news.cnet.com — More records were breached in 2008 than in the previous four years combined as a result of a few large breaches involving payment cards, according to a report released on Wednesday. There were 90 confirmed data breaches and the top five breaches accounted for 93 percent of total records compromised
THE top suits and some of the on-air talent at CNBC were recently ordered to a top-secret meeting with General Electric CEO Jeffrey Immelt and NBC Universal President Jeff Zuckerto discuss whether they've turned into the President Obama-bashing network, Page Six has learned.
"It was an intensive, three-hour dinner at 30 Rock which Zucker himself was behind," a source familiar with the powwow told us. "There was a long discussion about whether CNBC has become too conservative and is beating up on Obama too much. There's great concern that CNBC is now the anti-Obama network. The whole meeting was really kind of creepy."
One topic under the microscope, our insider said, was on-air CNBC editor Rick Santelli's rant two months ago about staging a "Chicago Tea Party" to protest the president's bailout programs -- an idea that spawned tax protest tea parties in other big cities, infuriating the White House. Oddly, Santelli was not at the meeting, while Jim Cramer was, noted our source, who added that no edict was ultimately handed down by the network chieftains.
CNBC flack Brian Steel confirmed the get-together, but insisted: "The dinner was to thank CNBC for a job well done in our in-depth reporting throughout the financial crisis. As far as our coverage is concerned, we are built for balance and we are unabashedly pro-investor."
Our source retorted: "That is complete bull[bleep] . . . they didn't invite a lot of people to [the meeting]. There were many staffers who were working 24/7 during the crisis who weren't asked to attend, even Santelli, who was a big star for the network during those weeks. Why not?"
In addition, the insider said: "News of the meeting is starting to leak out and people are contacting a number of the on-air people to ask if they've been muzzled by GE."
Watching Glenn Beck of Fox News rant about "progressive fascism" -- and muse about armed insurrection -- or listening to mainstream pundits prattle on about Barack Obama as the "most polarizing President ever," it is hard to escape the conclusion that today’s U.S. news media represents a danger to the Republic.
By and large, the Washington press corps continues to function within a paradigm set in the 1980s, mostly bending to the American Right, especially to its perceived power to destroy mainstream journalistic careers and to grease the way toward lucrative jobs for those who play ball.
The parameters set by this intimidated (or bought-off) news media, in turn, influence how far Washington politicians feel they can go on issues, like health-care reform or environmental initiatives, or how risky they believe it might be to pull back from George W. Bush’s "war on terror" policies.
Democratic hesitancy on these matters then enflames the Left, which expresses its outrage through its own small media, reprising the old theme that there’s "not a dime’s worth of difference" between Democrats and Republicans -- a reaction that further weakens chances for any meaningful reform.
This vicious cycle has repeated itself again and again since the Reagan era, when the Right built up its intimidating media apparatus -- a vertically integrated machine which now reaches from newspapers, magazines and books to radio, TV and the Internet. The Right accompanied its media apparatus with attack groups to go after troublesome mainstream journalists.
Meanwhile, the American Left never took media seriously, putting what money it had mostly into "organizing" or into direct humanitarian giving. Underscoring the Left’s fecklessness about media, progressives have concentrated their relatively few media outlets in San Francisco, 3,000 miles away -- and three hours behind -- the news centers of Washington and New York.
By contrast, the Right grasped the importance of "information warfare" in a modern media age and targeted its heaviest firepower on the frontlines of that war -- mostly the political battlefields of Washington -- thus magnifying the influence of right-wing ideas on policymakers.
One consequence of this media imbalance is that Republicans feel they can pretty much say whatever they want -- no matter how provocative or even crazy -- while Democrats must be far more circumspect, knowing that any comment might be twisted into an effective attack point against them.
So, while criticism of Republican presidents -- from Ronald Reagan to the two Bushes -- had to be tempered for fear of counterattacks, almost anything could be said against a Democratic president, Bill Clinton or now Barack Obama, who is repeatedly labeled a "socialist" and, according to Beck, a "fascist" for pressuring hapless GM chief executive Rick Wagoner to resign.
The Clinton Wars
The smearing of President Clinton started during his first days in office as the right-wing news media and the mainstream press pursued, essentially in tandem, "scandals" such as his Whitewater real-estate deal, the Travel Office firings and salacious accusations from Arkansas state troopers.
Through talk radio and mailed-out videos, the Right also disseminated accusations that Clinton was responsible for "murders" in Arkansas and Washington. These hateful suspicions about Clinton spread across the country, carried by the voices of Rush Limbaugh and G. Gordon Liddy as well as via videos hawked by Religious Right leader Jerry Falwell.
While not accepting the "murder" tales, mainstream publications, like the Washington Post and the New York Times, often took the lead in pushing or exaggerating Clinton financial "scandals." Facing these attacks, Clinton sought some safety by tacking to the Right, which prompted many on the American Left to turn on him.
The stage was set for the Republican "revolution" of 1994, which put the GOP in charge of Congress. Only in the latter days of the Clinton administration, as the Republicans pushed for his ouster through impeachment, did a handful of small media outlets, including Consortiumnews.com and Salon.com, recast the war on Clinton as a new-age coup d’etat.
Yet, despite the evidence of that, the major American news media mocked Hillary Clinton when she complained about a "vast right-wing conspiracy."
After Clinton survived impeachment, the national press corps transferred its hostility toward Vice President Al Gore in Campaign 2000 , ridiculing him as a serial exaggerator and liar, even when that required twisting his words. [For details, see our book Neck Deep.]
Then, when George W. Bush wrested the White House away from Gore with the help of five Republican partisans on the U.S. Supreme Court, the drumbeat of hostility toward the American President suddenly disappeared, replaced by a new consensus about the need for unity. The 9/11 attacks deepened that sentiment, putting Bush almost beyond the reach of normal criticism.
Again, the right-wing media and the mainstream press moved almost in lockstep. The deferential tone toward Bush could be found not just on Fox News or right-wing talk radio, but in the Washington Post and (to a lesser degree) the New York Times -- and on CNN and MSNBC. [For details, see Consortiumnews.com’s "America’s Matrix."]
To some foreigners, the U.S. news media’s early coverage of the Iraq War had the feel of what might be expected in a totalitarian state.
"There have been times, living in America of late, when it seemed I was back in the Communist Moscow I left a dozen years ago," wrote Rupert Cornwell in the London-based Independent. "Switch to cable TV and reporters breathlessly relay the latest wisdom from the usual unnamed ‘senior administration officials,’ keeping us on the straight and narrow. Everyone, it seems, is on-side and on-message. Just like it used to be when the hammer and sickle flew over the Kremlin." [Independent, April 23, 2003]
Bush’s Slide
Bush skeptics were essentially not tolerated in most of the U.S. news media, and journalists who dared produce critical pieces could expect severe career consequences, such as the four CBS producers fired for a segment on how Bush skipped his National Guard duty, a true story that made the mistake of using some memos that had not been fully vetted.
Only after real events intervened -- especially the bloody insurgency in Iraq and the ghastly flooding of New Orleans -- did the mainstream U.S. press corps begin to tolerate a more skeptical view of Bush. However, the news personalities who had come to dominate the industry by then had cut their teeth in an era of bashing Democrats (Clinton/Gore) and fawning over Republicans (Reagan and the two Bushes).
With Barack Obama as President, these "news" personalities almost reflexively returned to the Clinton-Gore paradigm, feeling the freedom -- indeed the pressure -- to be tough on the White House.
Though MSNBC does offer a few shows hosted by liberals and there are a few other liberal voices here and there, the national media remains weighted heavily to the right and center-right.
For every Keith Olbermann or Rachel Maddow or Paul Krugman or Frank Rich, there are dozens of Larry Kudlows, Sean Hannitys, Bill O’Reillys, Joe Scarboroughs and Charles Krauthammers who take openly right-wing or neoconservative positions — or the likes of Lou Dobbs, John King and Wolf Blitzer, who reflect Republican-oriented or neocon views out of personal commitment or careerist caution.
While the right-wing media denounces Obama as a "socialist" and Republican activists are organizing "tea parties" to protest taxes, the mainstream media continues to follow the old dynamic of framing political issues in ways most favorable to Republicans and least sympathetic to Democrats.
On CNN’s "State of the Union" Sunday, in an interview with Gen. Ray Odierno, host John King pushed a favorite media myth about President Bush’s successful "surge" in Iraq. King never mentioned that many factors in the declining Iraqi violence predated or were unrelated to Bush’s dispatch of additional troops, nor did King note the contradiction about Bush’s supposed "success" and Odierno’s warning that he may have to urge more delays in withdrawing U.S. troops.
‘Polarizing’ Obama
The commentariat class also has continued to frame the Republican hatred of Obama as Obama’s fault, describing his "failure" to achieve a more bipartisan Washington or -- in its latest formulation -- calling Obama "the most polarizing President ever."
It might seem counterintuitive to call a President with approval ratings in the 60 percentiles "polarizing" -- when that term was not applied to George W. Bush with his numbers half that of Obama’s. But this notion has arisen because Republicans have turned harshly against Obama, while Democrats and Independents have remained supportive.
This gap of about 60 points between Democratic approval and Republican disapproval is called the largest in the modern era. (Bush presumably was less "polarizing" because his Republican numbers slumped along with his approval from Democrats and Independents.)
What is rarely acknowledged is that the Republican Party has both shrunk in size and retreated toward its hard-line "base," meaning that the "polarization gap" could simply reflect the fact that a smaller, more extreme Republican Party hates Obama, while other presidents faced a larger, more moderate opposition party.
Rather, according to the Washington pundit class, this gap is Obama’s fault, much as he was blamed for "failing" to attract Republican votes for his stimulus bill and his budget. Rarely do the pundits lay the blame on the Republicans who have taken a position of near unanimous opposition to Obama, much as they did toward Clinton 16 years ago.
Instead of seeing a pattern -- that Republicans may hope to torpedo Obama’s presidency and reclaim congressional control , as they did in 1993-94 -- the Washington press corps describes the Republicans as holding firm to their small-government principles and the Democrats as refusing to give due consideration to GOP alternatives.
Already a new conventional wisdom is taking shape, that "polarizing" Obama would be wrong to use the "reconciliation" process to enact health-care and environmental programs by majority vote, that he should instead water them down and seek enough Republican votes to overcome GOP filibusters in the Senate, which require 60 votes to stop.
To get enough Republican votes on health care would almost surely mean eliminating a public alternative that would compete with private insurers, and on the environment, cap-and-trade plans for curbing carbon emissions would have to be shelved.
But that is the course that the pundit class generally favors, while demanding that Obama and the Democrats, not the Republicans, take the necessary steps toward cooperation.
"It will continue to behoove Obama to woo Republican help -- no matter how tough the odds," wrote Washington Post columnist David Broder on Sunday. "Presidents who hope to achieve great things cannot for long rely on using their congressional majorities to muscle things through."
But if Obama takes the advice of Broder and other pundits and dilutes his proposals to make them acceptable to Republicans, the President will surely draw the wrath of the Democratic "base," which will accuse him of selling out. The vicious cycle will have rotated once again.
Robert Parry's new book is Secrecy & Privilege: Rise of the Bush Dynasty from Watergate to Iraq."
WASHINGTON — A Pentagon office responsible for coordinating Defense Department information campaigns overseas has been abolished in an effort by the Obama administration to distance itself from past practices that some military officers called propaganda, senior officials said Wednesday.
Military and civilian critics said the office, the Defense Department office for support to public diplomacy, overstepped its mandate during the final years of the Bush administration by trying to organize information operations that violated Pentagon guidelines for accuracy and transparency.
Pentagon officials said the position of deputy assistant secretary of defense for support to public diplomacy had been eliminated, with the staff members reassigned and the office closed.
Senior Pentagon officials said the decision to close the office was made by Michele A. Flournoy, the new under secretary of defense for policy, and was meant to ensure that global communications efforts by the Defense Department and military would be aligned with the rest of the government.
“Because of the history of the office, we needed a fresh start in how we integrate the critical function of strategic communications across the board,” said a senior Pentagon official, who spoke anonymously to discuss a change that has not been publicly announced.
The office was created in 2007 to be the central point within the vast Pentagon bureaucracy and far-flung military to coordinate the Defense Department’s overseas information efforts with the rest of the government, in particular the White House, the State Department and American embassies.
But American military officers in Afghanistan in particular were angered last year by sets of “talking points” provided by the office for use in responding to queries on matters like civilian casualties. Officers who received the talking points predicted that the information would be seen by the Afghan public as blatant propaganda, and they refused to use them.
Officials said the Pentagon would now play a supporting role to the White House and the State Department in communicating government messages to foreign audiences, with the efforts no longer centralized in one place but assigned to each Pentagon policy office and regional military combatant commander.
Questions over the proper role of the Pentagon in public diplomacy have lingered since it was disclosed in 2002 that the Defense Department had created the Office of Strategic Influence; that office, a forerunner of the Pentagon public diplomacy office, was shut down after members of Congress expressed concerns that its behind-the-scenes efforts to shape public sentiment in wartime might undermine the military’s credibility.
Even in a supporting role, the Defense Department has far greater resources in money, trained communications personnel and broadcast and print technology than any other government agency or department.
Another senior Defense Department official briefed on the decision said the military, by its size and global reach, remained one of the government’s most visible tools for projecting American influence and defining its values, especially in operations short of combat, like humanitarian aid and disaster relief missions.
“The goal should be to produce words and actions that are matched,” the official said. “There still is a great need for a concerted effort in the planning stages of policy, execution and communications.”
The Obama administration has inherited a complex policy debate over how to communicate messages abroad during wartime, one that remained unresolved by the Bush administration despite a series of appointments of high-profile communications officials.
There is no disagreement that extremist and terrorist ideology is spread over the Internet and by videos with an agility not matched by either the government or the military, but there has been no agreement on a detailed plan of how to respond.
By Jason Leopold
In March 2003, after Iraqi troops captured several U.S. soldiers and let them be interviewed on Iraqi TV, senior Bush administration officials expressed outrage over this violation of the Geneva Convention.
"If there is somebody captured," President George W. Bush told reporters on March 23, 2003, "I expect those people to be treated humanely. If not, the people who mistreat the prisoners will be treated as war criminals."
No one in the Bush administration, however, acknowledged the extent of their own violations of rules governing humane treatment of enemy combatants. Nor did the U.S. news media offer any context, ignoring the U.S. handling of Afghan War captives at Guantanamo Bay in 2002 and the fact that the U.S. military also had paraded captured Iraqi soldiers before cameras.
During those heady days of “embedded” war correspondents reporting excitedly about Bush’s “shock and awe” invasion, what Americans got to see and hear was how the Iraqi violation of the Geneva Convention – the videotaped interviews – demonstrated the barbarity of the enemy and justified their punishment as war criminals.
Bush’s fury over the POW interviews echoed across Washington. “It is a blatant violation of the Geneva Convention to humiliate and abuse prisoners of war or to harm them in any way,” declared Pentagon spokeswoman Victoria Clarke on March 24.
That same day, Deputy Defense Secretary Paul Wolfowitz told the BBC, “The Geneva Convention is very clear on the rules for treating prisoners. They're not supposed to be tortured or abused, they're not supposed to be intimidated, they're not supposed to be made public displays of humiliation or insult, and we're going to be in a position to hold those Iraqi officials who are mistreating our prisoners accountable, and they've got to stop.”
On March 25, Defense Secretary Donald Rumsfeld added, “In recent days, the world has witnessed further evidence of their [Iraqi] brutality and their disregard for the laws of war. Their treatment of coalition POWs is a violation of the Geneva Conventions.” [For a contemporaneous story, see Consortiumnews.com’s “International Law a la Carte.”]
Hypocrisy Exposed
It would take months and years – as documents from Bush’s first term were gradually released to the public – to reveal the extent of the Bush administration’s hypocrisy.
For instance, it’s now known that the International Committee of the Red Cross began an investigation of U.S. war crimes in Iraq from the first days of the invasion, interviewing Iraqis captives from March to November 2003.
On Jan. 15, 2004, ICRC president Jakob Kellenberger expressed his concern to Secretary of State Colin Powell about the Bush administration’s attitude regarding international law, specifically an op-ed by then-State Department legal adviser William Taft IV in the Financial Times four days earlier.
In that op-ed, Taft wrote that there was no law that required the U.S. to afford due process to foreigners captured in the “war on terror.”
"American treatment of detainees held at Guantanamo Bay in Cuba is fully consistent with international law and with centuries-old norms for treating individuals captured in wartime," Taft wrote. “We are engaged in a war.”
It’s unclear what Kellenberger cited in Taft’s column, because the recently released minutes of the meeting were heavily redacted. But the conversation segued into Powell asking Kellenberger “where in addition to Afghanistan, did ICRC have problems with notification and access to detainees?”
Powell is quoted as saying “we are confident of our legal position, (referring to legal adviser Taft’s op-ed), but we also know the world is watching us.”
The next month, the ICRC gave Bush administration officials a confidential report which found that U.S. occupation forces in Iraq often arrested Iraqis without good reason and subjected them to abuse and humiliation that sometimes was “tantamount to torture” in violation of the Geneva Conventions.
Some excessive violence, including the use of live ammunition against detainees, had led to seven deaths, the ICRC report said.
“According to the allegations collected by the ICRC, ill-treatment during interrogation was not systematic, except with regard to persons arrested in connection with suspected security offences or deemed to have an ‘intelligence’ value,” the report said.
“In these cases, persons deprived of their liberty under supervision of the Military Intelligence were at high risk of being subjected to a variety of harsh treatments ranging from insults, threats and humiliations to both physical and psychological coercion, which in some cases was tantamount to torture, in order to force cooperation with their interrogators.”
Trickle-Down Torture
One of the recipients of the ICRC confidential report was Lt. Gen. Ricardo Sanchez, the senior U.S. military officer in Iraq, an ICRC official said later. Sanchez had instituted a “dozen interrogation methods beyond” the Army’s standard interrogation techniques that comply with the Geneva Conventions, according to a 2004 report by a panel headed by former Defense Secretary James Schlesinger.
Sanchez said he based his decision on “the President's Memorandum” justifying "additional, tougher measures" against detainees, the Schlesigner report said. The memorandum Sanchez was referring to was an order that Bush signed on Feb. 7, 2002, excluding “war on terror” suspects from Geneva Convention protections.
As the ICRC gathered more information about the Bush administration’s detention policies, it began to make some of its concerns public. On March 1, 2004, for instance, Gabor Rona, the ICRC’s legal adviser, wrote an op-ed also in the Financial Times that took issue with the Bush administration’s posture on the Geneva Conventions.
“The US is proceeding with plans to subject prisoners to military commission trials, citing the Geneva Convention provision that prisoners of war be tried by military courts. How can it do so while maintaining that no detainees are entitled to PoW status?” Rona wrote.
“That aside, the US risks throwing into the military-trial pot people whose alleged crimes have no connection with armed conflict, as understood in international humanitarian law. Such people can and should face trial, but not by military courts.”
Taft responded with an angry letter to Kellenberger on March 16, 2004.
“Your staff states categorically that detainees are entitled to an individualized procedure to challenge the basis of their detention,” Taft wrote. “No citation or support is provided for this assertion. There is, in fact, no such entitlement in the 1949 Geneva Conventions.
“However, the implication in the article is that the Geneva Conventions do provide such entitlement. This again has the unfortunate effect of misleading the public.”
The Abu Ghraib Scandal
The behind-the-scenes dispute over detainee treatment went public in another way in April 2004 when photos were leaked showing U.S. prison guards at Abu Ghraib forcing naked Iraqi detainees into fake sexual positions, intimidating detainees with attacks dogs, committing other abuses, and posing with the corpse of an Iraqi who had died in custody.
After a public scandal erupted, President Bush blamed the Abu Ghraib abuses on low-level prison guards.
“I shared a deep disgust that those prisoners were treated the way they were treated,” Bush said. “Their treatment does not reflect the nature of the American people.”
However, Bush’s finger-pointing at a few “bad apples” was soon contradicted when the contents of the February 2004 ICRC report were leaked to the Wall Street Journal in May 2004. The ICRC findings made clear that the Abu Ghraib abuses were not an isolated case.
Nevertheless, 11 enlisted soldiers, who were guards at Abu Ghraib, were convicted in courts martial. Cpl. Charles Graner Jr. received the harshest sentence – 10 years in prison – while Lynndie England, a 22-year-old single mother who was photographed holding an Iraqi on a leash and pointing at a detainee’s penis, was sentenced to three years in prison.
Superior officers were cleared of wrongdoing or received mild reprimands.
But the February 2004 ICRC report on Iraq took on added meaning with the recent disclosure of another ICRC report, dated Feb. 14, 2007. Based on interviews that the ICRC finally arranged with 14 “high-value” detainees held at secret CIA prisons, the report concluded those prisoners had been subjected to similar humiliating and abusive treatment, including forced nudity and stress positions, as well as the drowning sensation of waterboarding.
The ICRC concluded that the treatment “constituted torture,” a finding that has legal weight because the ICRC is responsible for ensuring compliance with the Geneva Conventions and supervising the treatment of prisoners of war.
Taken together, the two reports suggest that the Bush administration adopted a policy of torture against “high-value” detainees captured in 2002 and that the policy spread to Iraq in 2003 when U.S. forces were grappling with a rising Iraqi insurgency against the American occupation.
In December 2008, a Senate Armed Services Committee report reached a similar conclusion, tracing the U.S. abuse of detainees at Guantanamo Bay and later Abu Ghraib to President Bush’s Feb. 7, 2002, action memorandum that excluded “war on terror” suspects from Geneva Convention protections.
The report said Bush’s memo opened the door to “considering aggressive techniques,” which were then developed with the complicity of then-Defense Secretary Rumsfeld, Bush’s National Security Adviser Condoleezza Rice and other senior officials.
The public record – as it now exists – also makes clear that the Bush administration had a selective view of international law. When it worked to American advantage – as when Iraqis videotaped captured U.S. soldiers in March 2003 – Bush and his aides saw the rules as binding, but not when the laws of war constrained their own behavior.
In other words, international law applied to the other guy, but not to George W. Bush. He surely didn’t mean to implicate himself when he declared “the people who mistreat the prisoners will be treated as war criminals."
Jason Leopold has launched his own Web site, The Public Record, at www.pubrecord.org.
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"As newspapers struggle to keep their footing and retain their place in our democracy, there has been increasing talk about the need to give the public courses in media literacy. The thinking behind this movement is that if people truly understood the role the news media plays in the public discourse they would understand the danger to democracy if papers vanish.
The problem with that solution is that it ignores the fact many feel that news organizations routinely paint a stereotypical and one-dimensional picture of their lives. In those cases, many people believe mainstream news organizations detract from rather than add to the public discourse around issues important to their lives.
For the public to be moved to truly rally to save the media, the media must first fully cover all aspects of our communities."
By Donny Shaw
BuzzFlash Note: BuzzFlash fully supports the "New Way Forward" movement to fundamentally change the finance/banking system in the United States and to punish those who made our taxpayers pick up a $2 trillion tab for fraud, abuse and greed. Citizen protest is a vital part of a vibrant and progressive democracy. Join the "New Way Forward" demonstrations on April 11th.
Another day, another sign that the people in charge of our economy are looking out for the banks, not the public. The Financial Accounting Standards Board's decision on Thursday to let banks report the value of their toxic assets however they choose, regardless of what anyone is actually willing to pay for them, only serves to increase secrecy and manipulation in the financial sector. It's a politically motivated decision that gives banks a quick way to inflate their balance sheets without doing anything to address the underlying problems with their holdings.
The AIG bonuses, the Geithner subsidy plan, the mark to market changes -- Americans are seeing the pattern of protection for Wall Street, and we're angry. But unlike the media's fantasy of an irrational working-class mob seeking revenge on the first Wall St. executive they can find, our anger is targeted at the systematic injustices in America right now that continually provide for the financial elite and neglect the millions unemployed and foreclosed. If we are going to fight back, we are going to go straight at the root of the problem -- the collusion between Wall Street and Washington that leaves the rest of us behind.
As the banks grew bigger and bigger until they were "too big to fail," they also became so politically powerful that they are now immune to ordinary actions from our government. Decades of unprecedented campaign funding and political access have led to a gray area between Washington and Wall St. where it's uncertain who is on which side and people move back and forth fluidly between the two realms. Bankers have ingratiated themselves in our politics and sold to both major parties the belief that what is good for them is also good for the public at large. Now we have let this free-market fundamentalism run its course and it has led America to a complete economic meltdown. But the people in charge of our government and our economy have built their power on this intertwining of interests and they remained determined not to shake up the system.
They only way to end the bonus loopholes for executives, the blind-eye regulatory system and the trickle-up profit machine is for the bankers in power to be removed and the banks that caused this mess to be broken up. They need to be taken out of the equation so our policy-makers can operate with political independence to make decisions that protect the public. Can this be done? In a word, yes. It will be an epic struggle, but if we the people can find the courage to trust our guts and take on the economic injustices that have become so painfully obvious, this is precisely the kind of thing that America can overcome.
On April 11th, people across the country will take to the streets to show President Obama and Congress that there is political support for a progressive approach to fixing the economy. Fourteen days ago, a new grassroots initiative to demand structural change in the banking sector -- A New Way Forward -- was launched. In just two weeks, the group has grown from four people to over six thousand. Individuals have stepped up in 58 cities to organize protests to break up the banks; thousands have pledged to attend. Here is the plan:
NATIONALIZE: Insolvent banks that are too big to fail must incur a temporary FDIC intervention. No more blank check taxpayer handouts.
REORGANIZE: Current CEOs and board members must be removed and bonuses wiped out. The financial elite must share in the cost of what they have caused.
DECENTRALIZE: Banks must be broken up and sold back to the private market with new antitrust rules in place -- new banks, managed by new people. Any bank that's "too big to fail" means that it's too big for a free market to function.
Breaking up the banks is not a contrarian call to protest, it is a practical step our country must take right now if we are to have the independence to rebuild our economy so that it is sustainable, free, and in the interest of all people. The people in charge of our country consider these issues of decentralization secondary. They are determined to reset the status quo of the banking sector as soon as possible, and then take a stab at regulation. But if we re-inflate the banks without addressing the fundamental issues plaguing our economic and political systems, our chance as a country to tackle the power that the financial industry holds over our democracy will pass us by. The collusion between policy makers and bankers will be further cemented and we will have to wait until the next crisis (which will be much worse, and soon) takes its toll on working Americans.
A BUZZFLASH GUEST COMMENTARY
WASHINGTON — As the Obama administration completes its examinations of the nation’s largest banks, industry executives are bracing for fights with the government over repayment of bailout money and forced sales of bad mortgages.
President Obama emerged from a meeting with his senior economic advisers on Friday to say “what you’re starting to see is glimmers of hope across the economy.” But there were also signs of growing tensions between the White House and the nation’s banks over the next phase of the financial rescue.
Some of the healthier banks want to pay back their bailout loans to avoid executive pay and other restrictions that come with the money. But the banks are balking at the hefty premium they agreed to pay when they took the money.
Jamie Dimon, the chief executive of JPMorgan Chase, and two other executives of large banks raised the issue with Mr. Obama and the Treasury secretary, Timothy F. Geithner, at a meeting two weeks ago.
“This is a source of considerable consternation,” said Camden R. Fine, who attended the White House meeting as president of the Independent Community Bankers, a trade group of 5,000 mostly smaller institutions, many of which are complaining about the repayment requirements.
Meanwhile, the Obama administration wants weaker banks to move more quickly to relieve their balance sheets of the toxic assets, the home loans and mortgage bonds that nobody wants to buy right now. But the banks are resisting because they would have to book big losses.
Finally, there is increasing anxiety in the industry that the administration could use the stress tests of the 19 biggest banks, due to be completed in the next three weeks, to insist on management changes, just as it did with General Motors when officials forced the resignation of its chief executive after examining that company’s books.
Senior officials, recognizing that the next few weeks could prove pivotal for both the industry and the bailout effort, are moving ahead with major plans.
“You will be seeing additional actions by the administration,” Mr. Obama said after the meeting Friday, when the officials discussed the bank stress tests and the new $500 billion to $1 trillion plan that will use public subsidies to encourage private investors to buy mortgage assets.
Attending the session were Mr. Geithner; Sheila C. Bair, the head of the Federal Deposit Insurance Corporation; Lawrence H. Summers, the chairman of the National Economic Council; and other top regulators.
The tension between the industry and the administration is rising as the government’s bailout fund is dwindling, putting the administration in a bind. It is all but certain to need to seek more money from Congress, which wants to see results from existing programs first.
The fund is down to its final $134 billion, according to Treasury officials, and is expected to face new requests for money in the coming weeks to aid tottering banks, the auto industry and possibly insurance companies.
“Between now and Memorial Day we’re going to know a whole lot more about the degree of trouble the banks are in,” said Senator Charles E. Schumer, a New York Democrat who is vice chairman of the Joint Economic Committee. “At the same time, we will begin to have a good initial reading as to how well the administration’s programs are working.”
This month, the nation’s largest banks began announcing their latest quarterly earnings. Some, like Wells Fargo, have released results early to trumpet their profitable first quarter — and possibly to give them leverage in coming negotiations with their regulator.
The immediate concern for the administration is how to get the weaker banks to relieve their books of deteriorating mortgages and mortgage-backed securities.
Industry analysts estimate that United States banks alone have more than $1 trillion of such mortgages on their books but have recognized only a small share of the likely losses.
Economists at Goldman Sachs estimated recently that banks were valuing their mortgages at about 91 cents on the dollar, far more than investors are willing to pay for them.
Even though the Treasury Department plans to subsidize the purchases of toxic assets by giving buyers low-cost loans to cover most of their upfront cost, a growing number of analysts warn that many if not most banks will remain reluctant to sell.
“The gap is still very wide,” said Frank Pallotta, a former mortgage trader at Morgan Stanley, now a consultant to institutional investors. “If every bank was forced to sell at the market-clearing price, you’d have only five banks left in the market.”
The stress tests of the banks are aimed at estimating how much each bank would lose if the economic downturn proved even deeper than currently expected.
Government officials do not plan to disclose the results for individual banks but may reveal broad results for the entire industry at the end of the month.
If the test indicates that the losses would leave a bank with too little capital, the bank will have six months to either raise extra money from private investors or get money from the government. Executives at some banks are worried that regulators will start demanding changes in management and strategy, possibly forcing them to merge with stronger institutions.
Treasury officials said they understood that banks had valid reasons for placing higher values on their mortgages than investors, and said they were hoping to avoid major conflicts.
Facing a host of government restrictions — from how much they pay executives to how many foreign citizens they employ — some small banks have returned the bailout money, and some larger ones, including Goldman Sachs, Wells Fargo and Northern Trust, have said they want to do so as quickly as possible.
On Friday, Sun Bancorp of Vineland, N.J., became the sixth bank to exit the program, returning $89.3 million just three months after it received its loan.
Regulators are reluctant to approve the early repayments until banks can show that they have the capital to withstand further erosion in the economy and will not curtail their lending.
Both large and small banks have pressed the Obama administration to make it less costly for them to exit the bailout program by waiving the right to exercise stock warrants the banks had to grant the government in exchange for the loans. At a meeting last month, the chiefs of three of the largest banks separately asked Mr. Obama to direct the Treasury not to exercise the warrants, Mr. Fine said.
Douglas Leech, the founder and chief executive of Centra Bank, a small West Virginia bank that participated in the capital assistance program but returned the money after the government imposed new conditions, said he complained strongly about the Treasury Department’s decision to demand repayment of the warrants. That effectively raised the interest rate he paid on a $15 million loan to an annual rate of about 60 percent, he said.
“What they did is wrong and fundamentally un-American,” he said. “Even though the government told us to take this money to increase our lending, the extra charge meant we had less money to lend. It was the equivalent of a penalty for early withdrawal.”
Stephanie Cutter, a spokeswoman at the Treasury Department, said it did not comment about the participation of specific banks in the plan or their efforts to exit the program.
The one thing that strikes you when reading this is that there is no war, really. There is mass folly encountered, deadly chaos engaged and a kind of medieval criminality suffered, but no actual war, to which President Obama just committed thousands more troops and trainers -- a human admixture of warriors and therapists, if you will, to battle ghosts and advise an amorphous foreign temperament.
The NY Times piece, the "this" -- "Corruption Undercuts Hopes for Afghan Police," by Richard Oppel Jr. -- is a terrifying 1,500-word descent into another world and another time, which Western modernism has no more hope of organically changing than its subject could change the West.
It's a portrayal, variously and by aggregating bits and pieces, of "extortion by police officers," of "fraud and swindling up the chain of command," of kidnappings and smuggling and protection rackets, of "high-ranking officials [with] immunity from the law," of "provincial officials [likened] to a criminal mafia," and, as if this needed to be added, an utter "lack of competent civilian authority."
You won't read of enemy troops amassed or bases of operations supplied or communications lines established or military tactics determined because, as mentioned, this really isn't a war. What it is -- with advance apologies to my postmodernist friends -- is a cultural cesspool.
Yet we send troops and military advisers to better train and equip the guardians of perpetual chaos.
Tactics? There can be no effective tactics, it seems to me, since effective tactics stem from a comprehensible strategy and a higher, achievable objective -- two little items we don't exactly lack in our own minds, it's just that they're at war with each other. We shall rid Afghanistan of Qaeda elements and the unpacifiable Taliban, we declare, while simultaneously declaring we shall not engage in nation building, which, while admittedly impossible, is absolutely essential.
To be tactically effective we must be engaged in that which we can't. Here, for instance, from the NY Times piece, is just one small example of effectiveness denied: "Referring to one corrupt and high-ranking government official he sees routinely, Maj. Randy Schmeling, a 43-year-old Army National Guardsman who commands the American police mentoring teams in Ghazni [province], said, 'I’d like to break down his door, stomp on his chest, point my 9-millimeter at his head and say, Stop what you are doing!' " -- that being extortion, fraud, smuggling, etc.
Yes, well, that's one way of doing it; next time followed by an unholstered crack splintering the air. The problem, of course, is that the day after that the corrupt official's nephew or brother-in-law would return the dispensation, since human corruption is the one thing Afghanistan possesses an inexhaustible supply of. Hence even effective tactics would be, alas, momentary at best, not to mention ineffective.
As is customarily true in modern war, or police actions, or non-nation-building efforts of curious nation-building personalities, the embattled occupiers on the ground are closest to the reality and see best its immense contradictions. As does First Sgt. John Strain, a philosophical observer involved in training the Afghan police, who told the Times: "The corruption here is a bigger threat to a stable government than the Taliban. If we stay here another year, or another 50 years, I think it’ll probably only take two to three years after we are gone until it reverts to the way it was right before we got here....
"[I]t really breaks your heart, to think that what you are doing is probably not going to turn out to be a hill of beans."
In early December of last year, as President-elect Obama was assembling his domestic and foreign policy teams, the Times' Frank Rich dolorously pondered the "sardonic" term, "the best and the brightest." "The stewards of the Vietnam fiasco," he wrote -- referencing McGeorge Bundy, Walt Rostow, Robert McNamara -- "had pedigrees uncannily reminiscent of some major Obama appointees.... The rest is history that would destroy the presidency of Lyndon Johnson."
But, continued Rich, "that’s not what gives me pause.... No, it’s the economic team that evokes trace memories of our dark best-and-brightest past": Lawrence Summers and Timothy Geithner.
Rich was right to worry, as much as anyone is about any presidential appointments that harbor checkered pasts of questionable judgments. But on balance, I was convinced then, as I remain convinced now, that those with the much greater and predictable potential to destroy the presidency of Barack Obama are those advising his Afghanistan policy.
For that policy is, in previously stated words, one of immense contradictions mired in assured futility.
The one upside? I also believe Barack Obama himself is among the more authentic best and brightest. And from his reading of history, much like the exceedingly wary Jack Kennedy's, he'll someday declare victory in Afghanistan as a fulfillment of his campaign promise, and then promptly skedaddle -- leaving that cesspool to diplomats and drones.
Please respond to P.M.'s commentary by leaving comments below and sharing them with the BuzzFlash community. For personal questions or comments you can contact him atfifthcolumnistmail@gmail.com
THE FIFTH COLUMNIST by P.M. Carpenter
President Barack Obama endorsed a Justice Department move to dismiss a case in which the National Security Agency is being sued over its warrantless wiretapping program, because he believes the case presents a risk to national security, the White House told Raw Story Thursday.
