The Bubble Next Time

Regulations that will stop us from acting crazy next time there's an irrational boom.

By Daniel Gross
Posted Saturday, Feb. 28, 2009, at 7:42 AM ET

When financial historians look back at the last six months, they'll be hard-pressed to explain precisely why our advanced financial system suffered such a catastrophic failure. So many of the developments—a $1.2 trillion subprime-mortgage market, a $62 trillion unregulated, nontransparent credit-default-swap market, $50 billion private-equity buyouts of cyclical companies, hedge funds going public—seem, on their face, to be irrational, silly nonstarters. And yet the players pulling off these deals were lionized as geniuses, as transformational business figures. They were the Smart Money. They turned out to be the Dumb Money. How did the crown jewel of American capitalism—our financial-services industry—transform into cubic zirconia? How did a nation shift seamlessly from the dot-com bubble into a more inclusive housing and credit bubble? And, most important, how can we stop it from happening again

Asymmetrical class warfare

by Jamison Foser

The media are outraged at the "class warfare" supposedly present in President Obama's budget plans. In the past few days alone, Michelle Bernard said Barack Obama "was almost declaring class warfare" in his speech to Congress; CNBC's Carlos Quintanilla said, "I don't want to call it class warfare, although that's what it may end up being in the end, this debate over wealth redistribution"; the AP's Jennifer Loven asked White House press secretary Robert Gibbs, "Are you all worried at all that that kind of argument, that 'class warfare' argument could sink the ability to get some of these big priorities through?" Politico ran a Jeanne Cummings article headlined "Class warfare returns to D.C." And this afternoon, MSNBC joined the pile-on, with a segment asking: "Is there a war against the wealthy? Do we have a class war developing?"

Michael Kinsley: Words for a Shaken People

"We're having an earthquake," said my wife. It was early one recent morning, as we sat drinking coffee and reading the day's gloomy economic news. Was she being metaphorical? At this hour? We sat in nervous silence for a few seconds, mentally listing our regrets. (Her: Why didn't we put flashlights in all the bedrooms? Me: Why didn't we sell all these bedrooms and rent?) Then we resumed our day.

"The American Earthquake" is what the critic Edmund Wilson called his collection of reportage (mostly for the New Republic) about the Great Depression, and as a metaphor it's a good one. It captures, as "Depression" does not, the element of surprise, the panic, the remorse and the disbelief as it seems more and more likely that this actually is "the big one."

Glenn Greenwald: The Corruption of the Cocoon

The Atlantic's Marc Ambinder writes (h/t Andrew Sullivan):

Get Out Of Your D$*#( Shells

Here's a simple way to increase intellectual cross-pollination on the web: honest bloggers of the left and the right should try to interview at least one author/historian/politician from the other side of the aisle at least one a month. So -- Media Matters shouldn't just criticize Bernard Goldberg; they should interview him. Glenn Greenwald should, I don't know, see if Jack Goldsmith from Harvard would chat with him online. Bill Kristol should interview Jane Mayer. Pajamas Media needs to interview Democrats and Democratic experts, and not just each other, or Joe the Plumber, or Sen. Jim DeMint. Righties interviewing righties has gotten so boring and repetitive; lefties fawning over lefties is lazy. Who's going to be brave enough to reach out to an ideological or intellectual opponent, promote their new book, or interview them?

I agree with this almost entirely, but there's an assumption here that isn't quite accurate: the lack of such interviews and debates isn't evidence that there are no such attempts being made. To the contrary: not only politicians, but a huge portion of pundits and journalists, simply refuse to acknowledge any criticisms, let alone engage critics.

Our political discourse is so stratified that politicians and pundits can get all the exposure they want while confining themselves to hospitable venues and only speaking to sympathetic journalists.

Insight: Time to expose those CDOs

Published: February 26 2009 16:34 | Last updated: February 26 2009 16:34

Just how much should a debt vehicle backed by subprime mortgage bonds be worth these days? Two years ago, most banks and insurance companies assumed the answer was close to 100 per cent of face value – or more.

Since then, however, that “price” has clearly collapsed, triggering tens of billions of dollars worth of writedowns, particularly in relation to a product known as collateralised debt obligations of asset-backed securities (CDO of ABS.)

But as the zeroes relating to writedowns multiply, a peculiar – and bitter – irony continues to hang over these numbers. Notwithstanding the fact that bankers used to promote CDOs as a tool to create more “complete” capital markets, very few of those instruments ever traded in a real market sense before the crisis – and fewer still have changed hands since then.

Paul Krugman: Climate of Change

Elections have consequences. President Obama’s new budget represents a huge break, not just with the policies of the past eight years, but with policy trends over the past 30 years. If he can get anything like the plan he announced on Thursday through Congress, he will set America on a fundamentally new course.

The budget will, among other things, come as a huge relief to Democrats who were starting to feel a bit of postpartisan depression. The stimulus bill that Congress passed may have been too weak and too focused on tax cuts. The administration’s refusal to get tough on the banks may be deeply disappointing. But fears that Mr. Obama would sacrifice progressive priorities in his budget plans, and satisfy himself with fiddling around the edges of the tax system, have now been banished.

James Galbraith: Obama Isn't Doing Enough to Solve the Financial Crisis

— By Nick Baumann | Thu February 26, 2009 7:14 AM PST

The financial crisis is even worse than people think (and people already think it's pretty bad), and we aren't doing enough to stop it, economist and Mother Jones contributor James K. Galbraith told the House Financial Services Committee on Thursday morning. From his prepared testimony:

In 1930, John Maynard Keynes wrote, "The world has been slow to realize that we are living this year in the shadow of one of the greatest economic catastrophes of modern history." That catastrophe was the Great Crash of 1929, the collapse of money values, the destruction of the banking system. The questions before us today are: is the crisis we are living through similar? And if so, are we taking adequate steps to deal with it? I believe the answers are substantially yes, and substantially no.

Anthrax spores don't match dead researcher's samples

Poisonous anthrax that killed five Americans in the weeks after the Sept. 11, 2001 terror attacks doesn't match bacteria from a flask linked to Bruce Ivins, the researcher who committed suicide after being implicated by the Federal Bureau of Investigation, a scientist said.

Spores used in the deadly mailings "share a chemical 'fingerprint' that is not found in the flask linked to Bruce Ivins," Roberta Kwok wrote in Nature News, citing Joseph Michael, a scientist at the Sandia National Laboratories in Albuquerque, New Mexico.

Texas governor considering political suicide

by schroed

Thu Feb 26, 2009 at 08:19:28 AM PST

In Texas politics there is a phrase for leaving federal money on the table: "political suicide"

By now everyone has heard the news that Governor Rick Perry of Texas (a.k.a. Governor Goodhair), along with several other southern Republican governors, is considering rejecting part of the stimulus package that would provide $555 million in unemployment benefits for out-of-work Texans.

What might not be as widely known..

Rush from Reality

By Rick Perlstein

Created 02/26/2009 - 9:25am

I've been listening to Rush Limbaugh for going on twenty years now—since 1989, when my summer job after my first year of college involved driving a daily route which took me from Milwaukee to a little town two hours away. I listened to the whole thing. Every day.

He had been on nationally for only a year [1]. He was not yet a national phenomenon, and when I discovered him, I realized I had stumbled upon something important and extraordinary. I knew about Father Coughlin [2], the para-fascist "radio priest" of the New Deal Years—I'd read about him in history books—and had an inkling that I'd someday be reading about this "Rush Limbo" (as I first misheard his name) in books as well. For as has been frequently remarked, Rush is an astonishingly gifted talent when it comes to filling the air on the radio. Already, in 1989, people were packing auditoriums around the hinterlands to hear him dispense his wisdom on his "Rush to Excellence" tours. Already, he was an exceptionally commanding presence.

Partisanship, by the Bye

by Hendrik Hertzberg
February 23, 2009

Throughout the fortnight-long Battle of the Stimulus Package—the Capitol Hill confrontation that culminates this week in a signing ceremony for a historically unprecedented piece of legislation that will inject more than three-quarters of a trillion dollars’ worth of adrenaline into America’s fluttering economic heart—one question preoccupied commentators and observers, especially those desperate for relief from the daunting substance of the matter: was President Obama being “bipartisan” enough?

Some discussed the question calmly, others less so; but there was something like a consensus that if non-trivial numbers of Republican legislators failed to support the stimulus bill the fault, and the obloquy, would be Obama’s. “The bill will be judged a political success not simply if it becomes law, but if it’s deemed ‘bi-partisan,’ ” ABC’s “The Note” Web site warned. The Los Angeles Times, while calling the bill’s quick passage in the House of Representatives a “big legislative victory” for Obama, cautioned that “it was clear that his efforts so far had not delivered the post-partisan era that he called for in his inauguration address.” (The man had been in office for eight days—a tight schedule for era-delivering.) On the Senate floor, the remarks of Lindsey Graham, of South Carolina, provided evidence that an age of perpetual political peace had not yet dawned. “This bill stinks!” Senator Graham exclaimed.

Will Obama Go After Social Security? My Editor and I Have a Bet

By Joshua Holland, AlterNet
Posted on February 26, 2009, Printed on February 26, 2009
http://www.alternet.org/story/128915/

I have a bet with my editor, Jan Frel. He thinks that President Barack Obama is going to go after Social Security. It's a huge honeypot sitting in a country that's had an enormous amount of wealth shaken out of it, and if it were looted, it might produce enough in fat management fees alone to resuscitate Wall Street's ailing financial giants.

Jan's not alone. William Greider, writing in The Nation, noted that "Governing elites in Washington and Wall Street have devised a fiendishly clever 'grand bargain' they want President Obama to embrace in the name of 'fiscal responsibility.' "

Backstage at the theater of 'terror'

By Pepe Escobar

Afghanistan is not only the graveyard of empires; it's a graveyard of misconceptions.

Al-Qaeda leader Osama bin Laden believed that the mujahideen single-handedly defeated the Soviet empire; so a more compact mujahid band, al-Qaeda, would be the vanguard in defeating the American empire. It was never that simple.

Corruption Touched CIA’s Covert Operations

by Marcus Stern, ProPublica - February 25, 2009 12:00 am EST

Paramilitary agents for the CIA's super-secret Special Activities Division, or SAD, perform raids, ambushes, abductions and other difficult chores overseas, including infiltrating countries to "light up" targets from the ground for air-to-ground missile strikes. This week the government acknowledged for the first time that some of SAD's sensitive air operations were swept up in a fraud conspiracy that reached the highest levels of the CIA and cost the government $40 million.

That information was contained in a series [1] of court [2] filings [3] released in advance of the long-awaited sentencing of Kyle Dustin "Dusty" Foggo, the disgraced former No. 3 official at the CIA.

Obama: The Cap on Carbon Is Coming...

By Bill Scher

Created 02/25/2009 - 11:55am

...but obstructionists and lobbyists are right behind.

President Barack Obama yesterday made a very specific demand for averting a climate crisis[1] and transitioning to a clean energy economy when he said, "I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America."

And even more notably, the White House Press Secretary Robert Gibbs yesterday confirmed[2] earlier reports that the President's budget proposal will presume the "cap-and-trade" proposal will generate new revenue.

Thomas Frank: Richard Perle's Apologia

Maybe next time the neocons will win.

Governing was always difficult for conservatives, but as they return to the opposition, they are rediscovering their skill at blame evasion.

After all, this is a movement that is most comfortable imagining itself as an outsider. This is a movement that whirls through the pages of recent history taking credit for everything good and feeding the grisly bits to its chosen scapegoats.

GOP hates earmarks - except the ones its members sponsor

By David Lightman | McClatchy Newspapers

WASHINGTON — Republicans are expected to deliver a daylong rant Wednesday against Democratic spending legislation, yet the bill is loaded with thousands of pet projects that Republican lawmakers inserted.

Rep. Ralph Hall, R-Texas, included $142,500 for emergency repairs to the Sam Rayburn Library and Museum in Bonham, Texas. Sen. John Ensign, R-Nev., joined state colleagues to include $1.425 million for Nevada "statewide bus facilities." The top two Republicans on Congress' money committees also inserted local projects.

Financiers Used "Hotline" to SEC Examiners

Tuesday 24 February 2009

by: Matt Renner, t r u t h o u t | Report

Washington, DC - In a hearing which exposed failures by the government's financial police, Congressman Stephen Lynch (D-Massachusetts) highlighted the existence of a "hotline," which he said could be used by Wall Street firms to call off government inspectors. The existence of a "hotline" has been confirmed by the Securities and Exchange Commission (SEC), though its purpose has been disputed.

Long hours link to dementia risk

Long working hours may raise the risk of mental decline and possibly dementia, research suggests.

The Finnish-led study was based on analysis of 2,214 middle-aged British civil servants.

It found that those working more than 55 hours a week had poorer mental skills than those who worked a standard working week.

How You Can Green Your Home and Cash in on Stimulus Money

By G. Jeffrey MacDonald, Christian Science Monitor
Posted on February 24, 2009, Printed on February 25, 2009
http://www.alternet.org/story/128617/

Hampton Falls, N.H. -- Energy-saving systems for the attic, basement, and in between have effectively gone on sale, courtesy of the United States Congress.

But whether shoppers will take advantage -- or even notice available discounts -- remains an open question.

Tax incentives to encourage investments in energy efficiency took effect last week when President Barack Obama signed the $787 billion economic stimulus bill. That means homeowners with drafty windows, old heating systems, or other root causes of high energy bills can be rewarded in tax season if they make improvements in 2009 or 2010.

Obama Makes a Persuasive Pitch for His Progressive Agenda

By Dylan Loewe, Huffington Post
Posted on February 24, 2009, Printed on February 25, 2009
http://www.alternet.org/story/128750/

In 50 minutes last night, the president of the United States used his first speech to a joint session of Congress as a launching point, a chance to transform the bulk of his entire campaign platform into the core of a bold first year agenda. In one of his most compelling arguments to date, he laid out a blueprint going forward, rich with clarity and powered by an ever-accruing political capital.

What was most impressive about the speech was not its cadence and tone, but the framing used to sell its contents. Obama couched his unabashedly progressive agenda as critical to the country's long term economic future. Where President Clinton became famous for taking Republican ideas and wrapping them in Democratic arguments, President Obama called for some of the most liberal policies in a generation, and did so using the voice of a fiscal conservative.

A planet at the brink?

By Michael T Klare

The global economic meltdown has already caused bank failures, bankruptcies, plant closings, and foreclosures and will, in the coming year, leave many tens of millions unemployed across the planet. But another perilous consequence of the crash of 2008 has only recently made its appearance: increased civil unrest and ethnic strife. Someday, perhaps, war may follow.

A scam at the heart of the US

By Julian Delasantellis

Travelers visiting New York city from Americas's rural heartland in the 1980s might have been able to regale the folks back home with tales of encounters with knife-wielding drug addicts and/or disease-scourged prostitutes, but it's not like their predecessors who made the same trek back in the 1950s didn't have a tale to tell around the cracker barrel as well. They might have come back to the square dance and talked about playing and losing at the game of three-card monte.

"Basically, It's a Disaster"

By Bernhard Warner Posted Tuesday, February 24, 2009 - 3:54am

Today's Business Press

More than a decade's worth of gains have now been wiped out. The Dow on Monday sunk to a low last plumbed in the Clinton-Gore years in what BusinessWeek calls "the stock market's frightful slide." The blue-chip index is down to April 1997 levels, and the S&P 500 has lost half of its value since the start of 2008. For long-term investors, it all makes for grim accounting. "If you bought into the overall stock market—represented by the S&P 500—at any point in the last 11 years, your shares are now worth less than you paid for them," BusinessWeek writes. The Wall Street Journal points out that the latest downturn is particularly unsettling, as it's not just the banks pulling down the markets. Technology and commodity stocks like U.S. Steel have also fallen.

Judge questions law giving telecoms immunity

Bob Egelko, Chronicle Staff Writer

Tuesday, February 24, 2009

(02-23) 17:32 PST SAN FRANCISCO -- A federal judge in San Francisco is raising questions about the constitutionality of a law designed to dismiss suits against telecommunications companies accused of cooperating with government wiretapping.

Chief U.S. District Judge Vaughn Walker has asked President Obama's Justice Department to present its views by Wednesday on whether the law gives the attorney general too much power to decide whether a company is immune from lawsuits. Obama supported the measure as a senator when Congress approved it last year.

AP falsely reported Obama called Social Security "the single most pressing fiscal challenge we face by far"

Summary: AP's Liz Sidoti falsely reported that at his fiscal responsibility summit, President Obama "called the long-term solvency of Social Security 'the single most pressing fiscal challenge we face by far.' " In fact, Obama made that comment in reference to "the rising cost of health care."

Will's climate change column sparks outrage in environmental community

After Post refuses to address numerous global warming falsehoods, leading environmental organizations join Media Matters in calling for correction

Today, Media Matters for America President Eric Burns joined Sierra Club Executive Director Carl Pope, League of Conservation Voters President Gene Karpinski, and Friends of the Earth President Brent Blackwelder in issuing a letter to Washington Post ombudsman Andy Alexander asking him to address several blatant falsehoods in George Will's February 15 column about global warming.

Health insurance essential for health and well-being

Action urgently needed from President and Congress to solve crisis of the uninsured

WASHINGTON -- The evidence shows more clearly than ever that having health insurance is essential for people's health and well-being, and safety-net services are not enough to prevent avoidable illness, worse health outcomes, and premature death, says a new report from the Institute of Medicine. Moreover, new research suggests that when local rates of uninsurance are relatively high, even people with insurance are more likely to have difficulty obtaining needed care and to be less satisfied with the care they receive.

The number of people who have health insurance continues to drop, and employment-based coverage -- the principal source of insurance for the majority of Americans -- is eroding, a situation that is getting worse with the current economic crisis, the report notes. In 2007, nearly one in 10 American children and one in five non-elderly adults had no health insurance. The average amount employees paid per year for family coverage in an employer-sponsored plan rose from $1,543 in 1999 to $3,354 in 2008. If there is no intervention, the decline in health insurance coverage will continue, concluded the committee that wrote the report.

Why the GOP Really Hates Unions

By Art Levine, Huffington Post
Posted on February 23, 2009, Printed on February 24, 2009
http://www.alternet.org/story/128297/

The Hoover-like GOP has been working overtime to oppose President Obama's stimulus package while hoping he fails. Meanwhile, a report released yesterday by the Center for American Progress Action Fund essentially underscores the real reasons Republicans and the business community have taken another equally short-sighted economic stance: fighting workers' right to organize. As Unions Are Good For the American Economy points out with irrefutable statistics, unionization raises wages and boosts the economy because it puts more money in the pockets of American workers.

(The report itself, of course, doesn't directly accuse the GOP and corporate interests of opposing economic growth and recovery, but reading its measured analysis of the economic benefit of unions leads to the inescapable conclusion that anti-union business leaders have a misguided zeal for low wages at all cost -- regardless of the impact on their own workers, their firms' productivity, their own long-term profits or the broader economy.)

Wall Street Sharks Have Lost Everything, and Now They're Coming After Us

By Robert Kuttner, The Washington Post
Posted on February 24, 2009, Printed on February 24, 2009
http://www.alternet.org/story/128511/

With the enactment of a large economic stimulus package, fiscal conservatives are using the temporary deficit increase to attack a perennial target -- Social Security and Medicare. The private-equity investor Peter G. Peterson, who launched a billion-dollar foundation last year to warn that America faces $56.4 trillion in "unfunded liabilities," is a case in point. Supposedly, these costs will depress economic growth and crowd out other needed outlays, such as investments in the young. The remedy: big cuts in programs for the elderly.

The Peterson Foundation is joined by leading "blue dog" (anti-deficit) Democrats such as House Budget Committee Chairman John Spratt of South Carolina and his counterpart in the Senate, Kent Conrad of North Dakota. The deficit hawks are promoting a "grand bargain" in which a bipartisan commission enacts spending caps on social insurance as the offset for current deficits.

The Spectacular, Sudden Crash of the Global Economy

By Joshua Holland, AlterNet
Posted on February 24, 2009, Printed on February 24, 2009
http://www.alternet.org/story/128412/

The worldwide economic meltdown has sent the wheels spinning off the project of building a single, business-friendly global economy.

Worldwide, industrial production has ground to a halt. Goods are stacking up, but nobody's buying; the Washington Post reports that "the world is suddenly awash in almost everything: flat-panel televisions, bulldozers, Barbie dolls, strip malls, Burberry stores." A Hong Kong-based shipping broker told The Telegraph that his firm had "seen trade activity fall off a cliff. Asia-Europe is an unmit­igated disaster." The Economist noted that one can now ship a container from China to Europe for free -- you only need to pick up the fuel and handling costs -- but half-empty freighters are the norm along the world's busiest shipping routes. Global airfreight dropped by almost a quarter in December alone; Giovanni Bisignani, who heads a shipping industry trade group, called the "free fall" in global cargo "unprecedented and shocking."

Glenn Greenwald: Ryan Lizza's People Magazine love letter to Rahm Emanuel

White House Chief of Staff Rahm Emanuel -- who The New York Times described as "arguably the second most powerful man in the country" -- is certainly one of the most controversial figures in Washington. Prior to joining the Obama administration, Emanuel -- in the Clinton administration and then as a high-ranking member in the House Democratic caucus -- was at the center of countless political and personal controversies. Emanuel has played the central role in much of the Blue Dog dominance in the House and many (if not most) of the worst Democratic capitulations to the Bush agenda. Even in the four weeks that he's been in his current job, Emanuel has been the target of severe criticisms of his management skills from many precincts for his role in the Judd Gregg and Rod Blagojevich fiascoes and the Obama administration's questionable negotiating tactics in the stimulus package. Both Jane Hamsher and Howie Klein yesterday identified just some of the current and past controversies that Emanuel has triggered.

Dumb Money

The villains of the financial catastrophe aren't criminals. They're morons.

By Daniel GrossPosted Monday, Feb. 23, 2009, at 1:21 PM ET

In the past few months, we've been riveted and disgusted by the exploits of scamsters like Bernard Madoff and Allen Stanford (characters who, if they didn't exist, would have to be invented by Tom Wolfe). It's both easy and convenient to hold them up as the ultimate symbols of the just-ended boom. But we shouldn't. While there was some crime in the mortgage industry, law-abiding, respectable, upstanding citizens caused the overwhelming majority of financial losses suffered thus far. Skeezy money managers and mobbed-up boiler rooms didn't create the economic catastrophe. It was visited on us by firms in the Dow Jones Industrial Average and S&P 500—companies that trace their origins back to the 1800s, run by graduates of Yale and Harvard. The people who blew up the system weren't anarchists. They were members of the club: central bankers and private-equity honchos, hedge-fund geniuses and Ph.D. economists, CEOs and investment bankers. And the (overwhelmingly legal) con they perpetuated on themselves, their colleagues, their shareholders and creditors, and, ultimately, on us taxpayers makes Madoff's sins look like child's play.

Laissez-Faire Capitalism Has Failed

Nouriel Roubini, 02.19.09, 12:01 AM EST

The financial crisis lays bare the weakness of the Anglo-Saxon model.

It is now clear that this is the worst financial crisis since the Great Depression and the worst economic crisis in the last 60 years. While we are already in a severe and protracted U-shaped recession (the deluded hope of a short and shallow V-shaped contraction has evaporated), there is now a rising risk that this crisis will turn into an uglier, multiyear, L-shaped, Japanese-style stag-deflation (a deadly combination of stagnation, recession and deflation).

Diebold 'offices' listed in yellow pages are mostly Wal-Marts

Filed by Joe Byrne

Across the country, curious bloggers are calling up their local Diebold offices, and no one is answering.

Utah is among the number of states that now use a partial or fully electronic election system, and Premier Election Solutions, a subsidiary of Diebold, is the company that sold the machines to the state. To convince Utah decision-makers that Diebold was a big company with a substantial presence, Kathy Dopp, founder of UtahCountVotes.org, reported that a company representative told the decision-makers in 2006 that Diebold “has about 20 offices in Utah.” When pressed further, the representative refused to give the locations of any of the offices. In fact, the White Pages lists 18 Diebold offices.

Paul Krugman: Banking on the Brink

Comrade Greenspan wants us to seize the economy’s commanding heights.

O.K., not exactly. What Alan Greenspan, the former Federal Reserve chairman — and a staunch defender of free markets — actually said was, “It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring.” I agree.

The case for nationalization rests on three observations.

Poll: Most Americans fearful about state of country

By Paul Steinhauser
CNN Deputy Political Director

WASHINGTON (CNN) -- A new national poll indicates that nearly three out of four Americans are scared about the way things are going in the country today.

Seventy-three percent of those questioned in a CNN/Opinion Research Corporation survey released Monday say they're very or somewhat scared about the way things are going in the United States. That's six points higher than in an October poll.

Obama will not immediately repeal Bush tax cuts.

The New York Times reports today that President Obama plans to “set a goal this week to cut the annual deficit at least in half by the end of his term,” in large part through withdrawing from Iraq and raising taxes on the wealthy. Obama, however, will not immediately repeal the Bush tax cuts, instead letting them expire on their own in 2010:

Democrats Resisting Obama on Social Security

By JACKIE CALMES

Published: February 22, 2009

WASHINGTON — President Obama is eager to seek a bipartisan solution to ensure the long-term solvency of Social Security, people who have spoken with him say, but he is running into opposition from his party’s left and from Democratic Congressional leaders who contend that his political capital would be better spent on health care and other priorities.

Child abuse 'alters stress gene'

Abuse in early childhood permanently alters how the brain reacts to stress, a Canadian study suggests.

Analysis of brain tissue from adults who had committed suicide found key genetic changes in those who had suffered abuse as a child.

It affects the production of a receptor known to be involved in stress responses, the researchers said.

Obama nixed full surge in Afghanistan

By Gareth Porter

WASHINGTON - United States President Barack Obama decided to approve only 17,000 of the 30,000 troops requested by General David McKiernan, the top commander of US and North Atlantic Treaty Organization troops in Afghanistan, and General David Petraeus, the Central Command chief, after McKiernan was unable to tell him how they would be used, according to White House sources.

But Obama is likely to be pressured by McKiernan and the Joint Chiefs to approve the remaining 13,000 troops requested after the completion of an Afghanistan-Pakistan policy review next month.

Glenn Greenwald: Fox News "War Games" the Coming Civil War

Bill Clinton's election in 1992 gave rise to the American "militia movement": hordes of overwhelmingly white, middle-aged men from suburban and rural areas who convinced themselves they were defending the American way of life from the "liberals" and "leftists" running the country by dressing up in military costumes on weekends, wobbling around together with guns, and play-acting the role of patriot-warriors. Those theater groups -- the cultural precursor to George Bush's prancing 2003 performance dressed in a fighter pilot outfit on Mission Accomplished Day -- spawned the decade of the so-called "Angry White Male," the movement behind the 1994 takeover of the U.S. Congress by Newt Gingrich and his band of federal-government-cursing, play-acting-tough-guy, pseudo-revolutionaries.

What was most remarkable about this allegedly "anti-government" movement was that -- with some isolated and principled exceptions -- it completely vanished upon the election of Republican George Bush, and it stayed invisible even as Bush presided over the most extreme and invasive expansion of federal government power in memory. Even as Bush seized and used all of the powers which that movement claimed in the 1990s to find so tyrannical and unconstitutional -- limitless, unchecked surveillance activities, detention powers with no oversight, expanding federal police powers, secret prison camps, even massively exploding and debt-financed domestic spending -- they meekly submitted to all of it, even enthusiastically cheered it all on.

The Nitty Gritty of Obama's Mortgage Plan

— By Nick Baumann | Wed February 18, 2009 12:11 PM PST

Speaking in Phoenix, Arizona on Wednesday, President Obama said his $75 billion home mortgage rescue plan would "save ourselves the costs of foreclosure tomorrow," but "not help speculators who took risky bets on a rising market." As David Corn highlighted earlier, Obama tempered his appeals to populism and community feeling with a call for responsibility. "Solving this crisis will require more than resources – it will require all of us to take responsibility," Obama said. Great. But how does the plan actually work? Here's a primer.

The first part of the plan is a fairly simple regulatory fix that allows homeowners with Fannie Mae and Freddie Mac mortgages who owe between 80 and 105 percent of what their homes are worth to refinance those mortgages. Previously, only borrowers who had at least 20 percent home equity could refinance. By refinancing at a lower rate, borrowers could save thousands of dollars annually on their mortgage payments.

Volcker: Crisis May be Even Worse than Depression

The global economy may be deteriorating even faster than it did during the Great Depression, Paul Volcker, a top adviser to President Barack Obama, said on Friday.

Volcker noted that industrial production around the world was declining even more rapidly than in the United States, which is itself under severe strain.

"I don't remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world,'' Volcker told a luncheon of economists and investors at Columbia University.

Frank Rich: What We Don’t Know Will Hurt Us

AND so on the 29th day of his presidency, Barack Obama signed the stimulus bill. But the earth did not move. The Dow Jones fell almost 300 points. G.M. and Chrysler together asked taxpayers for another $21.6 billion and announced another 50,000 layoffs. The latest alleged mini-Madoff, R. Allen Stanford, was accused of an $8 billion fraud with 50,000 victims.

“I don’t want to pretend that today marks the end of our economic problems,” the president said on Tuesday at the signing ceremony in Denver. He added, hopefully: “But today does mark the beginning of the end.”

Does it?

The Gatekeeper

Rahm Emanuel on the job.

Ryan Lizza
March 2, 2009

Rahm Emanuel’s office, which is no more than a three-second walk from the Oval Office, is as neat as a Marine barracks. On his desk, the files and documents, including leatherbound folders from the National Security Council, are precisely arranged, each one parallel with the desk’s edge. During a visit hours before Congress passed President Barack Obama’s stimulus package, on Friday, February 13th, I absently jostled one of Emanuel’s heavy wooden letter trays a few degrees off kilter. He glared at me disapprovingly. Next to his computer monitor is a smaller screen that looks like a handheld G.P.S. device and tells Emanuel where the President and senior White House officials are at all times. Over all, the office suggests the workspace of someone who, in a more psychologized realm than the West Wing of the White House and with a less exacting job than that of the President’s chief of staff, might be cited for “control issues.”

Because the atmosphere of crisis is now so thick at the White House, any moment of triumph has a fleeting half-life, but the impending passage of the seven-hundred-and-eighty-seven-billion-dollar stimulus bill provided, at least for an afternoon, a sense of satisfaction. As Emanuel spoke about the complications of the legislation, he was quick to credit colleagues for shepherding the bill to victory—Peter Orszag, the budget director; Phil Schiliro, the legislative-affairs director; Jason Furman, the deputy director of the National Economic Council––but, in fact, nearly everyone in official Washington acknowledges that, besides Obama himself, Emanuel had done the most to coax and bully the bill out of Congress and onto the President’s desk for signing.

Crop Scientists Say Biotechnology Seed Companies Are Thwarting Research

By ANDREW POLLACK

Biotechnology companies are keeping university scientists from fully researching the effectiveness and environmental impact of the industry’s genetically modified crops, according to an unusual complaint issued by a group of those scientists.

“No truly independent research can be legally conducted on many critical questions,” the scientists wrote in a statement submitted to the Environmental Protection Agency. The E.P.A. is seeking public comments for scientific meetings it will hold next week on biotech crops.

Iraqis Have Voted: Will the U.S. Be Kicked Out the Door Soon?

By Robert Dreyfuss, The Nation
Posted on February 21, 2009, Printed on February 22, 2009
http://www.alternet.org/story/127846/

For the first time in six years, it's possible to see the light at the end of the tunnel in Iraq. Despite all their flaws -- and there were many -- the January 31 elections in fourteen of Iraq's eighteen provinces ratified the resurgence of secular nationalism. A large majority of voters repudiated the Shiite and Sunni religious parties and the Kurdish separatists. And in so doing, they broke free of the rigid confines of the ethno-sectarian politics that has dominated the Iraqi scene since 2003. The results mean that the Obama administration may soon have to deal with a vastly different cast of characters in Iraq -- politicians less willing to tolerate a long-term US presence and firmly opposed to a special relationship between Baghdad and Washington.

10 Dirty Tricks Wall Street Con Artists Will Pull to Keep the Rip-offs Going

By Paul B. Farrell, Wall Street Journal
Posted on February 22, 2009, Printed on February 22, 2009
http://www.alternet.org/story/128241/

Yes, America wants an economic recovery. A brand new bull. And nobody wants it more than Wall Street. It gets rich off bull markets. Yes, Warren Buffett may be buying, but the odds are against Wall Street now.

The financial sector's in the tank: Stocks are huge losers. Earnings stink. Bonuses are down. And if they ask for TARP money, CEO salaries get capped, there are no lavish conferences and you fly commercial -- very humbling for a big boss used to making a million bucks a week.

Saving social security

Here's a cheap and effective form of economic stimulus – tell America's baby boomers that their welfare benefits are safe

Dean Baker
guardian.co.uk, Monday 16 February 2009 18.30 GMT

The stimulus bill approved by Congress last week - and due to be signed into law by President Obama tomorrow - is a very good first step toward slowing the economy's decline, but it clearly is not large enough to accomplish the job. The US economy will be seeing a loss of close to $2.6 trillion in demand over this year and next due to the collapse of housing and commercial property bubbles.

To counteract this collapse, Congress gave President Obama just over $700bn in real stimulus. President Obama will have to make further requests from Congress to close the gap between what the economy needs and the stimulus package approved last week.

Paul Krugman: Who’ll Stop the Pain?

Earlier this week, the Federal Reserve released the minutes of the most recent meeting of its open market committee — the group that sets interest rates. Most press reports focused either on the Fed’s downgrade of the near-term outlook or on its adoption of a long-run 2 percent inflation target.

But my eye was caught by the following chilling passage (yes, things are so bad that the summarized musings of central bankers can keep you up at night): “All participants anticipated that unemployment would remain substantially above its longer-run sustainable rate at the end of 2011, even absent further economic shocks; a few indicated that more than five to six years would be needed for the economy to converge to a longer-run path characterized by sustainable rates of output growth and unemployment and by an appropriate rate of inflation.”

Thomas Frank: Bipartisanship Is a Silly Beltway Obsession

It's good policy that matters.

Last week, President Barack Obama spoke at town-hall meetings in cities hit hard by the recession. With only one exception -- a woman who thought Mr. Obama needed to have a beer with Sean Hannity -- the questions the president received in these places were all concerned with bread-and-butter economic issues: mortgage problems, funding for education, and the difficulties of low-wage work.

Over the weekend, after Congress had approved a massive economic stimulus package, it was the news media's turn to ask the questions. Here, a different concern permeated the discussion: The nation's desperate need for bipartisanship, and the president's failure to usher in a new era of brotherly love between Republicans and Democrats.

The New Depression

Martin Jacques
Published 12 February 2009

The business and political elite are flying blind. This is the mother of all economic crises. It has barely started and remains completely out of control.

We are living through a crisis which, from the collapse of Northern Rock and the first intimations of the credit crunch, nobody has been able to understand, let alone grasp its potential ramifications. Each attempt to deal with the crisis has rapidly been consumed by an irresistible and ever-worsening reality. So it was with Northern Rock. So it was with the attempt to recapitalise the banks. And so it will be with the latest gamut of measures. The British government – like every other government – is perpetually on the back foot, constantly running to catch up. There are two reasons. First, the underlying scale of the crisis is so great and so unfamiliar – and, furthermore, often concealed within the balance sheets of the banks and other financial institutions. Second, the crisis has undermined all the ideological assumptions that have underpinned government policy and political discourse over the past 30 years. As a result, the political and business elite are flying blind. This is the mother of all postwar crises, which has barely started and remains out of control. Its end – the timing and the complexion – is unknown.

Obama and Liberals: A Counter-Productive Relationship

By Glenn Greenwald, Salon
Posted on February 13, 2009, Printed on February 14, 2009
http://www.alternet.org/story/126867/

Published on Friday, February 13, 2009 by Salon.com

The New Republic's John Judis today has an excellent analysis of the politics behind the stimulus package -- one which applies equally to most other political controversies. Judis argues that the stimulus package ended up being far inferior to what it could have been and points to this reason why that happened:

But I think the main reason that Obama is having trouble is that there is not a popular left movement that is agitating for him to go well beyond where he would even ideally like to go. Sure, there are leftwing intellectuals like Paul Krugman who are beating the drums for nationalizing the banks and for a $1 trillion-plus stimulus. But I am not referring to intellectuals, but to movements that stir up trouble among voters and get people really angry. Instead, what exists of a popular left is either incapable of action or in Obama's pocket. . . .

This Isn't Your Grandfather's Recession

Tax cuts won't solve our current economic woes.

By Daniel GrossPosted Thursday, Feb. 12, 2009, at 6:16 PM ET

The congressional debate over the stimulus package may be over, but the larger debate isn't. Many critics of the bill, which contains a mix of tax cuts and government spending, believe that the government spending part just won't work. Thirty-six of the 41 members of the Republican Senate minority voted for an amendment by Sen. Jim DeMint of South Carolina that called for a stimulus package consisting only of tax cuts. Economists whose sympathies lie with the Republicans have backed up the cut-taxes/don't-spend approach. Robert Barro of Harvard, speaking to the Atlantic, called the stimulus package "probably the worst bill that has been put forward since the 1930s." The government spending proposed wouldn't work as intended, he argued. Instead, we should cut tax rates. Harvard economist Greg Mankiw, a former Bush adviser, expressed his preference for a stimulus that would immediately and permanently end payroll taxes, to be offset by an increase in gas taxes.

Mass media often failing in its coverage of global warming, says climate researcher

Stephen Schneider also calls for academics to help by doing outreach and says developed nations must get their own greenhouse gas emissions under control if they expect developing nations to do so.

"Business managers of media organizations, you are screwing up your responsibility by firing science and environment reporters who are frankly the only ones competent to do this," said climate researcher and policy analyst Stephen Schneider, in assessing the current state of media coverage of global warming and related issues.

Schneider, a coordinating lead author of chapter 19 in the report of the Intergovernmental Panel on Climate Change published in 2007, is calling for the news media to employ trained reporters in covering global warming. He will be discussing this and other issues in the symposium "Hot and Hotter: Media Coverage of Climate-Change Impacts, Policies, and Politics," which runs from 10:30 a.m. to 12:00 p.m. CT Friday, Feb. 13, 2009 at the annual meeting of the American Association for the Advancement of Science in Chicago.

Paul Krugman: Failure to Rise

By any normal political standards, this week’s Congressional agreement on an economic stimulus package was a great victory for President Obama. He got more or less what he asked for: almost $800 billion to rescue the economy, with most of the money allocated to spending rather than tax cuts. Break out the Champagne!

Or maybe not. These aren’t normal times, so normal political standards don’t apply: Mr. Obama’s victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks. And the politics of the stimulus fight have made nonsense of Mr. Obama’s postpartisan dreams.

Looting Social Security

By William Greider
February 11, 2009

Governing elites in Washington and Wall Street have devised a fiendishly clever "grand bargain" they want President Obama to embrace in the name of "fiscal responsibility." The government, they argue, having spent billions on bailing out the banks, can recover its costs by looting the Social Security system. They are also targeting Medicare and Medicaid. The pitch sounds preposterous to millions of ordinary working people anxious about their economic security and worried about their retirement years. But an impressive armada is lined up to push the idea--Washington's leading think tanks, the prestige media, tax-exempt foundations, skillful propagandists posing as economic experts and a self-righteous billionaire spending his fortune to save the nation from the elderly.

These players are promoting a tricky way to whack Social Security benefits, but to do it behind closed doors so the public cannot see what's happening or figure out which politicians to blame. The essential transaction would amount to misappropriating the trillions in Social Security taxes that workers have paid to finance their retirement benefits. This swindle is portrayed as "fiscal reform." In fact, it's the political equivalent of bait-and-switch fraud.

Cut the Military Budget--II

By Barney Frank

This article appeared in the March 2, 2009 edition of The Nation.

February 11, 2009

I am a great believer in freedom of expression and am proud of those times when I have been one of a few members of Congress to oppose censorship. I still hold close to an absolutist position, but I have been tempted recently to make an exception, not by banning speech but by requiring it. I would be very happy if there was some way to make it a misdemeanor for people to talk about reducing the budget deficit without including a recommendation that we substantially cut military spending.

Sadly, self-described centrist and even liberal organizations often talk about the need to curtail deficits by cutting Social Security, Medicare, Medicaid and other programs that have a benign social purpose, but they fail to talk about one area where substantial budget reductions would have the doubly beneficial effect of cutting the deficit and diminishing expenditures that often do more harm than good. Obviously people should be concerned about the $700 billion Congress voted for this past fall to deal with the credit crisis. But even if none of that money were to be paid back--and most of it will be--it would involve a smaller drain on taxpayer dollars than the Iraq War will have cost us by the time it is concluded, and it is roughly equivalent to the $651 billion we will spend on all defense in this fiscal year.

Bleak forecast on fishery stocks

By James Morgan
Science reporter, BBC News, Chicago

The world's fish stocks will soon suffer major upheaval due to climate change, scientists have warned.

Changing ocean temperatures and currents will force thousands of species to migrate polewards, including cod, herring, plaice and prawns.

By 2050, US fishermen may see a 50% reduction in Atlantic cod populations.

Questioning Authority: A Rethinking of the Infamous Milgram Experiments

By Liliana Segura, AlterNet
Posted on February 12, 2009, Printed on February 13, 2009
http://www.alternet.org/story/126492/

Between 1963 and 1974, Dr. Stanley Milgram conducted a series of experiments that would become one of the most famous social psychology studies of the 20th century. His focus was how average people respond to authority, and what he revealed stunned and disturbed people the world over.

Under the pretense of an experiment on "learning" and "memory," Milgram placed test subjects in a lab rigged with fake gadgetry, where a man in a lab coat instructed them to administer electrical shocks to a fellow test subject (actually an actor) seated in another room in "a kind of miniature electric chair."

How Banks Are Worsening the Foreclosure Crisis

By Brian Grow, Keith Epstein and Robert Berner
Fri Feb 13, 8:08 am ET

The bad mortgages that got the current financial crisis started have produced a terrifying wave of home foreclosures. Unless the foreclosure surge eases, even the most extravagant federal stimulus spending won't spur an economic recovery.

The Obama Administration is expected within the next few weeks to announce an initiative of $50 billion or more to help strapped homeowners. But with 1 million residences having fallen into foreclosure since 2006, and an additional 5.9 million expected over the next four years, the Obama plan -- whatever its details -- can't possibly do the job by itself. Lenders and investors will have to acknowledge huge losses and figure out how to keep recession-wracked borrowers making at least some monthly payments.

End times for Milton Friedman?

After World War II, laissez-faire economists had a big intellectual problem: the Great Depression. How could you argue for dismantling the post-WW II social insurance states and returning to the small-government laissez-faire of the past when that past contained the Great Depression? Some argued that the real problem was that the laissez of the past had not been faire enough: that everyone since Lord Salisbury and William McKinley had been too pinko and too interventionist, and thus the Great Depression was in no way the fault of believers in the free-market economy. This was not terribly convincing. So advocates of a smaller government sector needed another, more convincing argument.

It was provided by Milton Friedman.

Obama, Social Security and the Diamond-Orszag Plan

By: Jane Hamsher
Thursday February 12, 2009 9:30 am

Ben Smith says today that the left is "silent on Social Security reform" even as the administration considers it, and quotes Blue Dog Jim Cooper who says Obama is "in a honeymoon phase, and many liberals are afraid to express concerns."

Atrios calls it trolling. Perhaps it is, but there have been signs that serious Social Security reform is in the works, and people who have been briefed on the administration's plans indicate that things like raising the retirement age and cutting benefits are under consideration.

Blue Dogs Bark

February 11, 2009

NEIL SHAPIRO

The House of Representatives is a body that produces few stars, but Jim Cooper of Tennessee is a household name inside the Beltway. David Brooks has called him "one of the most thoughtful, cordial and well-prepared members of the House." He is viewed by the well-funded budget-hawk constituency as one of its most articulate advocates. Among his colleagues he has a reputation as a wonk and an intellectual--he even teaches a class at Vanderbilt University on health policy--and as the philosopher for the caucus of forty-nine conservative House Democrats known as the Blue Dogs. He gives off the slightly martyred air of someone who believes himself to be smarter than the people he works with.

Economist James Galbraith: Bailed-Out Banks Should Be Declared Insolvent

With estimates of the cost of addressing the financial crisis exceeding $9.7 trillion, we speak with economist and University of Texas professor James Galbraith, author of The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too. Galbraith says rather than pouring billions into propping up troubled giant banks, the government should declare them insolvent.

Unredacted documents reveal prisoners tortured to death

The American Civil Liberties Union has released previously classified excerpts of a government report on harsh interrogation techniques used in Iraq, Afghanistan and Guantanamo Bay. These previously unreported pages detail repeated use of "abusive" behavior, even to the point of prisoner deaths.

The documents, obtained by the ACLU under a Freedom of Information Act request, contain a report by Vice Admiral Albert T. Church, who was tapped to conduct a comprehensive review of Defense Department interrogation operations. Church specifically calls out interrogations at Bagram Air base in Afghanistan as "clearly abusive, and clearly not in keeping with any approved interrogation policy or guidance."

Nationalize Insolvent Banks

by Nouriel Roubini

A year ago I predicted that losses by U.S. financial institutions would be at least $1 trillion and possibly as high as $2 trillion.

At that time, the consensus was that such estimates were gross exaggerations--the naïve optimists had in mind about $200 billion of expected subprime mortgage losses. But, as I pointed out, losses would rapidly mount well beyond subprime mortgages as the U.S. and global economy spun into a severe financial crisis and ugly recession.

I argued that we would see rising losses on subprime, near-prime and prime mortgages; commercial real estate; credit cards, auto loans and student loans; industrial and commercial loans; corporate bonds, sovereign bonds and state and local government bonds; and massive losses on all of the assets--collateralized debt obligations (CDOs), collateralized loan obligations, asset-backed securities and the entire alphabet of credit derivatives--that had securitized such loans.

Firing Back on the Obama Recovery Package -- Again

By Sara Robinson

Created 02/12/2009 - 12:00pm

My God -- they're still at it. Two weeks ago, I wrote a ten-point takedown [1] of some of the biggest lies conservatives are telling about the stimulus bill. You can tell just how terrified they are: if this thing passes -- and especially, God and Alan Greenspan forbid, if it actually works, even a little bit -- it's going to discredit their entire model of how the economic world works. Because the battle over the stimulus package is nothing less than the battle for all the marbles, their Big Lie factory is working overtime, cranking out specious new absurdities on an almost daily basis.

And compared to the last round -- some of which were at least sort of plausible if you squinted at them just right -- this crop is just bizarre. You may also recognize a few of these points as second passes at arguments we covered in the first piece. In some cases, it's because they've reworked their argument to come at it from another direction; in others, it's because on our end, working out new and better comebacks is an ongoing process.

The 'best men' fall - again

By Steve Fraser

"Obtuse" hardly does justice to the social stupidity of our late, unlamented financial overlords. John Thain of Merrill Lynch and Richard Fuld of Lehman Brothers, along with an astonishing number of their fraternity brothers, continue to behave like so many intoxicated toreadors waving their capes at an enraged bull, oblivious even when gored.

Their greed and self-indulgence in the face of an economic cataclysm for which they bear heavy responsibility is, unsurprisingly, inciting anger and contempt, as daily news headlines indicate. It is undermining the last shreds of their once-exalted social status - and, in that regard, they are evidently fated to relive the experience of their predecessors, those Wall Street "lords of creation" who came crashing to earth during the last Great Depression.

Thomas Frank: Wall Street Mocked American Values

Just look at the lifestyles of these überconsumers.

By THOMAS FRANK

The announcement last week that Trader Monthly magazine was ceasing publication was one of those moments when a chance arrow of history scores a perfect bull's eye on a deserving target. The current recession, brought on at least in part by Wall Street's bonus lust, has claimed countless innocent victims. But in this case it has finally delivered a comeuppance to our era's loudest, gaudiest, cockiest champion of Wall Street excess.

Those who still single out former Merrill Lynch CEO John Thain as a symbol of extravagance should take note. Yes, the man once spent over a million dollars having his office remodeled and went on to arrange questionable bonuses for the year in which Merrill lost billions and sold itself to Bank of America.

What "Insolvent" Means

This is a grim bit of analysis from Mike Allen's Playbook:

An oft-quoted investment banker e-mails us: “There is no capital in the entire global financial system. None. When I say ‘financial,’ I mean banks, hedge funds, private equity funds, homeowners and other leveraged players. There is some capital among the ‘real money’ players such as sovereign wealth funds and central banks. And the U.S. can ‘print’ some. But that's it. …

Borrowers to Keep Legal Rights Under Foreclosure Plan

Fannie, Freddie Requirement That Forced Mortgage Holders to Sign Legal Waivers Eliminated

By Mary Kane 2/10/09 5:29 PM

Now that Treasury Secretary Timothy Geithner has unveiled his bank rescue plan, the Obama administration says it will turn next to setting up a fast-track way to stop the foreclosure crisis with national standards for loan modifications. The new standards - which will expand on a program launched by the government late last year - won’t be announced for a week or two. But one thing appears settled: They aren’t going to require borrowers to give up some of their legal rights in order to qualify for a loan modification.

Waivers requiring homeowners to sign away their rights to sue, in order to get their loan payments restructured on more affordable terms, were included in a streamlined loan modification program started by mortgage giants Fannie Mae and Freddie Mac in December. TWI first reported that the waivers were part of the agreements, buried in a long list of requirements for a modification. These waivers could mean that borrowers would have to give up all legal claims related to their mortgage, not just to the loan modification, even in cases where the borrowers were victims of predatory lenders.

More Gloom, Please

The economic and financial crises are even worse than Obama admits.

By Daniel Gross
Posted Tuesday, Feb. 10, 2009, at 3:38 PM ET

---

In the past week, the stock market reacted erratically to two huge government actions intended to shore up economic confidence. As this five-day chart of the Dow Jones industrial average shows, stocks rallied last Thursday and Friday as a deal over fiscal stimulus crystallized. The mere anticipation of the passage of an $800 billion-plus stimulus package was enough to get people whistling "Happy Days Are Here Again." But on Tuesday, stocks surrendered most of those gains after Treasury Secretary Tim Geithner laid out the latest plan to stabilize the faltering financial industry.

What accounts for bipolar response? These were twin, aggressive efforts to deal with the woes affecting the whole economy and the pathetic financial sector. Why would Geithner's Treasury plan worry Wall Street while the stimulus plan didn't? As a public speaker, Geithner is no Obama. Geithner could learn to be more upbeat, but that wouldn't be useful. Investors have lost faith in the financial system precisely because policymakers and executives engaged in the classic post-bubble reaction of promising a swift return to profitability. (In my forthcoming e-book, Dumb Money, I dub the realization that the titans of finance were a bunch of clueless oafs "The Slow Unmasking.")

Grass Strips Help Curb Erosion, Herbicide Transport

ScienceDaily (Feb. 11, 2009) — Grass filter strips placed in riparian zones not only curb soil erosion, but can help block and degrade the widely used herbicide atrazine, Agricultural Research Service (ARS) scientists report.

Atrazine has been used extensively to suppress weeds in corn production for decades, but because it's applied directly to soil it's especially prone to losses in surface runoff. The contamination of surface water by atrazine and its less-toxic breakdown components has raised ecological concerns.

Suspicion mounts about 'burrowing' Bush appointees

Stephen C. Webster
Published: Tuesday February 10, 2009

Some liberals are beginning to suspect Bush loyalists in career government positions are doing their best to try to deflate and hinder President Obama's agenda.

When the New York Times published a story on a former Guantanamo detainee who allegedly joined Al Qaeda in Yemen after his release, the timing struck Huffington Post reporter Sam Stein as "suspicious." The paper published its report just one day after President Obama ordered the prison closed.

Fox passes off GOP press release as its own research -- typo and all

Summary: In purporting to "take a look back" at how the economic recovery plan "grew, and grew, and grew," Fox News' Jon Scott referenced seven dates, as on-screen graphics cited various news sources from those time periods -- all of which came directly from a Senate Republican Communications Center press release. A Fox News on-screen graphic even reproduced a typo contained in the Republican press release.

New bank bailout fails to address core economic problems

By Kevin G. Hall | McClatchy Newspapers

WASHINGTON — The financial rescue plan unveiled Tuesday offers important moves to spur consumer lending, experts said, but it fails to answer key questions about how it would attack fundamental causes of the deepening economic crisis.

Drawing praise is an expansion of a program announced last December to have the Federal Reserve backstop loans to consumers. The Fed and Treasury Department will provide up to $100 billion in loans to private investors willing to purchase pools of loans for cars, students, credit cards, small business and nonresidential mortgages

Even elderly are facing eviction

Complaints on rise of nursing homes forcing out residents

By VANESSA HO
P-I REPORTER

For two years, Irene Henderer lived at the West Woods boarding home in Olympia, where she was known for her lively stories and sharp wit. But in November 2007, the home gave Henderer an eviction notice, along with 20 other Medicaid residents.

Henderer, 89, grew depressed and refused to leave her room for meals. As her move approached, she quietly asked her guardian: "Why can't I just die here?"

Obama Delivers Ideological Knockout to GOP at Press Conference

By Matthew Rothschild, February 10, 2009

This was Barack Obama at his best.

Thoughtful, serious, intelligent, agile, indignant, persuasive.

At his press conference Monday, he shredded Republican arguments against the stimulus package and made the best case by a President in decades for affirmative government intervention in the economy.

Is the Stimulus Package Too Watered Down to Get Us Anywhere?

By John Nichols, TheNation.com
Posted on February 11, 2009, Printed on February 11, 2009
http://www.alternet.org/story/126320/

Skeptical citizens might inquire: How does a Senate stimulus bill that was trimmed to eliminate "waste" (like school construction money that would create jobs in communities across the country) and "pork" (like funding to prepare for a pandemic that would bring a sputtering economy to a complete halt) end up costing almost $20 billion more than a supposedly spendthrift House plan?

The answer, of course, is that the tepid stimulus plan passed Tuesday by the Senate with a "bipartisan" 61-37 majority was not trimmed down to hold the line on spending. It was restructured to cut stimulus allocations by $108 million while dramatically increasing tax cuts -- at the behest of Republican Senators Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania and the Democrats with whom these alleged moderates cut a deal to pass the stalled bill.

A new tone as Clinton comes calling

By Nehginpao Kipgen

Hillary Clinton is soon to begin her maiden overseas trip to East Asia as the 67th secretary of state of the United States of America. The week-long trip starting on February 15 includes stops in Indonesia, Japan, South Korea and China.

Four fundamental issues are expected to dominate the visit. First, reshaping America's image in the Muslim world; second, the ongoing global financial crisis; third, global warming; and fourth, tensions surrounding the two Koreas and Pyongyang's nuclear program.

Two-step chemical process turns raw biomass into biofuel

Taking a chemical approach, researchers at the University of Wisconsin-Madison have developed a two-step method to convert the cellulose in raw biomass into a promising biofuel. The process, which is described in the Wednesday, Feb. 11 issue of the Journal of the American Chemical Society, is unprecedented in its use of untreated, inedible biomass as the starting material.

"Know This If Nothing Else: This Was A Hate Crime"

By Sara Robinson

Created 02/10/2009 - 2:12pm

Summary:

Progressives around the country can breathe a little easier today: James Adkisson has been sentenced to life behind bars for the deaths of Greg McKendry and Linda Kraeger, the Unitarian Universalist martyrs who died during his assault on their church in Knoxville, Tenn.,[1] last July. Progressives should take three lessons away from Knoxville.

Progressives around the country can breathe a little easier today: James Adkisson has been sentenced to life behind bars for the deaths of Greg McKendry and Linda Kraeger, the Unitarian Universalist martyrs who died during his assault on their church in Knoxville, Tenn.,[1] last July.

'This is the worst recession for over 100 years'

Ed Balls, the PM's closest ally, warns that downturn is ferocious and says impact will last 15 years

By Nigel Morris, Deputy Political Editor, and Sean O'Grady, Economics Editor

Tuesday, 10 February 2009

Britain is facing its worst financial crisis for more than a century, surpassing even the Great Depression of the 1930s, one of Gordon Brown's most senior ministers and confidants has admitted.

In an extraordinary admission about the severity of the economic downturn, Ed Balls even predicted that its effects would still be felt 15 years from now. The Schools Secretary's comments carry added weight because he is a former chief economic adviser to the Treasury and regarded as one of the Prime Ministers's closest allies.

The Early Reviews on Geithner’s Bank Rescue Plan: Fiasco!

Treasury Secretary Timothy Geithner is just now announcing the details of the administration’s bank bailout plan, but Naked Capitalism already has a verdict - Fiasco!

Here we have another scowling Treasury secretary, with a bit more hair than his predecessor, serving up the same fatally flawed approach as before: let’s just throw money at the banks and hope they get better. This is tantamount to using antibiotics to treat gangrene. You waste good medicine and the progression of the rot threatens to kill the patient.

Well, let’s not mince words.

Treasury outlines bank rescue plan, but Wall Street frowns

Kevin G. Hall | McClatchy Newspapers

last updated: February 10, 2009 05:31:36 PM

WASHINGTON — Treasury Secretary Timothy Geithner unveiled an ambitious and comprehensive plan Tuesday to revive the struggling banking sector, thaw the credit markets, spark more lending to consumers and reverse a nationwide housing slump.

Geithner took the wraps off the Obama administration's bank rescue plan shortly before the Senate passed an $838 billion economic stimulus plan. President Barack Obama is counting on both efforts to halt the worst economic downturn since the Great Depression.

We'll Never Be Happy Consumers Again -- No Stimulus Package Can Bring That Back

By James Howard Kunstler, Kunstler.com
Posted on February 10, 2009, Printed on February 10, 2009
http://www.alternet.org/story/126104/

Venturing out each day into this land of strip malls, freeways, office parks, and McHousing pods, one can't help but be impressed at how America looks the same as it did a few years ago, while seemingly overnight we have become another country. All the old mechanisms that enabled our way of life are broken, especially endless revolving credit, at every level, from household to business to the banks to the US Treasury.

Peak energy has combined with the diminishing returns of over-investments in complexity to pull the "kill switch" on our vaunted "way of life" -- the set of arrangements that we won't apologize for or negotiate. So, the big question before the nation is: do we try to re-start the whole smoking, creaking hopeless, futureless machine? Or do we start behaving differently?

Economic Stimulus on The Cheap

For US senators, decreasing the size of the stimulus package may be clever politics. But it's not smart economics

by Dean Baker

The moderates in the Senate of both parties are very proud of themselves for having negotiated a slimmed down version of the stimulus package. They apparently knocked out more than $100bn in spending, trimming the package to less than $400bn a year.

This led to a round of self-congratulations at what this crew considered a major accomplishment. Those of us who were not a party to the negotiations, and who don't share the peculiar thought processes of the moderate clique, see the primary outcome of this effort as having taken one million jobs out of the stimulus.

Quiet Countrywide Bailout Serves as Warning for Congress

Consequences Continue From the Failed Effort to Prop Up the Mortgage Giant

By Mary Kane 2/9/09 6:00 AM

As the Obama administration launches a new bank rescue plan and prepares to overhaul the financial regulatory system, lawmakers will look closely at the lending practices of major banks and mortgage firms. But some think they also should probe the government-chartered Federal Home Loan Banks, which served as lenders of last resort as the credit crunch intensified - propping up the very banks that made the kind of risky mortgages that led to the housing crisis in the first place.

With credit tightening in 2007, the Federal Home Loan Banks played a crucial role in the economy, helping Countywide Financial Corp. and failed subprime lenders IndyMac Bancorp. and Washington Mutual stay alive longer by lending them money when no one else would. The sharp expansion lending, which went mostly unnoticed at the time, was one of many emergency measures used by the government and the private sector to keep the financial system from collapsing.

Limbaugh, Hannity, and the GOP: an iron triangle of stimulus misinformation

On any given day during the current congressional debate over the economic recovery plan, chances are good that Rush Limbaugh or Sean Hannity will say something false about the administration's or congressional Democrats' efforts to pass a bill. And they do not promote these falsehoods in isolation; they are often promoted concurrently with each other and with Republican members of Congress.

Conservative Women’s Group Cites Small Petrodictatorship as Ideal Form of Government

Jeff Madrick from the Economic Policy Institute has written a book called The Case for Big Government which is dedicated to explaining how an active and capable state sector is a necessary precondition for economic growth. David Kusnets gave it a positive review in The New York Times Book Review. Donna Wiesner Keese, from the Independent Women’s Forum, a conservative anti-feminist group, objected:

Madrick’s statement, quoted by the reviewer, that “there really is no example of small government among rich nations,” is unsupported nonsense. Think Dubai, free and rich.

Bill Moyers Journal: Greenwald and Rosen

BILL MOYERS: Welcome to the JOURNAL.

This week at the White House there was a quick shift to Plan B. President Obama was all set to cheerlead his economic stimulus plan with a lightning round of network interviews when the news hit. Former Senate Majority Leader Tom Daschle, laden with tax problems and charges of influence peddling, took himself out of the running for Secretary of Health and Human Services. Quick as a flash, the president had lost control of his message. So, he changed his tune to a medley of mea culpas.

PRESIDENT BARACK OBAMA: You know ultimately, I take responsibility for the situation that we're in. I'm here on television saying I screwed up. I don't want my administration to be sending a message that there are two sets of rules.

BILL MOYERS: Message: I care and I'm really sorry, too. Contrition, of course, is rare in Washington; presidents almost never say, "I blew it." So here's how it was interpreted by cable and network news.

Paul Krugman: The Destructive Center

What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?

A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.

Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.

Yet the centrists did their best to make the plan weaker and worse.

Can Crazy Techno Schemes Actually Save Us from Climate Change?

By Gwen Schantz, AlterNet
Posted on February 9, 2009, Printed on February 9, 2009
http://www.alternet.org/story/125741/

Temperatures are rising, ice caps are melting, seas are swelling and if we don't do something soon (yesterday?), we're sure to find ourselves huddled together on a mountaintop in Utah, a little place we will lovingly refer to as "dry land."

As much as we all love island living, most of us would rather see our planet and civilization saved from the man-made catastrophe called global warming. There is no dearth of ideas floating around with regards to how to make this happen.

US Treasury to prop up housing under revamped bank bailout

by Jitendra Joshi Jitendra Joshi
Sun Feb 8, 3:56 pm ET

WASHINGTON (AFP) – President Barack Obama's administration will Tuesday unveil a new plan for the frozen banking sector including at least 50 billion dollars to shore up the housing market, officials said Sunday.

National Economic Council director Larry Summers said the plan to be announced by Treasury Secretary Timothy Geithner would help stabilize banks and encourage them to resume lending.

"There will be support for the credit markets more generally," he told ABC's "This Week" program.

Media Matters: Fundamentally flawed stimulus coverage

by Jamison Foser

If there's one fact that should be made clear in every news report about the stimulus package working its way through Congress, it is this: Government spending is stimulative.

That's a basic principle of economics, and understanding it is essential to assessing any stimulus package. So it should be an underlying premise of the media's coverage of the stimulus debate. Unfortunately, that hasn't been the case. Indeed, reporters routinely suggest that spending is not stimulative.