It Is Now Official: The U.S. Is A Police State

February 9, 2010 by tonyjack

By Paul Craig Roberts

February 09, 2010 “Information Clearing House” — Americans have been losing the protection of law for years. In the 21st century the loss of legal protections accelerated with the Bush administration’s “war on terror,” which continues under the Obama administration and is essentially a war on the Constitution and U.S. civil liberties.

The Bush regime was determined to vitiate habeas corpus in order to hold people indefinitely without bringing charges. The regime had acquired hundreds of prisoners by paying a bounty for “terrorists.” Afghan warlords and thugs responded to the financial incentive by grabbing unprotected people and selling them to the Americans.

The Bush regime needed to hold the prisoners without charges because it had no evidence against the people and did not want to admit that the U.S. government had stupidly paid warlords and thugs to kidnap innocent people. In addition, the Bush regime needed “terrorists” prisoners in order to prove that there was a terrorist threat.

As there was no evidence against the “detainees” (most have been released without charges after years of detention and abuse), the U.S. government needed a way around U.S. and international laws against torture in order that the government could produce evidence via self-incrimination. The Bush regime found inhumane and totalitarian-minded lawyers and put them to work at the U.S. Department of Justice (sic) to invent arguments that the Bush regime did not need to obey the law.

The Bush regime created a new classification for its detainees that it used to justify denying legal protection and due process to the detainees. As the detainees were not U.S. citizens and were demonized by the regime as “the 760 most dangerous men on earth,” there was little public outcry over the regime’s unconstitutional and inhumane actions.

As our Founding Fathers and a long list of scholars warned, once civil liberties are breached, they are breached for all. Soon U.S. citizens were being held indefinitely in violation of their habeas corpus rights. Dr. Aafia Siddiqui an American citizen of Pakistani origin might have been the first.

Dr. Siddiqui, a scientist educated at MIT and Brandeis University, was seized in Pakistan for no known reason, sent to Afghanistan, and was held secretly for five years in the U.S. military’s notorious Bagram prison in Afghanistan. Her three young children were with her at the time she was abducted, one an eight-month old baby. She has no idea what has become of her two youngest children. Her oldest child, 7 years old, was also incarcerated in Bagram and subjected to similar abuse and horrors.

Siddiqui has never been charged with any terrorism-related offense. A British journalist, hearing her piercing screams as she was being tortured, disclosed her presence. http://www.informationclearinghouse.info/article24605.htm An embarrassed U.S. government responded to the disclosure by sending Siddiqui to the U.S. for trial on the trumped-up charge that while a captive, she grabbed a U.S. soldier’s rifle and fired two shots attempting to shoot him. The charge apparently originated as a U.S. soldier’s excuse for shooting Dr. Siddiqui twice in the stomach resulting in her near death.

On February 4, Dr. Siddiqui was convicted by a New York jury for attempted murder. The only evidence presented against her was the charge itself and an unsubstantiated claim that she had once taken a pistol-firing course at an American firing range. No evidence was presented of her fingerprints on the rifle that this frail and broken 100-pound woman had allegedly seized from an American soldier. No evidence was presented that a weapon was fired, no bullets, no shell casings, no bullet holes. Just an accusation.

Wikipedia has this to say about the trial: “The trial took an unusual turn when an FBI official asserted that the fingerprints taken from the rifle, which was purportedly used by Aafia to shoot at the U.S. interrogators, did not match hers.”

An ignorant and bigoted American jury convicted her for being a Muslim. This is the kind of “justice” that always results when the state hypes fear and demonizes a group.

The people who should have been on trial are the people who abducted her, disappeared her young children, shipped her across international borders, violated her civil liberties, tortured her apparently for the fun of it, raped her, and attempted to murder her with two gunshots to her stomach. Instead, the victim was put on trial and convicted.

This is the unmistakable hallmark of a police state. And this victim is an American citizen.

Anyone can be next. Indeed, on February 3 Dennis Blair, director of National Intelligence told the House Intelligence Committee that it was now “defined policy” that the U.S. government can murder its own citizens on the sole basis of someone in the government’s judgment that an American is a threat. No arrest, no trial, no conviction, just execution on suspicion of being a threat.

This shows how far the police state has advanced. A presidential appointee in the Obama administration tells an important committee of Congress that the executive branch has decided that it can murder American citizens abroad if it thinks they are a threat.

I can hear readers saying the government might as well kill Americans abroad as it kills them at home–Waco, Ruby Ridge, the Black Panthers.

Yes, the U.S. government has murdered its citizens, but Dennis Blair’s “defined policy” is a bold new development. The government, of course, denies that it intended to kill the Branch Davidians, Randy Weaver’s wife and child, or the Black Panthers. The government says that Waco was a terrible tragedy, an unintended result brought on by the Branch Davidians themselves. The government says that Ruby Ridge was Randy Weaver’s fault for not appearing in court on a day that had been miscommunicated to him, The Black Panthers, the government says, were dangerous criminals who insisted on a shoot-out.

In no previous death of a U.S. citizen by the hands of the U.S. government has the government claimed the right to kill Americans without arrest, trial, and conviction of a capital crime.

In contrast, Dennis Blair has told the U.S. Congress that the executive branch has assumed the right to murder Americans who it deems a “threat.”

What defines “threat”? Who will make the decision? What it means is that the government will murder whomever it chooses.

There is no more complete or compelling evidence of a police state than the government announcing that it will murder its own citizens if it views them as a “threat.”

Ironic, isn’t it, that “the war on terror” to make us safe ends in a police state with the government declaring the right to murder American citizens who it regards as a threat.

The Democrats are Coming After Social Security

February 9, 2010 by tonyjack

By SHAMUS COOKE

It’s official: the Democrats are coming after Social Security and Medicare. All the backroom scheming and political conspiring is finally out in the open.

In an unusually long, 1,800 word editorial, entitled The Truth about the Deficit, published February 7, The New York Times — cheerleader for neoliberalism — gives its solution to the country’s debt problems. The main idea is summed up thus:

“To truly tame deficits will require serious health care reform [Obama’s plan slashes Medicare], the sooner the better. Other aspects of the long-term fiscal problem — raising taxes and retooling [reducing] Social Security — must take place in earnest as the economy recovers.”

Later the article is clearer: “And then there is Social Security. What is needed is a combination of benefit cuts and tax increases that preserve the program’s essential nature.” Of course those surviving on Social Security already live in poverty and cannot afford “benefit cuts.” Also, to make a dent in the deficit, benefit cuts to social security will have to be quite substantial, to the point where the program’s “essential nature” will be destroyed.

The New York Times acknowledges that such a course of action will be completely undemocratic and unpopular, but that politicians “must gather the political will to do what must be done…”

How can politicians destroy these cherished social programs in the face of such popular resistance? By trickery, of course. And this is exactly what Obama has proposed with his “bi-partisan deficit-reduction commission.” This idea puts Democrats and Republicans together to create a plan to destroy social programs. This way both parties share the blame, so that no one is to blame. The New York Times reveals Obama’s hidden motives:

“The deficit commission that Mr. Obama intends to establish could be helpful in breaking this logjam [resistance to cutting social security], by calling for necessary changes that politicians would be loath to broach without political cover.”

Labor unions and community groups also understand Obama’s treacherous motives. Dozens of them — including the AFL-CIO and Change to Win — signed a statement condemning the goals behind Obama’s “deficit commission.” The statement included some politically savvy points, including the following:

“…the proposed budget commission — which will be viewed as a way to actually cut Medicare benefits, while insulating lawmakers from political fallout — could confuse people and undermine the reform effort. And an American public that only recently rejected privatization of Social Security will undoubtedly be suspicious of a process that shuts them out of all decisions regarding the future of a retirement system that’s served them well in the current financial crisis.”

The statement concludes: “We urge you to act decisively to prevent the creation of such an extraordinary and undemocratic budget commission.”

However, it is not enough for only the leaders of unions and community groups to pressure the Democrats over this issue, especially when Obama has made it clear that he prefers the advice of Wall Street CEO’s. Unions and progressive groups must educate and mobilize their base to confront both the Democrats and Republicans over the protection of Medicare, Medicaid, and Social Security.

None of the major unions which signed the anti-commission statement have information about this plot on their websites; none are organizing their members to confront this plan — a plan that the entire political establishment is in agreement with. Nor are unions seriously proposing other ideas to fix the deficit, and the fixes are obvious.

The military budget must be slashed. Obama plans to spend over $700 billion in 2011 for the military. Both Democrats and Republicans are fine with this. Most Americans are not.

More importantly, taxes on the rich need to be increased. The nation’s tax structure changed drastically under Reagan and the two Bushes, with taxes on the wealthiest Americans dropping from 70 percent to the present day 35 percent. Under Eisenhower the richest Americans paid 90 percent of their income towards taxes. The loss in revenue that resulted from these giant tax reductions is one of the major contributors to the current deficit. It must be reversed in order to save Social Security, Medicare and Medicaid.

This is the solution that working-class Americans would prefer, rather than have their Medicare, Social Security, and public education destroyed. It is up to the union movement and community groups to unite and mobilize their members and all working people to demand this as a solution to the deficit and Great Recession.

Without a massive mobilization with rank and file participation, the corporate elite will continue to have their way unchallenged, with more bank bailouts and more war. A coalition of progressive groups with clear demands to address the recession will have the backing of the majority of Americans, while being resisted adamantly by both Democrats and Republicans.

Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action (www.workerscompass.org). He can be reached at shamuscook@yahoo.com

20 reasons Global Debt Time Bomb explodes soon

February 8, 2010 by tonyjack

By Paul B. Farrell, MarketWatch

Retire? You can fuggetaboutit if the new Global Debt Time Bomb is detonated by any one of 20 made-in-America trigger mechanisms.

Yes, 20. And yes, any one can destroy your retirement because all 20 are inexorably linked, a house-of-cards, a circular firing squad destined to self-destruct, triggering the third great Wall Street meltdown of the 21st century, igniting the Great Depression II that George W. Bush, Ben Bernanke, Henry Paulson and now President Obama have simply delayed with their endless knee-jerk, debt-laden wars, stimulus bonanzas and bailouts.

Wow, what an epic Hollywood blockbuster this will make: You know the drama, can’t miss the warnings. The financial press is flooding us with plot lines … a Forbes cover story focuses on a “Global Debt Bomb: How It Could Wreck Your Life” … Leaders at the World Economic Forum on Swiss Mt. Davos fear another global meltdown will trigger mass rebellions … The Economist calls the plot a “Global Asset Bubble,” with cheap money fast driving up asset prices.

Plus, Bloomberg BusinessWeek is adding jet fuel to the ticking time-bomb in: “After the Stimulus Binge, a Debt Hangover: Trillions of dollars have been spent keeping the global economy afloat. But now fears about the Great Recession are giving way to worries about something else: The Great Reckoning” when massive debts come due. Then the debt bomb explodes “and the results won’t be pretty for investors or elected officials.”

Forbes discovered the trigger mechanism in “This Time Is Different: Eight Centuries of Financial Folly,” by economists Carmen Reinhart and Kenneth Rogoff: The “90% ratio of government debt to GDP is a tipping point in economic growth.” For 800 years “you increase it over and beyond a high threshold, and boom!” Well guess what? “The U.S. government-debt-to-GDP ratio is 84%.” Soon, Ka-Booom! Depression. Kiss your retirement goodbye.

Who knows? Forbes? Bloomberg BusinessWeek? The Economist? Davos-World Economic Forum? True, they’re all looking at the same plot line for a Hollywood blockbuster about the “Global Debt Time Bomb.”

But the financial press navigates in a fog. There’s not just one, but many triggers, all linked in a lethal network. We’ve reported on it for years. Now you tell us: What triggers this firestorm?

Poll: 20 economic weapons of mass destruction triggering ticking Global Debt Time Bomb

1. Federal Budget Deficit Bomb. The Bush/Cheney wars pushed America deep into a debt hole. Federal debt limit was just raised almost 100% with Obama’s 2010 budget, to $14.3 trillion vs. $7.8 trillion in 2005. The Congressional Budget Office predicts future deficits around 4% through 2020. Get it? America’s debt at 84% of GDP will soon pass that toxic 90% trigger point.

2. U.S. Foreign Trade Bomb. Monthly deficits actually dropped from $50 billion per month to roughly $35 billion. But the total continues climbing as $400 billion is added each year. Foreigners now own $2.5 trillion of America, with China holding over $1.3 trillion in Treasury debt.

3. Weakening U.S. Dollar as Foreign Reserve Currency Bomb. Fear China and other currencies will replace dollar as main foreign reserves. The dollar’s fallen: The main index measuring dollar strength has gone from 120 at the Clinton-to-Bush handoff to below 80 today.

4. Cheap Money Bomb: Credit Ratings Down, Rates Up. Economists at S&P, Fitch and Moody’s were totally co-conspirators of Fat Cat Bankers, misleading investors before meltdown: Soon, debt up, ratings down, interest rates soar.

5. Global Real Estate Bomb. Dubai Tower, new “world’s tallest building” is empty. BusinessWeek warns that China’s housing collapse could be worse than America’s. Plus the U.S. commercial real estate bubble is now $1.7 trillion, a “ticking time bomb” bloating 25% of bank balance sheets.

6. Peak Oil and the Population Bomb. China and India each need 500 new cities. The United Nations estimates world population exploding 50% from 6 billion to 9 billion by 2050: Three billion more humans demanding more automobiles, exhausting more resources to feed their version of the gas-guzzling “America Dream.”

7. Social Security Bomb. We have no choice; eventually we must either cut benefits or raise taxes. Politicians hate both, so they’ll do nothing. Delays worsen solutions. Without action, by 2035 Social Security and Medicare benefits will eat up the entire federal budget other than defense.

8. Medicare: A Nuclear Bomb. Going broke faster than Social Security. Prescription drug benefit added an unfunded $8.1 trillion. In 5 years estimates rose from about $35 trillion to over $60 trillion now.

9. Health-care Insurance Bomb. Burden increasingly shifted to employees. Costs rising faster than inflation. Recent Obamacare plan would have cost $90 billion annually, paid to Big Pharma and insurers.

10. State and Local Government Budget Bombs. Deficits of $110 billion in 2010, $178 billion in 2011on top of more that $450 billion in underfunded state and municipal employee pension funds.

11. Underfunded Corporate Pensions Bomb. From $60 billion surplus in 2007 to $409 billion deficit in 2009. And a whopping 92% of the pension plans of companies are now underfunded. Defaults are guaranteed by taxpayers.

12. Consumer Debt Bomb. Americans are still living beyond their means. Even with a downturn, consumer debt rose from about $2.3 to $2.5 trillion. Fat Cat Bankers love it — yes love making matters worse by gouging cardholders and mortgagees, blocking help in foreclosures and bankruptcies.

13. Personal Savings Bomb. Before the 2008 meltdown savings rate dropped from about 10% in the early 1980s to below zero. Now it’s increasing, slowing retail recovery. Today, government’s the big “unsaver.”

14. War and Military Defense Deficits. Costs of Iraq and Afghanistan wars — $200+ billion annually, $3 trillion minimum, with massive long-term costs for veteran medical care, equipment renewal, recruitment.

15. Homeland Insecurity Bomb. Security at airports, seaports, borders, vulnerable chemical plants all increase budgets.

16. Fed/Treasury Bailout Bombs. Tax credits, loans, cash and purchase of toxic assets from Wall Street banks estimated at $23.7 trillion as new debt was shifted from too-big-to-fail Fat-Cat banks to taxpayers.

17. Insatiable Washington Lobbyists Bombs. Paulson, Goldman, Geithner, Morgan and Wall Street banks, through their lobbyists and former employees working inside now have absolute power over government spending. Democracy and voters are now irrelevant in America’s new corporate-socialism.

18. Shadow Banking: The Derivatives Bomb. Wall Street wants no regulation of this $670 trillion, high-risk, out-of-control casino that’s highly leveraged versus the $50 trillion total GDP of all nations. We forget that derivatives almost destroyed global economies in 2008-09, finally will by 2012.

19. Dysfunctional Two-Party Political Bomb. Polarized partisanship increasing: Every day both parties show zero interest in cooperating for the public good. Instead they fight viciously, resisting everything and anything proposed by opponents. Only goal: Score political points, make the other side look bad.

20. The Coming Populous Rebellion Bombs. Nobody trusts anyone in authority. For good reason. So immediate gratification, short-term betting and a lack of long-term perspective wins for individual investors, consumers and taxpayers as well as Washington, Wall Street and Corporate America CEOs. Today: “Doing what’s right for the common good and country” is just empty political rhetoric.

Forbes. The Economist. Davos-World Economic Forum. Bloomberg BusinessWeek. All one voice, one loud, lonely chorus echoing that famous Beatles tune: “Head in a cloud … The fool on the hill, sees the sun going down … a thousand voices talking perfectly loud. But nobody ever hears him, or the sound he appears to make … And the eyes in his head, see the world spinning ’round …ooh, round and round and round.”

Historians and behavioral economists tell us most investors are blind optimists. Investors cannot see bubbles from inside their bubble. Nor Fat Cat Bankers from inside their mega-bonus-bubble. Nor politicians from inside the beltway bubble.

Why? The optimist’s brain filters out bad news. They know their dreams of prosperity will come true. Then, when they finally do see that the proverbial light at the end of the tunnel is an oncoming train, it’s always too late.

I will say it again, gently: A new meltdown is coming. The Great Depression II is coming, soon. And yet, I know your mental filters are working, blocking warnings of a bomb. I can even hear you calling me “the fool on the hill who sees the sun going down, the world spinning round” … sees you kissing your retirement goodbye.

http://www.marketwatch.com/story/story/print?guid=98105012-8C05-444F-99C1-CB1F8D95870A

CIA Says To Expct Al Qaeda Attack Soon

February 6, 2010 by tonyjack

Al Qaeda can be expected to attempt an attack on the United States in the next three to six months, senior intelligence officials told Congress yesterday.
CIA Director Leon Panetta said the terror organisation was deploying operatives to the US to carry out new attacks from inside the country, including “clean” recruits with a negligible trail of terrorist contacts.

*** In order for the CIA to know if we are going to be attacked in 3 to 6 months, it must know who the attackers are going to be, in which case they can arrest the individuals and, hence, prevent the attacks — in which case, Panetta is lying. If the CIA does not know who the potential attackers are, then Panetta is lying about the coming attacks. In either event, PANETTA IS LYING. But how foolish of me to point out that the CIA is lying. The anomaly would be were the CIA telling the truth.

Ah, Yes, Obomber, This Is Certainly Post-Racial America

February 3, 2010 by tonyjack

Judge seals videotape in La. Taser death case

Suspect was struck by a 50,000-volt Taser nine times within the space of 14 minutes

By David Fitzpatrick and Drew Griffin
CNN.com

WINNFIELD, Louisiana — A judge has sealed a potentially explosive videotape taken in the aftermath of a racially charged incident in this small central Louisiana town two years ago.

On January 17, 2008, an unarmed man — wanted on what police said was an outstanding arrest warrant — was struck by a 50,000-volt Taser nine times within the space of 14 minutes.

The suspect, Baron “Scooter” Pikes, was handcuffed during each separate Taser incident, according to the Winnfield Police Department. The officer who fired the Taser, Scott Nugent, is white. Pikes, who was pronounced dead on arrival at a hospital, was black.

CNN’s account of the incident in the summer of 2008 relied on interviews at the time with the local parish coroner, the police and an attorney for the family of the victim.

Winn Parish Coroner Dr. Randy Williams told CNN that in his opinion, Nugent had violated every police procedure for using a Taser on a suspect. Moreover, contrary to initial police reports, Williams told CNN that there was no trace of drugs in Pikes’ system. The coroner ruled the death a homicide. Subsequently, the officer was fired following a long civil service hearing and is now on trial for manslaughter in Winnfield.

At the time, a lawyer for Nugent, Phillip Terrell, told CNN that his client had, in fact, followed proper procedure and that Pikes was resisting arrest and had fought with Nugent before being struck by the Taser.

The video sealed Monday by the judge shows the aftermath of Nugent’s Taser use, according to sources who have seen the tape. They told CNN that it runs about 17 minutes and was shot by Nugent himself.

The tape begins with Pikes handcuffed to a chair in the Winnfield Police Department, the sources said. He had already been hit by a so-called “direct” stun — a Taser fired directly into his chest rather than from a distance — and eight other Taser shots.

Off camera, voices can be heard taunting him, shouting the “N” word and demanding to know if he was high on drugs, the sources said. The tape also shows Pikes foaming at the mouth and struggling to breathe. He later slumps to the floor and is ultimately taken to an emergency room with shackles around both of his ankles. CNN has seen still photographs of the lifeless body, still in leg shackles at the hospital.

At a motion hearing Monday in Winn Parish District Court, both the prosecutor, R. Chris Nevils, and the lead defense attorney, George Higgins, said in open court that the tape existed and asked Judge John Joyce to seal it until it was put into evidence at trial, now set for June 14. Both lawyers said release of the tape would taint the local jury pool and set the grounds for a change of venue. Joyce agreed and ordered that the tape not be disseminated under threat of contempt of court until it is played in open court.

CNN approached Nugent after the hearing and asked him for comment on the tape but his attorneys advised him not to answer. The attorney also had no comment.

Attorneys for Pikes’ family have filed a wrongful death suit in a federal court in Louisiana, seeking unspecified damages from the town of Winnfield and each officer involved.

The lead attorney for the family, Carol Powell-Lexing, told CNN she believes Pikes’ death has been subject to a police cover up from the beginning. A spokesman for the Winnfield Police Department said there was no cover-up.

http://www.correctionsone.com/products/less-lethal/taser/articles/1999664-Judge-seals-videotape-in-La-Taser-death-case/

Obomber’s Junk Economics

February 1, 2010 by tonyjack

by Michael Hudson

In a dress rehearsal for this November’s mid-term election, Democrats and Republicans vied last week for who could denounce the banks and blame the other party the most for the giveaways to Wall Street that have swollen the public debt since September 2008, pushing the federal budget into deficit and the economy into a slump.

The Republicans are winning the populist war. On the weekend before his State of the Union address on Wednesday, Obama strong-armed Democratic senators to re-appoint Ben Bernanke as Federal Reserve Chairman. His Wednesday speech did not mention this act (happily applauded by Wall Street). The President sought to defuse voter opposition by acknowledging that nobody likes the banks. But he claimed that unemployment would be much higher if they hadn’t been bailed out. So the giveaway of public funds was all for the workers. The $13 trillion that has created a new power elite was just an incidental byproduct. Unpleasant, perhaps, as American democracy slips into oligarchy. But the least bad option. People might not like it, but Main Street simply cannot prosper without creating hundreds of Wall Street billionaires – without enabling them to increase their bonuses and capital gains as bank stock prices quadruple. It’s all to get credit flowing again (at 30 per cent for credit card users, to be sure.)

So the rest of us must wait for wealth to trickle down. The cover story is that, like it or not, this is how the world works. At least this is the argument of the lobbyists who are drafting and censoring laws and signing off on just who is acceptable to run the Federal Reserve, Treasury and other public-subsidy agencies. The working assumption is that the economy cannot recover without enriching Wall Street. . . .

read the whole story at http://counterpunch.com/

obomber is insane!

February 1, 2010 by tonyjack

he can make idiotic statements like this while bankrupting us with wars of aggression:

“We simply cannot continue to spend as if deficits don’t have consequences, as if waste doesn’t matter, as if the hard-earned tax money of the American people can be treated like Monopoly money. . . .”

http://www.nytimes.com/2010/02/02/us/politics/02budget.html?hp

JPMorgan vs. Goldman Sachs: Why the Market Was Down 7 Days in a Row

January 30, 2010 by tonyjack

by Ellen Brown

We are witnessing an epic battle between two banking giants, JPMorgan Chase (Paul Volcker) and Goldman Sachs (Rubin/Geithner). The bodies left strewn on the battleground could include your pension fund and 401K.

The late Libertarian economist Murray Rothbard wrote that U.S. politics since 1900, when William Jennings Bryan narrowly lost the presidency, has been a struggle between two competing banking giants, the Morgans and the Rockefellers. The parties would sometimes change hands, but the puppeteers pulling the strings were always one of these two big-money players. No popular third party candidate had a real chance at winning, because the bankers had the exclusive power to create the national money supply and therefore held the winning cards.

In 2000, the Rockefellers and the Morgans joined forces, when JPMorgan and Chase Manhattan merged to become JPMorgan Chase Co. Today the battling banking titans are JPMorgan Chase and Goldman Sachs, an investment bank that gained notoriety for its speculative practices in the 1920s. In 1928, it launched the Goldman Sachs Trading Corp., a closed-end fund similar to a Ponzi scheme. The fund failed in the stock market crash of 1929, marring the firm’s reputation for years afterwards. Former Treasury Secretaries Henry Paulson and Robert Rubin came from Goldman, and current Treasury Secretary Timothy Geithner rose through the ranks of government as a Rubin protégé. One commentator called the U.S. Treasury “Goldman Sachs South.”

Goldman’s superpower status comes from something more than just access to the money spigots of the banking system. It actually has the ability to manipulate markets. Formerly just an investment bank, in 2008 Goldman magically transformed into a bank holding company. That gave it access to the Federal Reserve’s lending window; but at the same time it remained an investment bank, aggressively speculating in the markets. The upshot was that it can now borrow massive amounts of money at virtually 0% interest, and it can use this money not only to speculate for its own account but to bend markets to its will.

But Goldman Sachs has been caught in this blatant market manipulation so often that the JPMorgan faction of the banking empire has finally had enough. The voters too have evidently had enough, as demonstrated in the recent upset in Massachusetts that threw the late Senator Ted Kennedy’s Democratic seat to a Republican. That pivotal loss gave Paul Volcker, chairman of President Obama’s newly formed Economic Recovery Advisory Board, an opportunity to step up to the plate with some proposals for serious banking reform. Unlike the string of Treasury Secretaries who came to the government through the revolving door of Goldman Sachs, former Federal Reserve Chairman Volcker came up through Chase Manhattan Bank, where he was vice president before joining the Treasury. On January 27, market commentator Bob Chapman wrote in his weekly investment newsletter The International Forecaster:

“A split has occurred between the paper forces of Goldman Sachs and JP Morgan Chase. Mr. Volcker represents Morgan interests. Both sides are Illuminists, but the Morgan side is tired of Goldman’s greed and arrogance. . . . Not that JP Morgan Chase was blameless, they did their looting and damage to the system as well, but not in the high handed arrogant way the others did. The recall of Volcker is an attempt to reverse the damage as much as possible. That means the influence of Geithner, Summers, Rubin, et al will be put on the back shelf at least for now, as will be the Goldman influence. It will be slowly and subtly phased out. . . . Washington needs a new face on Wall Street, not that of a criminal syndicate.”

Goldman’s crimes, says Chapman, were that it “got caught stealing. First in naked shorts, then front-running the market, both of which they are still doing, as the SEC looks the other way, and then selling MBS-CDOs to their best clients and simultaneously shorting them.”

Volcker’s proposal would rein in these abuses, either by ending the risky “proprietary trading” (trading for their own accounts) engaged in by the too-big-to-fail banks, or by forcing them to downsize by selling off those portions of their businesses engaging in it. Until recently, President Obama has declined to support Volcker’s plan, but on January 21 he finally endorsed it.

The immediate reaction of the market was to drop – and drop, day after day. At least, that appeared to be the reaction of “the market.” Financial analyst Max Keiser suggests a more sinister possibility. Goldman, which has the power to manipulate markets with its high-speed program trades, may be engaging in a Mexican standoff. The veiled threat is, “Back off on the banking reforms, or stand by and watch us continue to crash your markets.” The same manipulations were evident in the bank bailout forced on Congress by Treasury Secretary Hank Paulson in September 2008.

In Keiser’s January 23 broadcast with co-host Stacy Herbert, he explains how Goldman’s manipulations are done. Keiser is a fast talker, so this transcription is not verbatim, but it is close. He says:

“High frequency trading accounts for 70% of trading on the New York Stock Exchange. Ordinarily, a buyer and a seller show up on the floor, and a specialist determines the price of a trade that would satisfy buyer and seller, and that’s the market price. If there are too many sellers and not enough buyers, the specialist lowers the price. High frequency trading as conducted by Goldman means that before the specialist buys and sells and makes that market, Goldman will electronically flood the specialist with thousands and thousands of trades to totally disrupt that process and essentially commandeer that process, for the benefit of siphoning off nickels and dimes for themselves. Not only are they siphoning cash from the New York Stock Exchange but they are also manipulating prices. What I see as a possibility is that next week, if the bankers on Wall Street decide they don’t want to be reformed in any way, they simply set the high frequency trading algorithm to sell, creating a huge negative bias for the direction of stocks. And they’ll basically crash the market, and it will be a standoff. The market was down three days in a row, which it hasn’t been since last summer. It’s a game of chicken, till Obama says, ‘Okay, maybe we need to rethink this.’”

But the President hasn’t knuckled under yet. In his State of the Union address on January 27, he did not dwell long on the issue of bank reform, but he held to his position. He said:

“We can’t allow financial institutions, including those that take your deposits, to take risks that threaten the whole economy. The House has already passed financial reform with many of these changes. And the lobbyists are already trying to kill it. Well, we cannot let them win this fight. And if the bill that ends up on my desk does not meet the test of real reform, I will send it back.”

What this “real reform” would look like was left to conjecture, but Bob Chapman fills in some blanks and suggests what might be needed for an effective overhaul:

“The attempt will be to bring the financial system back to brass tacks. . . . That would include little or no MBS and CDOs, the regulation of derivatives and hedge funds and the end of massive market manipulation, both by Treasury, Fed and Wall Street players. Congress has to end the ‘President’s Working Group on Financial Markets,’ or at least limit its use to real emergencies. . . . The Glass-Steagall Act should be reintroduced into the system and lobbying and campaign contributions should end. . . . No more politics in lending and banks should be limited to a lending ratio of 10 to 1. . . . It is bad enough they have the leverage that they have. State banks such as North Dakota’s are a better idea.”

On January 28, the predictable reaction of “the market” was to fall for the seventh straight day. The battle of the Titans was on.

http://webofdebt.wordpress.com/jpmorgan-vs-goldman-sachs-why-the-market-was-down-7-days-in-a-row/

Obomber’s Latest Lies

January 29, 2010 by tonyjack

by Dave Lindorff

President Obama gives a good speech. He’s smooth, unruffled by audience response, good at a timely ad-lib remark, and knows how to win over a tough crowd–all skills that were in evidence at last night’s State of the Union address. But he’s also good at telling whoppers.

Here are a few.

Talking about health care, and the stalled bills in House and Senate which have become so encrusted with pro-industry amendments that the whole process should be referred to as the Health Industry Enrichment Act, Obama said at one point, addressing the doubts many in Congress and among the broader public have about those bills, “If anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors and stop insurance company abuses, let me know. Let me know. Let me know. I’m eager to see it.”. . .
The second big whopper was Iraq. There the president, to loud applause, said he would have all combat troops out of Iraq by August of this year. At another point, though, he went further, saying that “all our troops” would be “coming home.” The truth, though, is that they won’t be. In fact, though, as many as 50,000 US troops will remain in Iraq after this August. Whether they will be “in combat” or not is really not up to them. If they are attacked, of course they will be in combat. They may well be sent into battle too, though who knows if we’ll hear about it. There are unlikely to be too many members of the press with them, as the focus shifts to Afghanistan. But 50,000 is a lot of troops–much more than the US has in South Korea, for instance. It’s hardly an end to the war in Iraq. . . .
Third, the president slipped by the new big war, Afghanistan, in an astonishingly abrupt single paragraph. Think about it. He has ordered an escalation of that conflict, where the US already has committed 70,000 troops, with another 30,000 on the way, not counting perhaps 50-60,000 more private mercenaries, and has called for a new aggressive strategy of capturing and holding territory–a strategy that is bound to increase both US and innocent Afghani casualties–and he only said a couple of sentences about it.

And those sentences were full of lies. Obama said the US is “training Afghan security forces so they can begin to take the lead in July of 2011, and our troops can begin to come home,” but he knows his own advisors are telling him that those Afghan military forces are incapable of being expanded to do that job. The whole country is basically illiterate and not capable of being trained to handle much of the equipment, the military and police are hopelessly corrupt, and the tribal system makes a unified national army a pipe-dream. He said the US will “reward good governance,” but in fact has allied itself with a corrupt narco-regime led by Hamid Karzai, whose own brother is a leading drug kingpin.

There were more lies and misleading statements through the speech, for example his lie that his administration has “prohibited torture,” but these three alone make it amply clear that the president was not doing his constitutional duty of giving Congress an accurate report on the “state of the union.”

http://counterpunch.com/lindorff01292010.html

The Annotated Obama

January 29, 2010 by tonyjack

by joe bageant

I’ve managed to sit still through a few state of the union speeches, through the remarks of Kennedy, Johnson, Nixon, Ford, Carter, Reagan, one Bush (the pappy, I never could gut out one of The Dub’s ) and a Clinton. Brother Clinton finished me off, made me give up on state of the union speeches altogether.

Still, there was the off chance — OK, vain hope — that Obama might come out swinging in the wake of the Massachusetts massacre and the Supreme’s recent sale of Congress to corporations. As in: The senator from Wal-Mart now has the floor. So I poured myself a stiff one and fell into a deep cush recliner in front of a mongo brain-wrapping TV screen. Not that I would ever own one, mind you. I watch it at my friend and fellow writer Fred Reed’s house. That way he gets the rap for being a torpid brainwashed American pig.

Obama’s opener was predictable enough, the obligatory patriotic reference for the blood and balls crowd:

…when the Union was turned back at Bull Run and the Allies first landed at Omaha Beach…

Then came the hearkening back section, in this case to 1965, a time when blacks had hope and liberals had a few guts:

… and civil rights marchers were beaten on Bloody Sunday…

More than half of Americans were not yet born in 1965, and four fifths surely have never heard of Bloody Sunday at Selma. But what the hell, it’s a speech, right?

And again, we must answer history’s call…

Along with millions of other cranky old lefties, I wanted to scream back, Then pick up the fucking phone, damn ya!. . . .

read the whole article at http://counterpunch.com/bageant01292010.html