By Robert Scheer

The world according to John McCain is one in which America is triumphant at home and abroad thanks to the Bush legacy, rolling to victory internationally and mastering its domestic economic problems. If daily news, like reports of the 10 French soldiers killed by a resurgent Taliban in Afghanistan and the U.S. government’s imminent nationalization of much of the American mortgage-lending industry, would seem to deny such a rosy scenario, then that only shows skeptics lack the courage that sustained McCain as a prisoner of war in Vietnam.

There you have it encapsulated, the McCain campaign for president, an irrational mélange of patriotic swagger and blindness to reality that is proving disturbingly successful with uninformed voters. How else to explain the many millions of Americans who tell pollsters they prefer a continuation of Republican rule when so many of them are losing their homes to foreclosure and the nation is devastated by out-of-control military spending?

The economy is in a downward spiral, the national debt is at an all-time high, the dollar is an international disgrace and inflation in July had the steepest rise in 27 years, driven by oil prices fivefold higher than when George W. Bush invaded the nation with the world’s second-largest petroleum reserves.

While the oil-rich Mideast nations we protect refuse to fully open the oil spigots as payback for our military efforts, McCain celebrates Gen. David Petraeus as his No. 1 hero for “victory” in Iraq. Aside from the reality that victory there is now defined as returning to the level of stability provided by Saddam Hussein, who the Bush administration admits had nothing to do with the bin Laden-led terrorists, even that goal requires the cooperation of our former sworn enemies, Iran’s ayatollahs.

Presumably McCain envisions a more favorable outcome for Georgia, to which he would commit the unqualified support of the United States with his outrageously overreaching statement that “we are all Georgians.” If Democratic presidential candidate Barack Obama had been in contact with the leader of a nation before and after that nation provoked a war, his campaign would be a shambles. Not so McCain, who is acting as if he is already the elected commander in chief ensconced in a reconstituted neoconservative-dominated White House. By contrast, Secretary of State Condoleezza Rice has been reduced to a blustering bystander.

That military victory in Iraq and any other trouble spot is the key selling point of the McCain campaign is odd, because McCain’s credentials derive from participation in a war that resulted in the most ignominious defeat in U.S. history. How else to think of the loss of almost 59,000 Americans and 3.4 million Indochinese in a war that even McCain has long since not seriously tried to defend. Surely McCain accepted the notion that a Communist Party-run Vietnam was compatible with U.S. security interests when he, along with Sen. John Kerry, led the fight for U.S. recognition of Vietnam.

Wouldn’t it have been grand if McCain, who made his own pilgrimage of reconciliation to Hanoi, would have drawn the proper lesson from that sad chapter in American history—that victory isn’t everything it’s cracked up to be? Or, by extension, from the recent Olympic festivities in still-Red China, where Bush was photographed quite happily near portraits of the once-dreaded Chairman Mao, whom U.S. propaganda had long described, quite erroneously, as chief sponsor of the Vietnamese communists.

We are reminded of how brilliant Republican Richard Nixon was in rejecting the neoconservative addiction to the Cold War that McCain embraces when the late president traveled to Beijing to make peace with the man previously depicted as the bloodiest of communist dictators. It turns out that the various communist movements were nationalist above all else, and when we “lost” in Vietnam, the result was not attacks on the United States, but a war between China and Vietnam.

The lesson McCain should have learned is that the world is a complex place, that today’s enemies may be tomorrow’s negotiating partners—as Obama has at times dared to suggest—and that the neoconservative idea of a Pax Americana is a dangerous fantasy. And a costly one at that, not only in lost lives and blowback from the regions we destabilize, but also in the dollars that American taxpayers must waste.

Thanks to the absurdly misdirected war on terrorism that McCain so enthusiastically supports, we spend more annually in inflation-adjusted dollars on the military than at any time since World War II, even more than during the Korean and Vietnam wars. Vote for McCain and forget about funding to solve the Social Security, Medicare and subprime mortgage disasters or for anything else that truly would make America stronger.

Robert Scheer is author of a new book, “The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America.”
AP photo / Gerald Herbert

Republican presidential candidate John McCain stands in front of an A-4 Skyhawk fighter as he is introduced at a rally at the Virginia Aviation Museum in Richmond in February. McCain was flying such a craft when he was shot down during the Vietnam War.

http://www.truthdig.com/report/item/20080819_mccains_warped_worldview/

In the evolving neocon scheme of unconstitutional US governance, the job of running the country may belong to the office of the Vice President, while the primary duty of the president (other than following orders and acting like he’s in charge) may be to pardon the Vice President and all of his henchmen for their crimes.

We have survived (just barely) seven and a half years of life under a government that has eliminated the legislative and judicial branches, installed a certified moron in the oval office, and placed dictatorial power in a new fourth (or first) branch of government located wherever Dick Cheney casts his shadow. The Republican candidate to succeed George W. Bush is a bumbling idiot and senile to boot, clearly incapable of remembering what he had for breakfast, much less running a global empire. (And he lost any right to take pride in his torture victimhood when he began supporting the torture of others.) If he chooses a new Dick Cheney as his running mate, we will know that his role is puppet-in-chief and primary pardoner.

Now, I know what you’re thinking: why can’t Congress pardon each vice president and gang by legalizing their crimes, as done in the FISA modernization act or the military commissions act? Well, of course, it can - in the cases of crimes it finds out about. But Congress can’t be counted on to pardon crimes that are successfully kept secret, which however might be discovered while the criminals remain alive. And laws can always be undone by new laws or court rulings, while presidential pardons cannot be.

Alright, fine, but why couldn’t a president just pardon himself? Well, first of all, you don’t want the president to be in charge of the national crime syndicate for a number of reasons. First of all, he has to be chosen through something resembling an open election - a process well suited to selecting a Bush or a McCain, but not a Cheney or Lieberman. The Vice Presidential candidate need not be chosen through any primary elections, and can remain a footnote in the general election. Second, the Vice President’s office holds greater claim to a privilege of secrecy, by virtue of constituting its own separate and unregulated branch of government. Third, while the Constitution does not explicitly ban self-pardoning, no president has yet attempted it, and any sane Constitutional scholar would denounce it as patently outside the law.

Former consigliere generale Alberto Gonzales claimed that the Constitution only says that the right to habeas corpus cannot be taken away (except in certain circumstances) but does not assert that anyone ever has the right to habeas corpus in the first place. By that logic, the Bill of Rights provides no rights at all, and the president is free to do almost anything imaginable, including - yes - crushing children’s testicles or (should it develop any) Congress’s.

At the Constitutional Convention, James Madison and George Mason both argued that impeachment would be the response if a president ever pardoned someone for a crime he himself was involved in (as Bush has effectively done for Scooter Libby). The idea of a president pardoning himself for a crime he had committed was so patently abusive that I am certain Madison and Mason would have declined to include an explicit ban of it had anyone suggested the idea.

Of course it is very likely that Bush will attempt a self-pardon, particularly if Obama claims an election victory, but such a solution cannot be counted on. Hence the desirability of the president being a moron with an established family tradition of claiming to be “out of the loop,” of allowing the Vice President to run the country through secret task forces, of packing the courts with loyalists, of purchasing property in nations that lack extradition treaties, of rendering impotent and servile the International Criminal Court, and of placing in the White House for the next term a new pardoner in chief whose job can include pardoning the previous president. Remember that John McCain (and Barack Obama too, for

that matter) has not committed to refusing to pardon Bush.

In fact, McCain (and Obama too, for that matter) has not committed to ceasing to engage in lots of criminal abuses of the Cheney-Bush regime, or even to eliminating the secrecy of the executive branches [sic]. Perhaps more important, though, is the question of what legal and democratic principles, if any, McCain’s and Obama’s respective running-mates will be willing to commit to.

*************

Caroline Winter

Tens of thousands of US inmates are paid from pennies to minimum wage—minus fines and victim compensation—for everything from grunt work to firefighting to specialized labor. Here’s a sampling of what they make, and for whom.

Eating in: Each month, California inmates process more than 680,000 pounds of beef, 400,000 pounds of chicken products, 450,000 gallons of milk, 280,000 loaves of bread, and 2.9 million eggs (from 160,000 inmate-raised hens). Starbucks subcontractor Signature Packaging Solutions has hired Washington prisoners to package holiday coffees (as well as Nintendo Game Boys). Confronted by a reporter in 2001, a Starbucks rep called the setup “entirely consistent with our mission statement.”

Around the Big House: Texas inmates produce brooms and brushes, bedding and mattresses, toilets, sinks, showers, and bullwhips. Bullwhips?

Windows dressing: In the mid-1990s, Washington prisoners shrink-wrapped software and up to 20,000 Microsoft mouses for subcontractor Exmark (other reported clients: Costco and JanSport). “We don’t see this as a negative,” a Microsoft spokesman said at the time. Dell used federal prisoners for PC recycling in 2003, but stopped after a watchdog group warned that it might expose inmates to toxins.

Back to school: Texas and California inmates make dorm furniture and lockers, diploma covers, binders, logbooks, library book carts, locker room benches, and juice boxes.

Patriotic duties: Federal Prison Industries, a.k.a. Unicor, says that in addition to soldiers’ uniforms, bedding, shoes, helmets, and flak vests, inmates have “produced missile cables (including those used on the Patriot missiles during the Gulf War)” and “wiring harnesses for jets and tanks.” In 1997, according to Prison Legal News, Boeing subcontractor MicroJet had prisoners cutting airplane components, paying $7 an hour for work that paid union wages of $30 on the outside.

The law won: In Texas, prisoners make officers’ duty belts, handcuff cases, and prison-cell accessories. California convicts make gun containers, creepers (to peek under vehicles), and human-silhouette targets.

A stitch in time: California inmates sew their own garb. In the 1990s, subcontractor Third Generation hired 35 female South Carolina inmates to sew lingerie and leisure wear for Victoria’s Secret and JCPenney. In 1997, a California prison put two men in solitary for telling journalists they were ordered to replace “Made in Honduras” labels on garments with “Made in the usa.”

Open wide: At California’s prison dental laboratory, inmates produce a complete prosthesis selection, including custom trays, try-ins, bite blocks, and dentures.

Constructive criticism: Prisoners in for burglary, battery, drug and gun charges, and escape helped build a Wal-Mart distribution center in Wisconsin in 2005, until community uproar halted the program. (Company policy says, “Forced or prison labor will not be tolerated by Wal-Mart.”)

On call: Its inmate call centers are the “best kept secret in outsourcing,” Unicor boasts. In 1994, a contractor for gop congressional hopeful Jack Metcalf hired Washington state prisoners to call and remind voters he was pro-death penalty. Metcalf, who prevailed, said he never knew.

Caroline Winter is an editorial intern at Mother Jones.

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This article has been made possible by the Foundation for National Progress, the Investigative Fund of Mother Jones, and gifts from generous readers like you.

© 2008″ The Foundation for National Progress

Thomas Frank, a Kansas boy who once followed conservatism deep into his home state and now writes op-eds that probably drive the readers of the Wall Street Journal crazy, has had a front seat at the Washington spectacle these last years as the Bush administration applied its “enhanced interrogation techniques” to the Federal government. In his latest must-read book, The Wrecking Crew: How Conservatives Rule, Frank offers nothing short of a how-to history of the conservative era — specifically how to destroy a government, leave Americans in the lurch, and enrich yourselves all at the same time. It wasn’t just, as he argues, that this administration left “smoking guns” littered around the landscape, but that it itself was the smoking gun. If you want to know just what we face as a nation in terms of rebuilding America, his book is a good place to start. Tom

Follow This Dime

Why Misgovernment Was No Accident in George W. Bush’s Washington
By Thomas Frank

Washington is the city where the scandals happen. Every American knows this, but we also believe, if only vaguely, that the really monumental scandals are a thing of the past, that the golden age of misgovernment-for-profit ended with the cavalry charge and the robber barons, at about the same time presidents stopped wearing beards.

I moved to Washington in 2003, just in time for the comeback, for the hundred-year flood. At first it was only a trickle in the basement, a little stream released accidentally by the president’s friends at Enron. Before long, though, the levees were failing all over town, and the city was inundated with a muddy torrent of graft.

How are we to dissect a deluge like this one? We might begin by categorizing the earmarks handed out by Congress, sorting the foolish earmarks from the costly earmarks from the earmarks made strictly on a cash basis. We could try a similar approach to government contracting: the no-bid contracts, the no-oversight contracts, the no-experience contracts, the contracts handed out to friends of the vice president. We might consider the shoplifting career of one of the president’s former domestic policy advisers or the habitual plagiarism of the president’s liaison to the Christian right. And we would certainly have to find some way to parse the extraordinary incompetence of the executive branch, incompetence so fulsome and steady and reliable that at some point Americans stopped being surprised and began simply to count on it, to think of incompetence as the way government works.

But the onrushing flow swamps all taxonomies. Mass firing of federal prosecutors; bribing of newspaper columnists; pallets of shrink-wrapped cash “misplaced” in Iraq; inexperienced kids running the Baghdad stock exchange; the discovery that many of Alaska’s leading politicians are apparently on the take — our heads swim. We climb to the rooftop, but we cannot find the heights of irony from which we might laugh off the blend of thug and Pharisee that was Tom DeLay — or dispel the nauseating suspicion, quickly becoming a certainty, that the government of our nation deliberately fibbed us into a pointless, catastrophic war.

Bad Apples All Around

So let us begin on the solid ground of these simple facts: this spectacular episode of misrule has coincided with both the political triumph of conservatism and with the rise of the Washington area to the richest rank of American metropolises. In the period I am describing, gentlemen of the right rolled through the capital like lords of creation. Every spigot was open, and every indulgence slopped out for their gleeful wallowing. All the clichés roared at full, unembarrassed volume: the wines gurgled, the T-bones roasted, the golf courses beckoned, the Learjets zoomed, the contractors’ glass buildings sprouted from the earth, and the lobbyists’ mansions grew like brick-colonial mushrooms on the hills of northern Virginia.

Democrats, for their part, have tried to explain the flood of misgovernment as part of a “culture of corruption,” a phrase at once obviously true and yet so amorphous as to be quite worthless. Republicans have an even simpler answer: government failed, they tell us, because it is the nature of government enterprises to fail. As for the great corruption cases of recent years, they cluck, each is merely a one-of-a-kind moral lapse unconnected to any particular ideology — an individual bad apple with no effect on the larger barrel.

Which leaves us to marvel helplessly at what appears to be a spectacular run of lousy luck. My, what a lot of bad apples they are growing these days!

Corruption is uniquely reprehensible in a democracy because it violates the system’s first principle, which we all learned back in the sunshiny days of elementary school: that the government exists to serve the public, not particular companies or individuals or even elected officials. We Are the Government, insisted the title of a civics primer published in the earnest year of 1945. “The White House belongs to you,” its dust jacket told us. “So do all the other splendid buildings in Washington, D.C. For you are a citizen of the United States.” For you, young citizen, does the Post Office carry letters to every hamlet in the nation. For you does the Department of Agriculture research better plowing methods and the Bureau of Labor Statistics add up long columns of numbers.

The government and its vast workforce serve the people: The idea is so deep in the American grain that we can’t bring ourselves to question it, even in this disillusioned age. Republicans and Democrats may fight over how big government should be and exactly what it should do, but almost everyone shares those baseline good intentions, we believe, that devotion to the public interest.

We continue to believe this in even the most improbable circumstances. Take the worst apple of them all, lobbyist Jack Abramoff, whose astonishing career as a corruptionist has been unreeling in newspaper and congressional investigations since I came to Washington. Abramoff started out as a great political success story, a protégé and then a confidant of the leaders of the conservative faction of the Republican Party. But his career disintegrated on news of the inventive ways he ripped off his clients and the luxury meals and lavish trips with which he bribed legislators.

Journalistic coverage of the Abramoff affair has stuck closely to the “bad apple” thesis, always taking pains to separate the conservative movement from its onetime superstar. What Abramoff represented was “greed gone wild,” asserts the most authoritative account on the subject. He “went native,” say others. Above all, he was “sui generis,” a one-of-a-kind con man, “engaged in bizarre antics that your average Zegna-clad Washington lobbyist would never have dreamed of.”

In which case, we can all relax: Jack Abramoff’s in jail. The system worked; the bad apple has been plucked; the wild greed and the undreamed-of antics have ceased.

Misgovernment by Ideology

But the truth is almost exactly the opposite, whether we are discussing Abramoff or the wider tsunami of corruption. The truth is as obvious as a slab of sirloin and yet so obscured by decades of pettifoggery that we find it almost impossible to apprehend clearly. The truth slaps your face in every hotel lobby in town, but we still don’t get the message.

It is just this: Fantastic misgovernment of the kind we have seen is not an accident, nor is it the work of a few bad individuals. It is the consequence of triumph by a particular philosophy of government, by a movement that understands the liberal state as a perversion and considers the market the ideal nexus of human society. This movement is friendly to industry not just by force of campaign contributions but by conviction; it believes in entrepreneurship not merely in commerce but in politics; and the inevitable results of its ascendance are, first, the capture of the state by business and, second, all that follows: incompetence, graft, and all the other wretched flotsam that we’ve come to expect from Washington.

The correct diagnosis is the “bad apple” thesis turned upside down. There are plenty of good conservative individuals, honorable folks who would never participate in the sort of corruption we have watched unfold over the last few years. Hang around with grassroots conservative voters in Kansas, and in the main you will find them to be honest, hardworking people. Even our story’s worst villains can be personally virtuous. Jack Abramoff, for example, is known to his friends as a pious, polite, and generous fellow.

But put conservatism in charge of the state, and it behaves very differently. Now the “values” that rightist politicians eulogize on the stump disappear, and in their place we can discern an entirely different set of priorities — priorities that reveal more about the unchanging historical essence of American conservatism than do its fleeting campaigns against gay marriage or secular humanism. The conservatism that speaks to us through its actions in Washington is institutionally opposed to those baseline good intentions we learned about in elementary school.

Its leaders laugh off the idea of the public interest as airy-fairy nonsense; they caution against bringing top-notch talent into government service; they declare war on public workers. They have made a cult of outsourcing and privatizing, they have wrecked established federal operations because they disagree with them, and they have deliberately piled up an Everest of debt in order to force the government into crisis. The ruination they have wrought has been thorough; it has been a professional job. Repairing it will require years of political action.

Conservatism-in-power is a very different beast from the conservatism we meet on the streets of Wichita or the conservatism we overhear talking to itself on the pages of Free Republic. For one thing, what conservatism has done in its decades at the seat of power is fundamentally unpopular, and a large percentage of its leaders have been men of eccentric ideas. While they believe things that would get them laughed out of the American Sociological Association, that only makes them more typical of the movement. And for all their peculiarity, these people — Grover Norquist, Tom DeLay, Jack Abramoff, Newt Gingrich, and the whole troupe of activists, lobbyists, and corpora-trons who got their start back in the Reagan years — have for the last three decades been among the most powerful individuals in America. This wave of misgovernment has been brought to you by ideology, not incompetence.

Yes, today’s conservatives have disgraced themselves, but they have not strayed from the teaching of their forefathers or the great ideas of their movement. When conservatives appoint the opponents of government agencies to head those government agencies; when they auction their official services to the purveyor of the most lavish “golf weekend”; when they mulct millions from groups with business before Congress; when they dynamite the Treasury and sabotage the regulatory process and force government shutdowns — in short, when they treat government with contempt — they are running true to form. They have not done these awful things because they are bad conservatives; they have done them because they are good conservatives, because these unsavory deeds follow naturally from the core doctrines of the conservative tradition.

And, yes, there has been greed involved in the effort — a great deal of greed. Every tax cut, every cleverly engineered regulatory snafu saves industry millions and perhaps even billions of dollars, and so naturally securing those tax cuts and engineering those snafus has become a booming business here in Washington. Conservative rule has made the capital region rich, a showplace of the new plutocratic order. But this greed cannot be dismissed as some personal failing of lobbyist or congressman, some badness-of-apple that can be easily contained. Conservatism, as we know it, is a movement that is about greed, about the “virtue of selfishness” when it acts in the marketplace. In rightwing Washington, you can be a man of principle and a boodler at the same time.

The Wrecking Crew in Full Swing

One of the instructive stories We Are the Government brought before generations of schoolkids was the tale of a smiling dime whose wanderings were meant to introduce us to the government and all that it does for us: the miner who digs the ore for the dime has his “health and safety” supervised by one branch of the government; the bank in which the dime is stored enjoys the protection of a different branch, which “sees that [banks] are safe places for people to keep their money”; the dime gets paid in tax on a gasoline sale; it then lands in the pocket of a Coast Guard lieutenant, who takes it overseas and spends it on a parrot, which is “quarantined for ninety days” when the lieutenant brings it home. All of which is related with the blithest innocence, as though taxes on gasoline and quarantines on parrots were so obviously beneficial that they required little further explanation.

Clearly, a more up-to-date version is required. So let us follow the dime as it wends its way through our present-day capital. Its story, we will find, is the reverse of what it was in 1945. That old dime was all about service, about the things government could do for us. But the new dime is about profit — about the superiority of private enterprise, about the huge sums that can be squeezed out of federal operations. Instead of symbolizing good government, the dime now shows us the wrecking crew in full swing.

Our modern dime first comes to Washington as part of some good citizen’s taxes, and it leaves the U.S. Treasury in a payment to a company that has been hired to do work on the nation’s ports. Back in 1945, the government would have done the work itself, but now it uses contractors for such things. This particular contractor knows how to win a bid, but it doesn’t know how to do the work, so it subcontracts the job to another outfit. The dime follows, and it eventually makes up a worker’s salary, who incorporates it into his monthly car payment. From there it travels into the coffers of an auto industry trade association, which happens to be very upset about a rule proposed by a federal agency that would require cars to notify drivers when their tire pressure is low.

So the trade association gives the dime to a Washington consultant who specializes in fighting federal agencies, and this man launches challenge after challenge to the studies that the agency is using in the tire-pressure matter. It takes many years for the agency to make its way through the flak thrown up by this clever fellow. Meanwhile, with his well-earned dime, he buys himself a big house with nice white columns in front.

But this is only the beginning of the story. As we make our rounds of conservative Washington, we glimpse something much greater than single acts of incompetence or obstruction. We see a vast machinery built for our protection reengineered into a device for our exploitation. We behold the majestic workings of the free market itself, boring ever deeper into the tissues of the state. Ultimately, we gaze upon one of the true marvels of history: democracy buried beneath an avalanche of money.

Thomas Frank, the author of What’s the Matter with Kansas?, is the founding editor of The Baffler, a contributing editor at Harper’s, and, most recently, a columnist for the Wall Street Journal. His WSJ columns can be read at his website. He lives, of course, in Washington D.C. and this essay has been adapted from his new book, The Wrecking Crew: How Conservatives Rule (Metropolitan Books, 2008).

From the book The Wrecking Crew: How Conservatives Rule by Thomas Frank, Copyright © 2008 by Thomas Frank. Reprinted by arrangement with Metropolitan Books, an Imprint of Henry Holt and Company, LLC. All Rights Reserved.

By Jan Dahinten

SINGAPORE (Reuters) - The worst of the global financial crisis is yet to come and a large U.S. bank will fail in the next few months as the world’s biggest economy hits further troubles, former IMF chief economist Kenneth Rogoff said on Tuesday.

“The U.S. is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say ‘the worst is to come’,” he told a financial conference.

“We’re not just going to see mid-sized banks go under in the next few months, we’re going to see a whopper, we’re going to see a big one, one of the big investment banks or big banks,” said Rogoff, who is an economics professor at Harvard University and was the International Monetary Fund’s chief economist from 2001 to 2004.

“We have to see more consolidation in the financial sector before this is over,” he said, when asked for early signs of an end to the crisis.

“Probably Fannie Mae and Freddie Mac — despite what U.S. Treasury Secretary Hank Paulson said — these giant mortgage guarantee agencies are not going to exist in their present form in a few years.”

Rogoff’s comments come as investors dumped shares of the largest U.S. home funding companies Fannie Mae and Freddie Mac on Monday after a newspaper report said government officials may have no choice but to effectively nationalize the U.S. housing finance titans.

A government move to recapitalize the two companies by injecting funds could wipe out existing common stock holders, the weekend Barron’s story said. Preferred shareholders and even holders of the two government-sponsored entities’ $19 billion of subordinated debt would also suffer losses.

Rogoff said multi-billion dollar investments by sovereign wealth funds from Asia and the Middle East in western financial firms may not necessarily result in large profits because they had not taken into account the broader market conditions that the industry faces.

“There was this view early on in the crisis that sovereign wealth funds could save everybody. Investment banks did something stupid, they lost money in the sub-prime, they’re great buys, sovereign wealth funds come in and make a lot of money by buying them.

“That view neglects the point that the financial system has become very bloated in size and needed to shrink,” Rogoff told the conference in Singapore, whose wealth funds GIC and Temasek have invested billions in Merrill Lynch and Citigroup

In response to the sharp U.S. housing retrenchment and turmoil in credit markets, the U.S. Federal Reserve has reduced interest rates by a cumulative 3.25 percentage points to 2 percent since mid-September.

Rogoff said the U.S. Federal Reserve was wrong to cut interest rates as “dramatically” as it did.

“Cutting interest rates is going to lead to a lot of inflation in the next few years in the United States.”

(Editing by Neil Chatterjee)

by Bill Carter

Dan Abrams on “Verdict.” The program will end on Thursday.

Just in time for the closing rush of the presidential election, MSNBC is shaking up its prime-time programming lineup, removing the long-time host –- and one-time general manager of the network — Dan Abrams from his 9 p.m. program and replacing him with Rachel Maddow, who has emerged as a favored political commentator for the all-news cable channel.

The moves, which were confirmed by MSNBC executives Tuesday, are expected to be finalized by Wednesday, with Mr. Abrams’s last program on Thursday. After MSNBC’s extensive coverage of the two political conventions during the next two weeks, Ms. Maddow will begin her program on Sept. 8.

MSNBC is highlighting the date, 9/8/08, connecting it to the start of the Olympics on 8/8/08, as a way to signal what the network’s president, Phil Griffin, said “will be the final leg of the political race this year.” He added, “We making that Rachel’s debut.”

• Update: Maddow comments on new role

Mr. Abrams, who is well liked at MSNBC, is expected to remain at both that network and at NBC News, where he is the chief legal correspondent. He will also serve as an anchor during some of MSNBC’s daytime coverage, as well as a substitute host on NBC’s “Today” show, Mr. Griffin said.

The addition of Ms. Maddow as prime-time host had been expected for some time. Only a month ago, Mr. Griffin said she was at the top of the list to get a show at the network, and would likely get one soon.

MSNBC has put heavy emphasis this year on presidential election coverage (it has given itself the tag line, “The Place for Politics”) and has turned to Ms. Maddow frequently both as a guest and as a substitute for the network’s most popular host, Keith Olbermann. Mr. Olbermann’s emergence as the signature personality on the network has led to an unofficial rebranding of MSNBC as the liberal alternative to Fox News, which is dominated by conservative hosts like Bill O’Reilly and Sean Hannity.

MSNBC has been known to be seeking a way to capitalize to a greater degree on Mr. Olbermann’s popularity. A program hosted by Ms. Maddow will almost certainly be a closer ideological fit with Mr. Olbermann’s.

Mr. Abrams was not as overt a partisan. His program, “Verdict,” was based more in legal than political issues. He enjoyed some success, especially of late. With NBC’s Olympic coverage helping, Mr. Abrams beat Larry King’s show on CNN twice last week among the viewers preferred by news advertisers, people between the ages of 25 and 54.

Contacted by phone Tuesday, Mr. Abrams said “Putting my general manager’s hat back on, considering where the network is right now, it is actually the right call.”

Mr. Griffin said of the selection of Ms. Maddow, “This just completes our prime-time lineup. Our lineup makes sense now.”

]]> http://freddevan.com/wordpress/2008/08/10041/feed/ http://freddevan.com/wordpress/2008/08/six-questions-about-the-anthrax-case/ http://freddevan.com/wordpress/2008/08/six-questions-about-the-anthrax-case/#comments Wed, 20 Aug 2008 02:32:17 +0000 admin http://freddevan.com/wordpress/?p=10040 [A TomDispatch recommendation: Bill Moyers had Andrew Bacevich on his "Journal" for an hour Friday night, discussing his new book, The Limits of Power (which is now the number one bestseller at Amazon.com). It was nothing short of a tutorial for the American people on the three-pronged crisis that faces us -- economic, political, and military. Believe me, it's not to be missed and can still be watched at Moyers's website by clicking here. Make sure as well to check out Bacevich's two-part series on the American military crisis, excerpted from his book, which appeared at TomDispatch last week: "Illusions of Victory" and "Is Perpetual War Our Future?"]

Double Standards in the Global War on Terror

Anthrax Department
By Tom Engelhardt

Oh, the spectacle of it all — and don’t think I’m referring to those opening ceremonies in Beijing, where North Korean-style synchronization seemed to fuse with smiley-faced Walt Disney, or Michael Phelp’s thrilling hunt for eight gold medals and Speedo’s one million dollar “bonus,” a modernized tribute to the ancient Greek tradition of amateurism in action. No, I’m thinking of the blitz of media coverage after Dr. Bruce Ivins, who worked at the U.S. Army Medical Research Institute of Infectious Diseases at Fort Detrick, Maryland, committed suicide by Tylenol on July 29th and the FBI promptly accused him of the anthrax attacks of September and October 2001.

You remember them: the powder that, innocuously enough, arrived by envelope — giving going postal a new meaning — accompanied by hair-raising letters ominously dated “09-11-01″ that said, “Death to America. Death to Israel. Allah is great.” Five Americans would die from anthrax inhalation and 17 would be injured. The Hart Senate Office Building, along with various postal facilities, would be shut down for months of clean-up, while media companies that received the envelopes were thrown into chaos.

For a nation already terrified by the attacks of September 11, 2001, the thought that a brutal dictator with weapons of mass destruction (who might even have turned the anthrax over to the terrorists) was ready to do us greater harm undoubtedly helped pave the way for an invasion of Iraq. The President would even claim that Saddam Hussein had the ability to send unmanned aerial vehicles to spray biological or chemical weapons over the east coast of the United States (drones that, like Saddam’s nuclear program, would turn out not to exist).

Today, it’s hard even to recall just how terrifying those anthrax attacks were. According to a LexisNexis search, between Oct. 4 and Dec. 4, 2001, 389 stories appeared in the New York Times with “anthrax” in the headline. In that same period, 238 such stories appeared in the Washington Post. That’s the news equivalent of an unending, high-pitched scream of horror — and from those attacks would emerge an American world of hysteria involving orange alerts and duct tape, smallpox vaccinations, and finally a war, lest any of this stuff, or anything faintly like it, fall into the hands of terrorists.

And yet, by the end of 2001, it had become clear that, despite the accompanying letters, the anthrax in those envelopes was from a domestically produced strain. It was neither from the backlands of Afghanistan nor from Baghdad, but — almost certainly — from our own military bio-weapons labs. At that point, the anthrax killings essentially vanished… Poof!… while 9/11 only gained traction as the singular event of our times.

Those deaths-by-anthrax ceased to be part of the administration’s developing Global War on Terror narrative, which was, of course, aimed at Islamist fanatics (and scads of countries that were said to provide them with “safe haven”), but certainly not military scientists here at home. No less quickly did those attacks drop from the front pages — in fact, simply from the pages — of the nation’s newspapers and off TV screens.

Unlike with 9/11, there would be no ritualistic reminders of the anniversaries of those attacks in years to come. No victims, or survivors, or relatives of victims would step to podiums and ring bells, or read names, or offer encomiums. There would be no billion-dollar (or even million-dollar) memorial to the anthrax dead for the survivors to argue over. There would be little but silence, while the FBI fumbled its misbegotten way through an investigative process largely focused on one U.S. bio-weapons scientist, Steven J. Hatfill, who also worked at Fort Detrick and just happened to be the wrong man. (Bruce Ivins, eerily enough, would work closely with, and aid, the FBI’s investigation for years until the spotlight of suspicion came to be directed at him.)

This essentially remained the state of the case until, as July ended, Ivins committed suicide. Then, what a field day! The details, the questions, the doubts, the disputed scientific evidence, the lists of kinds of drugs he was prescribed, the lurid quotes, the “rat’s nest” of an anthrax-contaminated lab he worked in, the strange emails and letters! (”I wish I could control the thoughts in my mind… I get incredible paranoid, delusional thoughts at times, and there’s nothing I can do until they go away, either by themselves or with drugs.”) Case solved! Or not… The “mad scientist” from the Army’s Fort Detrick bio-wars labs finally nabbed! Or not…

It was a dream of a story. And the mainstream media ran with it, knowledgeably, authoritatively, as if they had never let it go. Now, as the coverage fades and the story once again threatens to head for obscurity (despite doubts about Ivins’s role in the attacks), I thought it might be worth mentioning a few questions that came to my mind as I read through recent coverage — not on Ivins’s guilt or innocence, but on matters that are so much a part of our American landscape that normally no one even thinks to ask about them.

Here are my top six questions about the case:

1. Why wasn’t the Bush administration’s War on Terror modus operandi applied to the anthrax case?

On August 10th, William J. Broad and Scott Shane reported on some of the human costs of the FBI anthrax investigation in a front-page New York Times piece headlined, “For Suspects, Anthrax Case Had Big Costs, Scores of the Innocent in a Wide F.B.I. Net.” They did a fine job of establishing that those who serially came under suspicion had a tough time of it: “lost jobs, canceled visas, broken marriages, frayed friendships.” According to the Times (and others), under the pressure of FBI surveillance, several had their careers wrecked; most were interviewed and re-interviewed numerous times in a “heavy-handed” manner, as well as polygraphed; some were tailed and trailed, their homes searched, and their workplaces ransacked.

Under the pressure of FBI “interest,” anthrax specialist and “biodefense insider” Perry Mikesell evidently turned into an alcoholic and drank himself to death. Steven Hatfill, while his life was being turned inside out, had an agent trailing him in a car run over his foot, for which, Broad and Shane add, he, not the agent, was issued a ticket. And finally, of course, Dr. Ivins, growing ever more distressed and evidently ever less balanced, committed suicide on the day his lawyer was meeting with the FBI about a possible plea bargain that could have left him in jail for life, but would have taken the death penalty off the table.

Still, tough as life was for Mikesell, Hatfill, Ivins, and scores of others, here’s an observation that you’ll see nowhere else in a media that’s had a two-week romp through the case: In search of a confession, none of the suspects of these last years, including Ivins, ever had a lighted cigarette inserted in his ear; none of them were hit, spit on, kicked, and paraded naked; none were beaten to death while imprisoned but uncharged with a crime; none were doused with cold water and left naked in a cell on a freezing night; none were given electric shocks, hooded, shackled in painful “stress positions,” or sodomized; none were subjected to loud music, flashing lights, and denied sleep for days on end; none were smothered to death, or made to crawl naked across a jail floor in a dog collar, or menaced by guard dogs. None were ever waterboarded.

Whatever the pressure on Ivins or Hatfill, neither was kidnapped off a street near his house, stripped of his clothes, diapered, blindfolded, shackled, drugged, and “rendered” to the prisons of another country, possibly to be subjected to electric shocks or cut by scalpel by the torturers of a foreign regime. Even though each of the suspects in the anthrax murders was, at some point, believed to have been a terrorist who had committed a heinous crime with a weapon of mass destruction, none were ever declared “enemy combatants.” None were ever imprisoned without charges, or much hope of trial or release, in off-shore, secret, CIA-run “black sites.”

Why not?

2. Why wasn’t the U.S. military sent in?

Part of the reigning paradigm of the Bush years was this: police work was not enough when the homeland was threatened. The tracking down of terrorists who had killed or might someday kill Americans was a matter of “war.” Those who had attacked the American homeland and murdered U.S. citizens would, as our President put it, be “hunted down” by special ops forces and CIA agents who had been granted the right to assassinate and brought in “dead or alive.”

Why then, when acts of murderous bio-terror had been committed on American soil, was the military not called in? Why were no CIA “death squads” — the tellingly descriptive phrase used by Jane Mayer in her remarkable new book, The Dark Side — dispatched to assassinate likely suspects? Why were no Predator unmanned drones, armed with Hellfire missiles, launched to cruise the skies of Maryland and take out Ivins or other suspects “precisely” and “surgically” in their homes (whatever the “collateral damage”)? Why, in fact, weren’t their homes simply obliterated in the manner regularly employed in Afghanistan, Pakistan, Somalia, and elsewhere? (In fact, it seems to have taken the FBI two years after their first suspicions of Ivins simply to search his house and even longer finally to take away his high-level security clearance.)

Once U.S. weapons labs were identified as the sources of the anthrax, why were no special ops teams sent in to occupy the facilities, shut them down, and fly those found there, shackled and blindfolded, to Guantanamo or other more secret sites?

Why, when the administration went to great lengths to squeeze off funding for terrorists elsewhere, was funding for those labs significantly increased?

Why, when those swept up or simply kidnapped by the Bush administration and then discovered to be innocent, were — after secret imprisonment, abuse, and torture — regularly released without apology or reimbursement (if released at all), did the U.S. government pay Hatfill $4.6 million to settle a lawsuit he filed in response to his ordeal?

Why when, according to the Vice President’s “one percent doctrine,” no response was too extreme if even a minuscule chance of a catastrophic attack against the U.S. “homeland” existed, were no extreme acts taken with a WMD killer (or killers) on the loose, possibly in Maryland’s suburbs?

3. Once the anthrax threat was identified as coming from U.S. military labs, why did the administration, the FBI, and the media assume that only a single individual was responsible?

Read as much of the coverage of the anthrax killings as you want and you’ll discover that the FBI has long taken for blanket fact that a single “mad scientist” was the culprit — and, no less important, that that theory has been accepted as bedrock fact by the media as well. No alternative possibilities have been seriously considered for years.

For instance, it is known that a set of the anthrax letters was sent from a mailbox in Princeton, New Jersey, some hours from Ivins’s home and the Fort Detrick lab in Frederick, Maryland. The question the FBI puzzled over — and the media took up vigorously — was whether, on the day in question, Ivins had time to make it to Princeton and back, given what’s known of his schedule. The FBI suggests that he did; critics suggest otherwise. No one, however, seems to consider the possibility that the lone terrorist of the anthrax killings might have had one or more accomplices, which would have made the “problem” of mailing those letters into a piece of cake.

Is it that Americans, as opposed to foreigners bent on terrorism, are assumed to be unstoppable individualists, loners canny enough to carry out plots by themselves? Does no one recall that the last great act of American terrorism in the United States, the bombing of the Alfred P. Murrah Federal Building in Oklahoma City in 1995, was a crime committed by at least two American “loners”? (The earliest reports in that case, too, blamed Arab terrorists — plural.)

There seem to have been no serious al-Qaeda “sleeper cells” in this country, but how do we know that there isn’t a “sleeper cell” of American bio-killers lurking somewhere in the U.S. military lab community?

4. What of those military labs? Why does their history continue to play little or no part in the story of the anthrax attacks?

In reading through reams of coverage of Ivins’s suicide and the FBI case against him, I found only a single reference to the work his lab at Fort Detrick had been dedicated to throughout most of the Cold War era. Here is that sentence from the Washington Post: “As home to the Army Biological Warfare Laboratories, the facility ran a top-secret program producing offensive biological weapons from 1943 until 1969.” And yet, if you don’t grasp this fact, the real significance of the anthrax case remains in the shadows.

As with the continuing story of nuclear dangers on our planet, the terrors of our age are almost invariably portrayed as emerging from bands of fanatics, or lands like Iran said to be ruled by the same, in the backlands of our planet (some of which also just happen to be in the energy heartlands of the same planet). And yet, if we are terrified enough of loose or proliferating weapons of mass destruction to threaten or start wars over them, it’s important to understand that, from 1945 on, these dangers — and they are grim dangers — emerged from the heartland of the military-industrial machines of the two Cold War superpowers, the U.S. and the USSR.

Put another way, the most conceptually frightening attacks of 2001 came directly from the Cold War urge to develop offensive biological weapons. Until 1969, the Army’s biological-warfare laboratories at Fort Detrick were focused, in part, on that task. Plain and simple. After President Richard Nixon shut down the offensive bio-war program in 1969, the Army’s scientists switched to work on “defenses” against the same. As with defenses against nuclear attack, however, such work, by its nature, is often hard to separate from offensive work on such weaponry. In other words, looked at a certain way, one focus of the Fort Detrick lab, which fell under suspicion in the anthrax attacks by the winter of 2001, has long been putting bio-war on the global menu. In that, it was evidently successful in the end.

There is irony here, of course. In the post-Cold War era, our worries focused almost solely on the deteriorating, sometimes ill-guarded Russian Cold War labs and storehouses for biological, chemical, and nuclear war. It was long feared that, from them, such nightmares would drop into our world. But in this we were, it seems, wrong. The labs with the holes were ours and — what’s more terrifying — the possibilities for leakage and misuse are still expanding exponentially.

5. Were the anthrax attacks the less important ones of 2001?

If you compare the two sets of 2001 attacks in terms of death and destruction, 9/11 obviously leaves the anthrax attacks in the dust. Thought about a certain way, however, the attacks of 9/11, while bold, murderous, televisually spectacular, and apocalyptic looking, were conceptually old hat. It was the anthrax attacks that pointed the way to a new and frightening future.

After all, the World Trade Center had already been attacked, and one of its towers nearly toppled, by a rental-van bomb driven into an underground garage by Islamists back in 1993. The planes in the 2001 assaults were, as Mike Davis has written, simply car bombs with wings, and car bombs have a painfully long history. Even though in their targeting — the symbolic mega-buildings of an imperial power whose citizens previously preferred to believe themselves invulnerable — the 9/11 hijackers offered a new psychological reality to Americans, their most striking and unsettling feature was perhaps themselves. Those 19 men had pledged to commit suicide not for their country, as had thousands of Japanese kamikaze pilots at the end of World War II, or even for a potential country like hundreds of Tamil suicide bombers in Sri Lanka, but for a religious fantasy (behind which lay non-religious grievances). On the other hand, the 9/11 attacks were but a larger, more ambitious version of, for instance, the suicide-by-boat attack on the U.S.S. Cole in a Yemeni port in 2000.

On the other hand, the anthrax mailings represented something new. (The Japanese Aum Shinrikyo cult had attempted to make and use bio-weapons, including anthrax, back in 1990s, but failed.) If the al-Qaeda strike on 9/11 had only simulated a weapon-of-mass-destruction attack, with the anthrax killer, no imagination was necessary. An actual weapon of mass destruction — highly refined anthrax — had been used successfully, then used again, and the killer(s) remained at large, not in the Afghan backlands but somewhere in our midst, with no evidence that the supply of anthrax had been used up.

And yet, even as the Bush administration, the two presidential candidates, all of Washington, and the media remain focused on terrorism in the Afghan-Pakistani border regions, few give serious thought — except when it comes to individual culpability — to the terror that emerged from the depths of the military-industrial complex, from our own Cold War weapons labs. To that, no aspect of the Global War on Terror seems to apply.

6. Who is winning the Global War on Terror?

The answer, obviously, is the terrorists. Just last week, Mike McConnell, the director of national intelligence, made this crystal clear when it came to al-Qaeda. He testified before Congress that the organization “is gaining in strength from its refuge in Pakistan and is steadily improving its ability to recruit, train and position operatives capable of carrying out attacks inside the United States.” In fact, it’s been clear enough for quite a while that the Bush administration’s Global War on Terror has mainly succeeded in creating ever more terrorists in ever more places. And yet, arguably, the anthrax killer or killers have, to date, gained far more than al-Qaeda. Looked at a certain way, whatever the role of Bruce Ivins, the anthrax killings proved to be a full-scale triumph of terrorism.

One theory has long been that whoever committed the anthrax outrages was intent on drawing attention (and probably funding) to further research and development of U.S. bio-war “defenses.” If so, then, what a remarkable success! In the years since the attacks occurred, funding has flooded into such labs, whose numbers have grown strikingly. On September 11, 2001, reports the Washington Post, “there were only five ‘biosafety level 4′ labs — places equipped to study highly lethal agents such as Ebola that have no human vaccine or treatment — a Government Accountability Office report stated last fall. Fifteen are in operation or under construction now, according to the report. There are hundreds more biosafety level 3 labs, which handle agents such as Bacillus anthracis, which does have a human vaccine.”

The few hundred people at work in the U.S. bio-defense program before 9/11 have swelled to perhaps 14,000 scientists who have “clearances to work with ‘select biological agents’ such as Bacillus anthracis — many of them civilians working at private universities” where, according to experts, “security regulations are remarkably lax.” And don’t forget the Army’s own billion-dollar plan to “build a larger laboratory complex as part of a proposed interagency biodefense campus at Fort Detrick.” We’re talking about the place where, as Ivins’s crew was evidently nicknamed, “Team Anthrax” worked and whose labs are reputedly “renowned for losing anthrax.” In these same years, according to the New York Times, “almost $50 billion in federal money has been spent to build new laboratories, develop vaccines and stockpile drugs.” Some of this money was pulled out of basic public health funds which once ensured that large numbers of people wouldn’t die of treatable diseases like tuberculosis and redirected into work on the Ebola virus, anthrax, and other exotic pathogens.

In these years, not to put too fine a point on it, the Bush administration has exponentially expanded our bio-war labs, increasing significantly the likelihood that a new “mad scientist” will have far more opportunity and far more deadly material available to work with. It has, in other words, increased the likelihood not just that terror will come to “the homeland,” but that it will come from the homeland. Thanks to this administration, the terrorists won this round and future terrorists can reap the fruits of that victory.

Bruce Ivins, whatever you did, or whatever was done to you, R.I.P. Your lab is in good hands. And the likelihood is that, almost seven years after the first anthrax envelope arrived, the world is more of a terror machine than ever.

Tom Engelhardt, co-founder of the American Empire Project, runs the Nation Institute’s TomDispatch.com. He is the author of The End of Victory Culture, a history of the American Age of Denial. The World According to TomDispatch: America in the New Age of Empire (Verso, 2008), a collection of some of the best pieces from his site, has just been published. Focusing on what the mainstream media hasn’t covered, it is an alternative history of the mad Bush years.

[Note on readings: Oddly enough, back in December 2002, as this site was going public, the very first TomDispatch guest writer, public health expert David Rosner, took up the issue of smallpox hysteria, pointing out that the disease was saved from total eradication on the planet by a U.S./USSR agreement "to make sure that the virus that causes smallpox would remain in storage awaiting a new opportunity to terrorize the world. For decades, both countries stored it, distributed it to various research labs and otherwise ensured that this public health victory would be turned into a potential human tragedy." He added: "Fear of smallpox has played nicely into the overall strategy of the Bush administration to militarize public health." It's a piece worth revisiting, as perhaps is "It Should Have Been Unforgettable," a post I wrote back in 2005 when the anthrax case had long fallen off the American radar screen.

More recently, Glenn Greenwald of Salon.com has done superb work on the anthrax story. In 2007, he wrote a striking column, "The unresolved story of ABC News' false Saddam-anthrax reports," on some crucially bad reporting by Brian Ross and ABC, and he followed up after Ivins's suicide with a piece, ("Journalists, their lying sources, and the anthrax investigation,") that has more unsettling questions about the anthrax case than any other 16 pieces I've seen. It's a must read. Jay Rosen, at his always interesting PressThink blog, took up Greenwald's challenge to Brian Ross and ABC on its reporting and pressed the point home in two recent posts, here and here.

Finally, Elisa D. Harris, a senior research scholar at the Center for International and Security Studies at the University of Maryland, had a fine, thoughtful op-ed last week in the New York Times, "The Killers in the Lab" ("Our efforts to fight biological weapons are making us less safe"), which laid out in an impressive way the expansion of U.S. bio-weapons research since 2001.]

John McCain is soaring to new heights of hypocrisy on his wife’s personal jet. He flies around the country bent on duping the public into believing he’s “one of them,” a regular guy who can empathize with Americans facing an overwhelming economic crush. What’s more, he disparages those who oppose his ridiculous policy proposals as “elitist.” But who’s the real elitist?

The REAL McCain is a multimillionaire who owns ten luxurious homes. The REAL McCain backs President Bush’s tax cuts for big corporations. The REAL McCain empathizes only with the interests of our nation’s wealthy minority, not its money-strapped majority. But far too many are buying into McCain’s deceit because the corporate press won’t present the whole picture, so we created this video to educate the public about the REAL McCain.

Together, you have been a force in making sure The REAL McCain videos have been seen by nearly 6.5 million people. But as Frank Rich noted in his NY Times column yesterday, 40% of Americans hear too little about McCain from the mainstream media, meaning “the public doesn’t know who on earth John McCain is.” That’s why it’s crucial you ensure this video is seen by as many as possible, and that we use each and every tool at our disposal to get the word out. Send this on to five friends and family members, and tell them to send it to five people they know. Get it to your local news outlets and blogs and networking sites like Digg. Raise hell about McCain’s economic duplicity!

AFL-CIO President John Sweeney summed it up best when he said McCain “simply doesn’t understand the challenges America’s working families are facing because he isn’t remotely affected by them.” It’s up to us to tell people who McCain really is, a personal jet-setting elitist more concerned with corporate lobbyists than hard-working Americans.

So you think the chorus of white hate groups is seething with rage that Barack Obama could become president? Think again.

Members of the knuckle-dragging set are taking a rosier view, judging by their Internet posts. They say the possibility of a biracial president is helping their recruitment efforts.

“It will be a beautiful day when the masses look at the paper and truly realize they have lost their own country,” according to one of the postings spotted by Mark Potok, who monitors hate groups at the Southern Poverty Law Center.

“White people aren’t going to do a thing until their toys are taken away from them,” says another. “So things have to be worse for things to be better.”

So much for the question of whether Obama will be able to reach beyond his core liberal constituency.

Even former Ku Klux Klan leader David Duke has taken time from his international network of Holocaust-deniers to blog: “Obama is a visual aid for white Americans who just don’t get it yet that we have lost control of our country, and unless we get it back we are heading for complete annihilation as a people.”

Mercy. Can’t we all get along?

Of course, these alleged hater-supporters might be expressing odd support for Obama in order to avoid receiving visits by the Secret Service.

Either way, their rhetoric is rife with pitiful themes of anger, fear and resentment—the three basic food groups of paranoid movements.

Obama has a bigger immediate headache than Duke and his allied dimwits. It’s the rising chorus of anti-Obama attack books that don’t always let truth get in the way of a good hatchet job.

Leading the pack is “Obama Nation” by Jerome R. Corsi. It leads the New York Times best-seller list, helped along by bulk orders from conservative book clubs and other arenas of the right-wing echo chamber.

Corsi does not hide his agenda. His inaccurate portrayal of Obama as a closet Muslim and black activist drug-user is intended to do what his earlier hit-job book, “Unfit for Command,” did to Sen. John Kerry in 2004 when he was the Democratic presidential nominee.

Corsi claims he’s not a hater, but says he’s known to make hateful statements. He has called Islam “a worthless, dangerous satanic religion.” He also has observed that “boy buggering in both Islam and Catholicism is OK with the pope as long as it isn’t reported by the liberal press.”

And “Obama Nation” is peppered unapologetically with innuendo, distortions and outright lies. It also has lots of double-meaning statements like, “The sexual attraction of his mother to her African husband jumps out from the page.”

For fairness and balance, check out the liberal Media Matters for America Web site or Obama’s own 40-page rebuttal to the “bigoted fringe” on his campaign’s new Web site, “Unfit for Publication.”

Kerry failed to respond to “Unfit for Command” for more than two weeks, or to the attack ads that followed. Obama’s team responded within 24 hours of a Page 1 New York Times story about “Obama Nation.”

Who knows how much good it will do? People who want to believe Obama is Muslim or some other deception are hardly going to let something so inconsequential as truth get in the way. Still, Obama has to respond and put his faith in the voters to be discerning. That doesn’t offer much consolation, but it’s what elections are really all about.

What do the hate groups and attack books have in common? A running theme of paranoia—fears that go beyond a rational basis.

“American politics has often been an arena for angry minds,” wrote historian Richard J. Hofstadter in the beginning of his now-classic 1964 essay, “The Paranoid Style in American Politics.”

“I call it the paranoid style,” he wrote, “simply because no other word adequately evokes the sense of heated exaggeration, suspiciousness and conspiratorial fantasy that I have in mind.”

Forty-four years later, Hofstadter’s political “arena” looks more than ever like a mud-wrestling pit.

News that the Bureau of the Census predicts non-Hispanic white Americans will become a minority in the nation’s population by 2050, earlier than previously expected, adds fuel to those who fear diversity.

Yet, California’s population, to cite one example, has been minority non-Hispanic white since the late 1990s and the state has hardly fallen into the sea. Despite occasional conflicts, Americans are remarkably versatile at assimilating newcomers who are willing to work hard.

The prospect that Obama might prove the durability of that American dream excites many Americans and irritates others. An Obama victory would show that America is not as racist as many black extremists believe it to be or as many white extremists wish it were.

Clarence Page is a member of the Tribune’s editorial board. E-mail: cptime@aol.com

By Robert Parry

Millions of Americans who watched Barack Obama and then John McCain respond to nearly identical questions from evangelical minister Rick Warren were surely impressed by McCain’s quick and sharp answers. Supposedly he had been in a “cone of silence” while Obama was getting grilled during the preceding hour.

However, as it turned out, TV viewers and other Americans were misled. McCain had not been in any “cone of silence” shielding him from hearing Warren’s questions and Obama’s answers.

On Saturday night as Obama was on stage, McCain was in his motorcade on the way to the church and thus would have had access through his staff to the questions and how Obama had answered them.

When McCain came on the set, he played along with the fiction about being in a “cone of silence,” joking that “I was trying to hear through the wall.”

McCain then proceeded to knock the questions out of the proverbial park, impressing not only the audience at Rev. Warren’s Saddleback Church in California, but the political pundits who spent the next two days praising McCain’s performance and judging him the clear winner over Obama.

For instance, New York Times columnist William Kristol declared that it was “McCain’s night” and marveled at how “McCain, who went second, was crisp by contrast [to Obama] and his anecdotes colorful.”

Kristol also mocked grousing from Obama’s aides that McCain may have had access to the questions beforehand. “There’s no evidence that McCain had any such advantage,” Kristol wrote in his Monday column.

However, in the same newspaper, New York Times reporters discovered that the assertion by Warren that McCain had been in some “cone of silence” wasn’t true.

“Members of the McCain campaign staff, who flew here Sunday from California, said Mr. McCain was in his motorcade on the way to the church as Mr. Obama was being interviewed,” wrote reporter Katharine Q. Seeyle.

Still, McCain’s staff bristled at suggestions that McCain listened to the broadcast while en route to the church.

“The insinuation from the Obama campaign that John McCain, a former prisoner of war, cheated is outrageous,” said McCain spokeswoman Nicolle Wallace. [NYT, Aug. 18, 2008]

What McCain’s Vietnam War-era POW status had to do with this wasn’t clear. But it was clear that Warren’s assurance that “we have safely placed Senator McCain in a cone of silence” wasn’t true, nor was McCain’s light-hearted remark about trying to hear through the wall.

If McCain did get pre-briefed on what questions to expect, it would be reminiscent of the presidential debate in 1980 when someone from Ronald Reagan’s campaign stole President Jimmy Carter’s debate briefing book and allegedly used it to coach Reagan’s responses.

Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written with two of his sons, Sam and Nat, and can be ordered at neckdeepbook.com. His two previous books, Secrecy & Privilege: The Rise of the Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & ‘Project Truth’ are also available there. Or go to Amazon.com.

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Last week, a speech by Sen. John McCain had phrases that were likely lifted directly from Wikipedia.

Now it seems McCain may have lifted another story last night at megachurch pastor Rick Warren’s Faith Forum. According to a very persuasive Daily Kos diary, the anecdote McCain told about a North Vietnamese prison guard making a cross in the dirt as a sign of solidarity — or as he said, “just two Christians worshiping together” — is very similar to a story about Alexander Solzhenitsyn and his times in the Soviet Gulags.

“As Solzhenitsyn stared at the Cross drawn in the dirt his entire perspective changed. He knew he was only one man against the all-powerful Soviet empire. Yet he knew there was something greater than the evil he saw in the prison camp, something greater than the Soviet Union.  He knew that hope for all people was represented by that simple Cross. Through the power of the Cross, anything was possible.”

Steven Waldman notes that McCain’s recounting of this story has changed over the years and “has gradually morphed from being about the humanity of the guard to being about the Christian faith of the guard and John McCain.”

Andrew Sullivan says that McCain’s early accounts of his years as a POW do not even include this story.

Aug. 11 (Bloomberg) — On March 11, the day the Federal Reserve attempted to shore up confidence in the credit markets with a $200 billion lending program that for the first time monetized Wall Street’s devalued collateral, somebody else decided Bear Stearns Cos. was going to collapse.

In a gambit with such low odds of success that traders question its legitimacy, someone wagered $1.7 million that Bear Stearns shares would suffer an unprecedented decline within days. Options specialists are convinced that the buyer, or buyers, made a concerted effort to drive the fifth-biggest U.S. securities firm out of business and, in the process, reap a profit of more than $270 million.

Whoever placed the bet used so-called put options that gave purchasers the right to sell 5.7 million Bear Stearns shares for $30 each and 165,000 shares for $25 apiece just nine days later, data compiled by Bloomberg show. That was less than half the $62.97 closing price in New York Stock Exchange composite trading on March 11. The buyers were confident the stock would crash.

“Even if I were the most bearish man on Earth, I can’t imagine buying puts 50 percent below the price with just over a week to expiration,” said Thomas Haugh, general partner of Chicago-based options trading firm PTI Securities & Futures LP. “It’s not even on the page of rational behavior, unless you know something.”

`Lottery Ticket’

The 57,000 puts that traded March 11 at the $30 strike price and the 1,649 that traded at $25 were collectively worth about $1.7 million, Bloomberg data show. Each put is equal to 100 shares of stock.

“That trade amounted to buying a lottery ticket,” said Michael McCarty, chief options and equity strategist at New York-based brokerage Meridian Equity Partners Inc. “Would you buy $1.7 million worth of lottery tickets just because you could? No. Neither would a hedge fund manager.”

During the next four days, New York-based Bear Stearns unraveled in the swiftest investment-banking failure in Wall Street history. Speculation about a cash shortage proved self- fulfilling, causing customers and lenders to demand their money back. Bear Stearns’s stock sank 47 percent to $30 on Friday, March 14. That’s when the Fed moved to stave off a panic by helping the U.S. Treasury arrange JPMorgan Chase & Co.’s purchase of the company for $2 a share, a price unimaginable to the firm’s 14,000 employees.

Wall Street Seizure

In the aftermath, Bear Stearns Chief Executive Officer Alan Schwartz told Congress that the firm was toppled by rumor- mongering and abusive trading. Regulators have begun peeling back trading records, hunting for suspects.

Schwartz and officials at the SEC declined to comment for this story.

The fire sale of Bear Stearns was the climax of a nine- month credit seizure that started with the failure of two Bear Stearns hedge funds, caused more than $490 billion of losses and writedowns in the banking and securities industry and ousted the CEOs of Citigroup Inc., Merrill Lynch & Co., and UBS AG. Never in its 95-year history had the Fed done so much to rescue Wall Street during its worst financial crisis in at least two decades.

The DNA

Evidence of any scheme to bring down Bear Stearns is most likely buried in options data, according to former government investigators. Options, contracts to buy or sell shares by a certain date at a specific price, can offer forensic evidence of market manipulation and insider trading, said Brent Baker, a former U.S. Securities and Exchange Commission Enforcement Division lawyer who helped prosecute Anthony Elgindy, the stock- picker convicted in 2005 on 11 counts of securities fraud, wire fraud, extortion and racketeering.

“On CSI Wall Street, the options are the DNA,” he said, referring to the television series, “Crime Scene Investigation.”

While Bear Stearns executives tried to quash rumors about the firm’s insolvency with press releases and television appearances by its CEO Schwartz, the number of $30 Bear Stearns put options held by speculators soared 10,768 percent from Monday March 10 to Tuesday March 11, Bloomberg data show.

On March 11, when the Fed said it planned to make up to $200 billion available through weekly auctions and for the first time lend cash in exchange for debt that included the devalued mortgage-backed securities that contributed to the credit seizure, one or more unidentified traders requested the Chicago Board Options Exchange list the even deeper out-of-the-money strike at $25.

Stock in Freefall

Bear Stearns also was rocked that week by failed trades, a problem associated with naked short selling. Failed trades in Bear Stearns soared more than 10,800 percent during the week of March 10, according to data released by the SEC.

Bear Stearns fell 11 percent to $62.30 in the first trading day of the week on speculation that the firm had insufficient liquidity, or enough funds to cover any sudden withdrawals. The 58-year-old Schwartz, who was in Palm Beach, Florida, at an industry conference, was puzzled by the rumors, according to people who talked to him. He was told by associates that the firm had no shortage of cash. Clients weren’t pulling their money, trading counterparties weren’t refusing to do business with Bear Stearns, and short-term credit lines weren’t being cut.

To quell the speculation, the company issued a two- paragraph statement at the end of the day, saying its financial position was “strong.”

Bankruptcy Put

Hedge funds, concerned about losing their money, weren’t convinced. Eagle Asset Management Inc. moved to other prime brokers, according to Managing Director Todd McCallister. Investors who had credit default swap contracts with Bear Stearns turned to Goldman Sachs Group Inc. and other Wall Street firms, asking them to buy the contracts.

On Wednesday, March 12, Schwartz appeared on CNBC, live from Florida, saying the company had ample resources to weather the credit crunch. While for the moment, at least, that assuaged concerns in the market, the capital flight began again the next day. Many of Bear Stearns’s traditional creditors reduced or halted their lending to the 85-year-old company founded by Joseph Bear and Robert Stearns.

By the end of the day, Bear Stearns’s cash was almost depleted and its stock closed at $57. As Schwartz realized the company couldn’t function on Friday without access to overnight borrowing, he called government officials, regulators and JPMorgan CEO Jamie Dimon.

Fed Steps In

After discussions late into Thursday night, the Fed agreed to provide cash through JPMorgan, the second-biggest U.S. bank by market value, because Bear Stearns didn’t have direct access to the Fed as a lender of last resort.

Then, on March 14, the CBOE listed a series of put options with less than five days to expiration. The lowest strike price, $5, was more than 90 percent out-of-the-money in what options traders refer to as a “bankruptcy put.” Bear Stearns slumped 47 percent that day to $30 in NYSE trading.

The out-of-the-money Bear Stearns puts point to a raid, said Baker, who’s now a securities lawyer whose clients include companies that have filed complaints over naked short selling.

The $25 Bear Stearns puts, and others obtained March 14 involving the right to sell 630,000 shares at a strike price of $5 by March 22, were “bizarre,” according to Haugh, the PTI partner who spent 18 years as a CBOE options-market maker.

`One Tick’

“An incredible amount of bearish activity could have been generated by just 10 to 15 people,” Haugh said. “Other people then pile in, because they think somebody knows something.”

John Olagues, who started trading options 30 years ago, said he has never experienced anything like it. Olagues, who runs a New Orleans consulting company called Truth in Options, also manages more than $1 million for a client who had a stake in Bear Stearns, which plummeted 94 percent in value on March 17. The drop prompted Olagues to start poring over options trading records and call officials at the CBOE.

“In just one tick, the company’s share price lost nearly all its value, a steeper drop than Enron’s right before its de- listing in 2001,” said 63-year-old Olagues, referring to the bankruptcy of Houston-based energy trading company Enron Corp. “I’ve never seen a stock perform like that in my life.”

Olagues, who was an options market maker at the Pacific Exchange and then the CBOE from 1976 to 1984, said he knows all about so-called time decay, implied volatility, arbitrage and the complexities of options trading. The former all-conference pitcher at Tulane University, who started Truth in Options in 2003, said he has found options transactions that convince him Bear Stearns was the victim of insider trading.

Vertical Put

“I would stake my reputation on that,” he said.

Olagues said he was able to avoid losses for his client on Friday, March 14. His hedged position — a so-called vertical put spread designed to absorb losses as great as 50 percent — made money by the closing bell that day. The hedging failed the next trading day, March 17, when the stock opened at $3.17.

“Nobody prepares for the stock going from $57 to $3 in just two days,” he said.

Schwartz told the U.S. Senate Banking Committee on April 3 that there are “lots of reasons why people could have a financial motivation to induce panic” and “a lot of trading would point to that.”

SEC Review

Bear Stearns has forwarded options data to the Senate Banking Committee and the SEC, said a person close to the firm, who declined to be identified.

SEC Chairman Christopher Cox told Congress last month that the agency is probing whether illegal trading spurred the collapse of Bear Stearns and the 72 percent drop this year in Lehman Brothers Holdings Inc.’s market value. The inquiry focuses on investors suspected of seeking to profit by intentionally spreading false information about the companies.

The SEC subpoenaed Wall Street’s largest firms and hedge funds for trading records and communications, including e-mails. The agency also enacted an emergency limit on so-called naked short sales in Freddie Mac, Fannie Mae and 17 brokerages as it prepares broader rules to thwart stock manipulation. That limit expires at midnight tomorrow.

Naked shorting, which can be illegal, occurs when short sellers who intend to profit from a decline in securities prices fail to borrow stock by the settlement date. Traders can use that method to drive down prices by flooding the market with sell orders.

`Turbocharge’ Effect

The strategy can “turbocharge” the effect of false rumors on a stock price, Cox said on a July 16 conference call with reporters. The SEC will consider new rules to prevent improper short selling, Cox told Congress on July 24. It also may force investors to disclose “substantial” bets on falling stocks, he said.

On Tuesday, March 11, when Federal Reserve Bank Chairman Ben Bernanke attended a luncheon with Wall Street executives at the New York Fed and the CBOE listed its $25 Bear Stearns put option, McCarty of Meridian red-flagged Bear Stearns in his “MEP Noteworthy Option Activity” memo.

What got McCarty’s attention that day was the volume of put trading in strike prices of $35 and below. Investors traded 84,109 puts at strike prices that would require a calamitous drop to make money, he said.

Big Bets

“Somebody placed some big bets that day that paid off,” McCarty said. “The question is, did they make it pay off?”

On March 14, when Schwartz sought emergency funding, Bear Stearns opened at $54.24 in NYSE trading. That day, the CBOE listed eight new put options that expired in five days with strike prices that ranged from $22.50 to $5. The lowest was 90.7 percent below the opening stock price.

Gail Osten, a spokeswoman for the CBOE, declined to say who placed the order for the options.

“Nobody in their right mind would buy that put unless you knew what was going down,” said Ray Wollney, Olagues’s partner at Truth in Options. On Friday, March 14, a total of 6,303 of the March $5 Bear Stearns puts traded.

That night, Schwartz got a call from Treasury Secretary Henry Paulson making it clear that Bear Stearns had until Sunday evening to find a buyer because the Fed planned to withdraw its financial backing. Paulson, who didn’t want the government to appear to be bailing out a Wall Street firm, then brokered the sale to JPMorgan.

Convincing the Board

Schwartz and Bear Stearns Chairman James “Jimmy” Cayne convinced fellow board members by explaining that their only alternative was to accept the deal or face bankruptcy. The agreement was announced Sunday night.

Options bets that looked irrational on Friday proved brilliant on Monday, when the shares traded between $3 and $5. By Wollney’s calculations, the traders who spent $35.8 million on the deep out-of-the-money puts reaped an estimated $274 million windfall from the plunge in Bear Stearns.

Peter Chepucavage, a former general counsel for compliance at Nomura Securities and onetime SEC lawyer, said the Bear Stearns bets were neither smart nor lucky.

“When you buy $5 strikes when the stock is trading over $50, you either have to be manipulating, or you have to have insider information,” said Chepucavage, who’s now with Washington-based Plexus Consulting.

`Riddled With Bullets’

John Welborn, a London School of Ec