NBC News and news services
Report: Militants wanted notoriety for 'India's 9/11'; 6 Americans dead
MUMBAI, India - A 60-hour terror rampage that killed 195 people across India's financial capital ended Saturday when commandos killed the last three gunmen inside a luxury hotel while it was engulfed in flames.
Authorities searched for any remaining captives hiding in their rooms and began to shift their focus to who was behind the attacks, which killed 18 foreigners including six Americans.
Orange flames and black smoke engulfed the landmark 565-room Taj Mahal hotel after dawn Saturday as Indian forces ended the siege in a hail of gunfire, just hours after elite commandos stormed a Jewish center and found six hostages dead.
The gunmen had set parts of the hotel ablaze as they played cat-and-mouse with scores of India's best-trained commandos, known as the Black Cats. They left bodies in their wake, some with grenades stuffed into the mouths or concealed underneath.
A dozen suspected terrorists hit 10 sites around Mumbai on Wednesday night, and the last holdout was the Taj hotel. "There were three terrorists, we have killed them," said J.K. Dutt, director general of India's elite National Security Guard commando unit.
Nine of the attackers were killed, a tenth caught alive. He told interrogators they wanted to go down in history for an Indian 9/11, and were also inspired by the bombing of the Marriott hotel in Islamabad in September, Times Now TV said, quoting an unidentified defense ministry official.
'Still scared'
Explosions continued rock the Taj hotel after the battle as soldiers blasted open doors and detonated explosives found on the gunmen as they swept the hotel once more looking for survivors and booby traps left by the militants.
Some hotel guests were still believed to be in their rooms. "They are still scared, so even when we request them to come out and identify ourselves, they are naturally afraid," said Dutt.
Sniffer dogs were taken into the famous hotel and workers wearing surgical masks arrived to remove bodies.
Many guests had been trapped in their rooms while the battle raged around them. They emerged to harrowing scenes.
"The blood, everywhere the blood," an American woman called Patricia told the NDTV news channel, choking back tears. "And when we came down to the lobby, all the hundreds and hundreds of policemen were standing there looking so fried and so sad."
NDTV also reported that the fourth and sixth floors of the Taj hotel had been gutted by fires. Officials were said to believe that a "large number" of bodies may yet be recovered there.
Outside, anxious relatives stood in groups hoping family members trapped inside would walk out. Many had been keeping a vigil since the attack began.
With the end of one of the most brazen terror attacks in India's history, attention turned from the military operation to questions of who was behind the attack and the heavy toll on human life.
A previously unknown Muslim group with a name suggesting origins inside India claimed responsibility for the attack, but Indian officials said the sole surviving gunman was from Pakistan and pointed a finger of blame at their neighbor and rival.
Islamabad denied involvement and promised to help in the investigation. A team of FBI agents also was on its way to India to lend assistance.
Commando training?
Several newspapers said some of the militants had checked into the Taj hotel days or weeks before the attacks, while the Times of India said they had rented an apartment in the city a few months ago pretending to be students.
An army general said the gunmen appeared to be very familiar with the hotel's layout and were well trained.
"At times we found them matching us in combat and movement," one commando told the Hindustan Times. "They were either army regulars or have done a long stint of commando training."
The bodies of New York Rabbi Gavriel Noach Holtzberg and his wife, Rivkah, were found at the Jewish center. Their son, Moshe, who turned 2 on Saturday, was scooped up by an employee Thursday as she fled the building.
Other Americans among the dead included:
Bentzion Chroman, an Israeli with dual U.S. citizenship who was visiting the center.
Rabbi Leibish Teitlebaum of Brooklyn, N.Y., who was visiting the center.
Alan Scherr, 58, and daughter Naomi, 13, of Virginia, who died in a cafe Wednesday night. They lived at the Synchronicity Foundation sanctuary about 15 miles southwest of Charlottesville, Va., and were among 25 foundation participants in a spiritual program in Mumbai, said Bobbie Garvey, a spokeswoman for the foundation, which promotes a form of meditation.
Germans, Canadians, Israelis and nationals from Britain, Italy, Japan, China, Thailand, Australia and Singapore were also killed. Some 295 people were wounded in the violence.
By Saturday morning the death toll was at 195, the deadliest attack in India since the 1993 serial bombings in Mumbai killed 257 people. But officials said the toll from the three days of carnage was likely to rise as more bodies were brought out of the hotels.
Even as the battle ended, Indians began burying their dead, many of them security force members killed fighting the gunmen.
In the southern city of Bangalore, black-clad commandos formed an honor guard as the flag-draped coffin of Maj. Gen. Unnikrishnan, who was killed in the fighting at the Taj, passed by. "He gave up his own life to save the others," said Dutt.
Bhushan Gagrani, the Maharashtra state government spokesman, told The Associated Press at least 11 gunmen had been killed and one captured alive after the attack that shook the city and the country.
"There is a limit a city can take. This is a very, very different kind of fear. It will be sometime before things get back to normal," said Ayesha Dar, a 33-year-old homemaker.
Trawler link?
On Saturday the Indian navy said it was investigating whether a trawler found drifting off the coast of Mumbai, with a bound corpse on board, was used in the attack
Navy spokesman Capt. Manohar Nambiar said the trawler, called "Kuber," was found Thursday and brought to Mumbai. Television footage showed a bound body lying face down on the deck.
Media reports said the man was the boat's skipper and had been killed when the trawler was hijacked after it sailed from Karachi, Pakistan. That could not be immediately confirmed.
Indian security officers believe many of the gunmen may have reached the city from a boat using a black and yellow rubber dinghy found near the site of the attacks.
India's foreign minister said the blame appeared to point to Pakistan. "According to preliminary information, some elements in Pakistan are responsible for Mumbai terror attacks," Pranab Mukherjee told reporters.
Pakistani Prime Minister Yousuf Raza Gilani insisted on Friday that his country was not involved. On Saturday Pakistan withdrew a pledge to send its spy chief to India to help probe the attacks.
Zahid Bashir, a spokesman for Gilani, told The Associated Press on Saturday a lower-ranking intelligence official would travel instead.
President-elect Barack Obama said he was closely monitoring the situation. "These terrorists who targeted innocent civilians will not defeat India's great democracy, nor shake the will of a global coalition to defeat them," he said in a statement.
The attackers were well-prepared, apparently scouting some targets ahead of time and carrying large bags of almonds to keep up their energy during a long siege. One backpack found contained 400 rounds of ammunition.
India has been shaken repeatedly by terror attacks blamed on Muslim militants in recent years, but this was more sophisticated — and more brazen.
The Associated Press, Reuters and NBC News contributed to this report.
URL: http://www.msnbc.msn.com/id/27940231/
by Allan Uthman - Buffalo Beast / The Smirking Chimp
When the networks projected an Ohio win for Obama on November 4th, I counted up the remaining states, and realized that Obama was going to win. Like a lot of people that night, I wanted to celebrate. I gladly turned off the TV and went out to get drunk.
As they were everywhere, people were out in the streets of Buffalo, NY, too that night. Shouting, singing, crying, forming impromptu drum circles and dance troupes. Strangers hugging each other, cars honking as they crawled by—this was unprecedented behavior in the Queen City, where the people generally exude a dull aura of eternal defeat. Maybe this was what it would look like if the Bills actually won a Super Bowl.
Of course, people were celebrating Obama’s victory, but I think the main source of jubilation was that the end of the Bush administration, and Republican rule, was finally in sight. There were many cries of “Obama!” that night, but there were just as many people expressing a superlative relief, like a long over-strained muscle finally relaxing, that our long national nightmare was finally over.
I, too, am glad—elated, really—that Bush’s absurd, colossally tragic reign is nearing an end. But that doesn’t change the fact that we failed. We all failed. Congress failed, the courts failed, and the American people failed. We have suffered through two terms of plainly illegitimate, nakedly contemptuous tyranny in a country that was designed to facilitate overthrowing tyrants, and we failed to do so.
I have no doubt that Obama, as disappointing as he will no doubt turn out to be, is a vast improvement over the past eight years, and may even be the best president of my lifetime—a dubious achievement at best. But it’s not enough to look forward and move on. If anything is to be learned from the Bush disaster, it’s important to look back, and to understand how terrible our failure has been.
As citizens, our expectations have fallen far and fast. When Nixon ignored a subpoena, the nation was outraged. Even Republican congressmen were vocally outraged, and Nixon was forced to resign to avoid impeachment. When Nixon tried to fire a special prosecutor, his Attorney General resigned. Then his Deputy Attorney General resigned. When Reagan lied to the people about crimes far worse than Nixon’s, it was a scandal, but our expectations had already been dramatically lowered. There were hearings, but no impeachment. A few years later, a Republican congress abused the impeachment process as an instrument of prudery, in an act of supreme political perversion.
And then the real rape of American government began, starting with Bush v. Gore. Now, the president, and even his former employees, ignore subpoenas as a matter of routine. They can exact political retribution on CIA agents (Scott McClellan recently revealed that Bush told him he was responsible for the Valerie Plame leak), and get nothing but a few critical editorials in return. They can fake us into a costly, bloody war, and no one will do anything but bitch about it. They torture people to generate false intel, and nothing comes of it. Nothing.
All this is to end on January 20th, presumably. But Bush’s underhanded tactics will not end on that day. Still, he is showing us what “sprinting to the finish” means, as he furiously works to undermine the incoming Democrats in as many ways as possible. For one, Bush is generating a last-minute smorgasbord of polluter-friendly regulatory rollbacks, setting new lows in terms of water quality and global warming emissions, setting new, lower standards for “acceptable” levels of coal slurry in streams, of melamine in food products, and generally manifesting their shamelessness and hostility toward American citizens. New DoJ rules permit the FBI to engage in prolonged infiltration and surveillance of subjects who are not suspected of wrongdoing, and increased latitude in selecting these subjects based on their race and religion.
Over 90 such new “regulations” have occurred or are in the works, and while executive orders are fairly easy for an incoming president to reverse, changing new department-generated regulations entails a long and arduous process. This extends Bush’s disastrous impact well into the next term.
And so does this: Reports abound that scores of loyal Bush mid- and low-level appointees in many departments are in the process of “burrowing,” that is, changing their job status from political appointments, which change with each administration, to career civil service positions, which will make it hard for Obama to fire them when he takes office. The object is clear: to surround Obama with hostile operatives, hamstringing his agenda at every turn with leaks, foot-dragging and other forms of sabotage. Smooth transition, indeed.
Because congress and the American people have been asleep at the switch, the Obama administration will be spending much of the next four years struggling to simply undo most of what Bush has left them. It will only be a few months before our amnesiac press starts to blame Obama for the inevitable economic collapse, environmental catastrophe, and foreign policy blowback Bush will leave him. The next few years will reveal even darker secrets still unknown to us, a predictable result of tolerating the shadowy machinations of the most secretive administration ever.
All of this could have and should have been avoided, if the congress or the American people had any sense of duty, or responsibility, or really any sense at all. The fact that Bush, Cheney, and the rest will walk out of the White House and back into lives of decadent opulence and ballooning bank accounts is a shame, a damn shame of historic proportions. And the shame is ours. Bush is the worst outlaw ever to occupy the White House, and it is not enough that he simply leave. The message we have sent to power-mad, totalitarian presidents of the future is clear: Do whatever you want; we will do nothing to stop you. The press will do everything in its power to gloss over your worst excesses, and marginalize your critics, and when the public finally catches on, the press will simply ignore you in favor of optimistic coverage of your possible successors. At least that’s how it works for Republicans.
Bush lied about Iraq; it’s nothing if not clear at this point. And what the hell did we do about it? Bush failed miserably in New Orleans, dashing the image of Republican competence. But what did we do about it? Even now, as Bush’s economic team fools us into pouring an insane, gargantuan amount of money into the largest banks in the world, pulling a classic scare-and-switch tactic we should all be familiar with by now, nobody even murmurs about holding him accountable. As we all hold our breath and wait for Obama to take office, we allow the most craven, criminal administration in American history to keep right on pillaging our laws, our money, and our collective sense of decency right to the end. We, as a nation, are a miserable failure.
It’s just not enough that it will soon be over. It’s not enough that we managed to get through it. It’s not enough that the Republicans are in disarray, apparently headed toward a schism. These people should be in jail. They should serve as an example to all who come after them, that there is only so much corruption, malfeasance, and rank incompetence that this nation will put up with. Instead, their scot-free exit signals the impotence of this country in the face of an all-out hijacking of its government.
So sure, celebrate a victory for relative sanity in Obama’s win. But at the same time, we should be lamenting an all-out defeat for accountability. An eight-year crime wave has swept through the most powerful democracy in the world, and the only people being punished are you and me. And maybe we deserve it, because the true failure is ours.
http://www.buffalobeast.com/133/shame.htm
By Ambrose Evans-Pritchard - The Telegraph (UK)
Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup.
The bank said the damage caused by the financial excesses of the last quarter century was forcing the world's authorities to take steps that had never been tried before.
This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.
"They are throwing the kitchen sink at this," said Tom Fitzpatrick, the bank's chief technical strategist.
"The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock.
"Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration, with the risk of a feedback loop. We don't think this is the more likely outcome, but as each week and month passes, there is a growing danger of vicious circle as confidence erodes," he said.
"This will lead to political instability. We are already seeing countries on the periphery of Europe under severe stress. Some leaders are now at record levels of unpopularity. There is a risk of domestic unrest, starting with strikes because people are feeling disenfranchised."
"What happens if there is a meltdown in a country like Pakistan, which is a nuclear power. People react when they have their backs to the wall. We're already seeing doubts emerge about the sovereign debts of developed AAA-rated countries, which is not something you can ignore," he said.
Gold traders are playing close attention to reports from Beijing that the China is thinking of boosting its gold reserves from 600 tonnes to nearer 4,000 tonnes to diversify away from paper currencies. "If true, this is a very material change," he said.
Mr Fitzpatrick said Britain had made a mistake selling off half its gold at the bottom of the market between 1999 to 2002. "People have started to question the value of government debt," he said.
Citigroup said the blast-off was likely to occur within two years, and possibly as soon as 2009. Gold was trading yesterday at $812 an ounce. It is well off its all-time peak of $1,030 in February but has held up much better than other commodities over the last few months – reverting to is historical role as a safe-haven store of value and a de facto currency.
Gold has tripled in value over the last seven years, vastly outperforming Wall Street and European bourses.
MSNBC
Charges possible after Black Friday crowd tramples employee at N.Y. store
NEW YORK - Police were reviewing video from surveillance cameras in an attempt to identify who trampled to death a Wal-Mart worker after a crowd of post-Thanksgiving shoppers burst through the doors at a suburban store and knocked him down.
Criminal charges were possible, but identifying individual shoppers in Friday's video may prove difficult, said Detective Lt. Michael Fleming, a Nassau County police spokesman.
Other workers were trampled as they tried to rescue the man, and customers stepped over him and became irate when officials said the store was closing because of the death, police and witnesses said.
At least four other people, including a woman who was eight months pregnant, were taken to hospitals for observation or minor injuries. The store in Valley Stream on Long Island closed for several hours before reopening.
Police said about 2,000 people were gathered outside the Wal-Mart doors before its 5 a.m. opening at a mall about 20 miles east of Manhattan. The impatient crowd knocked the employee, identified by police as Jdimytai Damour, to the ground as he opened the doors, leaving a metal portion of the frame crumpled like an accordion.
"This crowd was out of control," Fleming said. He described the scene as "utter chaos," and said the store didn't have enough security.
Dozens of store employees trying to fight their way out to help Damour were also getting trampled by the crowd, Fleming said. Shoppers stepped over the man on the ground and streamed into the store.
Damour, 34, of Queens, was taken to a hospital, where he was pronounced dead around 6 a.m., police said. The exact cause of death has not been determined.'
'Savages'
A 28-year-old pregnant woman was taken to a hospital, where she and the baby were reported to be OK, said police Sgt. Anthony Repalone.
Kimberly Cribbs, who witnessed the stampede, said shoppers were acting like "savages."
"When they were saying they had to leave, that an employee got killed, people were yelling `I've been on line since yesterday morning,'" she said. "They kept shopping."
Wal-Mart Stores Inc., based in Bentonville, Ark., called the incident a "tragic situation" and said the employee came from a temporary agency and was doing maintenance work at the store. It said it tried to prepare for the crowd by adding staffers and outside security workers, putting up barricades and consulting police.
"Despite all of our precautions, this unfortunate event occurred," senior Vice President Hank Mullany said in a statement. "Our thoughts and prayers go out to the families of those impacted."
A woman reported being trampled by overeager customers at a Wal-Mart opening Friday in Farmingdale, about 15 miles east of Valley Stream, Suffolk County police said. She suffered minor injuries, but finished shopping before filling the report, police said.
Shoppers around the country line up early outside stores on the day after Thanksgiving in the annual bargain-hunting ritual known as Black Friday. It got that name because it has historically been the day when stores broke into profitability for the full year.
Items on sale at the Valley Stream Wal-Mart included a Samsung 50-inch Plasma HDTV for $798, a Bissel Compact Upright Vacuum for $28, a Samsung 10.2 megapixel digital camera for $69 and DVDs such as "The Incredible Hulk" for $9.
PressTV
A US strategist says Israel will fly through Turkish air space if it goes through with the idea of attacking Iran.
Israel will be resolved to use Turkish air space to attack Tehran's nuclear facilities, says a prominent US political strategist.
In a recent political panel, Charles Krauthammer ruled out the possibility of Israeli warplanes flying through US-controlled Iraqi airspace to launch potential air strikes on the Islamic Republic and claimed that Tel Aviv would most likely opt to use Turkish air space instead.
He claimed that Israel would bomb the Iranian uranium enrichment infrastructure in the same manner it bombed Syria in September 2007.
"The Israelis would not attack (Iran) over Iraq. The way to go is through Turkey…When Israel attacked the reactor in Syria, it went up the Mediterranean and through Turkish air space," Hurriyet quoted Krauthammer as saying.
Recent reports of Israel beefing up military preparations have fueled speculation that Tel Aviv intends to stage its third attack on Middle Eastern countries over nuclear allegations. Israel had earlier attacked Iraq and Syria, claiming that they sought to attain nuclear weapons technology.
The Sunday Times reported Sunday that Israeli squadron leaders are conducting dress rehearsals in the Negev desert in preparation for air strikes on Iranian nuclear facilities.
According to Israeli officials, however, Tel Aviv was "warned" this week against striking Iran before US President-elect Barack Obama takes office in January.
Israeli Prime Minister Ehud Olmert was quick to deny the report, saying that Washington never rejected Tel Aviv's request to take military action against Iran.
"I don't remember that anyone in the administration, including in the last couple of days, advised me or any other of my official representatives not to take any action that we will deem necessary for the fundamental security of the state of Israel, and that includes Iran," Olmert said on Tuesday.
Israeli preparations for military action come after the release of the latest report on Tehran by the International Atomic Energy Agency (IAEA), which is the UN agency pertinent to the Iranian nuclear program.
The UN body says it has "been able to continue to verify the non-diversion of declared nuclear material in Iran".
The agency, however, insists that unless Tehran increases its cooperation with the agency, the UN body "will not be able to provide credible assurance about the absence of undeclared nuclear material and activities in Iran".
By David Neiwert - Crooks and Liars
There's probably no more dangerous place on the planet than being positioned between marauding shoppers and their objects of desire on the morning of Black Friday -- as one unfortunate man discovered today:
A worker died after being trampled and a woman miscarried when hundreds of shoppers smashed through the doors of a Long Island Wal-Mart Friday morning, witnesses said.
The unidentified worker, employed as an overnight stock clerk, tried to hold back the unruly crowds just after the Valley Stream store opened at 5 a.m.
Witnesses said the surging throngs of shoppers knocked the man down. He fell and was stepped on. As he gasped for air, shoppers ran over and around him.
"He was bum-rushed by 200 people," said Jimmy Overby, 43, a co-worker. "They took the doors off the hinges. He was trampled and killed in front of me. They took me down too...I literally had to fight people off my back."
Maybe it's time for people to start getting some perspective on "holiday bargains." Because this is just sick.
Of course, we are supporters of avoiding this madness altogether by supporting Buy Nothing Day.
A teenager jumps into a river to cool off after school in Montevideo November 27, 2008. Uruguay is experiencing the warmest November month this year in at least three decades, with temperatures above 30 degrees Celsius (86 degrees Fahrenheit) in the last 10 days, according to the Uruguayan Meteorology Bureau.
REUTERS/Andres Stapff
By Jim Hightower, Hightower Lowdown - Alternet
Our economy didn't melt down, it was taken down the unbridled greed of economic elites, enabled by their political courtesans in Washington.
What the hell's happening here? Why is my bank in the tank? And my house and job? And my retirement money? Even my state's teetering on the brink of broke! Who did this to us?
Fair questions, but we're not getting honest answers. Last year, at the first signs of the global financial slide toward the abyss, we were told that it's just a little hiccup caused by something called subprime mortgages. Not to worry, the Powers That Be declared confidently, for we have the damage contained. And rest assured that "the fundamentals of our economy are sound."
Then, this spring, Bear Stearns cratered, requiring an emergency federal subsidy to cover billions in bad loans. Okay, admitted those in charge, that subprime stuff actually is leveraged on up the financial system, and maybe there's been a bit of greed among a few of the big players, but we really do have the problem contained now, and, hey, "the fundamentals of our economy are sound."
But in September--Omigosh!--there went Lehman Brothers, Freddie Mac and Fannie Mae, AIG, Merrill Lynch, Goldman Sachs, Citigroup, WaMu, Wachovia, and others. Well, yes, conceded the now-frazzled financial establishment, but gollies, we're throwing hundreds of billions of your tax dollars into sandbags to contain the problem, and remember: "The fundamentals of our economy are sound."
In October, the contagion rolled through Britain, Canada, and Europe; it spread to Brazil and across to China and Japan; and--Holy Schmoly--suddenly all of Iceland was melting in bankruptcy! Stay calm, cried an openly panicked chorus of Washington officials, for we're holding some big summit meetings soon and consulting our Ouija boards, and...uh...ah...um...y'all just keep clinging to the thought that "the fundamentals of our economy are sound."
Laissez Fairies
You don't have to be in Who's Who to know What's What, do you? The fundamentals are NOT sound.
Wall Street and Washington (excuse the redundancy there) want us commoners to believe that this viral spread of economic grief was caused by those lower-income homeowners who couldn't pay their subprime loans--merely an unforeseeable glitch in a complex and otherwise healthy financial system. Hogwash. The source of today's pain is the same as it was in America's previous financial collapses: the unbridled greed of economic elites, enabled by their political courtesans in Washington.
This unbridling has been the long-sought goal of a cabal of deregulation ideologues who dwell in laissez-fairyland. During the past two decades, they have relentlessly pushed their economic fantasies into law. Their theory was that (to use Ronald Reagan's simple construct) "the magic of the marketplace" would create an eternal rainbow of prosperity through financial "innovation"--if only the market was unshackled from any pesky public regulations. What the dereg theorists missed, however, is that magicians don't perform magic. They perform illusions.
Let's meet some of the illusionists who are directly responsible for hurling you, me, America, and most of the world into this dark and as-yet unplumbed economic hole.
(continue reading)
By Nomi Prins - Mother Jones
Henry Paulson's bank-rescue program was always a turkey of a deal.
Perhaps this is stating the obvious, but the big US bailout plan hasn't worked so far. I don't just mean the $700 billion granted by Congress through the Economic Emergency Stabilization Act on October 3. I mean none of the related measures have worked, either.
Treasury Secretary Henry Paulson convinced Congress that the sky would fall without a $700 billion cushion. The Fed has initiated a loan program for troubled financial firms, spending trillions of dollars to bail out any company that ever overleveraged anything, and it has chopped interest rates in concert with its global central bank brethren.
And yet, the bloodbath continues. This week jobless claims clocked in at a 16-year high—and these figures don't even include the 53,000 job cuts announced by Citigroup, 3,000 by JPMorgan Chase, or up to 6,000 by Sun Microsystems. Nor do they count the cuts that will come from the auto industry, which will be in the tens of thousands if the Big Three survive, and in the millions if they don't. Last week, the Department of Labor announced that in October the US Consumer Price Index had staged its biggest drop in 61 years.
Why are we still listening to painful debates about whether to fix the bad decisions made by top corporate executives, rather than addressing the people at the foundation of the economy?
Recently, Sheila Bair, chair of the Federal Deposit Insurance Corporation, deftly explained the very sensible idea of helping homeowners in danger of foreclosure, as opposed to Paulson's idea of injecting arbitrary amounts of money into banks. This isn't a shot-in-the-dark solution Bair's offering; it's one that the FDIC has made work in a very short period of time. The same period during which Paulson's decisions have, well, not worked.
Bair wants private lenders to do what the FDIC has done successfully: help distressed borrowers. Since the FDIC seized Pasadena-based IndyMac in July, it's been able to reduce loan payments for some borrowers to 38 percent of their income by reducing interest rates, extending terms, or deferring principal payments.
According to the FDIC, "IndyMac has sent out more than 23,000 modification letters to eligible borrowers and has completed more than 5,300 modifications..." With that kind of proven efficiency, Bair proposed a similar $24 billion government-backed bailout program to be used for homeowners more generally.
Paulson didn't warm to her approach.
Since the bailout package was signed into law in October, the global economy has nose-dived. Maybe that wasn't Paulson's fault, but buying equity in banks was his choice.
In mid November, members of Congress on both sides of the aisle were incensed that Paulson flip-flopped on the original intent of his Troubled Asset Relief Program, which was purchase toxic assets from imperiled financial firms, deciding that injecting capital into troubled banks was the best way to dethaw the frozen credit markets. The rest of us can let that concern go. Buying junky assets would have been just as ineffective as buying stock in the companies that processed the junk. On October 28, the Treasury Department spent $125 billion to purchase preferred shares in Goldman Sachs, Merrill Lynch, Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, State Street, and Bank of New York Mellon. Since then, shares in those firms have plummeted an average of 55 percent. That makes the $125 billion investment worth about $69 billion right now.
The big lie was that this capital would go toward easing credit, but it hasn't. Nor will it, for three reasons. First, with banks like Citigroup trading at roughly 10 percent the price of McDonald's shares and struggling for survival, they need to conserve all the capital they can. Second, as long as there is uncertainty among banks as to what kinds of losses lurk within their books, there will be no true credit flow in the industry. And third, consumers will always come dead last on their list of priorities.
But as the nation turns to the next bailout question, whether to come to the rescue of the auto industry, we've got to ask if capital injections or loans are the best way to go. Perhaps the leaders of the Big Three need what the finance industry needs: a Sheila Bair-style solution.
The problem with automakers is their lack of operating cash, not withstanding the group CEO trip to DC to ask for $25 billion more of it. Simply providing cash will only prolong the problem. If Bair's plan can convert 5,300 loans to manageable assets rather than declining ones, and keep people in their homes, maybe a similar program could help GM, Ford, and Chrysler. Say the FDIC took these firms over. A comparable plan could negotiate affordable loans (since banks are sitting on their money) for consumers to purchase auto inventory with appropriate incentives, like upgradeability to energy-friendly cars as they get produced. A sustainable program providing ongoing cash infusion through inventory movement while reducing leverage could have a shot.
But even that might be too late. The fact that their cars weren't selling (first because the companies weren't forward thinking, and then because consumer throttle back on big ticket purchases in general) has created a potentially irrevocable cash shortage. There are those who blame this on pension and health care programs. But GM had $17 billion The Joy of The Mundane used under a Creative Commons license.
Nomi Prins is a reformed Wall Streeter and a frequent Mother Jones contributor.
Filed by Agence France-Presse
WASHINGTON (AFP) — George W. Bush hopes history will see him as a president who liberated millions of Iraqis and Afghans, who worked towards peace and who never sold his soul for political ends.
"I'd like to be a president (known) as somebody who liberated 50 million people and helped achieve peace," Bush said in excerpts of a recent interview released by the White House Friday.
"I would like to be a person remembered as a person who, first and foremost, did not sell his soul in order to accommodate the political process. I came to Washington with a set of values, and I'm leaving with the same set of values."
He also said he wanted to be seen as a president who helped individuals, "that rallied people to serve their neighbor; that led an effort to help relieve HIV/AIDS and malaria on places like the continent of Africa; that helped elderly people get prescription drugs and Medicare as a part of the basic package."
Bush added that every day during his eight-year presidency he had consulted the Bible and drawn comfort from his faith.
"I would advise politicians, however, to be careful about faith in the public arena," the US leader said in the interview with his sister Doro Bush Koch recorded as part of an oral history program known as Storycorps.
As his second term in office draws to an end, Bush joked he would miss some of the trappings that come with the presidency such as trips on Air Force One, never being stuck in a traffic jam, and the president's residence at Camp David.
But he said he was glad to be stepping back into the shadows.
"Frankly, I'm not going to miss the limelight all that much. It's been a fabulous experience to be the president ... But it will be nice to see the Klieg lights shift somewhere else."
The interview, which Bush recorded with First Lady Laura Bush, will be stored in the library of Congress and a museum devoted to the Bush presidency.
Excite News
SANTA ANA, Calif. (AP) - California authorities got a shock of their own when they discovered that a drunken driving suspect they had just stunned with a Taser was completely naked.
Santa Ana police say the naked man was pulled over by police Wednesday night after his van hit a car.
Police Commander Stephen Colon says a driver alerted officers to the van that had just hit his car. He says the driver was fumbling in the front seat and refused to put his hands up.
Policed used a stun gun on his head and neck and then saw he was completely naked.
Colon says the man, whose name was not released, was being tested for drugs or alcohol.
---
Information from: The Orange County Register, http://www.ocregister.com
A lawmaker is upset with his state's Department of Homeland Security for its lack of credit to a "higher power" for its work in protecting the state's citizens.
Kentucky State Rep. Tom Riner, a Southern Baptist minister who helped establish a requirement that the federally funded agency credit God with keeping the state safe, is upset that under Gov. Steve Beshear, the department's 2008 annual report did not do so.
"We certainly expect it to be there, of course," Riner, of Louisville, told the Lexington Herald-Leader.
Among the requirements of the 2006 anti-terror law is that a plaque be placed in the department's Emergency Operations Center. Part of the statement on the plaque reads: "The safety and security of the Commonwealth cannot be achieved apart from reliance upon Almighty God."
"This is recognition that government alone cannot guarantee the perfect safety of the people of Kentucky," Riner added. "Government itself, apart from God, cannot close the security gap. The job is too big for government."
"I will not try to supplant almighty God," said Homeland Security chief Thomas Preston. "All I do is try to obey the dictates of the Kentucky General Assembly. I really don't know what their motivation was for this. They obviously felt strongly about it."
by Bob Burnett - The Smirking Chimp
While there are many technical explanations for the current recession, the underlying cause is the pervasive ideology of self-interest that has guided President Bush's administration and permeated mainstream American ethics.
While George Bush ran for President as a born-again Christian and "compassionate conservative," his behavior indicated he was guided not by the principles of Jesus but rather by a narcissistic morality of personal advantage. While making a revealing documentary about the 2000 Bush campaign, filmmaker Alexandra Pelosi asked the candidate why she should vote for him; Bush replied. "It's in your interests." Pelosi observed, "He didn't push my country's interest - but rather, my own." Bush's primary consideration was what's in it for me?
As President, Bush conflated his personal interests - strengthening his power - with those of the United States and political considerations governed all White House decisions. In late 2001, after leaving his appointment as head of the White House Office of Faith-Based and Community Initiatives, John DiLulio observed: "There is no precedent in any modern White House for what is going on in this one: a complete lack of a policy apparatus. What you've got is everything, and I mean everything, being run by the political arm."
Presidential decisions were determined by the toxic alchemy of power and greed. Major legislative initiatives - energy and healthcare - were written by corporate lobbyists to benefit their interests at the expense of average Americans. And the President's self-centered attitude influenced both Main Street and Wall Street.
Bush promoted a national culture of profligacy. After 9/11, when asked how Americans should respond, he advised us to "go shopping." Rather than call on our patriotism, the President appealed to consumerism; citizens responded by running up huge credit card debts and dipping deeply into their home equity. During the Bush Administration, Americans borrowed $6.2 trillion, doubling their debts and causing the U.S. to have a negative savings rate.
At the same time, the President expressed absolute confidence in the wisdom of the free market and expanded the dangerous deregulation begun during the Clinton era. Among the consequences of Bush's extreme laissez-faire ideology were the accelerated flight of decent-paying jobs from the U.S. and pillaging of the environment. As Americans shopped until they dropped, financial-sector profits surged: by 2007 the finance industry represented a record 25 percent of US stock-market capitalization.
Aided by the loosening of regulations, banks such as Citgroup, broadened their scope of business and began to engage in a wide variety of financial activities. With this expansion came problems of control and oversight. The increased size of financial institutions made them more difficult to manage as executives were pressed to make profits beyond the range historically associated with banks.
At Citigroup, earning pressure caused bond traders to increase their participation in risky markets, particularly collateralized debt obligations (CDO's), which repackaged mortgages - notoriously sub-prime mortgages - for resale to investors. The expansion of this niche business was fueled by its profitability - fees were unusually high and, therefore, traders made million in bonuses - and the lack of oversight. Because of deregulation, there was no Federal oversight of the CDO marketplace. Financial industry supervision supposedly came from rating agencies, such as Moody's and Standard and Poor's, but they failed to exercise the required due diligence. So did internal auditors, such as Citigroup "risk managers;" who were impeded both by the Byzantine nature of CDO's and their perceived value as major earnings generators.
As the credit bubble grew, two pernicious moral propositions blinded top managers at Citigroup and other greedy banks to the ever-increasing probability of calamity: everyone else is doing it, so it must be okay and the ends justify the means . Over the course of the Bush Administration, the worldwide CDO market grew to near $500 Billion, resulting in gigantic executive bonuses and corporate earnings. Understandably, none of the participants was eager to jump off the gravy train.
Lurking behind this frenzied momentum was a naïve faith in the wisdom of the marketplace: the belief that whenever excesses occurred, the market would gracefully adjust. Recently, financier George Soros criticized "the prevailing theory of financial markets, which... holds that financial markets tend toward equilibrium and that deviations are random and can be attributed to external causes." He observed: "This theory has been used to justify the belief that the pursuit of self-interest should be given free rein."
The President of the United States has a dual responsibility to make key decisions and set a moral tone. By promoting a climate of unfettered self-interest, George Bush precipitated the current economic meltdown. American's eagerness for the onset of the Obama presidency indicates our need for a leader who will establish a public morality that emphasizes the common good.
_______
About author
Bob Burnett is a Berkeley writer, activist, and Quaker. Before starting a second career as a journalist, he was a technologist and one of the founding executives at Cisco Systems. Bob can be reached at boburnett@comcast.net.
REUTERS/Punit Paranjpe
by Dave Lindorff - The Smirking Chimp
I was listening to Robert Reich, once the left end of the spectrum in the Clinton cabinet, talking with CNN's Wolf Blitzer a few days ago, and Reich, who has in the past sometimes made sense, was talking about how Americans' incomes had fallen over the last eight years of the Bush/Cheney administration and that it was necessary to get their incomes back on an upward trend, so that they could "start shopping again."
Now I understand Reich was trying to make the case that the bailout so far has been focused on the banks and the insurance industry, and that none of this will help unless ordinary people start getting some relief, but still, there's something completely twisted and out of whack when the best we can come up with is that we need to get Americans back into the malls.
In fact, that is a good part of what's wrong with the US economy: Fully 75 percent of GDP in America is consumer spending.
The problem facing America, and to a great extent the broader world economy, is that we've pretty much met basic human needs long ago, and now it's about creating human wants and then convincing people that they need to buy more stuff and more services.
This is wrong in so many ways and on so many levels.
First of all, we don't need all this stuff. Is my life any better if I go from a 18-inch TV screen to a 60-inch TV screen? Is it, for that matter, any better if I go from an old cathode-ray tube to a flat screen digital display, or from no TV to a TV?
Is my life any better if I buy a high-performance $50,000 BMW than if I drive a $20,000 Honda Civic, or even a $5000 used Toyota Corolla with extended warranty?
Is my life any better if I live with my wife and my teenage son in a 4000-square-foot house than if I live in a 1800-square-foot or a 1200-square-foot house?
The answer is no. The benefits, if there are any at all, are minuscule, and usually short-lived.
The costs of these trying to satisfy these wants, however, are enormous. When I buy the large flat screen TV, I am contributing to the production of gasses, used in the flat screen, that are hundreds of times more potent greenhouse factors than carbon dioxide, and of course, from a balance-of-trade perspective, I'm sending dollars overseas to wherever the product is made (none are made in America). If I buy the $50,000 BMW, I contribute to massive waste of resources in building the vehicle and having it shipped from Germany, as well as driving it, not to mention to balance-of-trade issue again. If I buy the Honda, it may at least be made in America, but again there is all the energy waste and pollution that goes into its construction. The used car, on the other hand, gets good mileage and already exists. As for the house, no family, except perhaps one that eschews family planning and has a baby every year and a half, needs a 4000-square-foot house, and any family with 12 kids that might occupy such a palace would never be able to afford one.
So all this buying doesn't make us happier. In fact, by saddling us with massive amounts of debt, it simply enslaves us to jobs that polls tell us most people are simply desperate to get away from. Why, otherwise, do polls show that so many people want to retire early in an era when life expectancies are extending, and when people are staying healthy much longer into old age? Why, otherwise, do polls consistently show that over 60 percent of Americans say they would like to have a labor union represent them at work if they could get one? The reality is that most jobs, where we spend the majority of our waking hours five or six days a week, simply suck, and in many ways they suck because people are so desperate to hang on to them so they can pay their bills that they don't dare speak up or, god forbid, sign a union card.
Secondly, these artificial wants which so dominate our daily lives and that are instilled in us via slick marketing campaigns, are a disaster for the environment and for the chances of human survival. The earth is a finite resource, while humanity, growing at a prodigious rate, is gobbling up those resources--water, oil, trees, the oceans, and the very atmosphere itself--much faster than even the renewable resources can replace themselves. This situation cannot go on, and yet we're told that the goal is to get us back on that rapacious and self-destructive path as quickly as possible. Economic growth, we are always told, is an unambiguous good and is the primary goal of economic policy, though clearly it cannot go on.
Finally, thinking of ourselves as consumers, instead of as citizens and as people, is destructive of our social nature. Instead of learning to build community, and to relate to one another as neighbors and fellow citizens and human beings, as mere "consumers," we compete to have more or better stuff, compete to get the best deals on the things we buy, and compete to get jobs that will help us buy those things. The one thing we do not do in a consumer-based model of society is cooperate.
This is not condition we need to go back to.
Nor can we.
The consumer society as we have known it since the 1950s is dead, at least here in America. We have bought so much that now the country is a gigantic economic basket case. Our debts as individuals and especially as a nation (of which we all own a piece), are incomprehensibly great. According to a new report by Bloomberg, just the debts that the government has promised to back up in the banking and insurance industry in the current bailout have reached $7.5 trillion, which is half the nation's annual gross domestic product for the past year! The national public debt now totals $59.1 trillion, which represents over half a million dollars for every man, woman and child in America. External debt--the amount of money owed by the US to foreign nations--was, before the bailout, $13.7 billion, or about the total of a year's economic activity in the US. Let's be honest here: There's no way all, or even a significant portion, of this can ever be repaid.
So what should we do? Well, for starters we need to start to rethink what constitutes a good society. It's clearly not a bunch of crazed consumers, all struggling to pay their monthly bills, because we've seen where that has gotten us. Far better would be a society that valued education, the arts, scientific and philosophical inquiry, and natural beauty. Instead of encouraging kids to go to business school or law school, we should be encouraging them to go into the sciences, into medicine, into the arts. Bailout funds should not be going to Citicorp or AIG. They should be going to the hellholes that are called schools in our decayed inner cities. They should be going into environmental clean up projects and tree planting projects across the land. They should be going into solar and wind energy programs, and geothermal heating installation subsidies for every home in America.
Meanwhile, Americans should be waking up and recognizing how consumerism has reduced us all to little more than serfs of the corporations that sell us the things they convince us we need. Then we should all sign up for unions, and start demanding that the Bill of Rights be extended to the workplace. Why on earth should a boss be able to fire someone for expressing an opinion that is constitutionally protected outside the building? Why should a boss be able to tell me to either do a dangerous job or quit? Why, for that matter, should the boss be insulated from personal liability if I am injured at work because of decisions that were made by management about working conditions? These may seem to be remote issues from the matter of a consumer-based economy, but they are not. It is because we are all consumer-serfs that we have surrendered so much to our corporate masters.
The very idea that someone as supposedly liberal as Robert Reich could speak in terms of getting the consumer debt treadmill back up and running as a goal shows how impoverished our politics has become.
A scant few months ago, people were finally waking up to the fact that human life on this planet, indeed all life on this planet, is in grave danger because of the buildup of carbon in the atmosphere that is being caused by human development and economic activity. Even then, with clear evidence that the North Polar ice cap is vanishing, that the oceans are acidifying and that species are dying off at an alarming rate, there were those who grumbled at the cost when candidate Barack Obama spoke of spending $15 billion over the next few years to combat some of that warming by investing in clean energy program research and development. Now, however, no one is talking about that sorely needed investment, and meanwhile nobody bats an eye as the government, Obama included, talks about blowing as much as a trillion dollars to get the economy moving again!
There's plenty of money to get people out to the mall, but no money to save the earth, no money to save our children from ignorance, no money for healthcare reform, no money for the arts.
And of course there's war--two really. Since the US has ceased to be a productive power in the world, and has become the world's biggest debtor nation, its sole claim to importance and power is now military, and so there is not a word said, even as the country sinks into a depression, of cutting the bloated and out-of-control $1-trillion annual military and intelligence budget, perhaps 90 percent of which serves no function but to frighten and oppress and kill mostly poor, third world people around the globe. The propaganda machine tells us that those poor saps in uniform dodging roadside bombs in Iraq and Afghanistan, or dropping shells and bombs on villages made of mud bricks and killing innocent women and children, are "defending our freedom."
Nonsense. They are destroying our freedom by helping to bankrupt this nation, while stirring up deep hatreds of America everywhere they set foot.
The good news is that this particular economic downturn in the US may prove to be more than just another turn of the business cycle, but rather, the beginning of the inexorable spiral of decline of the US as a global economic power. The corporations (along with the schools, churches and politicians) that have lured and tricked us all into this mad consumer scramble for more and more useless crap and momentary gratification have driven the country into a debt hole from which it will clearly be impossible to climb out. That may not sound like good news, but viewed from the perspective of the wider world it certainly is--especially if it bankrupts the American military machine, and slows the production of greenhouse gasses. It could also be good news if it leads us, the American people, to rethink what our lives are really all about--if it leads us to start thinking of ourselves as part of a society, again, instead of just that incredibly insulting and derogatory term: "consumers."
People recognized how inane and wrong it was when, immediately after the 9-11 attacks, President Bush told us it was important for Americans to pick themselves up and then go out and shop. But Robert Reich has it just as wrong. The challenge we face as a nation is not to get people's income growing and consumers back to buying stuff. It is to get people to rethink what is important, to downsize our appetites, to think as citizens of a community, and to focus our politics and government on the important issues, like protecting the environment and enhancing the quality of life not just for all Americans, but for all the people who inhabit this globe.
_______
About author
Dave Lindorff is the author of Killing Time: an Investigation into the Death Row Case of Mumia Abu-Jamal. His new book of columns titled "This Can't be Happening!" is published by Common Courage Press. Lindorff's new book is "The Case for Impeachment," co-authored by Barbara Olshansky.
He can be reached at: dlindorff@yahoo.com
REUTERS/Denis Balibouse
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