Archive for December 15, 2008

Source:  F. William Engdahl ~ BlackListed News

The Federal Reserve has bluntly refused a request by a major US financial news service to disclose the recipients of more than $2 trillion of emergency loans from US taxpayers and to reveal the assets the central bank is accepting as collateral. Their lawyers resorted to the bizarre argument that they did so to protect ‘trade secrets.’ Is the secret that the US financial system is de facto bankrupt? The latest Fed move is further indication of the degree of panic and lack of clear strategy within the highest ranks of the US financial institutions. Unprecedented Federal Reserve expansion of the Monetary Base in recent weeks sets the stage for a future Weimar-style hyperinflation perhaps before 2010.

On November 7 Bloomberg filed suit under the US Freedom of Information Act (FOIA) requesting details about the terms of eleven new Federal Reserve lending programs created during the deepening financial crisis.

The Fed responded on December 8 claiming it’s allowed to withhold internal memos as well as information about ‘trade secrets’ and ‘commercial information.’ The central bank did confirm that a records search found 231 pages of documents pertaining to the requests.

The Bernanke Fed in recent weeks has stepped in to take a role that was the original purpose of the Treasury’s $700 billion Troubled Asset Relief Program (TARP). The difference between a Fed bailout of troubled financial institutions and a Treasury bailout is that central bank loans do not have the oversight safeguards that Congress imposed upon the TARP. Perhaps those are the ‘trade secrets the hapless Fed Chairman,Ben Bernanke, is so jealously guarding from the public.

Coming hyperinflation?

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One of the best opinion pieces on the economy I have read lately, by far.

Detroit’s Auto da Fé

Source: Nicholas Von Hoffman ~ The Nation

As our long national economic nightmare unfolds, each day is crazier than the one before. Senate Republicans, seemingly against limits on CEO compensation, now demand that GM and Chrysler factory hands take a pay cut. The Bush White House, gone soft and fuzzy on us in its last weeks of power, is arranging for the money to keep the auto industry going until the new Congress can work its will.

You can sympathize with the Democrats’ near-heroic efforts to prop up the Big Two-and-a-Half. Anything to keep people working. Who doesn’t know someone who has lost his or her job? You don’t have to read the blogs or watch TV news to be frightened at the number of people being thrown out of work.

 Right now, in percentage terms, we are probably approaching half of the number of unemployed in the depths of the Depression. In absolute numbers, we have 10 million out of work, plus another 10 million who are either not counted or are working part-time, because that’s all they can get. Republicans take note: they are not all Democrats.

Under these circumstances, Congressional Republicans are nuts to vote against the car bill on grounds that production line workers make too much money. If their motive is to break the auto workers union, they are wasting their time. The union is already busted; no Congressional coercion is needed to have it go along with another round of wage cuts.

The Republicans are right in one regard. The bailout legislation is a mess. It is a walking invitation for litigation brought on by the automobile companies’ bond holders. The legislation’s requirement that the companies come back by March reorganized for profitability is, car czar or no car czar, impractical dreaming.

The employment situation is so grievous that one can defend just giving the companies $14 billion as long as they promise not to lay people off for the next few months. That would leave us with thousands of employees with nothing to do, since there is no market for cars. The workers would be kept on the payroll oiling idle machines and wiping the floors, but the car manufacturers’ suppliers would not be getting business nor would the car dealerships be helped. Yet, futile as the car bill is, killing it would demoralize the nation.

We are in a terrible fix. We have had enough experience with multi-billion dollar rescues the last five or six months to understand that they are extremely hard to pull off. Vast, unaccounted-for sums have done little more than keep huge, dysfunctional financial organizations on life support. Trillions of dollars have been committed to unnamed corporations for vague purposes with undetermined public benefits.

If an auto company bailout postpones the trauma of seeing an entire industry and its jobs vanish, it may be worth spending the money.

Our ventures into corporate rescue show that putting money into an enterprise without taking into account the situation in which the company must operate guarantees failure. The 1979 Chrysler rescue by a government loan guarantee worked, but conditions today bear no resemblance to those of twenty-nine years ago.

The Big Two and a Half cannot be nursed back to health without something resembling a national transportation plan, but you can hear the uproar in Congress at the very mention of it. For 200 years we have gotten by without foresight by virtue of pluck and luck. But it seems we have run out of both.

Bush’s surprise trip to Iraq offered him more surprise than expected. During a  press conference with Iraqi Prime Minister Nouri al-Maliki, an angery Iraqi television journalist Muntadar al-Zaidi  stood up and shouted “this is a goodbye kiss from the Iraqi people, dog,” as the first shoe hurled toward Bush then with his second shoe, which the president also managed to dodge, Mr Zaidi said: “This is for the widows and orphans and all those killed in Iraq.” Iraqi Prime Minister Nouri al-Maliki never changed expressions. Al-Baghdadiya’s bureau chief reportedly told the Associated Press that he had no idea what prompted Mr Zaidi to attack President Bush, although reports say he was once kidnapped by a militia and beaten up. 
Will this event represent a policy change in Iraq, a little “shoe and awe” if you will or is Bush just being shooed away days before he leaves office?

All jokes aside when you consider how our invasion has affected the people of Iraq and the recent bi-partisan report detailing our use of torture released by the Senate Armed Services Committee Chairman Carl Levin (D-Mich.) and Ranking Member John McCain (R-Ariz.). A shoe being thrown at Bush is the least of his worries. The report contained an executive summary and conclusions of the Committee’s report of its inquiry into the treatment of detainees in U.S. custody. In part;

A major focus of the Committee’s investigation was the influence of Survival Evasion Resistance and Escape (SERE) training techniques on the interrogation of detainees in U.S. custody. SERE training is designed to teach our soldiers how to resist interrogation by enemies that refuse to follow the Geneva Conventions and international law. During SERE training, U.S. troops — in a controlled environment with great protections and caution — are exposed to harsh techniques such as stress positions, forced nudity, use of fear, sleep deprivation, and until recently, the waterboard. The SERE techniques were never intended to be used against detainees in U.S. custody. The Committee’s investigation found, however, that senior officials in the U.S. government decided to use some of these harsh techniques against detainees based on deeply flawed interpretations of U.S. and international law.

The Committee concluded that the authorization of aggressive interrogation techniques by senior officials was both a direct cause of detainee abuse and conveyed the message that it was okay to mistreat and degrade detainees in U.S. custody.

Chairman Levin also said: “The abuses at Abu Ghraib, GTMO and elsewhere cannot be chalked up to the actions of a few bad apples. Attempts by senior officials to pass the buck to low ranking soldiers while avoiding any responsibility for abuses are unconscionable. The message from top officials was clear; it was acceptable to use degrading and abusive techniques against detainees. Our investigation is an effort to set the record straight on this chapter in our history that has so damaged both America’s standing and our security. America needs to own up to its mistakes so that we can rebuild some of the good will that we have lost.”

In the course of its more than 18-month long investigation, the Committee reviewed hundreds of thousands of documents and conducted extensive interviews with more than 70 individuals.

Bush is so concerned about his legacy, I believe that can be  summed up with two words “War Criminal“.

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