AN OBAMA SCANDALS LIST 301-
NOTA: AQUI NO SE INCLUYEN LOS ULTIMOS ESCANDALOS EMBARAZOSOS INCURRIDOS POR LA PRESENTE ADMINISTRACION
Thursday, November 17, 2011
301. According to a November 15, 2011 report of the Transactional Records Access Clearinghouse (TRAC) at Syracuse University, the Obama Administration is on track to file 1,365 prosecutions for financial fraud. This is the lowest number in 20 years. It is especially egregious coming as it does after the biggest financial frauds in history leading to the 2007 housing bust and the 2008 meltdown, and the lack of any real change in banker behavior since those events.
302. On October 31, 2011, the Obama Administration stopped its funding to UNESCO, the UN’s main cultural institution, after this organization admitted Palestine as a member. In response, UNESCO announced that it would have to suspend its programs to the end of the year.
303. An August 11, 2011 survey showed that 42% of Americans are living paycheck to paycheck. The data are a slight improvement over the 2010 results but remain at levels seen at the height of the recession which began in December 2007. Even 14% of Americans with six figure salaries belong to this group.
304. On August 11, 2011, the US Postal Service (USPS) proposed cutting its workforce by 120,000 and reneging on healthcare and retirement plans for its workers. The reason for this was a 2006 Bush-era law that required the Post Office to prefund its healthcare benefits for the next 75 years and come up with the money to do so over the next 10 years. As a result, it is running spuriously inflated deficits. With this funding mandate, the Post Office lost $20 billion over the last four years. Without it, the USPS made a profit of $700 million. No other agency in government funds its benefits this way. What is really going on here is an attack on public sector employees by creating a fake budget shortfall. And although the Obama Administration has been in office 3 years, it did nothing to stop this from happening.
Sunday, November 7, 2010
201. Per a November 4, 2010 WSJ story, the Agriculture Department reported that 42,389, 619 persons received food stamps in August 2010 or approximately one in seven Americans. About half of these were children. The average (SNAP-$) for the first 11 months of FY 2010 (the September data were not yet in) was 40,064,441. By contrast, the average (Table 2) in FY 2000 was 16.701 million. In FY 2005, it was 24.571 million. While it is true that the number of participants in this program has increased more rapidly since the beginning of the recession in December 2007, it increased at a significant rate throughout the Bush years. It is not just the recent terrible economy but the incredible wealth inequality in the country which are at the root of these increases, the effects of which Obama and the Democrats have only accentuated.
202. On November 9, 2010, the DOJ announced John Durham, who was appointed a special prosecutor by Bush Attorney General Michael Mukasey in January 2008 to investigate the CIA destruction of torture tapes, including those of Abu Zubaydah and Abd al-Nashiri, would not, more than 2 1/2 years on, be charging anyone with anything. This lets Jose Rodriquez, the CIA’s then head of clandestine operations, who orchestrated their destruction off the hook. It is a Bush-Obama tag team win on a cover up and whitewash. The Bush Administration selected a tame prosecutor and after a suitably long and dilatory non-investigation, the Obama Adminstration signs off on the pre-ordained non-result. The Obama DOJ has also tasked Durham with investigating torture outside prescribed limits (item 72). In Washington, there is an unofficial but well established governmental system for these fake exercises in accountability: tame prosecutors, inspectors general, agency counsels, the OLC, and éminences grises. Even in the face of the most blatant instances of wrongdoing and criminality, they invariably find nothing to prosecute, nothing to pursue, at worst nothing more than mistakes were made. It is not a system of accountability but rather unaccountability, and it is one Obama very much supports.
203. On November 10, 2010, the co-chairs of Obama’s Cat Food Commission (item 136), Alan Simpson and Erskine Bowles, specifically chosen for their corporatist outlook and hatred for Social Security and Medicare released their own draft proposals to the rest of the Commission. Call it a pre-emptive strike.
What they came up with, as expected, was an ideologically based series of proposals divorced from any understanding of either economics or the purpose of government. In brief, they propose to cut Social Security and Medicare benefits to fund tax cuts for corporations and the rich. There is not an inkling of comprehension that in a deflationary period, that is with no inflation on the horizon, with high unemployment, and low capacity utilization, government deficits and debt are not the problem but the solution. The spending they represent creates, or would create if so much of it was not siphoned off by our elites in unproductive looting, the demand that is lacking on the private side.
The federal government and its budget have, other than the name, exactly zero to do with a family and its budget. The US is sovereign in its currency, denominates its debts in that currency, and has complete and ultimate control over its debt. It is impossible for it ever to “go broke”. At worst, it can print enough money to cause inflation. But with the collapse of the housing market and the subsequent systemic financial meltdown, the problem we face is the opposite. It is deflation. Obama, the Democrats, the Republicans, and the Cat Food commission are fixated on the wrong problem. The problem is our failing economy, the extreme wealth inequality in the country, rampant criminality in the financial sector, and a thoroughly corrupt political system which sponsors stacked “bipartisan” commissions which propose solutions which look like nothing more than excuses to further impoverish most Americans and sanction the continued looting of the country by corporations and the rich.
To this end, the chairs of Obama’s Cat Food Commission propose cutting the top tax rate for the rich and corporations from the current Bush tax cut level of 35% to 23% for the rich and 26% for corporations (p. 24). While it also, much as Bush did, extends tax cuts across the board, because so much wealth is concentrated at the higher end, almost all the benefit will be concentrated there. This will only worsen the already great and untenable wealth gap. It is important to remember that the top 1% in the US own 1/3 of the country and the top 10% own 2/3 of it. The other 90% can not exist on the steadily decreasing fraction of what’s left. If you want to know why so many Americans are so deeply in debt, it is not because they were foolish spendthrifts. They were driven into debt by the massive transfers in wealth over the last 30 years from them to the rich via policies and laws which the rich controlled and wrote.
The Cat Food Commission also proposes (excluding “reforms” to Social Security) to reduce the federal deficit from its current level of $1.3 trillion to $400 billion by 2015 and realize $3.8 trillion in savings by 2020 (p.11). Even in the best of times, economic projections are worthless beyond one to two years, and these are not the best of times. The 10 year projection is a Washington tradition. It is a political prop, but in terms of real economics it is meaningless. There are simply too many externalities that either aren’t known or aren’t factored in. It is political wishful thinking parading as science.
Yet all the many cuts enviseaged by the chairs would not even begin until 2012 and even then cuts would amount to only $69 billion the first year. This is like yelling “Fire!” and then finishing your book before going to put it out. They say the delay is necessary because the economy is weak. If this is so, a strengthening economy would make both their efforts and their urgency even less justifiable. Indeed if you look at their numbers, they assume that the deficit will decrease by $400 billion (from FY 2010’s $1.291 trillion) by 2012 on its own. It would seem rather that this is a ploy to make their program easier to sell. But why should one Congress, and a very lame duck one at that, with no skin in the game be allowed to tie the hands of future Congresses? And their hands would be tied. The Commission chairs want to make it as difficult as possible to get off this merry-go-round once it is started by requiring a 60 vote threshold in the Senate to exceed any of its prescribed spending caps. But what if their projections are wrong and there is another major downturn, what then? With the Bowles-Simpson proposals in effect, the government would be hamstrung in its response. All the chairs will have done is increase the likelihood of depression.
The proposals are presented in a telling way. Discretionary spending precedes mandatory outlays. Defense cuts are mentioned before civilian ones. Social Security is left to the end. It looks rather like an attempt to appear reasonable without actually being so. The individual suggestions are numerous and I will list those that most drew my attention.
Beginning with discretionary spending:
For the military:
The big item is the $28 billion in overhead cuts already proposed by Defense Secretary Gates who was engaged in pre-emptive strike of his own. It is not clear how many of these were real. Cutting future spending is different from cutting current spending. The second is real. The first is anybody’s guess.
Then there is $14.5 billion that comes from freezing everyone’s pay at the Pentagon not actually in combat. Reducing by 1/3 military bases abroad ($8.5 billion). While likely to be popular with both the left and some libertarian conservatives, it is all about which ones. Further replacement of military by contractors ($5.4 billion) because that has worked out so well up to now. And my favorite dumping dependents of military personnel into local public schools ($1.1 billion). I’m sure cash-strapped states will just love that.
The dog that didn’t bark in military spending is, of course, funding for the wars.
On the domestic side:
The big cut is a 10% reduction in the federal workforce ($13.2 billion) via 2 replacement hires for every 3 positions that become vacant. I wonder how that would work exactly. Would we only replace some of the numerous vacancies in the federal judiciary? Cut back on our food inspectors? The National Institutes of Health? The FDIC? The Justice Department? This sounds nice and simple but when you actually start thinking about it there are many departments in government that do things Americans want done that need more people not fewer.
Another 3 year pay freeze ($15.1 billion). Cut 250,000 augmentee contractors ($18.4 billion). These are apparently add-on positions. I am not sure who or what is being targeted here. A Cut and Invest Committee ($11 billion). This seems unConstitutional on its face. It would be a committee that could authorize and de-authorize programs on its own. Eliminate all earmarks ($16 billion). What is interesting about this is the commission’s admission that all earmarks which account for so much political posturing are actually a tiny part of overall government spending.
The tax code:
The rate reductions mentioned above. Elimination of essentially all tax exemptions ($1.1 trillion). Eliminate the AMT, Pease, and PEP. The recommendations tend to go arcane at times. This is probably intentional obfuscation. All 3 of these are aimed at wealthy Americans. The Alternate Minimum Tax we all know has problems with bracket creep that has made it applicable to more middle class Americans. It has needed fixing for years but the Congress has done nothing but a series of temporary patches. The Pease Act reduces high income exemptions for charity and mortgage interest payments. The PEP as its full name implies phases out the personal exemption for high income individuals. The personal deduction would be increased to $15,000 for individuals but this would be offset, in whole or in part, by eliminating the deduction for state and local taxes.
The mortgage deduction would be eliminated for jumbos (over $500,000), second residences and HELOCs (Home Equity Loans). The first of these would affect the rich but also many middle class homeowners in high cost urban areas (Washington, LA, San Francisco, etc.). The second is more directed to speculators and has a point. The problem with the HELOCs is that there are a lot of them out there. People were encouraged to take them out by banks on the upside of the bubble when house values were increasing sharply. Post-bust, this could decimate not only those already underwater but many who are still managing to keep up. Nor can I see banks welcoming the exposure of how overvalued all of the HELOCs they are holding really are. There is also a cap for exclusion on high end healthcare plans. The exact amounts are not given.
Reduce the corporate tax rate, as mentioned above, to 26%. The research tax credit would be made permanent. The draft recommendations also include eliminating (or modifying in unspecified ways) the domestic production deduction which gives small businesses a 9% tax cut for keeping manufacturing and related activities in the US. This more than anything should signal where the chairs stand on outsourcing. Oil and gas industry deductions, a sop for average Americans but still a good idea. And changes to depreciation, which depends on what and how it is done. Many corporations pay little or no federal taxes. So there is a vague call for international tax reform to repatriate those funds. Good luck with that. Countries that benefit from this arrangement are unlikely to sign off on its demise.
A 15 cent increase in the gas tax. This is a highly regressive tax and is being made at a time when gas prices are high due to a run up in commodities’ prices by Wall Street speculators. Government wide use of the Chained Consumer Price Index. This would have the effect of lowering COLAs (Cost of Living Adjustments). You can look at it as a precursor to what the proposals want to do to Social Security.
Cut fees to doctors, cap tort awards (always a favorite to rail against the lawyers), deductibles for everyone in a Medigap plan, get rebates for drugs in Medicare Part D (a small but real move to allowing Medicare to use its market share to negotiate drug prices)
But then there is just the blank demand for an extra $200 billion in cuts to federal health spending, i.e. Medicare.
Then there are the “illustrative” cuts (p.35). Most of these are fairly noxious. Cuts to medical education, dumping anyone who qualifies for Medicaid into Medicaid, even if they also qualify for another program, and price hikes for government and military retirees.
Miltary and government pensions are targeted for big hits:
Increase contributions from federal workers to 1/2 of total. Cut COLAs. Defer collection of military pensions until age 60.
Have loans to students accrue interest even while they are still in school. As if student loans aren’t crippling enough as they are.
Auction more of the radio spectrum, because corporate use should always trump public good.
Have the Power Marketing Administation charge market-based rates; the TVA to charge transmission fees, because if private companies can gouge the consumer why can’t the federal government
Fees in general to be indexed to inflation
And finally Social Security:
The chairs propose a minimum benefit to sweeten the toxic suggestions which follow.
A gradual partial removal of the income cap over the next 40 years; a gradual increase in the retirement age.
These two are supposed to offset each other politically. But the income cap could be taken off now with no increase in the retirement age needed. The Chained-CPI to reduce the COLA. Expand the base by including state and local workers in Social Security after 2020. Again unnecessary if the income cap is removed now.
There is also a vague, bizarre plan to allow retirees to collect half their benefits early. This sounds like someone’s pet project, or possibly a backdoor privatization scheme. The rationale for it is completely missing.
In response to criticisms that increasing the retirement age disproportionately affected those at the low end in physically demanding jobs, especially women, there is an unspecified call for an early retirement plan to cover them.
The dog that didn’t bark here is the government’s repayment of trillions of dollars of Social Security surpluses which politicians not only spent but used to make the federal deficit look smaller than it actually was. This should have been discussed both in discretionary and mandatory spending. While the pay backs would fall under mandatory spending, in the absence of higher taxes or increased borrowing (rather the opposite of what the commission was ostensibly created for), they would have to come out of the discretionary budget. Alternately, if it is the intention of the chairs never to pay that money back, then that too is very newsworthy.
These then are the recommendations of the Cat Food commission chairs. In general, they are pro-business and pro-rich. They propose for most Americans less and more expensive government, regressive taxes, higher fees, and fewer benefits. All the while they ignore the perilous state of the economy and most Americans which these recommendations will place at greater risk. They ignore yet a third dog that did not bark (the first two being the funding of the wars and the repayment of the Social Security surpluses), and that is the massive bailouts to Wall Street. When the next crisis hits, what will these pro-business, pro-rich types do then? Wall Street will be bailed out again. They may bitch and moan about it. They may let the Fed do it, but it will happen. Yet no mention of this occurs in their proposals. They tell us the money is not there. Yet when it comes to their tax cuts for the rich, their wars, and their bailouts, the money is always there for these. It is only when it is the needs and concerns of ordinary Americans which are at stake that the money suddenly disappears, when belts must be tightened, when we are told we must live within our means. Caviar for them, catfood for us. Those who created and populate this commission, the wealthy and powerful whom it represents see no difference between their interests and the interests of the country. This is how they justify to themselves the need to screw the rest of us over. They must have what they have and so the rest of us must sacrifice so that this can remain so. “Accept less so that we can continue to have more.” That is the only real proposal this commission is making.
On November 29, 2010, getting out ahead of the Cat Food commission reporting deadline of December 1, Obama proposed a two year pay freeze for government workers, excluding the uniformed military. Simpson and Bowles had proposed a 3 year freeze but theirs would begin in 2012. On December 1, 2010, Bowles and Simpson released their final report. It was very similar to their intial proposal outlined above with the exception of consideration of a payroll tax holiday in 2011 (an idea borrowed from the Domenici-Rivlin panel, p. 43). The chairmen also delayed a vote on their report until December 3. As Dean Baker notes, the commission’s mandate ends on December 1 rendering the report and the delayed vote on it invalid. It says a lot about this commission, and the arrogance behind it, that while demanding vast sacrifices from the rest of us it can’t even follow its own rules and meet its own deadlines.
On December 3, 2010, Obama’s Cat Food commission adjourned without taking an official, albeit still invalid, vote on the Bowles-Simpson recommendations. Informally, the vote standing was 11-7 with 14 needed to bring them up in Congress, hence the lack of an official vote. Dick Durbin (D-IL) cemented his faux liberal credentials by supporting the recommendations. I would love to say that this awful idea was dead once and for all, but Senate Majority Leader Harry Reid (D-NV) has promised to try bring up the Bowles-Simpson proposals in the next Congress. This gives a good picture of how conservative the Democratic party has become. Its leaders are willing to fight for, and keep fighting for, a deeply conservative fiscal agenda, something they would never do if this was a liberal or progressive proposal.
204. A November 14, 2010 NYT story reports that the Obama Administration just traded $3 billion in military aid to Israel, including 20 advanced F-35 fighters, and a pledge that the US would oppose any effort for international recognition of a Palestinian state without Israeli consent, all this, for a 90 day settlement freeze, in this round of doomed Middle East peace talks. I suppose one could argue that this is all kabuki, that the Obama Administration would have given the military aid and guarantees to Israel anyway and that the 3 month settlement freeze will in no way impede Israel’s ongoing colonization of the West Bank and East Jerusalem. Still it has every appearance of Obama giving away the store in exchange for, well really, nothing. Despite all the talk about budget deficits, about the need to cut Social Security and Medicare for most Americans, these concerns do not apply where Israel is involved.
On December 7, 2010, it was reported that this deal fell through because the Israelis refused to stop building settlements for even 90 days. This should demonstrate to our government how extreme and intransigent the Israelis have become, but it probably won’t. As for the Israelis, as I said above, they will likely get most of this stuff anyway so really why would they make even minimal, temporary concessions?
205. Showing that uninspired, supine leadership is a feature, not a bug, and that Democrats learned nothing from their recent pounding in the mid-term elections, on November 16, 2010 the Senate Democratic Caucus re-elected Harry Reid (D-NV) to its leadership position. Reid’s weak, weasely style, his incessant caves to Republicans, and his failure to translate a huge Democratic majority into much of anything legislatively were instrumental in slashing the Democratic majority in the Senate. What we will see is not a fresh perspective but more of the same old corporatist kowtowing. As in everything else, the Democrats continue to double down on a right wing agenda fundamentally at odds with its party’s own rank and file, and the needs of the country. As I said, this is not a mistake. It’s the plan.
In keeping with no change in direction, on November 17, 2010, Nancy Pelosi (D-CA) was elected 150-43 as House minority leader for the new Congress.
206. Some things never change. Conservative Christian proselytizing at the US Air Force Academy (USAFA) has been a scandal for years. A November 16, 2010 story relates how the academy will be sponsoring a Religious Respect conference. Notably univited to this affair is the Military Religious Freedom Foundation (MRFF), the major watchdog group on religious freedom in the military which grew up out of abuses at the Air Force Academy. The tolerance of conservative religious proselytizing can be seen in the fact that while expressly forbidden by the military code, it is not only prevalent at the USAFA but no service member has ever been punished for it there or anywhere else in the military. Also absent from the conference will be any Muslim representatives. A USAFA spokesman said that some had been invited but had decided not to attend. The spokesman could not identify any Muslim group which had been invited. This is precisely the kind of problem Obama and the Democrats could have and should have rooted out, but instead it has allowed it to fester. It is a manifestation of an inability, and unwillingness, to fix any problem at any level.
207. Even in these corrupt times, the government can’t seize your laptop and cell phone without probable cause and a warrant, except if you happen to be coming back into the country. Then they can not only seize but keep your electronics indefinitely. This came out in a November 9, 2010 post by Glenn Greenwald on harassment of Americans associated with Wikileaks or who had visited Bradley Manning, the alleged leaker of military documents on Iraq and Afghanistan. It is important to realize that those harassed by the TSA have done nothing illegal and are suspected having done nothing illegal. Their crime is much worse. They are associated with those who have embarrassed the US government and exposed its lies and misdeeds. The TSA reaction is completely understandable. It is exactly what you would expect in a banana republic.
208. The TSA is an agency out of control. This should really come as no surprise. It is part of the Department of Homeland Security, hands down the most incompetently run department in government. It is now on a binge to install expensive full body scanners and is giving airline passengers the choice between being zapped by the detector’s radiation and electronically stripped naked or having their genitals groped by TSA employees.
The blatant idiocy of the TSA was made clear to the whole country when on November 13, 2010, John Tyner famously told a TSA screener in San Diego. “If you touch my junk [gentials], I’ll have you arrested.” Tyner, who used his cell phone camera to record the incident and then posted it to web where it went viral, had been in line to pass through a metal detector when he was pulled out because the line for the full body scanner happened to be empty. Tyner declined. Screeners then told him it was either that or an invasive pat down. The following telling exchange took place:
Tyner told the agent, “I don’t understand how a sexual assault can be made a condition of my flying.” When the agent replied that a pat-down was not considered a sexual assault, Tyner said, “It would be if you were not the government.” The TSA supervisor told him, “By buying your ticket you gave up a lot of rights.”
A police state run by clowns. Most of what happens at airports is security theater. It doesn’t actually make travellers safer. It is only supposed to give them the impression that they are.
This is illustrated by the latest airplane bomb scare which happened back on October 29, 2010 and involved an attempt to send explosives in print toner ink cartridges. Two bombs were discovered on cargo flights with the bomb material originating in Yemen. It is important to remember that most passenger flights also carry cargo. Indeed this has been known since 9/11 or for more than 9 years, but airlines have successively stymied efforts to increase inspections because this would crimp profits in what has been for them a very lucrative market.
Feeling up or zapping John Tyner would have had no effect in these bomb plots. But his unplanned odyssey wasn’t over. Eventually, the screeners told him that if he didn’t wish either of these, the metal detector for reasons unknown having been taken out of the mix, they would take him to the airline counter for a refund and escort him out. This is what Tyner chose to do but on his way out he was intercepted by a plainclothes person who told him he could not leave the airport without completing his screening or he would face prosecution and a civil fine (of up to $11,000). Tyner left and the Kafka-loving folks at the TSA subsequently did indeed announce they were “investigating” him with a view to prosecute.
Why would anyone choose to fly under such conditions? Buying an airline ticket is now synonymous with signing away all your Constitutional rights, who knew? And the TSA is so grossly mismanaged and incompetent it is not like this blanket abrogation of yours rights even makes you safer. Where are Obama and the Democrats on all this? As usual, out to lunch.
In a December interview in the Atlantic, TSA head John Pistole stated, “it’s up to me to say, OK, does that exceed what I think is appropriate in terms of privacy.” As emptywheel noted on December 9, 2010, Pistole is wrong. The Privacy and Civil Liberties Oversight Board (PCLOB) was supposed to oversee such matters, but Obama let the board go vacant and has not even nominated any replacements. In such a case, the Department of Homeland Security is tasked with performing written assessments of such procedures. This too has not been done. In this abdication of oversight by the Obama Administration, a loose cannon like John Pistole is left calling the shots. One of his most recent, as reported by Rawstory on December 1, 2010, was to advise screeners to tell children that pat downs were a game. Child abuse experts warned that this groomed them for child molesters.
209. On November 28, 2010, papers to whom wikileaks had transmitted its third dump of US documents began releasing their stories on them. wikileaks itself came under a denial of service attack delaying its own release of the diplomatic materials. It is important to note that while wikileaks has over 250,000 State Department cables. It has only released those published by the newspapers it has partnered with and has kept the redactions they have made, initially this means that only about 1,000 have actually been posted. Most of these concerned Iran, Pakistan, and the Gulf, but they covered other topics as well. Of these others, one of the most interesting is a July 24, 2009 legal and constitutional analysis of the coup which removed Manuel Zelaya as President of Honduras on June 28, 2009. Listing the rationales of the coup plotters, the US embassy in Honduras concluded:
In our view, none of the above arguments has any substantive validity under the Honduran constitution. Some are outright false. Others are mere supposition or ex-post rationalizations of a patently illegal act.
Despite this assessment of the US embassy based on Honduran legal and constitutional experts, the Obama’s reaction to the coup was tepid, with its inaction ensuring the coup’s success.
210. One of the directives which made up the wikileaks November 28, 2010 dump came from Secretary of State Hillary Clinton. In it, she went beyond a general information gathering request for business card data and ordered American diplomats to seek out biometric information (fingerprints, DNA), password and encryption codes, credit card data, even information about foreign diplomats’ frequent flyer miles. Specifically targeted for this spying were UN Secretary General Ban Ki-Moon, the delegations of the permanent members of the Security Council, and more broadly the Group of 77 comprised of developing nations. Information on the UN’s communications’ infrastructure was also sought. Clinton justifed these activities by saying that most American intelligence is collected by the State Department. Clinton’s hamfisted rationalization and the intrusiveness of her requests make it easy to characterize all US diplomatic personnel as spies. Information is an important objective for the State Department, but when it mixes in encryption codes and DNA samples it crosses the line into espionage. In doing so, it not only compromises its mission but endangers its personnel, not to mention all Americans working and living abroad.
211. A November 28, 2010 NYT editorial laid bare a scheme by the Fed to protect banks from the consequences of widespread deceptive and fraudulent behavior. The 1968 Truth in Lending Act (TILA) granted to borrowers the right of rescission for three years in home equity (HELOC) and mortgage loans if the bank failed to provide “material disclosures”. What this means is that in these loans a person’s house is used as collateral for the loan. This is the bank’s security interest. But if the bank should lie, as has been commonly seen, about the interest rate for the loan or charge hidden or bogus fees, it loses through rescission its security interest. The homeowner is still on the hook for the principal, but the bank through its misdeeds has lost the right to foreclose. The practical effect of this arrangement is to force the bank to refinance the HELOC or mortgage on better terms to the homeowner, either by reducing the rate or principal, or both.
Enter the Fed which is run both by and for the banks. As announced on August 16, 2010 and published in the Federal Register on September 24, 2010, it offered the proposed rule change to TILA (buried deep in a much longer document) which covers for the banks’ pervasive bad, and usually fraudulent, practices, indeed exacts no penalty for them by eliminating rescission and doing away with any incentive for refinancing.
Rescission process in a court proceeding. The Board proposes to use its adjustment authority to ensure a clearer and more equitable process for resolving rescission claims raised in court proceedings. The sequence of rescission procedures set forth in TILA and the current regulation would seem to require the creditor to release its security interest whether or not the consumer can tender the loan balance. The Board does not believe that Congress intended for the creditor to lose its status as a secured creditor if the consumer does not return the loan balance. Therefore, the proposal provides that when the parties are in a court proceeding, the creditor is not required to release its security interest until the consumer tenders the principal balance less interest and fees, and any damages and costs, as determined by the [[Page 58548]]court. The Board believes this adjustment would facilitate compliance with TILA.
Of course, this in no way complies with TILA as the weasel wording ” would seem to require the creditor to release its security interest” clearly shows. TILA requires the release. The Fed simply inserts an ambiguity where there is none in order to reverse the black-letter of the law. This rule change not only validates but incentivizes fraudulent conduct by the banks. Perhaps the people at the Fed should revisit the title of the bill. It is the Truth in Lending Act, not the No Truth in Lending Act.
Per a January 24, 2011, Huffington Post story the Fed has decided to shelve this idea since it became known and generated a lot of negative publicity.
212. Julius Genachowski, the head of the Federal Communications Commission (FCC) has been kicking around the idea of net neutrality for what seems like an age. The first thing Genachowski needed to do if he was serious about net neutrality was to re-assert the FCC’s regulatory authority over broadband, an authority which it had voluntarily given up. This he never did. On December 1, 2010, he finally was to announce his proposal for net neutrality. As it turns out, what he is putting forward is anything but net neutrality. It would allow internet providers to charge different rates for different levels of service. This tiered internet is antithetical to net neutrality. It would also apply to wireless which is the fastest growing segment of the internet. Finally, it would allow for the splitting up of the internet, that is providers could cordon off parts of it for “special use” customers. Genachowski says this would foster innovation. What it really would do is carve up the internet and stifle innovation.
The Genachowski proposal is about as bad as any of us could have predicted. We can always hope it will be voted down by the full commission. But this proposal again demonstrates just how in the pocket of corporations the Obama Administration is and how hostile it is to the interests of ordinary Americans. No such luck. On December 21, 2010, the FCC approved Genachowski’s proposals.
213. On November 28, 2010, as stories on the most recent batch of wikileaks were being published by the papers to whom wikileaks had forwarded them, wikileaks itself came another a denial of service attack. Our own government as well as several of our allies rank high on the list responsible for that attack. Again important to note that wikileaks broke no laws in posting this material. As a result of the attack, wikileaks moved its content to Amazon.com’s cloud. Besides selling books, and now almost everything else, Amazon also operates one of the largest internet clouds in existence. However, on December 1, 2010, in response to arm twisting by the conservative Senator Joseph Lieberman, chairman of the Homeland Security committee, Amazon yanked wikileaks from its servers. wikileaks then moved back to servers in Sweden. This episode demonstrated 3 things. First, the lengths that the authoritarian Lieberman working at the behest of the Obama Administration would go to censor First Amendment covered materials. Second, how quickly corporations are willing to work with the government against the interests of the American people. And third, how futile it is to try to censor material, especially legitimate material, on the internet. What the wikileaks document dumps have shown us is how often our government, under both Democrats and Republicans, lie to us, how often it seeks to hide these lies by massive abuse of the classification process and endless appeals to “national security”, and the complicit role of our media in not exposing these lies and over classification. Indeed across the board our traditional media have been as upset, or even more upset, by the leaks than by the lies, crimes, and incompetence they have brought to light. Instead they feed us the mutually contradictory lines that the leaks represent nothing new and that they represent a grave risk to our national security.
214. A wikileaks cable of April 17, 2009 shows that the Obama Administration successfully pressured the Spanish government into abandoning its support for a legal action mounted in March 2009 by a Spanish human rights group, Association for the Dignity of Spanish Prisoners, against 6 former Bush Administration officials for the construction of a legal framework which sanctioned torture. The six were Attorney General Alberto Gonzales; David Addington, chief of staff and legal adviser to the Vice President; William Haynes, Department of Defense General Counsel; Douglas Feith, Under Secretary of Defense for Policy; Jay Bybee, head of Justice’s Office of Legal Counsel (OLC); and John Yoo, author of the most notorious of the torture memos at the OLC. The group contended that Spanish courts had universal jurisdiction over crimes committed abroad against Spanish citizens and that since 5 Spanish citizens were being held at Guantanamo Spanish courts had jurisdiction over their mistreatment. Following the visits of two Republican Senators, Judd Gregg (R-NH) on April 13, 2009 and Mel Martinez (R-FLA) on April 15, 2009 accompanied by embassy officials, Spain’s Attorney General Cándido Conde-Pumpido announced his government would no longer support the legal action. (In the April 15, 2009 meeting, Martinez and the embassy Chargé d’Affaires “underscored that the prosecutions would not be understood or accepted in the U.S. and would have an enormous impact on the bilateral relationship,” nothing like threats to make your point)
This left the decision to proceed in the hands of the judge. But just a few months later in June 2009 the Spanish parliament restricted its definition of universal jurisdiction and the case was transferred from the original judge who favored proceeding with another judge who dutifully let the case languish. So not only will the Obama Administration not prosecute the perpetrators of Bush era criminality, it together with obviously interested Republicans will do everything it can to see no one else does either.
215. On December 3, 2010, Obama announced that the US and South Korea had come to an agreement on “free” trade.
I am very pleased that the United States and South Korea have reached agreement on a landmark trade deal that is expected to increase annual exports of American goods by up to $11 billion and support at least 70,000 American jobs.
Unsurprisingly, Obama does not include how many US jobs are likely to be lost. At a time of sky high domestic unemployment, this trade pact is an example of neoliberal ideology and corporate interest trumping the needs of the country. That sucking sound you hear are more US jobs going abroad. South Korea is a nation of 49 million whose economy is based on export. We on the other hand are the world’s largest importer. Guess who is going to win in this exchange. To add insult to injury, the primary US beneficiary from this trade agreement looks like it will be US banks. The economic shocks of the last few years have completely discredited the paradigm that we can trade services for goods, but that is exactly the thinking that underlies this agreement. It shows too that Obama is committed to an economic agenda that is at once both indifferent and hostile to ordinary Americans.
A July 1, 2010 estimate from the labor-oriented Economic Policy Institute (EPI) put job losses from a US-South Korea free trade pact at 159,000. The EPI noted that the US government has been notoriously wrong in its estimates of the effects of such deals. For instance, it maintained that China’s entry in 2001 into the WTO (World Trade Organization) would only increase our trade deficit by $1 billion a year and few to no US jobs would be loss. The 2009 trade deficit with China was $227 billion and millions of American jobs have been lost.
There was also a free trade deal ready for legislative action with Colombia and on April 18, 2011, the White House OK’ed a third one with Panama. As Ross Perot observed about NAFTA, that sucking sound you hear is more American jobs leaving the country.
On October 12, 2011, the Senate passed all three free trade agreements as follows Colombia 66-33; Panama 77-22; and Korea 83-15. On October 13, 2011, the House did as well: Colombia 262-167; Panama 300-129; and Korea 278-151. The Panama deal is a boon to rich American tax cheats. The Korean deal will kill American jobs, and the Colombian deal is for a country whose elites kill labor leaders.
216. The Obama White House response to the wikileaks releases has been to put it mildly excessive, even non-sensical. In a word, the Administration has gone bonkers. On December 3, 2010, the general counsel of the Office of Management and Budget (OMB), directed government departments and agencies and their contractors not to access wikileaks via the internet and provided them with a model memo to this effect. As a result, also on December 3, 2010, the Library of Congress blocked access to wikileaks from its staff computers and a wireless network for visitors. The Obama White House created the incredibly inane situation where the Library of Congress, the nation’s repository of information, doesn’t have information that is in the public domain at the fingertips of hundreds of millions. Similarly, the State Department ordered its employees not to access wikileaks. One defense contractor went so far as to block not only wikileaks’ URL but any news story containing the word “wikileaks”. Things got so silly and police state-ish that Columbia University warned its students that commenting and linking to the wikileaks docs could jeopardize future employment with the government.
The most recent wikileaks dump of State Department cables depicts a government that is secretive, arrogant, and routinely deceptive on even the most basic and public of issues. The Administration’s hamfisted reaction to the leaks just confirms this view. But more than this, it takes conspiracy theories that it is behind the cyber attacks on wikileaks and the smearing and criminal pursuit of Julian Assange out of tinfoil territory and makes them not only plausible but likely. The Obama Administration seems intent on proving that it is as out of control as the leaked cables suggest it is. Fear and incompetence will do that.
There are two issues here. The first is that all but a handful of these cables should never have been classified in the first place. Yes, many of them show our government lying and behaving stupidly. The cure for that is not to lie or act stupid. It is not to cover such behavior up. The second is that now that most of the world has this information, that is except for those countries like ours which are trying to censor and restrict access, there is no reason to continue the pretense that this material is “classified”. It just makes our government and its Kafka-esque attempts to cordon itself off from these exposures look even stupider. What makes this all even more bizarre and incongruous is that when Obama came to office he promised that transparency would be paramount. Now his Administration has been reduced to antics befitting a banana republic.
On December 4, 2010, reports surfaced that American troops in Iraq were getting messages that if they even tried to access stories on wikileaks they would be breaking the law. Even the Social Security Administration has warned its employees about accessing wikileaks. The inanity continues. Also on December 4, 2010, PayPal blocked wikileaks’ account. What is so disturbing about this aspect of the Obama Administration’s assault on wikileaks is the blurring, or even erasing, of the line between corporations and the government. They are acting as extensions of each other. Yet and this seems to be a point that is getting increasingly lost is that wikileaks has been charged with no crime related to the leaks. There have been rumbles that the 1917 Espionage Act might be used against Assange and wikileaks, but this law has never been used that way and would leave every reporter in Washington to whom classified material has been leaked susceptible to prosecution. But since those leaks were by Washington insiders, they won’t be. So we come down to selective prosecution of those whose true crime is not that they published classified material but that they were outsiders and embarassed the US government, or more particularly some of its politicians. And American corporations are abetting this punishment although it is a clear violation of 5th and 14th Amendment due process protections. Finally, our government is either conducting or sponsoring the denial of service attacks on wikileaks. Quite simply, cui bono? That is our government, not wikileaks is the one engaged in a criminal activity.
A December 5, 2010 New York Times story reports that 208 mirror sites for wikileaks have sprung up in response to attempts to block the site. wikileaks is currently using a Swiss URL but the Swiss government under US pressure is reviewing this. On December 6, 2010, the Swiss PostFinance closed an account for Julian Assange’s legal defense fund. Wikileaks is viewed as a threat to the privileges of elites around the world, and they are responding with a degree of solidarity and concern they have never shown toward any issue which affects the rest of us. The corporate attacks on wikileaks continue with Visa and Mastercard refusing to pass on donations to the organization. Meanwhile an arrest warrant for Assange was issued on December 6, 2010 and Assange surrendered to British authorities the next day on December 7, 2010. Again showing the solidarity of the political elites who hate to have their stupid, duplicity, and general incompetence aired in public, Assange was denied bail.
217. According to a December 6, 2010 CNBC story, the first run of new harder to counterfeit hundred dollar bills with Timothy Geithner’s name on them, representing more than 10% of US currency in circulation, a $110 billion’s worth, or more than a billion notes, has been indefinitely sequestered due to a printing flaw on an unknown number of the notes. A crease was found in many of them which when the ends of the notes are pulled apart exposes a blank white space. Because of their enhanced security features, the notes cost about 12 cents a piece to produce, about twice what other notes cost. Doing the math, this means the current flawed run cost around $132 million, and will cost millions more to sort out the bad notes. This kind of error should have been caught early and at multiple points in the process. There is just no justification for this kind of bungling. Still given all the other failures of our elites, and this Administration, I guess failing at a task as basic as printing the currency was to be expected.
218. During most of 2010, two issues kept coming up. The first was an extension of benefits for those unemployed between 26 and 99 weeks (item 148). The last extension of these died on December 1, 2010 due to Congressional inaction. The second was what to do about the Bush tax cuts which were set to expire at the end of the year. Things finally came to a head on both in the last days of the 2010 post-election lame duck session of Congress.
What is important to realize is both of these issues could have been dealt with anytime in the first two years of the Obama Presidency. The Republicans would have sought to end the unemployment insurance (UI) extensions and keep the tax cuts for the wealthiest Americans, but Obama and the Democrats could have made the extension of UI permanent to 99 weeks and ended the tax cuts for the wealthiest Americans either by using the reconciliation process or, more likely, enforcing the filibuster, –if they had wanted to. But Obama and the Democrats did not want to, and their conservatism, both in tactics and philosophy, is key to understanding what happened and the deal that was struck.
On November 18, 2010, the House failed to achieve the 2/3 vote necessary to suspend the rules and pass an extension of jobless benefits. The vote was 258-154. On December 4, 2010, an attempt to keep the Bush tax cuts for those making up to $250,000 a year was defeated at cloture 53-36 (60 votes needed). However, the Obama White House had undercut the action in the Senate by announcing on November 30, 2010 and again on December 2, 2010 that it was in talks with Republicans to extend the Bush tax cuts for the wealthy as part of a larger deal. On December 6, 2010, Obama announced that deal with Republicans.
1) an extension of the Bush tax cuts and an AMT (Alternate Minimum Tax) fix for 2 years at an estimated cost of $458 billion, with $75 billion of this the tax cut for the wealthy; retention of the 15% rate on capital gains
2) a reduction in the estate tax to 35% with the exemption raised to $5 million. This is estimated to cost $88 billion over 2 years and represents the lowest rate in 80 years.
3) an extension of unemployment benefits for 13 months backdated to December 1, 2010 for those unemployed 26-99 weeks. No help for the 99ers, those unemployed for more than 99 weeks. It is important to note that the recession began in December 2007 more than 150 weeks ago. Estimated cost: $56 billion.
4) a 2% reduction in the employee portion of the payroll tax from 6.2% to 4.2% for incomes up to $106,800. Estimated cost: $120 billion. Here it is important to note that commodity price inflation (gas, food, etc.) fueled by speculation financed by the Fed’s easy money policies will consume most of this. That is it will be turned into corporate profits and will go to investors, the overwhelming majority of whom are the wealthy. There is also the question of how this cut in the tax is to be paid for. It seems like the federal government will credit Social Security’s account, i.e. issue it IOUs much as it does for the Social Security surpluses it borrows.
5) Extension of low income tax credits. Estimated cost: $40 billion.
6) A miscellany of corporate tax cuts whose estimated cost is unknown
On the basis of these numbers this is a package that will probably come in around $800 billion. Just a few days ago, everyone in Washington was a deficit hawk. How quickly things change. Now this is being sold as a second stimulus. However, most of the package is about keeping things where they are. Your taxes won’t be cut. They just won’t be going up. The one exception is the payroll tax reduction but, as I said, most of that will be eaten up by inflation in basic commodities so your buying power really won’t increase.
Relatively speaking who are the winners? Taking an overall cost of $800 billion, about 12% of this is aimed at lower incomes and the unemployed. (numbers 3 and 5). The middle class gets about half (number 1), and the wealthy will end up with about 35% of the total (numbers 1, 2, 4, and 6).
On December 15, 2010, CNN revised its numbers estimating the cost of the package at $858 billion:
Extending the Bush tax cuts, including those for the rich: $207.5 billion
AMT fix: $137 billion
Social Security payroll rollback: $112 billion
Child tax credit: $91 billion
Estate tax reduction: $68 billion
Extension of jobless benefits: $57 billion
Extended investment tax rates (15% capital gains): $53 billion
Other individual tax cuts: $51 billion This would leave $81.5 billion for corporate tax breaks
These numbers tend to hide what the wealthy are likely to end up with but it looks like, taking into account commodity price inflation and the disproportionate ownership of stocks by the rich, the 35% figure mentioned above holds up.
There was immediate pushback against this deal by Congressional Democrats and some Republicans, but, as of this writing, it is unclear if this opposition is real or kabuki, that is artful whinging for the benefit of the rubes while making sure that the votes are there for passage. We will see.
It was, in fact, kabuki. On December 15, 2010, the Senate passed the Obama/Republican tax cut deal 81-19. The byzantine maneuvering it took to bring this bill up is reflected in its name: the vote was on a motion to Concur in the House Amdt. to the Senate Amdt. with Amdt. No. 4753 to H.R. 4853; Airport and Airway Extension Act of 2010, Part III. The lopsided vote and the way the bill came up are clear indications that for all their grumbling Democrats were seriously behind this deal. On December 16, 2010 literally a minute before midnight when few were there to see it, the House passed the tax cut package 277-148, (the rollcall lists it as the 17th). You can get an idea of how controlled the vote was in that the yeas were evenly split between Democrats (139) and Republicans (138). The benefits of the bill will go disproportionately to the rich and increase the already massive inequality of wealth in the country. Republicans went along for the ride but this was a plan engineered and executed by Obama and the Democrats.
219. A December 2, 2010 story in the Guardian based on one of the wikileaks’ State Department cable relates how employees of Dyncorp, a US contractor in Afghanistan training police in Kunduz, were buying drugs and paying for Afghan boys dressed as girls to dance for them, and maybe other things. The embassy helped hush up the affair, on the one hand, counseling the Afghan government on the best way to see the story downplayed in the American press, while at the same time assuring the Afghan government that the US government would better supervise contractors although it knew it had no power to do so. The story illustrates how disorganized, sloppy, and ineffective core programs, like training security forces, are, despite Obama Administration’s best efforts to tout “progress” in Afghanistan.
220. A December 9, 2010 New York Times story reports Obama’s EPA has decided to further delay already long delayed reduction in smog and toxic emissions from industrial boilers and incinerators, citing a need for further study. The invocation of further study on rules that are set to go is a standard Washington way for weakening and/or smothering them. The regulations on smog, including ozone and mercury emissions, have been delayed until July 2011 and other regulations on the boilers will be put on hold until April 2012. The inaction on global climate change, the silence on a concurrent global warming conference being held in Cancún, the response to the BP blowout in the Gulf, and now backtracking on pollution rules show that the environment is just not a priority for this Administration.
Under a court order which noted that the EPA had had 3 years to come up with regulations and denied the agency’s attempts at further delay, on February 23, 2011, the EPA announced significantly scaled back standards for boiler pollutants. Having labored mightily, it brought forth a mouse, further evidence that this Administration is both pro-business and anti-environment.
221. There are some events that are so predictable you could tell the time by them. Peter Orszag was Obama’s director of the Office of Management and Budget (OMB) until July 30, 2010. Before that, he had headed the OMB’s Congressional counterpart, the CBO (Congressional Budget Office) from January 2007 to November 2008. And before that he had headed the Hamilton Project which was principally founded by Clinton Treasury Secretary and Obama economic guru Robert Rubin. In part he made his bones early in his career by offering plans to cut Social Security. The Pete Peterson-inspired Cat Food Commission with its mandate to cut Social Security owed much to him. On leaving government, the neoliberal Orszag took up an op-ed position at the New York Times. But having paid his dues in government and looked out for the interests of the US financial system, he was ready to make millions working as vice something or other for global whatever. On Decmber 9, 2010, it was announced that he had accepted the position of vice chairman of global banking for Citigroup. Citigroup is by the way where Robert Rubin made his millions after leaving government as well. If you wonder why banks don’t need to pay government officials bribes for favorable treatment, the answer is they do. They’re just delayed.
222. According to a July 8, 2010 in Haaretz reported on here, the Obama Administration has agreed to supply nuclear fuel to Israel, fuel which can be processed for nuclear weapons. The hypocrisy of this is stellar. Israel is not a signatory of the Nuclear Non-Proliferation Treaty (NPT) and has at least 100 nuclear weapons. Obama is contravening the NPT, the same treaty he uses to beat up and sanction Iran, which has no nuclear weapons and which our own intelligence agencies say doesn’t have a program for them.
223. The DREAM Act was legislation that provided a long and laborious pathway to permanent residency for the children of illegal immigrants who had been in been in the country at least 5 years. It would not have taken effect for 2 years. Those qualifying would have been granted temporary residency for 6 years and would have had to complete a degree or at least two years of college work or served two years in the military during that time. The program had numerous restrictions and qualifications. It was, nevertheless, popular with liberals and Hispanics but was not pushed by the Obama Administration. On December 18, 2010, it failed at cloture 55-41. Cloture would have occurred had not 5 Democratic Senators: Baucus (MT), Hagan (NC), Nelson (NE), Pryor (AR) and Tester (MT) voted against it, and one Manchin (WV) did not vote at all.
224. If you are a crook, Congress is definitely the place to be. It offers great scope and opportunities. And even if you should happen to be one of the few investigated, the odds are the Department of Justice will just kick around the investigation for a few years and then let it die. At least that is the pattern of the Obama Administration which has dropped investigations of some of the most notoriously corrupt current and former members, including Tom Delay (R-TX), Jerry Lewis (R-CA), Don Young (R-AK), Alan Mollohan (D-WV), and John Ensign (R-NV). This is another instance of the glaring two-tiered justice system in this country, an easy going one for our privileged elites and a draconian one for the rest of us.
225. You may think that talk of the US being a Surveillance State is overblown and hyperbolic, but the government already has a formidable array of means, both public and private, to track almost all of our communications and transactions without court order and via fusion centers and other programs to amass databases on even our legal activities, all in the name of keeping us safe from the terrorists. One of these is the FBI’s Guardian system for suspicious activity reports (SARs). It is an example of how often our privacy is invaded and to what little purpose. As reported by the Washington Post on December 20, 2010, 161,948 SARs leading to 103 investigations leading to 5 arrests and so far no convictions. To break this down, only 1 in every 1500 tips merits an investigation. Only 1 in 32,000 leads to an arrest, and we don’t even know what these arrests were for or how many would have occurred through regular policing. And finally zero convictions for 161,948 reports. Wasteful, intrusive, and ineffective, feel safer?
226. On December 21, 2010, former Raytheon lobbyist and now Deputy Secretary of Defense William Lynn sent out a memo on ethics. On December 29, 2010, the Pentagon issued a rule which watered down restrictions on organizational conflicts of interest for contractors, that is where a contractor can use its position in one program to gain unfair advantage in other aspects of that program or in different programs. Blatant contractor abuses were a major and recurring scandal of the Bush Administration. It looks like nothing has changed under Obama’s watch, other than, as we have seen so many times before, Obama is institutionalizing and legitimizing that abuse.
227. In response to the inaction of the federal government, on October 13, 2010, the Attorney Generals of all 50 states began an investigation into the massive, systemic frauds, forgeries, and perjuries of foreclosuregate, the attempts by banks to foreclose on homeowners using no or fabricated paperwork. On December 14, 2010, Iowa Attorney General Tom Miller, who led the combined investigation, promised criminal charges. Less than a month later, on January 4, 2011, Miller caved saying he was in the process of making deals with the banks that would be civil and reform oriented, not criminal. What Miller was doing was issuing the banks another Get-Out-Of-Jail-Free Card. Given the in your face nature of the criminality, it would not be hard for any competent AG to convict the banks and their servicers on criminal grounds. Such an approach would force real reform, the kind Miller says he wants, The shift to a civil setting will allow banks to continue to flout the law and write off any fines or settlements as cost of doing business. This is another major institutional fail and shows our elites are simply incapable of reform at any level, some illusory activity to placate the rubes and to use in the next political campaign, yes, but real change? Not a chance.
228. It is impossible to overstate how corporatist Obama and his Administration really are. On January 6, 2011, Obama announced that Bill Daley would be his new Chief of Staff replacing Rahm Emanuel who left to run for mayor of Chicago, a position recently vacated by Bill’s brother Richard. It is not just the cosy nature of this arrangement that is disturbing. Bill Daley is Mr. NAFTA. As Clinton’s Commerce Secretary, he pushed for ratification of this first of the large “free trade” agreements which have done so much to devastate American jobs. He is being touted as someone with an outside Washington viewpoint, or at least as much of an oustide view as can be seen from his offices as Midwest chairman of JPMorgan Chase.
229. Keeping with the theme of corporate influence in the Obama Administration, on January 7, 2011, Obama appointed Gene Sperling to replace Larry Summers as director of the National Economic Counsel (NEC). He is another Clinton era retread, another neoliberal and free trader. He has close connections to both Robert Rubin and Larry Summers. He was deputy director of the NEC from 1993-1996 when Rubin was its director. He was then director of the NEC from 1996-2000 and worked with Summers on the repeal of Glass-Steagall, the admission of China into the World Trade Organization, and passage of the Commodities Futures Modernization Act (CFMA) which deregulated derivatives and allowed big financials into commodity futures markets, like oil, resulting in the rampant speculation and price increases we have seen in them. More recently Sperling was an adviser to Treasury Secretary Timothy Geithner. In his introduction, Obama credited Sperling for his work on the noxious 2010 end of the year tax cut deal (item 218). You could say that Sperling is a good fit for Team Obama. Like most of Obama’s economic advisers he promoted and participated in many of the most ill-conceived and destructive economic policies of our times. His connections to Rubin, Summers, and Geithner mean that we can only expect more of the same kind of disastrous corporatist policies from him.
230. One of the main reasons corporations are out of control is because the regulatory climate has been so lax. If Obama has anything to do with it, and he does, it will remain that way. On January 18, 2011, Obama issued an Executive Order requiring regulatory offices of the federal government to “streamline” their regulations. Performance objectives were to be favored over specific rules. This might look like a principles based approach but really isn’t. Rather it will give more wiggle room for corporations to dodge compliance even as they claim they are in compliance. Unsurprisingly, flexibility is stressed. Reducing burdens on the public and public participation are also emphasized, but, of course, this isn’t the real public. It is rather the “stakeholders”, that is the corporations to be regulated that are to have more say in how they are regulated.
In a less corrupt economy with fewer “captured” politicians and regulators, such directions might make more sense. But in such an environment, would they even be necessary? It is not over regulation that got us into this mess. It is that even the regulations we had on the books weren’t enforced and were widely ignored by corporations. Does anyone seriously believe that by making regulation even slacker corporations will behave better than they have?
231. Gulet Mohamed is a 19 year old Somali-American from Virginia who went to study Arabic in Yemen. Yemen is a cheap country to learn Arabic in, but because of the instability there, Gulet Mohamed left after several weeks, first going to Somalia to visit his mother’s family and then to Kuwait to live with relations there. On December 20, 2010, he was detained, beaten and threatened by Kuwaiti authorities for a week. They then agreed to release him back to the US, but the US government spiked this plan by putting him on the No-Fly list. So he was effectively stuck in Kuwaiti custody where he was aggressively interrogated by FBI agents, illegally because he had invoked his Miranda protection of right to counsel. The FBI was apparently obsessed with finding information on Anwar al-Awlaki, the American whose extra-judicial killing Obama has OK’ed. But Gulet Mohamed had no information. His crime was that family and culture put him in that part of the world. During his detention, the US State Department failed to render consular services to him, a fact which it later lied about.
Using a smuggled cell phone of another prisoner, Gulet Mohamed was able to contact his family who got him a lawyer. On January 18, 2011, a lawsuit was filed in federal district court in Alexandria alleging that the US government was behind Gulet Mohamed’s arrest and ongoing detention in Kuwait and that this was a denial of his legal rights. District judge Anthony Trenga agreed and ordered the government to appear on the 19th to reply, at which point the government caved. Gulet Mohamed was allowed to return to the US on the 21st but was again interrogated without counsel by the FBI on arriving at Dulles (see item 152).
This is an example of a disturbing and illegal practice the Obama Administration has adopted called “detention by proxy” where, under US government sponsorship, US citizens are detained, tortured, and interrogated in other countries. The tell is that Kuwait is a US client and would not have arrested and tortured Gulet Mohamed without US authorization. There is also the fact that Gulet Mohamed was interrogated by FBI agents and that they blatantly violated his Constitutional rights. And instead of helping him, the State Department left him to twist in the wind. Finally there was the quick fold to render the lawsuit moot before a federal court could rule on the legality of the government’s actions. Do not look for the offending FBI agents or their superiors to be punished. Do look for more of this, at least as long as the Obama Administration thinks it can get away with it.
232. On January 19, 2011, in Nelson v. NASA, the Supreme Court decided 8-0 in an opinion written by Samuel Alito that any government employee, even those who do not work with classified materials must submit to intrusive background checks. The case begun under Bush and argued before the Supreme Court under Obama revolves around Bush’s Homeland Security Presidential Directive 12 (HSPB-12) issued August 27, 2004 which established “a mandatory, Government-wide standard for secure and reliable forms of identification issued by the Federal Government to its employees and contractors” for the purposes of “gaining physical access to Federally controlled facilities and logical access to Federally controlled information systems.” The standard used was drawn up by the Commerce Department. It required that government employees sign a release to allow former landlords and references to receive a Form 42. This form
asks if the reference has “any reason to question” the employee’s “honesty or trustworthiness.” Id., at 97. It also asks if the reference knows of any “adverse information” concerning the employee’s “violations of the law,” “financial integrity,” “abuse of alcohol and/or drugs,” “mental or emotional stability,” “general behavior or conduct,” or “other matters.”
If the answer is yes to any of these open-ended questions, the reference is asked to provide details
A suit was brought by contract employees of the Jet Propulsion Laboratory (JPL) which is managed by CalTech for NASA. They were working at JPL before this new directive but were being forced to comply with it or be terminated. Alito wrote that the material was covered by the Privacy Act of 1974, that it was in line with private sector practices, that the government had wide latitude in how it managed its internal operations, and that it had no Constitutional responsibility to prove that its questions were necessary to the stated purpose.
We reject the argument that the Government, when it requests job related personal information in an employment background check, has a constitutional burden to demonstrate that its questions are “necessary” or the least restrictive means of furthering its interests.
There is a fairly glaring contradiction here. Alito asserts that the Privacy Act is sufficient to safeguard employees’ “informational” privacy, but what the Act actually says is that
Each agency that maintains a system of records shall– (1) maintain in its records only such information about an individual as is relevant and necessary to accomplish a purpose of the agency required to be accomplished by statute or by Executive order of the President [5 U. S. C. §552a(e)(1)]
The requirement that Alito says isn’t in the Constitution is in the statute, language which he himself cites in his opinion. So even if there is no Constitutional issue, Alito leaves unadressed the government’s violation of its own law. This is not to say the Privacy Act is not without its problems. It has a very large loophole. Disclosure is allowed
to another agency or to an instrumentality of any governmental jurisdiction within or under the control of the United States for a civil or criminal law enforcement activity if the activity is authorized by law, and if the head of the agency or instrumentality has made a written request to the agency which maintains the record specifying the particular portion desired and the law enforcement activity for which the record is sought [5 U. S. C. §§552a(b)(7)]
Alito dismisses this as a concern, but it is really the heart of the matter. The government has a long history going back decades of violating legal restrictions on the kinds and amount of information it can collect on us, and what it does with it. Since 9/11, domestic surveillance has increased exponentially. Form 42 is just another avenue for this. The Court has not only blessed the government’s unnecessary collection of data on its employees but through weaknesses in the Privacy Act and the government’s record of abusing such weaknesses, it has effectively gutted the Act and paved the way for the information it was supposed to protect to be disseminated to various government databases.
This is not an overreaction. We saw something similar with National Security Letters, warrantless demands for information, where the FBI promised to monitor them assiduously and use them judicially. Individual NSLs became blanket NSLs. The FBI didn’t follow its own procedures in who could issue them or for what. Nor did it keep track of how many were being issued until forced to do so. It turned out it was in the hundreds of thousands. Then too there is a whole plethora of projects involving domestic databases from fusion centers to the old JPEN TALON program to Main Core to TIA and many, many more. The telecoms abetted illegal warrantless government wiretapping for years. When this became known the Congress immunized them with the FISA Amendments Act. As I said above, the government has a history of abuse and illegal activity in this area. The Court in refusing to take this into consideration was not just being disingenuous but complicit. Finally, Nelson v. NASA illustrates two important points about the current Court. It continues to turn a blind eye to excesses no matter how egregious when national security is invoked (just as long as its own turf is not infringed, think Hamdan and Boumediene). And as its appeal to the extremely invasive practices of the private sector shows, while it has 5 arch-conservative justices, it has 9 pro-business ones.
233. On January 21, 2011, Obama named Jeffrey Immelt, CEO of GE, chairman of a new Council on Jobs and Competitiveness, replacing the outgoing Paul Volcker and his Economic Recovery Advisory Board. The choice is in line with Obama’s ever more open corporatism and confirms that Obama will not use fiscal policy to promote job creation, but improbably will rely on the private sector to do so. Still it is a bizarre. Immelt famously said on December 6, 2002:
When I am talking to GE managers, I talk China, China, China, China, China. [Five Chinas] You need to be there. You need to change the way people talk about it and how they get there. I am a nut on China.
In July 2010, he toned this tone a little to:
“I really worry about China,” the FT quotes him as saying. “I am not sure that in the end they want any of us to win, or any of us to be successful.”
This lament was not about GE’s practice of sending jobs and technology to China but its difficulties in establishing market share there. Apparently no one ever explained the concept of mercantilism to him. In any case, this is the person that Obama chose to spur job growth in the US, a clueless CEO who has been outsourcing jobs for a decade.
On March 24, 2011, it was reported that in 2010 GE had $14.2 billion in total profits. Like many corporations GE shifted a lot of those profits overseas so that it didn’t have to pay tax on them here. This cut their US profits down to $5.1 billion. But this is far from the end of the story. GE’s tax lawyers managed to work it so that the company not only paid no US taxes in 2010 but indeed racked up a $3.2 billion tax credit.
NBC which is owned by GE conveniently failed to report the GE tax story.
A March 28, 2011 story reported how GE is looking to cut back on pensions and healthcare for its union workers in contract negotiations. It has also sought to intimidate some workers with plant closures if they do not accept a wage freeze.
This is the kind of company GE is, and that is kind of CEO Jeffrey Immelt is. This isn’t about an incredibly bad choice made by Obama. This is about an incredibly bad choice made by Obama that Obama knew at the time was an incredibly bad choice. It reeks of bad faith and shows just how cynical his Administration is on the subject of jobs. His choice of Immelt was like his choosing Jack the Ripper for your abdominal surgery.
234. The Senate has become one of the largest obstacles to democratic government in the country. Its structure flies in the face of the concept of “one man, one vote”, that is that all voters should count the same. There are small snippets of the East Coast, like Rhode Island, Delaware, and Vermont, that get two Senators whereas very populous neighbors, like New York, Pennsylvania, and New Jersey get the same number. Clearly, the votes of the citizens of small states count more than those in large ones. But at least someone lives in them. The situation is much worse in the West where you have vast empty expanses, like Wyoming, North Dakota, Montana, and Alaska. They still get two Senators apiece, the same as California and Texas. The small state Senate representation is reminiscent of the “rotten boroughs” that plagued the British Parliament into the 19th century.
Then there are the Senate’s rules. The principal abuse involves the filibuster. The filibuster is a parliamentary maneuver to stall and eventually kill legislation by keeping debate on it open, and thus preventing a vote on the legislation itself. It is not part of the Constitution. It is just a Senate rule and could be done away with by simple majority vote if Senators so chose. In its current form, if invoked, it requires 60 votes to end debate and proceed to a final vote. It used to be that Senators engaging in a filibuster had to actually be on the Senate floor talking and a filibuster could, in fact, be talked out. This doesn’t happen anymore. The minority party simply forces the majority party to come up with 60 votes on cloture votes to end debate. That’s it. They don’t have to talk or stay up late or do anything. In other words, the filibuster has become a completely painless way for the minority party to have a veto on all legislation. And under Minority Leader Mitch McConnell this is exactly what Republicans have done since the beginning of the Obama Presidency. Indeed McConnell promised to do this even before the Senate met in new session in January 2009. So it wasn’t like the Democrats didn’t see this coming.
With Democrats looking to get trounced in the November 2010 mid-term elections, there began to be some talk among Senate Democrats of reforming the filibuster, not doing away with it but making it less of an absolute block. This was always kabuki, an empty gesture to mollify some elements of the Democratic base. You have to understand that Democratic officeholders, especially Senators, are far more conservative than Democratic voters. They never really mounted any real opposition to Bush, or to Obama too, for that matter, for his continuation and expansion of Bush’s policies. They don’t want the power to enact progressive legislation. They aren’t progressive. If they had the power to end the filibuster, then their subsequent and very public failure to use that power would produce even bigger election losses. Worse, they would be using it to promote an agenda in which they do not believe. It is something of a Hobson’s choice, but even though there are costs to appearing ineffective, the filibuster gives Senate Democrats and Democrats in general some small cover to enact a far more conservative agenda that they actually support. In short, the filibuster is a figleaf which allows conservative Democrats to act conservatively. Small as it is they were not going to give it up, and they didn’t.
235. On February 9, 2011, the Tech Herald reported that 3 data intelligence firms, HBGary Federal, Palantir Technologies, and Berico Technologies had been solicited by Hunton and Williams, a typical big Washington lobbying law firm that trades on its government connections, to create a presentation on how to combat Wikileaks. Their client was Bank of America, the object of a promised Wikileaks document dump. Interestingly because it shows how tight the government is with these players and how it is willing to wage its own vendetta against Wikileaks by any means available, it was the Department of Justice (DOJ) that steered Bank of America to Hunton and Williams. Bank of America also brought in Booz Allen, the well known intelligence contractor which works for the CIA and NSA and whose list of senior vice presidents is a particularly egregious example of the revolving door between government and private contractors.
Matters came to a head when HBGary’s CEO Aaron Barr told the Financial Times that it had infiltrated Anonymous, a group of hackers who had attacked some of the large corporations which, although Wikileaks has been charged with no crime, made themselves part of the government’s campaign against it by refusing to further host Wikileaks in their cloud (Amazon.com) or direct contributions to it (Visa, Mastercard, and PayPal). In retaliation, Anonymous hacked HBGary and released tens of thousands of their emails. The Bank of America program against Wikileaks was part of this dump.
The suggested plan included sowing dissension within the Wikileaks, a disinformation campaign against it, potential blackmail of its employees (“Search for leaks. Use social media to profile and identify risky behavior of employees.”), cyber attacks against it, planting phoney information with it and then trumpeting the error and the group’s untrustworthiness, and exposing whistleblowers to Wikileaks in the hopes of scaring others off. Supporters of Wikileaks were also to be targeted. There was even the singling out of the salon.com columnist and blogger Glenn Greenwald and a not so subtle threat against him:
These are established professionals that have a liberal bent, but ultimately most of them if pushed will choose professional preservation over cause, such is the mentality of most business professionals. Without the support of people like Glenn wikileaks would fold.
Clearly, some of these activities, such as blackmail and the cyber attacks, are illegal, as is conspiracy to commit them.
ThinkProgress also found in the emails a similar plan directed against it and other liberal groups on behalf of the hyper-conservative Chamber of Commerce passed through Hunton and Williams and involving the same three players, HBGary, Palantir, and Berico, known as Team Themis.
With the exposure of these activities, the sponsors (Bank of America and the Chamber of Commerce) ran for the hills, minimizing their role and emphasizing the preliminary nature of the proposals. Hunton and Williams hid behind no comment, and Palantir and Berico tried to dump as much blame as possible on HBGary. Booz Allen too seems intent on dodging responsibility although one of its senior vice presidents, William Wansley, appears to have had the leading role in the operational side of the Bank of America program directed against Wikileaks. The sleeper in all this is the Department of Justice and the Obama Administration. They were the ones who set this up, making the initial referral of Bank of America to Hunton and Williams. Their involvement shows, not the blurring, but the erasure of the line between government and large corporations. The government didn’t just use Bank of America to go after Wikileaks, it conspired with the bank to commit felonies for the bank’s benefit. But as Glenn Greenwald has said, don’t expect the DOJ to investigate its role in this affair. That’s a long wait for a train don’t come.
236. Following popular demonstrations in Tunisia that toppled its dictator, large scale demonstrations began in Egypt on January 25, 2011. (A liveblog of events can be found here.) With a population of 83 million, Egypt is the largest nation in the Arab world. The demonstrations were peaceful but defiant. Their focal point was Tahrir Square near the museum housing many of the nation’s exhibits from its Pharaonic past. Their target was the 30 year dictatorship of Hosni Mubarak. Unemployment, extreme poverty, corruption, cronyism, political repression, rigged national elections in 2005, the specter of another round of rigged elections in 2011, and efforts by Mubarak to create a dynastic succession to his son Gamal established the background to the protests. A conduit for this popular anger was a Facebook page, We are all Khaleed Saeed, set up an Egyptian Google executive Wael Ghonim in memory of a young man beaten to death by police in June 2010.
Basically, Mubarak had the police and state security apparatus headed by Omar Suleiman. These were used to attack and arrest demonstrators, but they were unable to dislodge the protesters, or provoke them into violence. This was the key strategy of the regime to create enough chaos to force the military to intervene and crackdown on the protesters in the name of public order. It failed. Because the protesters remained essentially peaceful and because the Egyptian army was split between high ranking officers who were tied to the regime and conscript troops and midlevel officers who sided more with the uprising.
Up to this point, the Obama Administration had been largely silent on events in Egypt. It had been US policy for 30 years to back the Mubarak dictatorship, a policy which Obama had continued. Initially Mubarak refused to resign. Instead on January 29, 2011, Mubarak named Omar Suleiman as his vice president and on February 1, 2011 said he would not seek re-election in the September 2011 presidential elections.
With the naming of Suleiman and the promise to pass some powers to him, Obama and Secretary of State Clinton both tried to sell a go-slow approach characterizing Suleiman as a legitimate alternative to Mubarak and someone who could be relied to manage Egypt’s gradual transition to democracy. Again it is important to remember that they were saying this about Mubarak’s chief henchman, his enforcer, and head torturer. Perhaps they felt so comfortable with Suleiman because he had managed the Egyptian end of the US policy of extraordinary rendition for torture. On February 11, 2011, Mubarak finally resigned. He turned power over to the Supreme Council of the Armed Forces. This was ironic on many levels. Mubarak, the dictator, had thrown himself on the constitution saying it would not let him resign. But when he left he decided on a decidedly unconstitutional means to do so. The military promised to hold elections within six months, but leaving the military in charge raises questions about how much the protesters really won. On the other hand, it reassured the Obama Administration.
Events in Tunisia but especially Egypt which remains the heart of the Arab world spawned protests in many other Arab countries, notably Algeria, Jordan, Yemen, and Bahrain, and even in non-Arab Iran. With the exception of Iran, the Administration’s response to these has been muted. But with Iran, it has been enthusiastic. In other words, in the Middle East, it encourages democracy among its enemies and disfavors it among its allies.
At the same time, the US government pursues its vendetta against Wikileaks, Secretary of State Hillary Clinton announced on February 15, 2011 that the US would spend $25 million a year to support dissident bloggers in repressive countries. When confronted with this contradiction, Clinton said the difference was that the Wikileaks documents had been stolen. However they were not stolen by Wikileaks, and Wikileaks broke no law in publishing them. Clinton’s response was deeply disingenuous. Washington insiders like Clinton have leaked classified material to journalists for years. Some access journalists, like Bob Woodward, have made their careers out of being conduits for such leaks. The great sin of those who passed on the material to Wikileaks was precisely that they weren’t Washington insiders. They were not, as the protesters in Tahrir Square were not, part of the powers that be.
And that is the core lesson here. The Obama Administration was comfortable with the Mubarak dictatorship, and the other dictatorships in the region, as long as they went along with US policies. It only became an outspoken champion of democracy where opponents, like Iran, were concerned. For a President who was elected on a platform of change, Barack Obama has shown that he is profoundly hostile to it, not just here at home but abroad. While protesters demonstrated in Egypt, his Administration was seeking to keep, if not Mubarak, as much of his regime as possible in place. Nor can it square the circle of its support for internet freedom in countries it doesn’t like with its own pursuit of Wikileaks.
237. In the face of state budget deficits (and the failure of the federal government to help with funding them in these still bad economic times) and ideologically driven governors, on February 3, 2011, Health and Human Services Secretary Kathleen Sebelius laid out how, while not being able to opt out of a Medicaid expansion (part of the Obama healthcare plan and which would be paid for largely with federal funds), states could still cut their Medicaid spending by cutting some services like prescription drugs, dental services, and speech therapy and by increasing copays and deductibles for the poor. This illustrates again that coverage is not care. The poor will still be covered by Medicaid. They will just be increasingly priced out of using it.
On February 15, 2011, Sebelius told states that they could cut their Medicaid roles by eliminating coverage for non-disabled, non-pregnant persons whom the states had voluntarily covered in the past and received a waiver from the federal government to cover.
238. On February 20, 2011, the commanding general in Afghanistan David Petraeus accused parents of deliberately causing burns to their children in a US attack in Konar province in order to blame US forces for them. This follows a long string of incidents extending over years and into the Bush Administration where US military commanders have routinely minimized their responsibility in the deaths of Afghan civilians by arbitrarily reducing the number of those killed and wounded or claiming that Taliban fighters were among them. The current case is particularly egregious since the whole counterinsurgency strategy (Petraeus wrote the manual on it) is about protecting civilians. It is a measure of how rotten, and desperate, the mission in Afghanistan has become that the top military commander there would stoop to making this kind of charge.
239. A February 23, 2011 Rolling Stone article by Michael Hastings reports that the US general in charge of training Afghan security forces Lt. Gen. William Caldwell, beginning in December 2009, ordered a psy-ops unit in Afghanistan to target visiting American dignitaries, including US Senators, in an effort to garner continued support for the Afghanistan war. The problem with this is that it is illegal. The Smith-Mundt Act of 1948 specifically prohibits the US government propagandizing its own citizens. Now, of course, our government propagandizes us constantly. But Caldwell took this process several steps further when he sought to use a psy-ops unit normally tasked with targeting enemy troops against Americans, and not just any Americans but those whom Caldwell supposedly works for. On top of this, Caldwell launched a disciplinary investigation of the head of the psy-ops unit Lt. Col. Michael Holmes who had tried to resist Caldwell’s misuse of the unit. Holmes received an official reprimand for his efforts.
On July 27, 2011, it was reported that Caldwell had been cleared of any wrongdoing in the matter of the psy-ops and Michael Holmes. Of course. Would we expect anything different say like real accountability from this Administration?
240. In a February 19, 2011 column, the Times’ Bob Herbert notes that the Obama Administration plans to cut community service block grants by 50% form $700 million down to $350 million. These grants go to local on the ground programs fighting poverty. Such a cut will devastate them across the board and do nothing for Obama’s cynical attempts to reduce government spending. Tens of billions in extended tax cuts for the rich, hundreds of billions for meaningless wars? No problem, but less than $1 billion for the poor? This the government can not afford. This illustrates the fundamental point that the question is not about how many resources we have as a society, i.e. that is the idea that we do not have enough to solve our problems, but rather how those resources are being allocated. As long as most of the country’s resources go into the hands of an unproductive and wasteful few, we will continue to lack the resources to address the needs and hopes of the many.
241. One of the results of Obama and the Democrats’ widespread failure to do any of the things they were elected in 2008 to do was large scale losses in the 2010 midterms. They lost the House of Representatives, but they also lost in the states. In Wisconsin, a hard right union hating Republican ideologue Scott Walker won the governorship. In his first state budget, Walker proposed doing away with the collective bargaining rights of public employees. Unions have been decimated in the private sector and now cover only 6.9% of workers there. The public sector is the last concentration of unionism (36.2%) in the country (think police, firemen, and teachers) and has long been a target of union destroying corporate interests. Historically, unions raised wage and benefit standards for both union and non-union members alike. Their gutting tracks with the lack of wage growth and the loss of benefits over the last 30 years among wage earners generally.
Walker announced his budget on February 11, 2011. Small demonstrations began at the state capital on February 13, 2011. These swelled to nearly 70,000 on February 19, 2011. Meanwhile on February 17, 2011, Democratic state Senators left for Illinois to prevent a vote on the bill. Similar protests occurred in Indiana and Ohio where similar bills were being proposed. Walker’s budget also contained goodies for rich conservatives like the Koch brothers. On February 23, 2011, a tape was released of Walker talking with someone he thought was David Koch. On the tape, Walker is heard discussing how to trick the absent Democratic lawmakers into returning, ways to discredit protesters, and a willingness to accept presents from David Koch.
Throughout all this, Obama and his White House have been silent. This is unsurprising. Obama is ideologically closer to Walker than he is to the protesters. He has frozen the wages of federal workers even though such a freeze will have only a negligible effect on the deficit. He has backed the interests of corporations at every turn and has steadfastedly refused to push labor priorities, like EFCA (item 37).
242. On March 1, 2011, former Democratic Senator from Connecticut Christopher Dodd accepted the position of CEO of the Motion Picture Association of America (MPAA), Hollywood’s top lobbying job. Dodd had been chairman of the Financial Services Committee where he proved time and again to be the biggest whore for the banks in the Senate. He never saw the housing bubble until it burst, never saw the meltdown coming, promptly caved to Bush Secretary of the Treasury and former Goldman chairman and CEO Henry Paulson’s demands when it did, and with that other great financial whore Barney Frank (D-MA) crafted the largely useless Frank-Dodd bill on financial reform. Facing loss in a bid for re-election to a 6th term, Dodd decided to retire. It was widely believed that like so many elected officials he would cash in, become a highly paid lobbyist, and help perpetuate our corrupt system of revolving door insider connection peddling. Dodd repeatedly denied that he would go this route. Given his record of sucking up to corporations in the Senate, his protestations were not widely believed either. Dodd is barred by law from lobbying for 2 years but his job at the MPAA shows how easily that restriction can be bypassed. He won’t lobby personally himself. He’ll just direct the lobbyists who work for him where to go and who to talk to.
243. On March 7, 2011, Barack Obama signed an Executive Order (EO) re-instituting the notorious sham practice of the CSRTs (Combat Status Review Tribunals) at Guantanamo, only the name was changed to PRB (Periodic Review Board). The PRBs are to review the status of prisoners at Guantanamo. It is meant to give a semblance of due process without actually according any. Like the CSRTs before them, the PRBs are skewed against prisoners and the government can withhold material from defense counsel on the grounds of national security. Since these are all national security cases, that is a critically large waiver. And as the EO states this is a “discretionary exercise” and prisoners can be held regardless of what the PRB decides, not that the PRBs are likely, engineered as they are, to produce any result the Obama Administration does not want. Rather than close Guantanamo down, this marks a return to business as usual there. It is another example where Obama promised a break with the Bush Administration only to end by completely embracing its position.
244. Scott Bloch was the former Bush-era deputy director and counsel to the Department of Justice’s Task Force for Faith-based and Community Initiatives. He then was appointed Special Counsel at the United States Office of Special Counsel (OSC). This is an independent agency set up to protect whistleblowers and prosecute the use of civil service employees for political purposes. Bloch was a fairly common example of the Bush practice of choosing the fox to guard the henhouse. He is noteworthy because he became the target of whistleblower complaints by his own employees. He then retaliated against them and rather clumsily had the hard drives of his computers wiped in an attempt to destroy evidence. When the Bush Administration to whom he was an embarrassment failed to support him, he even threatened investigations, which never materialized, into it.
What brings this affair into the current Administration is that the Obama Justice Department (DOJ) has actively colluded with Bloch to avoid his serving any jail time. Bloch entered into a plea agreement with the DOJ. The charge was misdemeanor lying to Congress with regard to the erasing of his computer hard drives. The statute clearly states that the penalty for such a crime is a jail term of not more than 12 months but not less than one month. On April 24, 2010, Bloch legally accepted the government’s deal and on April 27, 2010, Bloch pled guilty in court. He was to be sentenced on July 10, 2010 but criticism of the government’s push for Bloch only to serve probation caused a postponement. On February 2, 2011, Federal Magistrate Judge Deborah Robinson ruled that Bloch must serve the statutory minimum sentence. On February 7, 2011, the government filed a motion for Robinson to reconsider her ruling. The motion was so badly written that the government withdrew it four days later on February 11, 2011. But in withdrawing its motion, it recognized that Bloch would be filing a motion to withdraw his guilty plea. It went further and said that it thought Bloch’s reasons for doing so were “well-founded” and that it would not oppose Bloch’s motion. Finally, it announced to the court it was in negotiations with Bloch on a plea agreement to a different charge, one that would clearly not involve jail time.
On February 17, 2011, Scott Bloch did indeed file a motion to withdraw his guilty plea. However, on March 9, 2011, judge Robinson denied his motion in an opinion critical of both Bloch and the DOJ. Robinson noted that Bloch’s motion was an admission of perjury in that he had stipulated under oath to the facts alleged by the government (that he had committed the crime he was charged with) when he legally entered into the plea deal.
This is not a lot of jail time and, in the great scheme of things, Scott Bloch is a marginal player, but the DOJ’s treatment of him shows what lengths the Obama Administration will go to prevent any precedent of an Executive branch official going to jail or facing any real accountability for their acts while in office.
On March 30, 2011, Scott Bloch was sentenced to one month in jail, one year of unsupervised probation, and 200 hours of community service. This is still a very light sentence but Bloch continued argue to the end, with DOJ help, that he should serve no time at all.
245. Bradley Manning, a then 22 year old private serving in Iraq, is the alleged source for the following wikileaks releases: Reykjavik13 a test case (February 18, 2010), a Defense Department report on how to destroy wikileaks (March 15, 2010), the Collateral Murder video of a 2007 Apache helicopter attack on civilians resulting in the deaths of 2 Reuters reporters (April 5, 2010), the Afghanistan docs (July 25, 2010), the Iraq docs (October 22, 2010), and the State Department cables (from November 28, 2010 onwards). In Iraq, Manning had access to SIPRNet (Secret Internet Protocol Router Network) and JWICS (Joint Worldwide Intelligence Communications System). SIPRNet as its name implies carried information classified as secret from the Department of Defense and the Department of State. It is accessible by about half a million Americans and various US allies. JWICS did essentially the same thing as SIPRNet but also included higher levels of classification. It appears that little or any of the wikileaks material was classified above secret. There are two other things that should be borne in mind in all this. The government classifies orders of magnitude above what actual security considerations would entail and government officials routinely leak material with much higher classification levels to the Washington press, not to whistle blow but to score political points. Indeed some journalists, like Bob Woodward, have made careers out of publishing such material.
The Obama Administration responded to the leaks in two polar opposite ways. It said that they were a gross breach of national security and would cost lives and that they were nothing much and had resulted in death or injury to no one. This second response is not accurate. One person has been injured by the releases, Bradley Manning.
Manning entered into discussions online in May 2010 with Adrian Lamo, an extremely unreliable hacker who outed him to the FBI. How this all happened is unclear because Lamo who was the source of this information has put out so many different versions of it. On May 26, 2010, Manning was detained in Iraq and formally arrested on May 29. On July 6, 2010, he was charged with putting classified material on to his personal computer and passing it on to those not authorized to receive it. On July 29, 2010, he was transferred to the brig at Quantico, Virginia where he remains.
There he was designated a “maximum custody detainee” and placed under a Prevention of Injury (POI) protocol. What this means is that Manning is held in solitary confinement 23 hours a day; he is allowed to walk one hour a day in shackles, he has limited TV privileges with the set located outside his cell; he must remain visible at all time; he is checked every 5 minutes by guards; he is not allowed to sleep between 5AM and 8PM weekdays and 7AM and 8PM on weekends; if he tries to he is made to sit up or stand by guards; he is allowed short monthly visits again while shackled; he is not allowed to talk to prisoners in other cells; and he may only sleep in boxer shorts, is not allowed sheets, and given only a heavy unshreddable blanket.
Isolation and minute control of a prisoner for extended periods of time is coercive treatment and torture. As of this writing, Manning has been held 9 1/2 months in this way. There is no custodial reason for this. Rather the Obama Administration has two goals in mind. It wishes to make Manning an example to other potential whistleblowers and it seeks to pressure Manning into an admission that wikileaks solicited material from him, making that organization and Julian Assange part of a criminal conspiracy. It doesn’t bother the Obama Administration in the slightest that there is zero evidence that such collusion took place and that wikileaks committed no crime in publishing these unsolicited leaks. But that is the point about torture. It is not about getting to the truth. It is about the torturer hearing what the torturer wants to hear.
There have been other attempts to increase pressure on Manning. On January 19, 2011, the Brig Commander on his own and in violation of regulations put Manning on the even stricter suicide watch. This required Manning to sleep naked and stand naked outside his cell during morning report. In addition his eyeglasses were taken away from him. Manning’s attorney filed a complaint. The suicide watch was rescinded January 20, 2011, and the Brig Commander was subsequently removed. On March 2, 2011, Manning’s petition to downgrade him from POI status was rescinded. Manning joked with guards about the ridiculousless of his trying to kill himself with his underwear and flipflops. This resulted in Manning again being put on suicide watch from March 2-10, 2011. Also on March 2, 2011, the military came out with a new charge sheet against Manning with two new charges: that he did “knowingly give intelligence to the enemy, through indirect means” and that he did “wrongfully and wantonly cause to be published on the internet intelligence belonging to the United States government, having knowledge that intelligence published on the internet is accessible to the enemy.” Giving aid to the enemy has it is more commonly known is an offense that carries the death penalty, although the Pentagon told Manning’s attorney it would be seeking life in prison instead. Also the previous charges were expanded and upgraded to theft knowing that such theft would injure the US or advantage a foreign power.
If you want evidence of an out of control Administration, the Bradley Manning case is it. This isn’t about national security. Its about embarrassment and control. The Afghanistan and Iraq documents simply confirmed what most already knew about the US role in both conflicts. The State Department cables supplied us with many new specifics, but again the overall import that the US is comfortable dealing with corrupt and dictatorial powers around the world is again widely known. Rather the damage done by these leaks is that taken together they show how routinely and often the government lies to us, US citizens. The abusive treatment of Bradley Manning is all about punishing and intimidating those who would try to get the truth out to the American public. Most of what Manning is charged with leaking should not have classified in the first place. As I said, SIPRNet was accessible to a half million people as well as to various foreign governments. The idea that this information wasn’t available to anyone really interested in acquiring it is patently ridiculous. No, the real people they wanted to keep this information from was we the public. If we had a government that was even minimally open and truthful, there would have been no need for a Bradley Manning. But we don’t have such a government and so we need Bradley Mannings to lift the rock and show us what is crawling underneath it. Because we have the government we have, Bradley Manning cannot be dealt with in the usual way. He must be made an EXAMPLE. He must be mistreated. He must be charged with something as close to heresy or treason as possible. And showing that there is no difference between Democrats and Republicans, it is not Bush, but Barack Obama, who is leading the charge in this persecution and inquisition.
On April 19, 2011, Jeh Johnson the general counsel for the Department of Defense announced that Manning would be transferred to Leavenworth, Kansas envisioning that his pre-trial would be even lengthier than the current 11 months it has been. It was probably done to pre-empt a habeas petition Manning’s attorney was preparing to file with regard to his treatment at Quantico. The move also takes Manning out of the Washington spotlight and makes the few visits he is allowed even harder. The sweetener is supposed to be that it is a medium security facility. None of this changes, undoes, or mitigates the fact that this is an indefinite detention of an American citizen and that he has been held under conditions amounting to torture. It is a violation of his 5th Amendment right to due process, his 6th Amendment right to a speedy trial, his 8th Amendment protection against cruel and unusual punishment, and his 14th Amendment right to equal protection of the laws.
Speaking of equal protection of the laws, on April 21, 2011, in response to an impromptu question at a fundraising event, Barack Obama stated of Manning, “He broke the law.” Obama then went on to declare that “We’re a nation of laws.” First, Obama has no business commenting on and prejudging the Manning case. Manning has in fact not been convicted of anything. Indeed it has been this Administration’s strategy to keep Manning from trial for as long as possible, both to pressure and punish him in advance of any trial and to intimidate other whistleblowers. Second, as I stated above, the way this Administration has treated and held Manning has violated both law and Constitution. And how hypocritical is it that Obama should suddenly remember we are a nation of laws in this case? This is the same President, you will remember, who has refused to investigate and prosecute the rampant criminality of the Bush Administration and Wall Street. We are mostly certainly not a nation of laws. What we have is a system of punishment for the serfs and impunity for the masters.
246. On March 10, 2011, addressing a small audience at MIT, the head spokesman of the State Department P.J. Crowley called the detention and treatment of Bradley Manning “ridiculous, counterproductive and stupid.”
The next day Obama in one of the most cynical responses on record said,
“I have actually asked the Pentagon whether or not the procedures that have been taken in terms of his confinement are appropriate and are meeting our basic standards. They assured me that they are.”
Unfortunately for Manning, torture is our country’s most basic standard. Let bankers steal trillions. Obama sees nothing to investigate let alone prosecute. But let an ordinary American shed a little light on how what used to be called “our” government lies to us and that person must be crushed. Crowley has actually been a good soldier of this Administration during his tenure at State. This was apparently though a bridge too far even for him, and in an unguarded moment he spoke the truth. On March 13, 2011, Crowley was forced to resign. A truth, even a little truth spoken to a few, is more than this Administration can take.
247. The revolving door in the Obama Administration doesn’t so much turn as spin. A classic case of the inherent conflicts of interest and dishonesty of such a practice is that of David Stevens, Assistant Secretary for Housing at the Department of Housing and Urban Development (HUD) and Commissioner at the Federal Housing Authority (FHA). Stevens was an Executive Vice President at Wells Fargo and a Senior Vice President at Freddie Mac. At the time of his nomination he was president and COO of Long and Foster, described in his HUD bio as “the nation’s largest, privately-held real estate firm.” In other words, he was chosen not to represent the interests of ordinary Americans but those of the real estate and mortgage industries. On top of this, his nomination was delayed by a lawsuit alleging that he had been behind a scheme to circumvent the anti-kickback provisions in the 1974 Real Estate Settlement and Procedures Act (RESPA). HUD decided that there was no violation on the odd grounds that it was OK if the dummy joint venture that Long and Foster had set up with Wells Fargo (Prosperity Mortgage) and through which Stevens tried to funnel Long and Foster’s business was the recipient of fees (i.e. the kickbacks), as long as it was the company (Prosperity Mortgage) and not the individual agents who received the money. The interests of Long and Foster’s clients didn’t seem to enter into this at all. This was the man that Obama chose to be his top man in Housing at HUD.
Returning to his HUD bio, his responsibilities are described as,
Commissioner Stevens has direct responsibility for oversight and administration of the FHA insurance portfolio, which includes multifamily housing, insured health care facilities and well over 20 percent of mortgages in the domestic single family market. Stevens also has responsibility for other programs within HUD, such the regulatory areas of the Real Estate Settlement Procedures Act(RESPA) and the Secure and Fair Enforcement Mortgage Licensing (SAFE) Act.
Yes, he was tasked with enforcing the very law he was accused of violating.
As the Washington Post reports, Stevens has been in recent months deeply involved in the joke global settlement talks with the mortgage industry to make its massive, systemic multi-trillion dollar frauds go away for the relatively tiny figure of $20 billion. Stevens has done such a good job of not looking after the interests of the American people but those of the real estate and mortgage industries that their main trade (read lobbying ) group the Mortgage Bankers Association (MBA) has hired him to be their head. The MBA has maintained throughout that there never was any fraud and that we all should disbelieve our lying eyes. To add insult to injury and to show how lost Stevens and the Obama Administration are to even the most rudimentary notion of conflict of interest, Stevens does not plan to quit his current positions until next month April 2011.
The Obama Administration is the Bush Administration in so many ways. It was something of a hallmark of Bush to place the most corporate friendly and most rabidly anti-regulatory person he could find from an industry into positions of oversight and regulation of that industry. Obama again is following in his predecessor’s footsteps.
248. On February 14, 2011, following the example of Egypt and Tunisia, Bahrainis began their own protests. Bahrain is a small island in the Persian Gulf. Although it is 70% Shia, it is an absolute monarchy ruled by the Sunnis al-Khalifas. Most of the country’s wealth goes to the Sunnis. The protests were for the establishment of a constitutional monarchy. Bahrain is also home to the US Navy’s Fifth Fleet. Secretary of Defense Robert Gates visited the country on March 12, 2011 and called for reform. The next day pro-government elements responded calling for martial law and Saudi intervention. The day after that, March 14, 2011, one thousand Saudi forces and 500 troops from the UAE entered Bahrain and began brutally suppressing the protests. There are a couple of points to be made. This was occurring with an ally at the same time that Obama was pushing for military intervention in Libya to block Gadhafi own brutal suppression of his opponents. Gates and Obama had to know about the Saudi and UAE plans to invade Bahrain. All that takes preparations and communications, all of which we monitor. And considering that pro-government forces were calling for all this the day before it happened, it is not like this came out of the blue. Yet rather than go public or simply veto the Saudi plan, the Obama Administration let it go forward then feigned surprise and distress at its happening. How different the reaction toward Gadhafi and an ally.
The Saudis may be behind the stiffening of anti-democratic forces in the region. On March 18, 2011, Yemeni security forces killed 41 and injured hundreds as the country’s dictatorial president Ali Abdullah Saleh declared a state of emergency and a curfew. Saleh is a US ally and the Obama Administration with its repressive allies is content with expressions of disapproval but with no actions or sanctions to back those up.
249. On March 25, 2011, it was reported that Obama had appointed Larry James to a White House task force on Enhancing the Psychological Well-Being of The Military Family. As the top military psychologist at Guantanamo in 2003 and Abu Ghraib in 2004, James was deeply involved in enabling the “enhanced” interrogations and abuses at both facilities. His appointment is another example of this Administration’s discounting and downplaying of torture.
250. In the last days of the Bush Administration, then Attorney General Michael Mukasey instituted new guidelines effective December 1, 2008 for the FBI which allowed its agents to investigate anyone not for a specific reason but simply by invoking the most general of excuses. Per the ACLU at the time,
Under the new “assessment” authority, FBI agents can investigate anyone they choose, so long as they claim they are acting to prevent crime, protect national security, or collect foreign intelligence, with absolutely no requirement of a factual connection between their authorizing purpose and the conduct of the individuals they are investigating. FBI agents can start “assessments” without any supervisory approval, and without reporting to FBI headquarters or the Department of Justice. The Guidelines do not require the FBI to keep records regarding when “assessments” are opened or closed and “assessments” have no time limitation. The FBI can even start an “assessment” of you simply to determine if you would make a good FBI informant. Innocence no longer protects ordinary Americans from being subjected to a wide range of intrusive investigative techniques. The techniques include:
- collecting information from online sources, including commercial databases.
- recruiting and tasking informants to gather information about you.
- using FBI agents to surreptitiously gather information from you or your friends and neighbors without revealing their true identity or true purpose for asking questions.
- having FBI agents follow you day and night for as long as they want
What brings this into the Obama era is that most of these “assessments” occurred necessarily because of the timing of when the guidelines went into effect during the Obama Administration. On March 25, 2009, Senator Russ Feingold (D-WI ) asked in hearings how many such investigations had taken place. The Department of Justice did not respond to Feingold’s question until November 19, 2010, that is 2 years and 8 months later, and when it did so, it classified its answer. However this was leaked to the Times’ Charlie Savage who wrote about it on March 27, 2011. The response was:
The FBI has initiated 11,667 Type 1 and Type 2 assessments, 3,062 of which are ongoing. 427 preliminary and full investigations have been opened based upon information developed in these Type 1 and Type 2 assessment. 480 Type 3,4, 5, and 6 assessments have been initiated, of which 422 remain open.
The beginning and end dates for this tabulation are not given and its accuracy is questionable. Remember that FBI agents were allowed to perform these “assessments” in an unsupervised fashion and not required to keep much in the way of records on them. Still the numbers are instructive. 427 of 11,667 Type 1 and 2 assessments led to some further investigation, that is a 3.7% rate, meaning that this program by its own imperfect accounting had at least a 96.3% failure rate. But it is actually far worse than this. We don’t know the split among the 3.7% between preliminary investigations and full investigations or what the breakdown was between criminal, national security, and intelligence categories. Nor do we know if the invasion of privacy and the trashing of Americans’ 4th Amendment protection against “unreasonable searches and seizures” resulted in a single successful prosecution.
But the malevolent idiocy of this program does not stop even there. The FBI is allowed to keep all the information it collects and enter it into a database, even on the 96.3% for whom it found it had zero reason to even do an assessment.
The truth about these programs is that they don’t make us safer or put the bad guys away. Indeed the argument can be made that they make us less safe because they divert law enforcement resources into endless wild goose chases and encourage law enforcement to act in sloppy unaccountable ways. Is this really worth the price of the loss of our privacy and 4th Amendment rights? Well, to Administrations both Democratic and Republican, it is. And why not? Our elites never expect to be the targets of such surveillance, just the rest of us.
251. Even cursory adherence to the Constitution has become a “quaint” anachronism. The Constitution gives sole power to declare war to the Congress. Yet the last time the Congress actually declared war on anyone was on June 5, 1942 against Axis allied governments in Bulgaria, Romania, and Hungary. However from the end of the Second World War to the present, we have been involved in dozens of wars around the world, without any Congressional declaration. These conflicts are often called something else but that in no way abrogates Congress’ responsibility to act. But Congress has not acted, and the country’s war making power has been unconstitutionally transferred to the President. This goes directly against the intentions of the Founders who saw vesting war making power in the Executive exactly the kind of abuse which they had rebelled against.
Yet since WWII, the Congress has repeatedly failed to defend its war making power and has effectively ceded it to the President. In 1973, there was an attempt to reclaim at least part of its Constitutional mandate with the enactment of the War Powers Act. This act required the President to seek Congressional approval within 60 days of the initiation of hostilities. But it was fatally flawed. You see the problem is not limiting the Executive’s power but in the Congress not exercising its. The War Powers Act didn’t change that. If a President chose to ignore it, the Congress had little recourse. It could try to deny funds but in the face of a certain Presidential veto, the votes necessary for an override present an overwhelmingly high bar. And besides, it misses the point. The only real sanction on a President who acts unconstitutionally is removal via impeachment and conviction. But this just returns us to our starting point which is a Congress which no longer acts independently of the Executive but rather at its beck and call. Still Presidents did at least do some minimal notification and consultation with Congressional leaders before beginning their wars. It is worth noting that even George Bush, that arch promoter of the unilateral Presidency, sought Congressional support, if not a declaration of war, in the two Authorizations for the Use of Military Force (AUMFs) for his wars in Afghanistan and Iraq. Certainly he abused these to the maximum possible but he did seek some Congressional cover for his actions. Fast forward to Obama.
On March 19, 2011, without any prior notification to Congress, Obama ordered military operations against Libya and its dictator Muammar Gadhafi. On March, 23, 2011, in Cairo, Secretary of Defense Robert Gates said there was no timeline for military action in Libya and that it was unrealistic to think operations would be over in a matter of weeks, that is he expected our military involvement in Libya to continue for months if not years. This is well beyond the parameters set up by the War Powers Act. Yet on March 30, 2011, Secretary of State Hillary Clinton in a closed Congressional hearing stated that Obama would likely ignore any limitation Congress placed on his actions in Libya. This is another case of Obama taking an even more extreme and unconstitutional position than Bush. He has given himself the right to make war and cut the Congress entirely out of the process. This is as baldly unconstitutional as you can get. Obama has no doubt calculated that as corrupt as he is, as corrupt as the Congress is, and as apathetic and disenpowered as the American public is, he will get away with this latest power grab. He could well be right.
On April 1, 2011, a quite appropriate date for what follows, the Office of Legal Counsel (OLC), the office in the Justice Department which is supposed to supply advice to the Executive branch on whether what it is doing is legal, opined
that the President has the power to commit United States troops abroad,” as well as to “take military action,” “for the purpose of protecting important national interests,” even without specific prior authorization from Congress.
Moreover, the President as Commander in Chief “superintend[s] the military,” Loving v. United States, 517 U.S. 748, 772 (1996), and “is authorized to direct the movements of the naval and military forces placed by law at his command.”
The OLC, of course, is the same office from which John Yoo wrote his famous memos legitimizing torture and advancing the theory that the President had unlimited powers in war. The war Yoo had in mind was the war on terror, and, as that essentially had no end, the dictatorial power he sought for the President was effectively permanent. Although John Yoo is long gone from the OLC, his view of the imperial Presidency and unilateral Executive lives on there.
The Framers, however, never meant to grant such power to the President as the OLC asserts. Even Alexander Hamilton, the most energetic promoter of Presidential power, rejected it. In Federalist 69, he wrote,
The President is to be commander-in-chief of the army and navy of the United States. In this respect his authority would be nominally the same with that of the king of Great Britain, but in substance much inferior to it. It would amount to nothing more than the supreme command and direction of the military and naval forces, as first General and admiral of the Confederacy; while that of the British king extends to the declaring of war and to the raising and regulating of fleets and armies—all which, by the Constitution under consideration, would appertain to the legislature.
The con that the OLC is trying to sell is to equate bad practice, Presidential end runs around Congress’ war making power and the often Congressional acquiescence in these run arounds, with Constitutional legitimacy. But even in this history of Executive excess and Congressional failure to live up to its responsibilities, the pattern heretofore has been for there to be at least some consultation with Congress. And nothing precludes and the Constitution demands that when the President does use military force on an emergency basis that Congressional authorization and approval should be subsequently obtained.
The OLC opinion simply ignores all this. Rather it dresses up specious arguments to make them sound as plausible as possible.
The memo says Obama’s use of force in Libya turns on two questions:
first, whether United States operations in Libya would serve sufficiently important national interests to permit the President’s action as Commander in Chief and Chief Executive and pursuant to his authority to conduct U.S. foreign relations; and second, whether the military operations that the President anticipated ordering would be sufficiently extensive in “nature, scope, and duration” to constitute a “war” requiring prior specific congressional approval under the Declaration of War Clause.
The national interests it cites are “preserving regional stability and supporting the UNSC’s credibility and effectiveness.” These are laughable. We have never had any interest in the stability of the Middle East. We have perpetuated the Israel-Palestine conflict and supported dictators throughout the region as long as we were assured of access to oil and the routes by which it was transported. Between oil and stability, oil has won everytime.
As for the UN Security Council, the US has a veto. Presidents only support those Security Council decisions with which they already agree. All the others get vetoed or get pulled under threat of veto. So really the US doesn’t support the Security Council per se but rather uses it as a mechanism to legitimize certain of its foreign policy objectives. There is a world of difference between this and what the OLC maintains.
As for the Libyan war not being a real war, tell that to the people dying in it. The OLC’s bizarre reasoning is that, as long as the scope and duration are limited, this war is too small to count, both under the Constitution and the War Powers Act. But as I pointed out above, even Defense Secretary Gates thinks that the Libyan war will exceed the “small war” legalism the OLC is relying on. Even in its own terms, when we look beyond the OLC’s rhetoric to the substance of its arguments, we find that they are empty. But then that is to be expected. The whole exercise of the OLC memo is to give, not a legal defense but a legal sounding rationale, to what is the Executive’s unconstitutional usurpation of Congress’ war making power.
Related to this, Sen. Rand Paul (R-KY) tried to get a vote on this December 20, 2007 statement of Obama which he gave as part of a survey of his campaign positions:
The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation
On April 5, 2011, the Senate in a not so rare demonstration of bipartisan cowardice voted 90-10 to table his motion. Here is the rest of Obama’s answer:
In instances of self-defense, the President would be within his constitutional authority to act before advising Congress or seeking its consent. History has shown us time and again, however, that military action is most successful when it is authorized and supported by the Legislative branch. It is always preferable to have the informed consent of Congress prior to any military action. As for the specific question about bombing suspected nuclear sites, I recently introduced S.J. Res. 23, which states in part that “any offensive military action taken by the United States against Iran must be explicitly authorized by Congress.” The recent NIE tells us that Iran in 2003 halted its effort to design a nuclear weapon. While this does not mean that Iran is no longer a threat to the United States or its allies, it does give us time to conduct aggressive and principled personal diplomacy aimed at preventing Iran from developing nuclear weapons.
We did not attack Libya in self-defense. The closer example is Iran where candidate Obama demanded that any military action be “explicitly authorized by Congress.”
Along these lines, the argument has been made that the Senate passed a non-binding resolution supporting the imposition of a no-fly zone on March 1, 2011. The story on this is quite interesting. Democratic Senate leaders basically pulled a bait and switch. They put out a resolution with nearly the same title as a non-controversial one condemning violence in Libya that had been circulating for a few weeks. Senators only see the title on these notifications so thought the resolution being voted on was the older one without the no-fly zone language. At 6:30 in the evening before an essentially empty Senate, Chuck Schumer (D-NY) in an action that took about one minute moved that the resolution be adopted by unanimous consent. And there being no objection because no one knew what was going on except those in the know, it was, in fact, adopted. This was the stealthy, deceitful way that Obama got a Senate resolution purportedly supporting his future military plans against Libya while avoiding any real debate on the issue.
On May 20, 2011, at the end of the 60 day window afforded under the War Powers Act to gain Congressional approval for military actions begun by the Executive, the Libyan war became illegal. As a result on May 20, 2011, the Obama White House declared that it’s use of military force in Libya was too small to need Congressional approval.
In a June 18, 2011 story, the Times Charlie Savage reported that both Caroline Krass, acting head of the Office of Legal Counsel (OLC), the government’s adviser on the legality of its actions, and Jeh Johnson, the Pentagon’s general counsel, that is the Pentagon’s chief civilian lawyer, told Obama that his actions in Libya amounted to “hostilities” under the War Powers Act. In other words, Obama ignored the opinion of the two heaviest legal hitters on this subject in the government. Instead he went with Robert Bauer, the White House counsel, a lightweight in these matters and the State Department’s legal adviser Harold Koh who told him what he wanted to hear. Koh is an interesting case. He was supposed to be one of the very few liberals in the Obama Administration. His selling out on this issue illustrates a very simple truth: that no liberal with a shred of integrity would work in this Administration.
252. It’s not like Obama doesn’t get it. It’s that he really is that way. On March 25, 2011, Obama accepted an award for his efforts to increase transparency in government. He did so behind closed doors and away from the media. Indeed his acceptance wasn’t even listed in his schedule. Obama’s Administration vies with that of George Bush for the most secretive and opaque. It was incredibly ironic, not to mentioned completely wrongheaded, for anyone, even a group of journalists, to think he deserved such an award, but the way in which he received it made clear that Obama was well aware of the incongruity between his pledge of transparency and the reality of his Administration.
253. From April 7, 2011, the Democrats have decided to follow the Republicans and embrace Citizens United (item 180). They have set up so-called super PACs which can receive unlimited contributions from 501(c)(4) groups. These groups don’t have to list their donors. So while our government is being openly bought, that is even more so than it is now, we will not know who is doing the buying, although you can be sure both the politicians and those writing the checks will know.
You can see this as a response to Obama and the Democrats’ current situation. They have kicked their base numerous times in the face. There is a distinct lack of enthusiasm for them as a result. So they are supplementing their funds by going straight to the rich for handouts. It merely shows that anyone who votes for, or contributes to, any Democrat (or any Republican) is voting against their own interests and in favor of those of the rich.
254. Throughout March 2011, there was talk of a “grand deal” on the 2011 budget. To understand what an epic fail this is in basic governance, you have to remember that the government’s 2011 fiscal year began on October 1, 2010 so 6 months into their fiscal year the Democrats and Republicans had still not completed their budget for the current year. On April 8, 2011, continuing resolutions to keep the government running were to run out. This set up the specter of a government shutdown. It was pure Shock Doctrine and high political kabuki. This was not a case where one side wanted budget cuts and the other side didn’t. It was one where both sides wanted cuts and used a self-created “crisis” to justify them. Unsurprisingly, late on the night of April 8, 2011, a “deal” was announced. $38.5 billion in cuts below the 2010 baseline were to be made. Defense would get a $5 billion increase above 2010 levels. (The wars are funded separately.) So some $43.5 billion would be coming out of the non-defense discretionary budget or what most of us think of as the federal government. $18 billion of this would be from one time cuts and wiping out surpluses where they existed.
These cuts may not seem huge but they have a multiplicative effect over time and could reduce government spending by as much as $500 billion over ten years. Isn’t that a good thing? No, unemployment remains high, the economy is a mess, and the financial sector remains a ticking time bomb. All these cuts do is eliminate, again, whatever stimulative impact the big tax cut deal at the end of last year (item 218) might have had. I say might have because the parts that were going to the lower and middle class were mostly going to go to the non-stimulative activity of paying down debt. They were wiped out a second time by the increases in commodity prices, especially in food and gasoline, due entirely to financial speculators. Now they are being gutted a third time by these budget cuts.
Meanwhile the rich will keep all of their tax cuts. But there is nothing unusual about that either. Trillions have gone to them and the corps and banks they own and control, and to their wars. At the same time, the rest of us are being told that there is not enough money to go around and that we must tighten our belts. It is another example of our country being of the rich, by the rich, for the rich. That is the real message about what the Democrats and Republicans were doing here. Nor is it over. Think of this rather as the first salvo. The debt ceiling has to be raised in May leading to another Shock Doctrine opportunity for budget cuts. The Cat Food commission’s recommendations, or at least those of Bowles and Simpson (items 136 and 203), are still out there. And the 2012 fiscal year will begin only 4 months after the May debt ceiling fight, 3 if you take into account Congress’ month long August vacation.
255. On April 13, 2011, the Office of the Comptroller of the Currency (OCC), perhaps the most bank friendly of all the bank friendly federal regulators sought to do an end run around other cosmetic efforts to hold banks “accountable” for their criminality and fraud in foreclosuregate. The OCC issued weak cease and desist orders to the banks letting them off for their massive prior frauds (that is criminal investigations into their activities) and only requiring some largely pro forma review. The banks were allowed to choose and hire their own “independent” auditors who would look at some of their loan files. This process is supposed to take 120 days. If the banks are hiring these guys, you can be sure they will not be independent. And given the time constraints and the banks’ influence on what mortgages will be looked at, it is clear that few will be examined and fewer still in depth. It is, in other words, a kabuki exercise meant to let the banks off the hook and shows, in case anyone had any doubts, that the regulators are there to collude with and cover for the perpetrators, not to serve us or any public interest.
256. On April 26, 2011, it was reported that there would be a major reshuffling of the neocon deck chairs in the Obama Administration’s military and intelligence apparatus. Leon Panetta will be nominated to replace Robert Gates as Secretary of Defense. Panetta is currently CIA director. As DCI, Panetta did nothing to reform the CIA. Indeed he was a strong proponent of covering up Bush era illegalities there. As the current revolts in the Arab world show the CIA under Panetta’s leadership continues to do an awful job predicting future events or being ready to react to them when they happen. In fact, the CIA has played a not insignficant role in poisoning relations with the people in that part of the world by its support for the dictatorships that oppressed them. It has been doing much the same with its drone programs in Pakistan. Somehow people don’t like the idea of the CIA bombing their country at will. Go figure.
David Petraeus is slated to be named to Panetta’s position at CIA. Petraeus originally made his reputation training the Iraqi army. He actually failed miserably at this, but Petraeus has always been an opportunist and known to move on to another position before the shit hits the fan. Bush chose him to lead the “surge” in Iraq. Petraeus had just written the book on counterinsurgency. It never seemed to matter to anyone, especially Bush, that the surge was never going to come close to meeting the conditions which Petraeus had himself laid down for a successful COIN strategy. Sectarian violence did decrease during Petraeus’ stewardship in Iraq, but it had nothing to do with him. His big sweeps, in fact, tended to inflame the situation and increase US casualties. What saved him was a split between the traditional Sunni power structure and more radical jihadist elements. The traditionalists sought him out and he was able to buy them off for a couple hundred million a year, a nominal sum considering the $140 billion or so that it was costing us to keep an army in the country. Sectarian violence also decreased because, by that time, the Shiites had been largely successful in their ethnic cleansing campaigns in Baghdad and elsewhere and were quite content to sit on and consolidate their winnings. It should be remembered that the actual rationale for the surge was not to decrease sectarian violence but to achieve the conditions for a political settlement between the Iraq’s Kurds, Shia, and Sunnis. The surge failed to even come close accomplishing this.
After McChrystal’s implosion in June 2010, Petraeus was sent to take charge in Afghanistan. As then CENTCOM commander, he already oversaw both Iraq and Afghanistan. This move simply put him in charge of daily operations. In the 10 months he has been there, the downward spiral has only continued. The timetable for even the hope for the beginning of a withdrawal was pushed back to 2014 under his watch but the decision was in the works well before his taking over there. He merely helped legitimize it.
Ryan Crocker will be named to replace Karl Eikenberry as our ambassador in Afghanistan. Eikenberry lost favor for criticizing the notoriouly corrupt and ineffective government of our resident puppet Hamid Karzai. Crocker, on the other hand, was Bush’s ambassador to Iraq during the surge and one of its most vociferous and dishonest cheerleaders. Seeing as the Obama Administration is in every significant way a continuation of the Bush Administration, it is completely unsurprising that Obama would choose a Bush neocon for this position.
Finally, a Marine Lieutenant General John Allen will be the new commander in Afghanistan. The choice of a Marine as commander is an indication that the Obama Administration will continue to doubledown and push for, despite any talk to the contrary, for a military solution there.
This is all set against the backdrop of an April 25, 2011 Washington Post-ABC poll which showed that more Americans now disapprove of Obama’s handling of the war than approve it (49% to 44%). Their poll for March showed that overall 64% of Americans do not think the war is worth fighting.
257. On April 24, 2011, there was a series of articles from around the world based on another wikileaks, or son of wikileaks, document dump. This one was on the government’s files on Guantanamo detainees, specifically its Detainee Assessment Briefs. It has been known for some time through habeas petitions in federal court that many of the cases against Guantanamo inmates were so flimsy as to be non-existent. These were people who were swept up in Afghanistan and Pakistan because they were in the wrong place at the wrong time or to pick up a bounty. What the government documents show is the widespread government use of snitches at Guantanamo to inculpate the detainees held there. Just 8 of these informants were used to build cases against 255 of their fellow inmates (that is 1/3 of the 750 men who have passed through or are still being held at Guantanamo). The problem was that they were unreliable and their information often untrue, and the government knew this.
In a Kafkaesque twist, the next day April 25, 2011, the Justice Department warned attorneys for the detainees that they could not use any of the information from the released documents because they were still classified. So this information is available to virtually anyone on the planet, with the exception of those who actually could make use of it.
258. Treasury Secretary Timothy Geithner has decided to exempt foreign exchange derivatives from clearinghouse requirements set forth in the already notoriously weak Dodd-Frank financial reform bill. On April 29, 2011, Assistant Secretary for Financial Markets Mary Miller said there was no need because foreign exchange derivatives were a “well functioning market.” There are just a few things wrong with that statement. First, the first time derivatives blew up, shaking financial markets, was back in 1998 when Long Term Capital Management (LTCM) went kerblooey because of foreign exchange action following the 1997 Asian banking crisis and the 1998 Russian default. Second, after the 2008 meltdown, the Fed ran programs eventually amounting to $5.4 trillion to stabilize foreign exchange markets. Third, the foreign exchange derivatives market is $30 trillion in size or twice our current GDP. Fourth, there is a lot of potential instability in foreign exchange markets. The euro could well not survive. Japan is reeling from the earthquake and tsunami. The UK’s austerity policy is failing and dragging the country’s economy even futher down. China is being squeezed between rising commodities’ prices and the need to keep the yuan low to underwrite exports as well as serial bubbles. So far all this has led to a devaluating of the dollar, but if any of these economic powers goes down or there is another general downturn in the world economy, there will be a flight to safety and subsequent revaluation of the dollar. Sixth, netting which is used to defend the stability of derivatives markets in general is a dishonest fiction. Netting is when a bank buys derivatives as insurance to cover both sides of a position. If a currency goes up against another currency, they’re covered. If it goes down relative to it, they’re covered for that too. However, in a major crisis or a downturn, most of the sellers of derivatives covering the downside will be quickly wiped out and so most of those positions for which they sold derivative insurance will not be covered. Seventh, because the dollar is the world’s reserve currency, many international business deals are denominated in dollars. In the event of a major crisis or worldwide downturn and a flight to safety to the dollar, there will not be enough dollars out there to cover all the dollar denominated deals. This was a prime reason for all the large swap programs the Fed ran with central banks around the world after the 2008 meltdown. It was basically supporting the foreign exchange markets and protecting them from the consequences of their own miscalculations.
Anything as big and as prone to failure as foreign exchange markets needs not just regulation but close regulation, much more than is even in Dodd-Frank. That Geithner is taking them out of the mix is just another example of him acting on the banks’, not the country’s, behalf. Why am I not surprised?
259. The State Department is proposing an insane, draconian, impossible, Kafkaesque application for a US passport. For those not born in a medical facility or whose birth was not recorded for more than a year, the form asks mother’s residence one year before, at time of, and one year after birth. If she saw a physician before or after the birth, it asks name of physician and dates of appointments. It asks what papers the mother may have used to enter the country and the circumstances of, and witnesses to, the birth. It asks if there was any religious ceremony, like a circumcision or baptism, that occurred and may have recorded the birth (with names and addresses to be supplied). For both this group and those born outside the US, it goes on to ask every place one has lived from birth to the present (with addresses and dates), every place one has worked (with names, dates, addresses, names of supervisors, and their telephone numbers), and every school ever attended (with names, dates, and addresses). The State Department announcement of the proposed rule (February 24, 2011) estimates that it will affect 74,021 applicants and that it will take 45 minutes to complete. Any organization that is as bad at math as those two numbers suggest should really not be entrusted with anything that takes more than crayons to communicate.
260. In April 2011, the Obama Administration’s Department of Justice submitted a brief for certiorari to the Supreme Court (that is it petitioned the Court to hear the case) in US v. Antoine James. It argued that law enforcement agencies should be allowed to tag vehicles with GPS tracking devices for extended periods of time without a warrant.
The facts are that the FBI and DC police began investigating Antoine James in 2004 for selling cocaine. In their investigation, they used both warranted and warrantless surveillance. At one point, they got a warrant to attach a GPS device to James’ Jeep Grand Cherokee. It was to be attached within 10 days and within DC. Law enforcement complied with neither of these provisions, attaching the GPS tracker 11 days later in Maryland. James’ attorneys moved to suppress evidence obtained through the GPS tracking on 4th Amendment grounds. The district court allowed GPS evidence except when the car was in a garage next to James’ residence. After 2 trials, James was convicted of conspiracy to sell more than 5 kilos of cocaine and sentenced to life in prison. His conviction was reserved on appeal.
In US v. Knotts (1983), the Supreme Court had concluded that a “person traveling in an automobile on public thoroughfares has no reasonable expectation of privacy in his movements from one place to another.” However, Knotts was about a single trip, not extended surveillance 24/7 for a month. Interestingly, in its brief, the government cites repeatedly the dissent of Judge Sentelle to the Circuit Court of Appeals’ decision, that is it is relying on an extremely conservative judge to bolster its view.
This case is another example of the Obama Administration’s disregard for the Constitution when it does not serve its purposes, specifically the 4th Amendment’s protection against “unreasonable searches and seizures.” It is also part of the larger construction of a surveillance state where an individual’s privacy is reduced closer and closer to zero and where the state can examine any and all aspects of our lives effectively without supervision or oversight by anyone. This is not about a suspected drug dealer but all of us. The history of the case shows that the FBI could have gotten a valid warrant and executed it properly if it had wanted to. It just couldn’t be bothered. Now under cover of that sloppiness, the government wishes, not to rectify its sloppiness, but institutionalize it at the expense of our 4th Amendment rights and right to privacy. Given the radically reactionary nature of this Supreme Court, they are betting they will get away with it.
261. In our corrupt politics, it has been true for years that panels and commissions supposed to objectively and fairly evaluate issues are, in fact, stacked with pseudo-independent “experts” guaranteed to validate whatever our corporatist elites want. As an example of this, on May 5, 2011, Obama Energy Secretary Steven Chu announced the creation of an expert panel to study the environmentally damaging practice of fracking, the injection of solutions under pressure underground to concentrate and facilitate the extraction of natural gas. The panel is to be chaired by John Deutch, an ex-head of the CIA, who used to be on the board of Schlumberger, a major fracking concern, and is currently on the board at Cheniere Energy, a liquified natural gas company. Other member are Stephen Holditch, a fracking design engineer; Mark Zoback, a senior advisor at Baker Hughes, another fracking company; Kathleen McGinty, former chair of the White House Council on Environmental Quality under Clinton and now a senior vice president at Weston Solutions whose clients include gas drilling and natural gas companies; Susan Tierney, another Clintonista who was an assistant secretary of Energy and who is now the managing principal at the Analysis Group, another consulting company to natural gas using utilities and natural gas pipeline companies; and Daniel Yergin, the archtypal denier of Peak Oil and Peak Energy (cornucopian) who consults for a variety of energy interests. Fred Krupp, president of the Environmental Defense Fund (EDF) is also on the panel. It is important to understand that the EDF is something of a Trojan horse. It advocates market based, that is corporate friendly “solutions” to environmental problems. Krupp also was a founder of US Climate Action Partnership in association with big corporate polluters like Alcoa, GE, and DuPont who ostensibly want to work for limits on greenhouse gases in so far as it does not get in the way of their own pollution practices.
Noticeably missing from this lineup is any bona fide representative of the environmental community or critic of fracking. This is, of course, a feature , not a bug. This is all very reminiscent of Dick Cheney’s Energy Taskforce and Obama’s Cat Food Commission. It is quite simply a propaganda exercise. The interests of the environment and of ordinary Americans are totally excluded.
262. On April 27, 2011, the Supreme Court in a 5-4 decision dealt a blow to class action lawsuits in AT&T v. Concepcion. The Concepcions, a California couple, sued ATT for false advertising when ATT charged the couple sales tax on what were supposed to be free phones. The contract they signed with ATT, of course, written by ATT, required arbitration of all disputes and specifically prohibited recourse to class action lawsuits against the company. In other words, ATT had stacked the deck against its own customers. When the individual amounts are small, as here ($30), arbitration becomes a vehicle which allows the corporation to keep the fruits of its bad behavior. Indeed it incentivizes such behavior. The vast majority of those taken advantage of by the company’s bad practices will not enter into arbitration, because they may not be aware that they were taken advantage of and, even if they were, individually it is not worth the time and expense to them to contest the matter through arbitration. The Concepcions filed suit in federal court and their suit was consolidated into a class action. The lower courts found for the Concepcions on the grounds that the prohibition against a class action was unconscionable under California law. Scalia writing for the radically conservative majority reversed citing the 1925 Federal Arbitration Act. This act put the arbitration process on par with judicial review, but only if that process was found to be fundamentally fair. Whatever the conditions for arbitration were in 1925, today this process primarily advantages corporations and disadvantages individual claimants, pitting as it does the great resources of the corporation against those of single individuals. This decision is another example of a conservative Court standing a statute on its head to justify a predetermined corporatist conclusion.
263. Some Supreme Court decisions are just astonishingly badly reasoned. On June 13, 2011, in Janus Capital Group v. First Derivative Traders, the Court’s radically conservative majority ruled 5-4 that financial companies are not liable for perpetrating fraud upon their investors. Investors in Janus Capital Group (JPG) brought a private action against the company under the SEC’s Rule 10b-5 which prohibits anyone from making an “untrue statement of a material fact” with regard to the sale or purchase of securities. To make such a statement is the very essence of fraud. The scam worked like this. The parent company JPG set up a subsidiary wholly owned shell company Janus Capital Management (JCM) to act as an “investment adviser” to yet another entity Janus Investment Fund, which while managed by JCM was owned by its investors, mutual funds. The shell company JCM lied in the prospectuses it produced about its successful management of the Janus Investment Fund (JIF). These lies in turn made its parent company, the real substance behind the JCM shell, look more successful and a better investment opportunity than it, in fact, was. Basically, it was the parent JPG which wrote the prospectuses through its shell JCM for the JIF fund. You would think this would make them liable for the lies they made. But Thomas who wrote the majority opinion held that the prospectuses belonged to the JIF fund which filed them with the SEC. As a result, JPG and JCM were off the hook. The effect of this ruling is that it gives a license and incentive to financial management companies to lie to make themselves look better and so drive up their value, that is it sanctions and promotes financial fraud.
264. The Roberts Court is pro-corporation in its orientation. It is correspondingly anti-class action since class actions redress in part the great inequality between the coporation and its resources and those of the individual. On June 20, 2011, the Court, with Scalia writing for the majority, handed down its decision in Walmart v. Dukes. This was a class action lawsuit involving 1.5 million current and past female employees of the retail chain and was filed under Title VII of the 1964 Civil Rights Act. Title VII is another major target of the Roberts Court. The suit charged that Walmart’s local managers engaged in a diffuse and widespread pattern of discrimination against women employees in both pay and promotions.
The Court as a whole agreed that the class could not be certified under rule 23 (b)(2) of Title VII because it required a single remedy for all participants in the suit (the members of the class) and its purpose was injunctive, not monetary, relief. So there were two problems. Some class members (past employees) could only seek monetary redress while some (current employees) sought both monetary compensation and injunctive relief. So the remedy would vary and be in whole or in part monetary in nature, both conditions being precluded by the paragraph’s class making provisions. This was a fixable problem because the lawyers for the women employees had asked that certification of the class be considered under the following rule 23 (b)(3) that dealt with monetary compensation issues if it was found that the class could not be certified under 23 (b)(2).
The class had also been certified under rule 23(a)(2) which required that members of the class had some common question at law which united them. This part of the decision was arrived at with a 5-4 majority of the Court’s radical conservatives. Where the previous part of the decision depended upon an actual reading of the rule in question, in this part Scalia failed to do so rather he looked at the conditions for class formation under 23 (a). This is the kind of sloppy legal thinking and cherrypicking of arguments to ideological ends that Scalia is infamous for.
Basically, the Court affirmed that large national corporations can engage in diffuse, widespread discrimination as long as they do not order it from the top down but rather leave it to their local managers. It did so by stacking the deck against those who would contest such discrimination. Scalia reasoned that since the kind and degree of discrimination varied from location to location, there were no common facts and hence no common class. The effect of this is to pit the power and resources of a Walmart against much smaller classes or even individuals. In such an unequal fight and with a corporatist Court, hating class actions and Title VII, waiting at the end of the process, large corporations are free to practise discrimination and those discriminated against have fewer means and a harder road to contest that discrimination.
265. The whitewash of torture continues. In January 2008, Attorney General Michael Mukasey gave US Attorney for Connecticut John Durham the task of investigating the destruction of torture tapes by the CIA. It was a blatant case of destroying evidence. But on November 9, 2010, Durham concluded his investigation without charging anyone (item 202). On August 24, 2009, Obama Attorney General Eric Holder announced that he was tasking Durham to look into the interrogations of 101 detainees (item 72). However, Holder effectively hamstrung this inquiry—it was not an investigation—by confining it to a review of existing materials. Nor was it a review to find torture but rather torture in excess of what the Bush Administration had authorized. Given Durham’s proficiency in not finding what he was halfheartedly being asked to look for, it was no surprise that on June 30 , 2011, he closed 99 of the cases and referred only 2 for further investigation. These will likely quietly disappear somewhere down the road too. This was never about accountability. It was rather a pro forma process to make sure real accountability never happened.
266. On May 31, 2010, the Israelis attacked a flotilla of ships carrying humanitarian aid to Gaza in the Mavi Marmara incident (item 160). 9 peace activists were killed, including one Turkish-American, and dozens wounded. In June 2011, a second civilian aid convoy was prepared. On June 24, 2011, State Department Spokesperson Victoria Nuland sought to scare off participation by US activists warning them that “We underscore that delivering or attempting or conspiring to deliver material support or other resources to or for the benefit of a designated foreign terrorist organization, such as Hamas, could violate U.S. civil and criminal statutes and could lead to fines and incarceration.” It goes to show how subservenient the Obama Administration is to Israel that it is willing to act as Israel’s attack dog and threaten its own citizens with terrorism for engaging in humanitarian relief that just happens to embarrass the state of Israel. Of course, no threat was made to Israel if it again attacked and killed Americans this year as it did last year.
267. On July 6, 2011, it was reported that the Obama Administration held a terrorism suspect Ahmed Abdulkadir Warsame onboard a US Navy ship for two months in order to interrogate him outside the US judicial system. Warsame was captured on April 19, 2011 in transit between Somalia and Yemen and is alleged to have ties to both Somalia’s al Shabab and al Qaeda in Yemen. Two months into his interrogation, Warsame was mirandized but he waived his rights. At such a late date in the proceedings, his being mirandized was virtually meaningless. Unlike many detainees, he was charged in a federal district court, Southern District of New York (SDNY).
268. On July 12, 2011, Jeremy Scahill reported in the Nation that the Obama Administration was continuing to operate a black site in Mogadishu, Somalia, unreported to the International Red Cross, where detainees are rendered from other countries, held in poor conditions, and interrogated by the CIA. The twist that is supposed to confer plausible deniability on these activities is that the prison is nominally run by Somalis even though the CIA pays their salaries.
269. On June 8, 2011, it came out that Boumediene granting the right of Guantanamo detainees to habeas corpus had been vitiated by the DC Court of Appeals which has been upholding government wins on the one hand and reversing and remanding detainee wins at the district court level. Despite the often flimsiness of the government’s cases (item 257), these decisions have been endorsed by the Supreme Court which has refused to grant certiorari (hear) any further appeal of these cases. This has led other detainees to drop their habeas petitions as futile. A Constitutional right as fundamental as habeas corpus has been debased and turned into a pro forma exercise thanks to a conservative judiciary and an aggressive Obama Administration that would rather rack up wins than serve justice.
270. On May 16, 2011, the Supreme Court issued an 8-1 decision, with Alito writing for the majority and Ginsburg in dissent, in Kentucky v. King. The Court’s opinion represents yet another assault on the Fourth Amendment protection against “unreasonable searches and seizures.” The Obama Administration filed an amicus brief in support of this attack.
Following an undercover buy of crack cocaine in Lexington, Kentucky, a drug dealer ran to a nearby apartment building. Uniformed police who were called to the scene smelled marijuana coming from one of the apartments. Assuming that this is where the suspect had fled, they knocked on the door and announced they were the police. When they heard movement within the apartment, they again made an assumption that evidence was being destroyed. They kicked open the door and found one person smoking marijuana and powder cocaine in view. Hollis Deshaun King was arrested, conditionally pled guilty, and was sentenced to 11 years for drug trafficking. The case arises out of King’s effort to suppress the evidence obtained from the original police search. The Kentucky Court of Appeals ruled the search evidence admisible. The Kentucky Supreme Court reversed and ruled it inadmisible.
The Fourth Amendment requires a warrant based on probable cause and granted by a court before a search can be executed. An exception that has been developed by the courts over time is if there are exigent circumstances. Now law enforcement could invoke exigent circumstances for any search they might make. So in turn there is a common sense two part test for exigent circumstances: the police acted in good faith and their actions did not create the exigent circumstances. In its decision, the Kentucky Supreme Court ruled the police had acted in good faith but that their announcing they were the police at the door created the exigent circumstance, a possible destruction of evidence, and that this was reasonably foreseeable by them. Alito and most of the Court ruled that police knocking on a door and announcing their presence was consistent with the Fourth Amendment. In other words, the Court removed the more important of the two branches of the test of whether exigent circumstances exist or not.
There is a distinct element of class in this decision. If the Justices had ever had their doors broken down by police, they would not have ruled as they did. But for them such an incident is unthinkably remote. There are, however, many neighborhoods and communities where such police actions do happen and where the police are feared and distrusted. In them, virtually any action or reaction to the presence of the police could be taken as suspicious and creating an “exigent” circumstance. In essence, this decision by the Court is another example of the two-tiered system of justice we now have in this country. For the powerful, there will be, at least with regard to police searches, a fully functioning Fourth Amendment, not because it is part of the Constitution but because they are powerful. For the rest of us, the Fourth Amendment is dead. We will be ruled by exigent circumstances and the whims of the police.
271. Excessive purely financial, that is not related to hedging, speculation has been going on in oil markets since 2004. This has deliberately inflated the baseline price of oil and derivative petroleum products, like gasoline. Speculation also has been responsible for spikes, like the one that sent oil futures to a high of $145.18/bbl on July 14, 2008.
The usual pattern of a spike is that traders jack up the price of oil until there is a backlash from consumers. When politicians start getting heat but well before any effective remedial action is taken, the traders bank their winnings.
This is what happened in 2011 when consumers started seeing $4/gal gas. From February 22, 2011 when the futures price of oil hit $93.57, the price has been above $90 and hit a high of $113.93/bbl on April 29, 2011. It then “eased” off into the $90-$100 range in June.
On June 23, 2011, Obama announced he would release 30 million barrels from the Strategic Petroleum Reserve to counter the spike in oil prices. Other countries pledged to release a similar amount. What is bizarre about this is that the spike was already over by then. The announcement did have an effect on futures prices. They dropped from $95.41 on June 22, 2011 to $91.02 on June 23, the day of the announcement. However, the effect was transient. Exactly one week later on June 30, 2011, the futures price of oil closed at $95.42, virtually the same price as before the announcement. Obama’s action was meaningless political theater. He didn’t even have the timing on it right. The three simplest things to do to wring excess speculation out of the oil market would be to close out the anonymous over the counter market, ban the non-commercial financial players (Goldman Sachs, Barclays, Morgan Stanley), and set position limits. Notably, Obama did none of these things.
272. The revolving door continues to revolve. On July 6, 2011, it was reported that Christine Varney, the head of the Justice Department’s Anti-Trust Division, would be stepping down to become a partner at Cravath, Swaine & Moore where her paycheck will be around $3 million a year. Under Varney, the Anti-Trust Division did little to challenge corporate power and mergers. One of those mergers was between United Airlines and Continental in August 2010. Cravath represented United Airlines and Varney approved the merger.
273. On November 10, 2010, Erskine Bowles and Alan Simpson delivered their recommendations to cut taxes on the rich and corporations and slash Social Security and Medicare (item 203) and on December 15 and 16, 2010, Congress passed the Obama tax cut deal which he had negotiated with Republicans and which kept the Bush tax cuts for the rich in place (item 218). At this time or even before the November 6, 2010 elections, the Democrats had majorities in both Houses and could have pushed for raising the debt ceiling at least to the end of the 2011 fiscal year on September 30, 2011. Obama could have made it one of the conditions of his tax cut deal. On April 8, 2011, the first grand deal on the budget was announced. Raising the debt ceiling could have been part of that.
Instead on May 16, 2011, the government hit the debt limit without Congressional action. Treasury Secretary Geithner announced that by not paying into government retirement funds, the deadline for the government “running out of money” could be extended until August 2, 2011.
Volumes could be written on all the plans and counterplans proposed by the two sides. In general, these involved cuts, mostly to Social Security, Medicare, and Medicaid comprising 75% to 100% of the deal with tax increases contibuting 25% to zero. Deal sizes were in the $3-$4 trillion range, with Obama favoring the largest package: about $3 trillion in cuts and $1 trillion in tax increases and/or closing tax loopholes.
There are several observations pertinent to these events. First, first quarter growth in 2011 was a slow 1.8%. The effects of the original Obama stimulus, limited and imperfect as they were, are gone. The putative stimulative effects from a reduction in the payroll tax as part of the Obama tax cut deal were nullified by commodities price inflation. State and local budgets are a disaster. Private industry is sitting on historically high profits which they are not investing and do not intend to invest. Unemployment is above 9%. Un- and under employment is twice that. Housing continues to deflate and the massive frauds that permeate every aspect of the mortgage and securitization markets remain unresolved. It is Hoover and more than Hoover for the government to cut back its spending at this time. It will worsen economic conditions and has the potential of returning the country to depression.
Second, the money is there. The idea that it is not is a relic of the gold standard. Obama tells us that the money is not there for Social Security, Medicare, and Medicaid that help ordinary Americans, but the money is there for unproductive tax cuts for the rich and for his wars.
Third, the debt limit violates the 14th Amendment Section 4
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.
That is if Congress appropriates the money in its budget, the Constitution says it can not question the validity of any debt that arises out of it. Obama has the power and the duty to finance the debt, period.
From the start, this has been about manufacturing a crisis, the prospect of a real but unnecessary default, and its use by both parties to justify slashing programs that benefit ordinary Americans and not the rich and corporations. The differences between Obama and the Democrats on the one hand and the Republicans on the other are not about the goals but about how each can achieve the greatest political advantage from the crisis.
274. On July 20, 2011, an Aeroméxico flight from Mexico City to Barcelona was denied entrance into US airspace because a Mexican human rights activist Raquel Gutiérrez Aguilar was on board. The incident shows how malicious and goofy the TSA no-fly list is. It is another example of the Obama Administration keeping an atrocious Bush idea, and if anything making it worse.
Flights from Mexico to Europe routinely cross US airspace. Gutiérrez Aguilar had taken such a flight as recently as the previous year. Her current trip was to speak in Italy on Latin American social movements. This is nothing more than using the TSA to harass foreign human rights activists. Is there a more perverted agency? It gropes the public on a daily basis. It scans them naked. (Item 208) It harasses foreign human rights activists and American critics (Item 207). But does it actually catch terrorists or make it safer to fly? No.
275. On July 27, 2011 in the aftermath of the devastating attack in Norway by a rightwing Christianist terrorist, it was reported that the Department of Homeland Security (DHS) has only one person dealing with right wing terrorist threats in the United States. After Obama came to office, the DHS prepared a report on right wing extremism. It was leaked to conservatives engaged in pseudo-outrage. Apparently they forgot or chose not to remember that a right wing extremist Timothy McVeigh killed 168 people on April 19, 1995 in Oklahoma City, or that terrorist threats from the right are growing.. In what has become standard operating procedure for the Obama Administration, DHS Secretary Janet Napolitano withdrew the report and gutted the unit which monitored right wing extremist groups.
276. On May 27, 2011, the Center for Labor Market Studies at Northeastern University in Boston issued a report which found that in the six quarters (year and a half) following the official end of the recession in June 2009, that is to the end of December 2010, the real national income in the US grew by $528 billion. Pre-tax corporate profits accounted for $428 billion or 88% of this figure. Real wages and salaries increased by $7 billion, or 1.3% of this amount. The report noted that if the analysis was extended for an additional quarter, corporate profits would account for 92% of the growth in real national income, and wages and salaries would actually be negative, declining by $22 billion.
277. On July 18, 2011, the chief scientist for Arctic research at the Bureau of Ocean Energy Management Regulation and Enforcement (BOEM) Charles Monett was suspended, placed under a gag order, and prohibited from contacting colleagues at the BOEM as the result of an investigation by the Interior Department’s Inspector General with regard to a paper Monett had authored expressing concern that polar bears were at risk from declining pack ice due to global warming. The Obama Administration is seeking to open up the Chukchi and Beaufort seas to oil drilling. This had been put on hold after the BP disaster in the Gulf of Mexico. Harassing Monett is a means to shut him up. It also serves as a warning to other scientists that their findings better not disagree with Administration policy. It is very reminiscent of Bush attempts to shut down climate change scientists like James Hansen.
On August 26, 2011, Monnett was ordered back to work although not restored to his previous functions. BOEM itself came under investigation by Interior’s Scientific Integrity Officer, at which point, one of its managers then just happened to wipe his hard drive.
278. A Pew study of July 26, 2011 based on data from 2009 showed that the median wealth of whites ($113,149) was 20 times that of African Americans ($5,677) and 18 times that of Hispanics. This marked an increase in wealth disparity from 2005. It was attributed to the greater impact of the housing bubble bust and the recession among African Americans and Hispanics. Obama has done exactly nothing to help the groups that have suffered the most from the depredations and speculations of the banks. Instead he has focused on bailing out the very banks that created this devastating wealth disparity.
279. As reported on August 15, 2011, the Obama Administration and its chief anti-regulator Cass Sunstein who presides over the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs have literally been endangering children’s lives by slow walking new child labor rules.
280. Demonstrating that it has learned nothing from the BP oil spill, on August 19, 2011, the Obama Administration announced that it would resume oil and gas leases in the Gulf of Mexico. It is a boon for the oil companies but will have no current or future effects on the price of oil.
281. It is really almost impossible to describe just how in the pocket of the banks Obama is. Iowa Attorney General Tom Miller (item 227) has been leading bogus settlement talks with the banks over their huge frauds in mortgages. New York Attorney General Eric Schneiderman has shown some honesty and integrity by refusing to sign off on this process. For his refusal to go along, Miller knocked him off the Executive Committee overseeing the bogus negotiations. Schneiderman’s signing on to any deal is crucial because almost all mortgage trusts went through Wall Street and so are governed by New York state law, which barring Congressional intervention, is controlling.
An August 22, 2011 New York Times story by Gretchen Morgenson reported that the Obama Administration has been trying to pressure Schneiderman to go along with the Miller charade. It sent HUD (Housing and Human Development) Secretary Shaun Donovan and officials of the Justice Department to talk to both Schneiderman and his allies about getting back on board this sellout to the banks. The HUD Secretary was doing this despite his own Inspector General’s finding in May 2011 that audits of five lenders: Bank of America, JPMorgan, Wells Fargo, Citigroup, and Ally Financial showed that they had defrauded taxpayers by filing claims against the FHA for the loan balances of homes they had foreclosed using faulty and defective documents.
On September 18, 2011, the anti-investigation forces upped the ante outing an investigator in Schneiderman’s office as a part-time dominatrix.
282. Operation Fast and Furious was a sting put together by the ATF (Bureau of Alcohol, Tobacco, and Firearms) in 2009-2010. Its goal was to allow the purchase of weapons by straw purchasers and then use these to track down those running gun smuggling operations from the US to Mexico. It was a fiasco. Some 2,000 weapons ended up in Mexico. Most were never recovered. They were used in numerous shootings, including one that resulted in the murder of US Border Patrol Agent Brian Terry on December 14, 2010. His death effectively ended the program.
This was a program that was completely within the Obama Administration. It was run out of the ATF and Main Justice in Washington. On August 30, 2011, ATF acting director Kenneth Melson resigned. No heads rolled though at Main Justice. Instead also on August 30, 2011, the US Attorney for Arizona Dennis Burke resigned. As US Attorney, Burke would have been the one to sign some warrants for the program and to give it limited legal guidance, but the actual direction of the program came out of the DOJ in Washington. Basically, Attorney General Eric Holder decided he had to sacrifice someone, but rather than going after those actually responsible, that is those in Washington, he scapegoated the US Attorney in Arizona. Classy.
283. A WHO report released in August 2011 showed that the US was ranked 41st in the world in terms of newborn mortality rates. In 1990, it was ranked 28th. Obama’s decision to delay the implementation of healthcare reform until 2014 and its stress on insurance rather than actual care will result in thousands of unnecessary newborn deaths. Corporate profits must be maintained and our standing on this health issue is unlikely to improve.
284. On November 15, 2011, Dan Choi, a former serviceman, chained himself to the White House fence along with 12 others to protest Don’t Ask Don’t Tell (DADT)(item 46). He was arrested. Usually those arrested are prosecuted under local ordinances, if at all. But this time the White House knew that Dan Choi, an outspoken critic of the Administration’s footdragging on repeal of DADT, would be there and they decided before the protest even took place that he would be prosecuted under federal statutes that carry far heavier penalties. That the White House was treating Dan Choi’s protest differently from others is selective prosecution and it is illegal, if that concept still has any meaning in our much debased legal system. The aim of the Obama White House was not just to punish Dan Choi personally but to chill public expressions of dissent generally. To show that this was not a fluke or a mistake, on August 31, 2011, government prosecutors took the highly unusual step of seeking a writ of mandamus against the federal judge hearing the case, John Facciola, after he signaled to prosecutors that he would grant a defense request for access to government discussions and communications about Dan Choi’s arrest. (Mandamus in this case would be an appeal to the Court of Appeals to reverse Facciola’s granting of the defense’s request). The prosecution wanted the judge to disallow a selective prosecution defense, again even though this is what was happening and such a prosecution was illegal on its face. The Obama Administration is hostile to criticism and reacts with extreme vindictiveness to it where and when it can.
285. In response to the high unemployment resulting from the 2008 meltdown and subsequent recession, in February 2009, the Congress granted a 65% subsidy for COBRA premiums. COBRA is a program designed to allow those laid off or between jobs to keep healthcare coverage for up to 18 months. The subsidy applied to those from September 2008 onward and was extended 3 times. The last extension was in May 2010. This meant that the subsidy would expire on August 31, 2011 unless further action was taken. But in the budget cutting frenzy of 2011, no action was taken. And thousands of Americans were cut loose by a government and an Administration that couldn’t be bothered with them.
286. On September 2, 2011, Obama directed the EPA to dump smog regulations to control ozone. It is a case of putting the profits of corporations ahead of the health of ordinary Americans. But it is also an example of this Administration’s deceitfulness and duplicity.
Ozone limits were set at 84 parts per billion back in 1997. Per the Clean Air Act, review of these standards was to take place every 5 years. In 2006 in the Bush Administration EPA scientists recommended a reduction in the limit to 60-70 ppb based on data that showed that ozone wasn’t just exacerbating the condition of those with respiratory ailments but that it was killing them. The Bush Administration, however, ignored these recommendations and finalized a rule in 2008 which set a more business-friendly limit of 75 ppb. The American Lung Association and others sued to stop implementation of this rule.
With Obama’s election, his EPA sided with the plaintiffs. In exchange for their withdrawing their lawsuit, the EPA promised to issue new regulations. But there was a catch. They set the deadline a year and a half away, August 2010. That date came and went without EPA action. In December 2010, the EPA announced it was going back to review the data all over again (see item 220 for this and related). Then in January 2011 it finally announced that it would follow the original 2006 recommendations of the EPA scientists. However the rule making process is lengthy and so it still had not been finalized in August 2011 when Obama yanked it.
Obama’s stated reason was that ozone limits would have to be reviewed again in 2013 anyway, that is 5 years on from the 2008 Bush rule. But that isn’t true. As the Administration’s own dating of the next review shows, it is not the date of the review (2006) but the rule (2008) which determines the timing on the next review. If a new rule had been issued in 2011, the next review would be scheduled for 2016. On top of this, future reviews are not going to raise ozone limits. They are not going to find that ozone is good for you. Limits will either be kept where they are or made even stricter. Given the review and rule making procedure, it will likely be 2016 at the earliest before there is a new ozone regulation ready to be finalized, at which point the same argument could be made as now, that the next review is only a couple of years off (2018). As it is, the EPA is allowing polluters to follow the already known to be too high 1997 standards. That is Obama is even worse on ozone than the Bush Administration was prepared to be.
Basically, he strung along environmental and public health groups for 2 1/2 years, got them to suspend their lawsuits during this time, and then stuck it to them when it came time to deliver on his promises to them. He did so using a reason that was transparently false. He did so despite the fact that his action will kill Americans. Finally, he did so because of the costs to the polluters to clean up their act, even though health gains outweighed these costs and it was settled law that cost could not be taken into account in the setting of the ozone limits.
287. On September 8, 2011, Obama announced his jobs plan.
The Obama jobs plan:
$78 billion in tax cuts for businesses:
$65 billion cut payroll taxes in half from 6.2% to 3.1% on first $5 million in payroll and from 6.2% to 0 on first $50 million in wages for new hires
$5 billion for 100% expensing on new plants and equipment, available to both large and small firms
$8 billion for $4,000 tax credits to hire those unemployed more than 6 months
$105 billion for infrastructure projects
$50 billion for transportation projects
$10 billion for an infrastructure bank
$30 billion to modernize schools
$15 billion in neighborhood stabilization (keeping up properties that banks don’t)
$35 billion to rehire teachers and first responders ($30 billion for teachers; $5 billion for first responders)
$175 billion to cut employee payroll taxes in half from 6.2% to 3.1%
$54 billion for unemployed
$49 billion for an extension of Unemployment Insurance
$5 billion for transitional work programs
$447 billion: total
The first thing you should notice about this jobs plan is that it is not a jobs plan. Only $140 billion (the infrastructure projects and the teacher and first responder rehires) of the $447 billion (31% of the package) relates directly to job creation.
Business, especially small businesses, get a near $70 billion windfall without actually having to commit to hire anybody or hire anybody that they wouldn’t have hired anyway.
The $175 billion employee payroll tax cut sounds good but it is unclear how much of this will result in new spending. The previous payroll tax cut went to pay down debt and to pay for increases in gas and food prices. None of that creates jobs. It just went to the banks and the speculators, but I repeat myself.
It’s also important to keep in mind that halving the payroll tax for both employers and employees is a way for Obama to justify future cuts to Social Security. By deliberately underfunding the program, he can then demand benefit cuts to bring funding back into line.
Extension of the unemployment insurance is a good idea. However, it does not help the 99ers and it does not create new jobs. It simply keeps us where we are. Without it, more jobs would be lost and the plight of many of unemployed would be significantly worse.
The transitional work programs raise all kinds of red flags for me. States can get waivers to violate Department of Labor standards to force the unemployed back into the labor force. The Georgia Works model is promoted. This is where companies can hire the unemployed temporarily at minimum wage. It is wage depressing. There are also work sharing and wage insurance schemes. In a different labor environment or a different country, these might be useful but in ours I can’t help but think they would be gamed to hire labor cheaply and then dump them when the subsidies ran out.
Then there is the question of how this will be paid for. Obama is putting it on the tab of Cat Food Commission II. Instead of $1.5 trillion in cuts, the new target will be closer to $2 trillion. As I said above, this looks like a setup to slash Social Security, as well as Medicare and Medicaid.
Finally, as even the loathesome Mitch McConnell has noted, this is an election year gimmick. It is not clear how much of this will be enacted, if the Republicans will play along (unlikely), or how many more sweeteners for business might be added. But like the original Obama stimulus it is too small and not really designed to address effectively the 14 million U-3 unemployed, the 25 million U-6 un- and under employed, and the 29 million disemployed. It is not meant to fix anything but to the stop the deterioration in jobs and the economy just long enough to get Obama through the elections. And to show his appreciation for our passivity, he is sticking us with the bill.
288. On September 13, 2011 POGO (Project on Government Oversight) released a study that found that while government contractors pay their employees less than unionized government workers this does not translate into cost savings. On average, contractors bill the government at 1.83 times the rate it would cost government workers to do the same job. Contractors were found to be more expensive in 33 of 35 job classifications. Executive compensation can be up to nearly $700,000 or $300,000 more than the President makes. This is a big deal because whereas the federal work force is around 2 million strong, the contract work force had ballooned to nearly 8 million as of 2005 and currently accounts for some $320 billion in spending. This is typical of a looting model of government. We pay more and get less with the excess being siphoned off by well connected private sector looters.
289. On September 14, 2011, EPA Administrator announced that the agency will not meet a September 30, 2011 deadline to propose greenhouse gas regulations for power plants. Pursuant to a lawsuit by environment groups, the EPA was supposed to have proposed new regulations by July 26, 2011. On June 13, 2011, it announced that the parties to the suit had agreed to the September 30, 2011 extension with a final rule to be published by May 26, 2012. This looks to be the standard operating procedure of the Obama EPA: respond only after being sued and then draw out the process for as long as possible. It’s a pattern that benefits corporations and screws the public but so what else is new?
290. Commodities markets, especially oil, are dominated by noncommercial speculators who treat these markets less as investments and more like casinos, destroying their price discovery function and causing ordinary Americans to pay inflated prices for the goods produced from them. As per a September 25, 2011 story, the Commodities Futures Trading Commission (CFTC) has been working on rules to limit, not end, this kind of unproductive trading. It has proposed position limits of 25% of the deliverable supply of the underlying commodity. In commodity markets today, the contracts traded are many times the actual physical supply and dominate pricing. The CFTC would limit a trader to holding contracts up to 125% of what was actually physically available in the market.
These rules are supposed to address the two ways that speculators can distort price, either by cornering the physical commodity or flooding the market with contracts and so dominating pricing by sheer dint of numbers.
The two rules are not contradictory because they apply to different trading strategies. Those who go the physical route can’t go the paper route and vice versa.
The problem is that the position limits are still too high. They still allow for substantial distortion in pricing. Worse, a handful of traders could work separately in a legal sense but cooperatively to get around them. And of course a trader could use the opaque over the counter markets to much the same ends.
In short, the Obama CFTC has not ended unproductive noncommercial speculation, it only seeks to make some superficial changes to how the game is played. The real losers in this are, as usual, the rest of us.
291. When I wrote about the Bush Administration, one of the salient ideas I tried to convey was just how deep the rot went. It was not just a few political appointees but went down layers and layers into the guts of departments and agencies. The treatment of Peter Van Buren, a 23 year career State Department officer, illustrates that much the same corrupting process continues in the Obama Presidency. Van Buren wrote a book critical of his time spent in Iraq “reconstructing” the country. His book was pre-cleared by State more than a year ago. But then in a recent blog post Van Buren linked to a Wikileaks cable. This ostensibly brought the wrath of the State Department down on him for leaking classified information, even if it is available to anyone on the planet with access to the net, and even though government officials routinely leak real classified information to sympathetic reporters on a daily basis. Then after his book had already been printed, State belatedly decided it wanted minor changes to it. Taken together, this illustrates to what absurd lengths this Administration will go to suppress criticism, not just of its own programs but those of its predecessor.
292. On October 9, 2011, it was reported by Charlie Savage in the New York Times that the Obama Administration had obtained a legal opinion from the Justice Department’s Office of Legal Counsel (OLC) justifying their targeting and killing of an American citizen Anwar al-Awlaki (item 140). The opinions of the OLC are binding on the Executive branch. However, the process has been distorted. Opinions are kept secret and their aim no longer is to clearly delineate what is and is not legal but rather to defend Executive policy decisions no matter how outrageous. We saw this in the Bush Administration with Yoo-Bybee memos with its bogus and legally horrendous justifications for torture. We are now seeing it in the Obama Administration with its argument that it could ignore the War Powers Act when it went to war in Libya (item 251) and now with its equally trumped up justification for the killing of a US citizen abroad. What is particularly pernicious about the al-Awlaki case is that it is an example of “secret law”, that is the Obama Administration uses its sock puppets in the OLC to give it extraordinary powers through secret OLC opinions. These opinions may, in fact, be blatantly at odds with Congressional intent and being secret are unreviewable by the Congress or the courts. Hence the name, the Obama Administration is creating its own laws and we have no way of knowing what they are or challenging them. If this isn’t tyranny, what is?
293. Per an October 9, 2011 story in the New York Times, two former Census bureau officials released a report based on publicly available Census data which showed that from when the recession was officially called as ended in June 2009 to June 2011 real median household income fell 6.7%, from $53,518 to $49,909. This is twice as much as income fell during the recession (3.2%, from $55,309 to $53,518) which officially lasted from December 2007 to June 2009. Particularly hard hit during the Obama-period (June 2009-June 2011) were households where the head of household lost a job, 18.4% decline, and households with an African American (not Hispanic) head, 9.4% decline versus 4.7% for whites and 4.9% for Hispanics.
What this shows is that for most Americans the recession never ended and that the Obama Administration’s economic record is even worse than previously thought.
294. A UN report released October 10, 2011 found that in the period from October 2010 to August 2011, 125 of 273 detainees interviewed (46%) held by the Afghan National Directorate of Security (NDS) had been tortured. One third of 117 detained by the Afghan National Police (ANP) had been tortured. Systematic torture was found to occur in 5 of the 47 detention centers visited. US-led forces turned over 89 of those interviewed to Afghan security forces. Of these 19 (21%) reported torture. We are expending American lives and spending vast amounts to keep in power in Afghanistan, the world’s biggest producer of heroin, a deeply corrupt government which routinely tortures its citizens, and all Obama can do is to scheme to keep us there as long as possible.
295. The cry has gone up that there shall be no more bank bailouts. This is rhetoric. The truth is that backdoor bailouts are continuing to happen. On October 18, 2011, Bloomberg reported that the foundering Bank of America (BAC) has been moving derivatives from its investment bank unit to its retail bank operation. The amounts involved are staggering. The parent bank holding company had at the end of June 2011 some $75 trillion, yes trillion, in derivatives. $53 trillion or 71% were now held by the retail bank. There are several different kinds of derivatives. The ones originally held by Merrill were probably of the more exotic and riskier type. Why else move them? You see by parking them in its retail bank BAC hopes to get FDIC coverage for them. That is if they blow up and BAC goes down, not only would the FDIC and by extension US taxpayers be on the hook for any losses, the counterparties to the derivatives would be first in line ahead of even regular depositors, you know those whom the FDIC was created to protect. The Fed has signed off on this scam which amounts to fraudulent conveyance and conspiracy to commit fraud. The FDIC hasn’t and could choose not to enforce the derivative contracts. The big question is will it?
296. October 24, 2011: the Obama Administration is seeking to codify in a rule the long term practice of government lying in response to FOIA requests for disclosure. The Freedom of Information Act (FOIA) was enacted to enhance the people’s right to know what their government is up to. It has generally been disliked by the Executive branch for precisely this reason. Administrations hate to disclose information that shows their ineptitude, dishonesty, and even criminality. Principally, they have chosen two routes to undermine the law. The first is to slow ball the process. FOIA requests can languish for years both to disincentivize their use and ultimately to render any releases obsolete. The more criminal approach is simply to deny that the documents exist.
You can see how both play out in the timing of the proposed rule change. In May 2006, CAIR and others submitted a FOIA request for information on FBI infiltration of Islamic groups in Southern California. A year later in June 2007 the FBI got around to releasing a few pages of redacted material. In response in September 2007, the groups sued. On March 21, 2008 as part of its motion for summary judgment the FBI lied to 9th Circuit district judge Cormac Carney stating that the pages released were all it had. Yet another year later on April 20, 2009, the FBI submitted a new declaration indicating that it had, in fact, withheld materials pertinent to the groups’ FOIA request. In June 2009, Carney issued a sealed opinion in which he upheld the FBI’s withholding material as part of an ongoing investigation but criticized the government’s lying to the court. (It is once again important to remember that federal courts bend over backwards to accommodate the Executive on anything remotely related to national security. So Carney’s criticisms are an indication of how far the Executive exceeded and abused its authority.) The Court of Appeals stayed his unsealing of the opinion pending their ruling on it. The case was argued before it in November 2010. At this point you can see the synergy between this case and the FOIA rule change. On March 21, 2011, the government issues its proposed rule opening up a one month comments period which ended on April 20, 2011. Meanwhile on March 30, 2011, the 9th Circuit Court of Appeals ruled that Carney could release a redacted version of his opinion, and on April 27, 2011, a week after the comments period closed on the rule, Carney released his truncated opinion showing that the government had lied both to the groups petitioning, and more tellingly the courts. The juxtaposition of the dates was so compelling and the uproar that resulted from them was such that the government briefly reopened comments for 20 days ending October 19, 2011.
Up to the present, it had been thought the government had been working under the Glomar exception which neither affirms nor denies the existence of documents. The new Obama exception, which again simply codifies the actual more extreme current practice, is to “respond to the request as if the excluded records did not exist.” It is comical in a thoroughly cynical way that this was supposed to be the most transparent of Administrations. The upshot of this rule is that it makes it easier for the government to hide the truth from its own citizens and makes it an even longer and harder to uncover its lies.
297. The Keystone XL pipeline is a project that would run a 36 inch line carrying oil 2,000 miles from the tar sands of northern Alberta to refineries in Oklahoma. Production of oil from the tar sands uses and pollutes large quantities of water in a fragile environment. And both the need for such a pipeline (there already is a Keystone pipeline) and its safety have been questioned.
But mostly Keystone XL is a case study in corporate/government cronyism. TransCanada is the tar sands producer and the owner of Keystone XL. Since the pipeline crossed an international border the State Department took a leading role in its approval. It just so happened that TransCanada’s lead lobbyist for the project was Paul Elliott, a former deputy national campaign manager for Hillary Clinton, the current Secretary of State (and a supporter of the project). This in itself should have raised red flags about conflict of interest. Indeed such concerns were justified. Friends of the Earth obtained via FOIA correspondence between Elliott and State Department officials which showed that far from being impartial these officials had a close working relationship with Elliott, backed the project, and coached both TransCanada and Canadian officials in how to gain approval for it. In addition, as part of the approval process the State Department needed to conduct an environmental review. As it turns out, the environmental review was conducted by Cardno Entrix. It was one of three companies recommended by TransCanada to do the study, and TransCanada, which had the most to gain from a favorable report, paid for the study. This was another massive conflict of interest. Unsurprisingly, the company found that construction and use of the pipeline would have minimal impact on the environment. The EPA which was apparently not in the bag for TransCanada gave the study a failing grade. Because of the uproar about State’s handling of its pipeline oversight and growing opposition to the project, on October 25, 2011, a State Department spokesman announced that State might miss an end of the year deadline for a decision on the pipeline. Such a delay is likely only a tactical pause. The odds are that in the end the pipeline will win because that is how cronyism works. .
298. An October 27, 2011 Eric Lichtblau story reports how Obama gets around his pledge not to take campaign money from lobbyists. He lets his bundlers, who often supervise lobbyists but are not registered lobbyists themselves, do it.
299. The Administration has been deporting undocumented “illegal” immigrants at a rate of nearly 400,000 a year because the contractors the Department of Homeland Security (DHS) uses have been paid to handle this number. The Administration boasts that 55% of those deported have criminal records and that 51,260 of those were for felonies. But what this actually shows is that only about one in eight of those deported had committed serious offenses. The DHS has supposedly been focusing on criminals through its Secure Communities program. 226,000 have been deported through it. Even if we use this number, only about one in four of those deported had serious records. The effect of Secure Communities has had a disproportionate impact on the Latino community. A third of those deported through it had children or spouses who were US citizens. In addition, while 2/3 of the undocumented are Latino, they account to 93% of those detained under Secure Communities. In response to criticism, and the election campaign already having started, the Administration promised a review.
300. On September 17, 2011, Occupy Wall Street (OWS) began in a small park near New York’s financial district. Unlike the mostly astroturfed, Koch-bankrolled, and completely coopted Tea party, OWS was the first authentic expression of the vast popular discontent in the country. It had its roots in that discontent, in the example of the Arab Spring, and among the remnants of unvealpenned progressives. The reaction of corporatist media and political figures was both comical and predictable. At first, they ignored it. Then they dismissed it. It had no demands they said as if its name didn’t say it all. It needed to make demands –to the powers that be that could be duly filed away and forgotten. It had no leaders –to coopt. Instead OWS just stayed there, a daily rebuke to the failures of the elites. And it grew. Occupy movements sprang up in towns around the country, and around the world. On October 15, 2011, Occupy demonstrations took place in more than 900 cities.
Authorities did not take kindly to any of this. On September 24, 2011, only a week into the protest, a New York City Deputy Detective Anthony Bologna was videoed pepper spraying women already detained (kettled) behind orange netting. The video went viral and epitomized the overreaction of the police. On October 1, 2011, 700 were arrested crossing the Brooklyn Bridge. Trapping protesters on the bridge and then arresting them again showed the excessive reaction of the police and the mayor billionaire Michael Bloomberg to OWS. For something that was ostensibly of no great importance, it certainly got under the skin of the powers that be. Bloomberg continued to issue threats to remove protesters from Zucotti park and/or so limit their activities that OWS became meaningless. The problem was that these efforts not only energized the protests, caused them to grow, but discredited the police and the mayor who were trying to stop them.
Such efforts were replicated by mayors and police in other cities, but overall their actions were sporadic. That changed in November 2011. Jean Quan, the mayor of Oakland, another major site of Occupy protest, said on the BBC that she had been in on a conference call with 18 other mayors on what to do about the Occupy sites. On November 13, 2011, Occupy Portland was cleared. On November 14, 2011, Occupy Oakland was swept by police and the next day on November 15, 2011, Zucotti park was raided. Both the Oakland and New York police actions took place in the middle of the night. The aim was not just to remove the protesters, and end the protests, but to destroy as many of the resources at the sites as possible.
The justifications for these raids were hygiene and crime. But virtually all of the violence associated with the Occupations came from the police. As for hygiene, public officials had basically set this up by, for example, refusing the set up of port-a-potties in Zucotti park. Even so the health of the public and the protesters was not the real issue but rather the political health of the mayors and the elites they represent. OWS is a protest of the system and a rejection of those who run it. That rejection covers Democrats as much as Republicans as much as Wall Street bankers. It covers Obama and no doubt explains his occasional tone deaf platitudes with regard to the movement and his thunderous silence in response to the attacks upon it.