Patriot Act, the media are compounding the problem rather than helping it. While TV devotes 24/7 coverage to pretending that mudslinging Democrats and Republicans represent the full range of debate, while right-wing radio hosts scream socialism, and while pundits like Thomas Friedman implore Congress “to give them the capital and the flexibility to put out this fire,” the American people are getting virtually no hard economic analysis about what the bailout would achieve or what the range of options are.

Why aren’t Luc Laeven and Fabian Valencia on television right now? They just submitted a comprehensive report to the International Monetary Fund after studying 42 banking crises over the past 37 years. Their conclusion: Bailouts often do not work, they often result in more bad practices, and they distort economies by transferring wealth from taxpayers to bankers and their customers.

Why hasn’t economist Dean Baker been invited onto a single television program in the past week ? He is one of the guys who actually predicted the current crisis. He wrote this week: “There is no way that the failure to do a bailout will lead to more than a very brief failure of the financial system. The worst case scenario is that we have an extremely scary day in which the markets freeze for a few hours. Then the Fed steps in and takes over the major banks. The system of payments continues to operate exactly as before, but the bank executives are out of their jobs and the bank shareholders have likely lost most of their money. In other words, the banks have a gun pointed to their heads and are threatening to pull the trigger unless we hand them $700 billion.”

Why isn’t New York University economist Nouriel Roubini all over the news right now? He says the claim that “spending $700 billion of public money is the best way to recapitalize banks has absolutely no factual basis or justification. This way of recapitalizing financial institutions is a total rip-off that will mostly benefit – at a huge expense for the U.S. taxpayer – the shareholders and even unsecured creditors of the banks. ….The pockets of reckless bankers and investors (will) have been made fatter under the fake argument that bailing out Wall Street was necessary to rescue Main Street from a severe recession.”

Roubini continues, “Instead, the restoration of the financial health of distressed financial firms could have been achieved with a cheaper and better use of public money. It is pathetic that Congress did not consult any of the many professional economists that have presented alternative plans that were more fair and efficient and less costly ways to resolve this crisis. … and it is a scandal that even Congressional Democrats have fallen for this Treasury scam that does little to resolve the debt burden of millions of distressed home owners.”

But turn on your television – the place where more than 60% of Americans get their primary news – turn on your radio, or open your local newspaper, and you’re not going to see what these top economists are saying. It’s a McCain quote, an Obama sound byte, and the same pundits who have proven their incompetence over and over. The result is an American public that is fundamentally uninformed about the issues that matter most – like economics, health care, and war – and over-informed about those that matter least: sports, celebrity, the latest campaign ad, and horserace analysis of elections.

We have no reason to believe that the press — and along with it, most politicians — will ask the tough questions, expand the range of debate, and bring the facts to the American people. But until they do, our economy – and our democracy — will continue its race to the bottom.

Copyright © 2008 HuffingtonPost.com, Inc.

Josh Silver is the Executive Director of Free Press a national, nonpartisan organization that he co-founded with Robert McChesney and John Nichols in 2002 to engage citizens in media policy debates and create a more democratic and diverse media system.

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Bailout Vote Underscores US Leadership Crisis

October 1, 2008

Truthout, Monday 29 September 2008

by: Steven Thomma, McClatchy Newspapers

photo
The bailout deadlock demonstrates that no definitive leadership exists in Washington – least of all in the White House. (Photo: Ezra Shaw / Getty Images AsiaPac)

Columbus, Ohio – The failure of a proposed Wall Street bailout Monday underscored that America is suffering not just from a financial crisis, but also from a crisis of political leadership.

“This has been a bad day for Washington and a bad day for American politics,” said Harold Ford, a former Democratic congressman from Tennessee. “What happened today was an embarrassment for the country.”

None of the country’s political leaders, Republican or Democrat, has proved able to navigate the treacherous politics of the moment and secure an agreement to bail out the country’s financial system and restore confidence in the marketplace.

President Bush is a largely discredited lame duck. He’s not trusted by his own party and was unable to bend the Congress to his will even as he warned of a catastrophe if lawmakers rebelled.

Democratic presidential nominee Barack Obama and his party’s congressional leaders control the Congress and agreed with Bush’s urgency, but they couldn’t deliver a majority, either.

Still, they came closer than did Republican John McCain and his party’s leaders in the House of Representatives, who delivered only 30 percent of the GOP votes for the compromise, while Democrats delivered some 60 percent of their members.

Leaders of both parties vowed to seek bipartisan cooperation toward drafting a compromise that could pass, but with their own elections five weeks away, they couldn’t stop themselves from partisan attacks, which make the goal of bipartisan agreement even more difficult to reach.

Nowhere is the crisis more evident than it is in the White House.

Bush limps toward the end of his second term with among the lowest job-approval ratings in history – a recent Gallup poll found just 27 percent approving and 69 percent disapproving.

Worse, he’s lost credibility in Congress, notably for leading the country into war in Iraq on false claims that Iraq had ties to al Qaida and weapons of mass destruction. When he dispatched Vice President Dick Cheney to lobby House Republicans to support the Wall Street bailout, the closed-door session grew heated, and some members reportedly reminded Cheney that they’d trusted him on Iraq.

Bush also is paying a price for years of strong-arming Congress, particularly when he counted on then-House Majority Leader Tom DeLay, R-Texas, to “hammer” proposals such as a costly expansion of Medicare past skeptical conservatives.

“There’s no question the rank-and-file are carrying some grudges from the past,” said Dan Schnur, the director of the Unruh Institute of Politics at the University of Southern California.

Democrats, who won control of both the House and Senate in 2006, also couldn’t deliver. Congress’s approval rating is even lower than Bush’s, at around 18 percent.

When Obama, the party’s new leader, learned of the plan’s rejection, he spoke about Washington almost as if he weren’t a member of Congress.

“Democrats and Republicans in Washington have a responsibility to make sure that an emergency rescue package is put forward that can at least stop the immediate problems we have so we can begin to plan for the future,” he said.

He didn’t say how he might lead or what role he’d play. “Step up to the plate,” he told Congress. “Get it done.”

His party’s leaders in Congress also threw up their hands, as House Speaker Rep. Nancy Pelosi, D-Calif., and others bragged that they’d delivered a majority of the Democratic votes, even though that wasn’t enough.

“The Democratic side more than lived up to its side of the bargain,” Pelosi said, lauding fellow Democratic leaders for “getting 60 percent of the House Democrats to support a bill which isn’t our bill.”

Republican leaders in Congress were powerless as well to deliver the votes they’d promised, saying that they lost about 12 committed votes when some of their members got mad at Pelosi.

“We could have gotten there today had it not been for this partisan speech that the speaker gave on the floor of the House,” said House Republican Leader Rep. John Boehner, R-Ohio.

McCain appeared as impotent as everyone else. He’d suspended his campaign briefly last week to rally support for the plan, and spent part of Saturday lobbying House Republicans by phone, but he couldn’t deliver, either.

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Why not a bailout for the rest of us?

October 1, 2008

What’s really required in this crisis is an entirely different kind of government intervention in the economy.

Editorial

Socialist Worker,  October 1, 2008

Quickly organized protests around the U.S. drew opponents of the bailout for Wall Street (Joe Newman)Quickly organized protests around the U.S. drew opponents of the bailout for Wall Street (Joe Newman)

AS THE smoke cleared after Monday’s stunning House of Representatives vote against a $700 billion financial bailout for Wall Street, the politicians immediately got down to the business of blaming each other–and scheming about the next attempt to push through this rescue of the super-rich.

But for working people trying to figure out what the hell has happened to the U.S. financial system–and why the leaders of the U.S. government, apparently regardless of political party, are prepared to spend more than $2,000 for every man, woman and child in this country to save Wall Street–the reaction was different.

For one thing, there was sweet satisfaction to be taken in the fact that the bankers and stockbrokers didn’t get their way for once–especially since they’re out to steal $700 billion in taxpayers’ money to cover their bad investments, under a program devised by former Wall Street CEO and now Treasury Secretary Henry Paulson.

With the business world ratcheting up political pressure and Paulson predicting certain doom if no action was taken, the Bush administration and the leadership of both parties in both the House and Senate were all sure that the bailout bill would go through. Yet the legislation was derailed because members of Congress are feeling the heat from a growing popular outrage over the staggering scale of a giveaway to the very same people who led the economy to the edge of the abyss.

It was an all-too-rare turn of events for the U.S. political system–the opinions of ordinary Americans actually mattered in what happened.

At the same time, though, there’s a sense of foreboding. If the government can’t agree on a bailout, will Wall Street really crash and burn–and cause an economic catastrophe on Main Street, too?

After all, that’s the claim of “King Henry” Paulson and his nominal boss, George W. Bush. They’re basically extortionists, insisting that if Congress doesn’t agree to a king’s ransom for the banks, the economy gets it–in the form of a worldwide financial meltdown that would wipe out workers’ savings and eliminate millions of jobs overnight.

The stock market plunge that followed the House vote Monday will have reinforced such fears. Few workers have the resources to play the stock market, of course, but their lives are affected by its ups and downs, especially the downs–for example, the loss of retirement savings in 401(k) accounts that many workers rely on, now that defined benefit pension plans are going the way of the dinosaur.

So is it true? Are we all–the multi-millionaire bankers on Wall Street and the tens of millions of workers on every other street–in the same boat after all? Do we really need the Paulson bailout to avert a second Great Depression?

The answer is no.

The argument that a bailout of the banks is good of all us is an ideological smokescreen, to cover the specifics of the Paulson proposal, as sanctioned by the Democrats–which benefits the rich and powerful, at the expense of the rest of us.

There are plenty of ways that government intervention could alleviate the financial crisis and provide urgently needed relief to working people. But that would involve programs, policies and priorities that the bankers despise–and that political leaders in Washington want nothing to do with.

Paulson is right to say that Wall Street is facing its most severe crisis since the Great Depression–a catastrophe entirely of its own making–and that the U.S. government has to respond. But the form that response takes–a huge handout for the super-rich or a progressive plan to rein in the banks and help ordinary people–depends on whether workers organize to make their voices heard and felt in Washington.

Continued . . .

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McCain/Palin Campaign’s End-Run Around Media

September 30, 2008

The McCain campaign is attempting to do something unheard of in the modern political era. It is not just running against the mainstream media, it is running around it.

[Alaska Gov. Sarah Palin speaks at a rally at Capital University in Columbus, Ohio, on Monday. (MANDEL NGAN / AFP/Getty Images) ]Alaska Gov. Sarah Palin speaks at a rally at Capital University in Columbus, Ohio, on Monday. (MANDEL NGAN / AFP/Getty Images)

This strategy is not so much expressed in McCain campaign manager Steve Schmidt’s declaration last week that the New York Times is “150 percent in the tank” for Democratic Sen. Barack Obama or the media-bashing by several speakers at this month’s Republican National Convention. It’s more about the GOP’s continued sheltering of its vice presidential nominee, Alaska Gov. Sarah Palin.She has yet to hold a major press conference 32 days after McCain announced her as his running mate – and that’s not changing anytime soon. McCain spokesman Michael Goldfarb said Palin will do at least one news conference before election day. That could mean that the person who could potentially lead the free world will have done one national press conference before being sworn into office.

The Democratic vice presidential nominee, Joe Biden, has given more than 89 national and local interviews over roughly the same period of time.

Other than TV interviews with CBS anchor Katie Couric, ABC anchor Charlie Gibson and conservative Fox News commentator Sean Hannity, Palin hasn’t engaged the press. The effort to shield her is so intense that when she met with foreign leaders in New York last week, the campaign initially would only allow photographers near her.

No favors

“I don’t think the campaign is doing her any favors by not letting her answer any questions,” said PBS political editor Judy Woodruff, who has covered politics for 30 years for CNN and PBS. “If she’s elected vice president of the United States and were she to succeed to the presidency, she needs that interchange with journalists. The American people have a right to know what does she know and how does she think.”

“The media needs to continue to say, every day, until she has a news conference, ‘When is she going to have a news conference? Why isn’t she having one?’ I just find it astounding,” Woodruff said. “I think the media has a responsibility to continue to point out that this is unlike any presidential or vice presidential candidate in memory. She has been more bottled up.”

When television news outlets threatened not to run any images of her meeting with Afghan president Hamid Karzai on Tuesday unless reporters were allowed in as well, the campaign allowed CNN – which was providing the pool report for the event – inside. Briefly. According to the network, “CNN’s producer and other photographers were allowed in the room for just 29 seconds.”

‘Free Sarah Palin’

Last week, The Chronicle began a “Free Sarah Palin” campaign on its Politics blog, documenting the continuing lack of access to the candidate. The effort was echoed by CNN host Campbell Brown, who called on “the McCain campaign to stop treating Sarah Palin like she is a delicate flower that will wilt at any moment.”

“This woman is from Alaska, for crying out loud. She is strong. She is tough. She is confident. And you claim she is ready to be one heartbeat away from the presidency. If that is the case, then end this chauvinistic treatment of her now. Allow her to show her stuff,” Brown said. “Free Sarah Palin.”

The real loser in this game of hide-the-candidate: voters. Palin was not well-known outside of conservative circles before the campaign chose her. Polls, including one taken by the Pew Research Center, taken over the past few days show that Palin’s approval rating has dropped since she was nominated.

“The lack of access is potentially damaging in the eyes of the voter, because they are trying to get to know the candidate,” said Paul Dimock, associate director of the nonpartisan Pew Research Center for People and the Press. Palin is especially vulnerable because voters know McCain, Obama and Biden better, he said.

“The McCain campaign has discovered it has a major problem,” said Carol Jenkins, president of the Women’s Media Center. “Increasingly, it has become clear that she doesn’t have a grasp of the issues. If I were John McCain, I’d be doing the same thing with her.”

No incentive

But Jenkins said the campaign doesn’t have an incentive to give the media more Palin face time. “If there is anybody more despised than Congress, it’s the media.”

So what can the media do? Jenkins said they shouldn’t have given in to the campaign’s demands last week during Palin’s New York visit. “At some point, the media has to stop cooperating with the campaign.”

Friday, syndicated conservative columnist Kathleen Parker had seen enough of Palin – and called on her to withdraw.

“Palin’s recent interviews with Charles Gibson, Sean Hannity and now Katie Couric have all revealed an attractive, earnest, confident candidate. Who Is Clearly Out Of Her League,” Parker wrote at the National Review Online.

“Palin filibusters. She repeats words, filling space with deadwood. Cut the verbiage and there’s not much content there,” Parker wrote. “If BS were currency, Palin could bail out Wall Street herself.”

But other news executives say what the McCain campaign is doing is not that unusual.

“All politicians go through a stage where they want to minimize how much they are exposed to the media,” said Paul Friedman, vice president of news at CBS, the network that scored one of the three major Palin interviews. He shrugged at what could be learned in a news conference that couldn’t in a one-on-one interview. “I just don’t think it is that cosmic of an issue. We’ll see more of the candidates soon. Just wait for the debates.”

© 2008 The San Francisco Chronicle

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The Rise Of The American Oligarch Class

September 30, 2008

The Paulson Plan

Robert Wenzel | Information Clearing House, Sep 29, 2008

The word oligarchy dates back at least to the time of Aristotle and comes from the Greek words for “few” (ὀλίγον olígon) and “rule” (ἄρχω arkho). An oligarchy is generally considered any form of government where a small elite segment of society, be they from royalty, wealth, family or military, rule. The most current day popular meaning associates an oligarch with an extremely wealthy person who acquires his wealth, or increases it significantly, by incorporating the use of government influence. Oligarchs are not the only ones who become rich, but their success and secretive influence over governments put them into a separate class.

A recent example of a major grab of power and wealth in this type of oligarch fashion comes from the period of the collapse of the Soviet Union. In the confusion during the collapse, and the rise of Boris Yeltsin as president of Russia, the oligarchs made their move. With relatives or close associates as government officials, sometimes even government officials themselves, they achieved vast wealth by acquiring state assets very cheaply during the so-called “privatization” process controlled by the Yeltsin government.

The current $700 billion Paulson bailout plan has brought to the forefront a new class of what must be called American Oligarchs and oligarch wannabes. Some may have originally earned their wealth by supplying consumers with desired goods, but at some point they crossed over to the dark side to use government as a vehicle to take from the poor and the middle class to give to themselves. Others, never produced an honest product and have been career long parasites on the working classes.

It is instructive that outside of this small group of oligarchs and wannabe oligarchs, few appear to have been in favor of the Paulson “bailout”. (Note: The use of the word “bailout” to describe the Paulson Plan is a misnomer, see my column: THE BIG LIE: The Supposed Paulson ‘Bailout’ Plan).

A letter circulated and signed by many academic economists was sent to Congressional leaders objecting to the plan. The Austrian economists, who are the only ones who understand the business cycle, as would be expected also objected to the plan (See Rockwell: Stop the Bailout and Murphy: The Government Is Not Promoting Stability ).

Even some bankers have objected:

U.S. Treasury Secretary Henry Paulson’s proposed $700 billion bank rescue aims to help “poorly run” companies and the primary beneficiaries would be Goldman Sachs Group Inc. and Morgan Stanley, said BB&T Corp. Chief Executive Officer John Allison in a critique of the plan.

Treasury “is totally dominated by Wall Street investment bankers” and “cannot be relied on to objectively assess” the impact of government policy on the financial industry, Allison wrote in a Sept. 23 letter to Congress…

Allison, 60, said Congress should “hear from well-run financial institutions” as lawmakers consider the plan, which seeks to ease the credit crunch by buying troubled mortgage- related assets. Under Allison, Winston-Salem, North Carolina- based BB&T avoided the subprime mortgage market, whose collapse led to the credit crisis. BB&T has risen 26 percent this year, the best showing in the 24-company KBW Bank Index.

From the right, Newt Gingrich has called the plan “stupid.” From the left, Paul Krugman opposed the plan, calling it “Cash for trash.”

Most noteworthy is the fact that the notoriously pro-Bush FOX television network carried this AP report:

There is scant public support for President Bush’s $700 billion federal rescue plan for the U.S. financial industry and little expectation it would solve the crisis that has roiled the markets and hobbled some of the country’s largest investment firms, according to a poll released Friday.

Just 30 percent of Americans say they support Bush’s package, according to an Associated Press-Knowledge Networks poll released as White House and congressional leaders struggled to rescue the plan after House Republicans rebelled against it. Despite the president’s pleas that the package is urgently needed to prevent an economic meltdown, 45 percent say they oppose Bush’s proposal while 25 percent said they are undecided.

Yet, despite the extremely limited support for the plan, the Oligarchs prevailed and Paulson’s Plan will become law. Indeed, the Oligarchs were out in full force to support the legislation. As I have pointed out before, Paulson with his Goldman Sachs connections must be considered an oligarch, but there are others.

Billionaire David Rubenstein, co-founder of the politically connected Carlyle Group, has come out in favor of Paulson’s Plan. Rubenstein told CNBC that he hopes Congress will move quickly to approve the rescue of the U.S. financial system.

Carlyle Group almost has too many ways to benifit from Paulson’s Plan to count. They ran a mortgage securities firm that went under. Those securities will be coming up for sale under a reorganization, just in time for purchase by the Treasury.

The Federal Reserve has changed regulations which will allow them to buy larger stakes in bank stocks. And Rubenstein wants to buy some of the paper the Treasury acquires. “Private equity can help by buying these assets,” he told CNBC. “Private equity can be among the most significant buyers of assets.”

Billionaire Warren Buffett is in favor of the plan, and he just bought, through Berkshire Hathaway, a $5 billion stake in Goldman Sachs. Goldman Sachs just received approval from the Fed to become a bank holding company, so that they can buy up troubled banks (And then sell the troubled mortgages of the banks to the Treasury?). Buffett called Paulson’s plan “absolutely necessary” and said that “I am betting on the Congress doing the right thing for the American public and passing this bill,”

Billionaire Wilbur Ross , through a firm controlled by Ross, bid $435 million last September to buy the service unit of American Home Mortgage, which collects payments from homeowners. He is in favor of Paulson’s Plan and penned a column published at the New York Post to say so, “…we need this passed, and passed quickly…,”wrote Ross.

There are likely other oligarchs who maintain a low profile and keep their names out of the headlines, and there are oligarch wannabes like former New York City Mayor Rudy Giuliani . Giuliani has put out a press release advising that his firm has formed a “task force” to “guide financial institutions, private investment funds, institutional investors and other market participants through the legislative, regulatory and enforcement challenges posed by the” Paulson Plan.

Clearly, the new oligarchs have arrived in America. It will mean a lower standard of living for the rest of us as it is clear by the Paulson Plan that they are not afraid to think big when grabbing money from the populous at large. Further, they have the political skill and influence to get the legislation passed that will benefit themselves even when there is virtually non-existent popular support. Be scared, very scared. The new American Oligarchs now rule financial America and there is no such thing as enough with them. They will be back for another big bite from our wallets and income streams, all too soon.

Update: Word has reached me (HTrpm) that snuck into Paulson’s plan are changes that will make it easier for the Fed to inflate the money supply. So is the play for the Oligarchs to grab the banks, the assets and the mortgages and then inflate the money supply boosting the value of all these assets by trillions, while the rest of us simply get to deal with the price inflation as higher prices at the grocery store, the gas pump and everywhere else?

Robert Wenzel is an economic consultant and Editor & Publisher of EconomicPolicyJournal.com. He can be reached at rw@economicpolicyjournal.com.

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ECONOMY-US: Bailout for Who?

September 27, 2008


By Adrianne Appel | Inter-Press Service


BOSTON, Sep 26 – U.S. lawmakers and the George W. Bush administration are continuing their closed-door meetings through the weekend to try and fashion a softer 700-billion-dollar deal for Wall Street that will appeal to citizens angry at the prospect of the mega-corporate bailout.

Treasury Secretary Henry Paulson brought the plan to Congress on Sep. 19 in a three-page outline, and said it was necessary to prevent the collapse of the finance market due to complex trades involving subprime mortgages.

The plan would have allowed Paulson, a former CEO of Goldman Sachs, complete control of the massive payout with no oversight, no auditing and no plan of a payback to the taxpayer.

ACORN president Maude Hurd captured the nation’s sentiment when she hinted at the potential electoral fallout in a speech this week: “There is a palpable populist revolt rolling through towns and cities across the country, and if Main Street doesn’t get any real help with the mortgage out of this deal, the American people only have to wait a few weeks for a constructive outlet for their anger.”

ACORN is the nation’s largest grassroots community organisation of low- and moderate-income people, with over 400,000 member families in 110 cities across the country.

At the Capitol, members of Congress attempted to convince taxpayers — and voters — that they had their best interests in mind, and that meant a big bailout for Wall Street.

“Hundreds of billions of dollars that Americans invested in retirement accounts and mutual funds have evaporated,” and more surely would, warned Democrat Chris Dodd, Senate Banking Committee chairman, while giving the impression that the income security of average people is at stake.

This couldn’t be further from the truth, say those who study stock ownership. The average U.S. citizen owns very little or no stock, and wouldn’t be helped directly by an up-market.

“I think the middle class are not going to be very affected at all by a bailout. It’s something that is going to affect the very wealthy. Changes in the stock market won’t make much difference to the middle class,” Edward Wolff, a New York University economist, told IPS.

“It’s just a political gambit to help the rich recover from the stock market collapse. If you claim that everyone is suffering, it’s easier to get a bailout from Washington,” Wolff said.

In 2001, the richest 10 percent of families owned 85 percent of all outstanding stocks, about 85 percent of all financial securities and 90 percent of all business assets, according to Wolff.

As for the rest of the country, only 32 percent of households owned more than 10,000 dollars of stock, and only 25 percent of households owned more than 25,000 dollars worth of stock, Wolff said.

A 2007 report by the Government Accountability Office found that in 2004, just 36 percent of workers had any savings at all in a retirement account. Most U.S. citizens will depend on Social Security in retirement, the government programme that provides 30-40 percent of what was earned in their lifetimes.

The bad practices of the mortgage lending industry targeted people of colour and the elderly, in particular, according to a report by United for a Fair Economy.

Only 11 percent of subprime loans went to first-time buyers last year. The vast majorities were refinancing that caused borrowers to owe more on their homes under the guise that they were saving money. Many borrowers were talked into refinancing their homes to gain additional cash for things like medical bills, the report says.

African American borrowers will lose between 71 billion and 92 billion dollars, and Latino borrowers will lose between 75 billion and 98 billion dollars as a result of bad subprime loans, according to the report.

“A couple decades of deregulation have allowed people at the top of the financial food chain to benefit from millions of people, through unscrupulous mortgage lending practices,” Michael Lapham of United for a Fair Economy told IPS.

“Who are we most concerned about helping? Homeowners facing foreclosure or people who’ve made millions and billions on subprime lending?” Lapham asked.

The U.S. public seems especially peeved at the idea of helping companies that pay exorbitant salaries to their bosses, at a time when many people have seen a decline in their standard of living.

According to the Institute for Policy Studies, CEOs of large U.S. companies last year made an average of 10.5 million dollars, while the top 50 private equity and hedge fund managers pocketed an average of 588 million dollars each.

The institute notes that draft proposals floated by the chairs of both the House and Senate banking committees would allow Paulson to determine what qualifies as “inappropriate or excessive” executive compensation under the bailout plan.

“Secretary Paulson amassed a personal stock stash worth over three-quarters of a billion dollars as the CEO at Goldman Sachs,” said analyst Sarah Anderson. “He hardly strikes us as the appropriate arbiter of what’s excessive and what’s not.”

In a statement, Anderson said the nation needs clear and strict limits on CEO pay “so that taxpayers won’t have to worry about their money flooding into the pockets of top executives and encouraging another round of reckless behaviour.”

On Thursday, unions, and anti-poverty and peace groups took to the streets, staging large demonstrations on Wall Street and in many cities chanting, “No bailouts for billionaires.”

At the end of the day Thursday, it was hard-line Republicans, including Sen. Richard Shelby and Rep. Spencer Bachus, who stood firm against the bailout. Bachus told reporters that the Republicans do not want the U.S. to buy the bad debts of the companies, but instead to loan the companies money.

Their argument that the market could do more to fix itself was bolstered later Thursday evening, when troubled Washington Mutual bank, riddled with bad mortgages, was bought by J.P. Morgan Chase.

The Democrats want the bailout, one that would meter out the billions in installments and somewhat restrict the pay of CEOs, Dodd said.

“I don’t understand why the Democrats in particular didn’t feel they have the leverage to get more out of this deal. Congress has squandered an opportunity to actually help homeowners facing foreclosure,” Brenda Muniz, legislative director for ACORN, told IPS.

According to an analysis of U.S. Census data by the Centre for Budget and Policy Priorities, 18 percent of U.S. children lived in poverty in 2007.

The willingness of Congress to consider a 700-billion-dollar payout makes clear that Congress could budget other large sums to help end homelessness and hunger, and improve public education.

“When people go to Congress to ask for more affordable housing funds and are told there isn’t money, then along comes Wall Street and they say, ‘Oh sure we have 700 billion dollars for your bailout.’ It definitely makes you question our nation’s priorities,” Lapham said.

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Pakistan and US troops exchange fire

September 26, 2008

From Times Online
September 26, 2008

Asif Ali Zardari

(Emilio Morenatti/AP)

Pakistan’s president Asif Ali Zadari warned against allied incursions into Pakistan in a speech to the UN

American and Pakistan troops have exchanged fire over the Afghan border, US officials have confirmed.In the first serious exchange between forces acknowledged by the US, Pakistani soldiers fired at American helicopters escorting Afghan and U.S. ground troops along the volatile border, sparking a five-minute ground battle between the countries which have been allies in the war on terrorism.

Attempting to play down the incident, President Asif Ali Zardari, Pakistan’s president said only flares were fired at foreign helicopters which he said had strayed across the border from Afghanistan into his country.

The five-minute exchange, which could have easily escalated into a much bigger conflict, could heighten tensions at a time the United States is stepping up cross-border operations in a region known as a haven for Taliban and al-Qaida militants.

It also came as new Pakistani President Asif Ali Zardari was in New York meeting with U.S. Secretary of State Condoleezza Rice, and Afghan President Hamid Karzai was scheduled to meet with U.S. President George W. Bush on Friday.

Two American OH-58 reconnaissance helicopters, known as Kiowas, were on a routine patrol in the eastern province of Khost when they received small arms fire from the Pakistani border post, according to a U.S. military spokesman in Bagram. There was no damage to aircraft or crew, officials said.

U.S. Central Command spokesman Rear Admiral Greg Smith said the helicopters had been escorting U.S. troops and Afghan border police. When the helicopters were fired on, the ground forces fired rounds meant not to hit the Pakistani troops, but to make certain that they realized they should stop shooting; Rear AdmiralSmith said from Centcom headquarters in Florida.

The Pakistani forces fired back during a skirmish that lasted about five minutes. The joint patrol was moving about a mile inside Afghanistan, with the helicopters flying above, he said.

The Pakistani military disputed the U.S. version, saying its troops fired warning shots when the two helicopters crossed over the border — and that the U.S. helicopters fired back.

“When the helicopters passed over our border post and were well within Pakistani territory, own security forces fires anticipatory warning shots. On this, the helicopters returned fire and flew back,” a Pakistani military statement said.

In New York, President Zardari said his military fired only flares at foreign helicopters that he claimed had strayed across the border from Afghanistan.

Mr Zardari said before his meeting with Ms Rice that his forces fired only as a way “to make sure that they know that they crossed the border line.”

Later, in an emotion-charged speech at the U.N. General Assembly, President Zardari vowed to continue the fight against terrorists but warned against allied incursions into Pakistan.

“Just as we will not let Pakistan’s territory to be used by terrorists for attacks against our people and our neighbors, we cannot allow our territory and our sovereignty to be violated by our friends,” he said.

“Unilateral actions of great powers should not inflame the passions of allies,” he said.

The Pakistani military said the matter was “being resolved” in consultations between the army and the NATO force in Afghanistan. A NATO statement said the militaries were “working together to resolve the matter.”

The shooting comes amid a string of cross-border incidents, including a raid by American commandos into Pakistan’s tribal areas on September 3 that angered many in Pakistan, and the apparent crash landing because of possible mechanical failure of a U.S. spy drone this week in Pakistan’s tribal areas.

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Israel asked US for green light to bomb nuclear sites in Iran

September 26, 2008

US president told Israeli prime minister he would not back attack on Iran, senior European diplomatic sources tell Guardian

nuclear enrichment plant of Natanz in central Iran

A view of the nuclear enrichment plant of Natanz in central Iran. Photograph: EPA

Israel gave serious thought this spring to launching a military strike on Iran’s nuclear sites but was told by President George W Bush that he would not support it and did not expect to revise that view for the rest of his presidency, senior European diplomatic sources have told the Guardian.

The then prime minister, Ehud Olmert, used the occasion of Bush’s trip to Israel for the 60th anniversary of the state’s founding to raise the issue in a one-on-one meeting on May 14, the sources said. “He took it [the refusal of a US green light] as where they were at the moment, and that the US position was unlikely to change as long as Bush was in office”, they added.

The sources work for a European head of government who met the Israeli leader some time after the Bush visit. Their talks were so sensitive that no note-takers attended, but the European leader subsequently divulged to his officials the highly sensitive contents of what Olmert had told him of Bush’s position.

Bush’s decision to refuse to offer any support for a strike on Iran appeared to be based on two factors, the sources said. One was US concern over Iran’s likely retaliation, which would probably include a wave of attacks on US military and other personnel in Iraq and Afghanistan, as well as on shipping in the Persian Gulf.

The other was US anxiety that Israel would not succeed in disabling Iran’s nuclear facilities in a single assault even with the use of dozens of aircraft. It could not mount a series of attacks over several days without risking full-scale war. So the benefits would not outweigh the costs.

Iran has repeatedly said it would react with force to any attack. Some western government analysts believe this could include asking Lebanon’s Shia movement Hizbollah to strike at the US.

“It’s over ten years since Hizbollah’s last terror strike outside Israel, when it hit an Argentine-Israel association building in Buenos Aires [killing 85 people]”, said one official. “There is a large Lebanese diaspora in Canada which must include some Hizbollah supporters. They could slip into the United States and take action”.

Even if Israel were to launch an attack on Iran without US approval its planes could not reach their targets without the US becoming aware of their flightpath and having time to ask them to abandon their mission.

“The shortest route to Natanz lies across Iraq and the US has total control of Iraqi airspace”, the official said. Natanz, about 100 miles north of Isfahan, is the site of an uranium enrichment plant.

In this context Iran would be bound to assume Bush had approved it, even if the White House denied fore-knowledge, raising the prospect of an attack against the US.

Several high-level Israeli officials have hinted over the last two years that Israel might strike Iran’s nuclear facilities to prevent them being developed to provide sufficient weapons-grade uranium to make a nuclear bomb. Iran has always denied having such plans.

Olmert himself raised the possibility of an attack at a press conference during a visit to London last November, when he said sanctions were not enough to block Iran’s nuclear programme.

“Economic sanctions are effective. They have an important impact already, but they are not sufficient. So there should be more. Up to where? Up until Iran will stop its nuclear programme,” he said.

The revelation that Olmert was not merely sabre-rattling to try to frighten Iran but considered the option seriously enough to discuss it with Bush shows how concerned Israeli officials had become.

Bush’s refusal to support an attack, and the strong suggestion he would not change his mind, is likely to end speculation that Washington might be preparing an “October surprise” before the US presidential election. Some analysts have argued that Bush would back an Israeli attack in an effort to help John McCain’s campaign by creating an eve-of-poll security crisis.

Others have said that in the case of an Obama victory, the vice-president, Dick Cheney, the main White House hawk, would want to cripple Iran’s nuclear programme in the dying weeks of Bush’s term.

During Saddam Hussein’s rule in 1981, Israeli aircraft successfully destroyed Iraq’s nuclear reactor at Osirak shortly before it was due to start operating.

Last September they knocked out a buildings complex in northern Syria, which US officials later said had been a partly constructed nuclear reactor based on a North Korean design. Syria said the building was a military complex but had no links to a nuclear programme.

In contrast, Iran’s nuclear facilities, which are officially described as intended only for civilian purposes, are dispersed around the country and some are in fortified bunkers underground.

In public, Bush gave no hint of his view that the military option had to be excluded. In a speech to the Knesset the following day he confined himself to telling Israel’s parliament: “America stands with you in firmly opposing Iran’s nuclear weapons ambitions. Permitting the world’s leading sponsor of terror to possess the world’s deadliest weapon would be an unforgivable betrayal of future generations. For the sake of peace, the world must not allow Iran to have a nuclear weapon.”

Mark Regev, Olmert’s spokesman, tonight reacted to the Guardian’s story saying: “The need to prevent Iran from obtaining nuclear weapons is raised at every meeting between the prime minister and foreign leaders. Israel prefers a diplomatic solution to this issue but all options must remain on the table. Your unnamed European source attributed words to the prime minister that were not spoken in any working meeting with foreign guests”.

Three weeks after Bush’s red light, on June 2, Israel mounted a massive air exercise covering several hundred miles in the eastern Mediterranean. It involved dozens of warplanes, including F-15s, F-16s and aerial refueling tankers.

The size and scope of the exercise ensured that the US and other nations in the region saw it, said a US official, who estimated the distance was about the same as from Israel to Natanz.

A few days later, Israel’s deputy prime minister, Shaul Mofaz, told the paper Yediot Ahronot: “If Iran continues its programme to develop nuclear weapons, we will attack it. The window of opportunity has closed. The sanctions are not effective. There will be no alternative but to attack Iran in order to stop the Iranian nuclear programme.”

The exercise and Mofaz’s comments may have been designed to boost the Israeli government and military’s own morale as well, perhaps, to persuade Bush to reconsider his veto. Last week Mofaz narrowly lost a primary within the ruling Kadima party to become Israel’s next prime minister. Tzipi Livni, who won the contest, takes a less hawkish position.

The US announced two weeks ago that it would sell Israel 1,000 bunker-busting bombs. The move was interpreted by some analysts as a consolation prize for Israel after Bush told Olmert of his opposition to an attack on Iran. But it could also enhance Israel’s attack options in case the next US president revives the military option.

The guided bomb unit-39 (GBU-39) has a penetration capacity equivalent to a one-tonne bomb. Israel already has some bunker-busters.

Iran nuclear map Map showing nuclear activity in Iran

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Retired Soldier Now In Fight Against War in Iraq

September 25, 2008

Published on Wednesday, September 24, 2008 by The Virginia Pilot

by Bill Sizemore

NORFOLK – For Ann Wright, it’s a badge of honor that Fox News host Bill O’Reilly once cut off her microphone midinterview.

[Retired Col. Ann Wright was one of three U.S. diplomats to resign in protest over the American invasion of Iraq in 2003.]Retired Col. Ann Wright was one of three U.S. diplomats to resign in protest over the American invasion of Iraq in 2003.

“He was questioning my patriotism,” Wright said in an interview this week. “All I had said was that the United States needed to follow the Geneva Conventions in its treatment of prisoners. I said, ‘Bill, I was in the military 29 years and I was a diplomat for 16 years. What have you done for the country?’ “Presumably Wright, 61, won’t have to worry about being cut off when she speaks tonight at the Naro Expanded Cinema about her unlikely odyssey from soldier to diplomat to full-time anti-war activist.

By her own description, hers was a “squeaky clean” life story. She grew up in Bentonville, Ark., where she was a Girl Scout and her father was a banker who gave Sam Walton a loan that helped launch the Wal-Mart empire.

After retiring from the Army as a colonel, she joined the State Department and served in a variety of overseas posts, including reopening the U.S. Embassy in Kabul, Afghanistan, after the 2001 terrorist attacks.

Over the decades, she said, she had often disagreed privately with U.S. policy but kept her mouth shut, believing she could serve best within the system.

“But it all changed when President Bush decided that he would invade and occupy an oil-rich Arab Muslim country that had not attacked the United States,” she said. “It was such a dangerous move for the United States that I felt I could not be a part of it.”

Wright was one of three U.S. diplomats to resign in protest over the American invasion of Iraq in 2003.

Since then she has been arrested 15 times for raising her voice in a public and indelicate manner. Once, after lecturing the Senate Foreign Relations Committee from the gallery, she was sentenced to three days in jail.

Wright has co-written a book, “Dissent: Voices of Conscience,” a collection of profiles of men and women in government who have publicly criticized the Bush administration’s foreign policy.

Appearing with Wright tonight will be Jonathan Hutto, a sailor and co-founder of Appeal for Redress, an organization that encourages active-duty personnel who are against the war in Iraq to speak out.

© 2008 The Virginia Pilot

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