After a spell in the political wilderness, where his financial reform proposals received scant attention, Paul Volcker looks to be fully back in the mix. The former Federal Reserve chairman from 1979 to 1987, Volcker now has the ear of both Obama and the current Fed chair, Ben Bernanke. According to a Bloomberg story today, Volcker met with Bernanke six times—five of which were one-on-one meetings—between January and November 2009; by contrast, Volcker met with Bernanke only once in the year before that. And it's obvious that Volcker has had plenty of contact with the top financial gurus in the Obama administration: After all, the president's push to ban proprietary trading by throwing up a firewall between commercial banks' deposits and their riskier trading operations is being called the "Volcker Rule."
For the most part, this surge of Paul Volcker's is a good thing. Since Obama took office last year Volcker has been pushing rigorous, important reforms—reining too-big-to-fail institutions, restoring parts of the Glass-Steagall Act—but had clashed with administration officials like National Economic Council Director Larry Summers and hadn't exerted much influence despite his stature as one of the leading economists in the country. A veteran of Beltway economic policy, Volcker also appears to have little patience for powerful lobbyists like the US Chamber of Commerce or the Securities Industry and Financial Markets Association (SIFMA) who support "reform lite." And while Volcker's backing of the Fed to keep its watchdog role overseeing financial institutions and consumer protection may not be best for the country, given how poorly the Fed did that job before the crisis, his rise within the financial reform debate can only improve the odds for a bill that actually limits excessive risk-taking and tries to prevent future crises.
From land to sea, there's no mistaking that the US is heading toward a future of unmanned wars. That conclusion is one of the main take-aways from the Defense Department's 2010 Quadrennial Defense Review, released today, a detailed report that updates Congress on the Pentagon's strategies and planning. The 2010 QDR further cements the Defense Department's commitment to bolstering its fleet of unmanned combat ships, like the Reaper and Predator drones whose lethal attack missions over Pakistan and Afghanistan are one of the worst-kept secrets in all of government.
According to the QDR, everything about the military's drone armada is ramping up. The DoD plans to increase the number of Predator and Reaper drone orbits (sustained airborne missions for more than 24 hours) from 35 today to 50 in the 2011 fiscal year to 65 in 2015, a significant uptick that comes on top of the Air Force's projections that all its drones will fly 250,000 total hours this year, up from a measly 71 hours for the Reaper drone in 2004. The QDR says the Army will also increase the number of drones in every class of its fleet in the next few years, especially its souped-up Extended Range Multi-Purpose Predator.
Not to be outdone, the Navy is developing its own aerial drone, the N-UCAS built by Northrop Grumman, which could deploy from aircraft carriers around the world and expand the military's aerial reach. And as the QDR reports, the unmanned future isn't confined to the skies, either: Underway right now is a far-ranging underwater drone with strike capabilities that the Navy is developing. The QDR also vaguely hints at improvements in drone intelligence gathering capabilities, like the current "Gorgon Stare" video technology boasting 10 different cameras operating at once and a more advanced camera technology with 30 feeds at once that could come online this fall.
Interestingly, the QDR's outlook on drone warfare isn't limited to the US. DoD officials anticipate—as they logically should—that unmanned drones are quickly becoming the weapon of choice around the world, briefly noting that "non-state actors such as Hezbollah have acquired" drones and pose a threat going forward. The only question now, based on this latest QDR and other news reports, is whether future warzones will actually feature any living, breathing people at all—apart, that is, from the unfortunate bystanders living in countries like Afghanistan and Pakistan whose skies are filled with the Predators and Reapers and other drones of the future.
Should President Obama and members of Congress attend the annual National Prayer Breakfast, hosted by the shadowy yet extremely well-connected Christian organization The Fellowship? No way, says [PDF] the government watchdog organization Citizens for Responsibility and Ethics in Washington (CREW), who today is urging the president and lawmakers to avoid the group's entreaties and star-studded annual breakfast this Thursday. The Fellowship, also known as The Family, is headed by a spiritual confidante to government figures named Doug Coe who claims to be leading a "spiritual war" for Christ. Its acolytes have included public officials like Sen. John Ensign (R-NV), disgraced South Carolina governor Mark Sanford, and even Secretary of State Hillary Clinton, whose close ties with the Fellowship were reported by Mother Jones in 2007.
Like others who've written about the Fellowship, CREW says the secretive group uses its connections and clout to arrange meetings between US and foreign officials behind closed doors, and has told its members, like Sen. James Inhofe (R-OK), to spread the Fellowship's evangelical mission while on taxpayer-funded trips. The group's National Prayer Breakfast, CREW contends, is merely a chance for the group to draft more members into its ranks and to boost its fundraising coffers. "The president and members of Congress should not legitimatize this cult-like group—the head of which has praised the organizing abilities of Hitler and Bin Laden—by attending the breakfast," said Melanie Sloan, CREW's executive director. It's doubtful, however, whether CREW's advice will be heeded: There are no signs that Obama, who spoke at the breakfast last year and is slated to do the same on Thursday, plans to back out.
There's plenty to sink your teeth into in the latest report to Congress [PDF] from Neil Barofsky, the main bailout watchdog, including yet more questions about the Treasury and Federal Reserve Bank of New York's handling of AIG's rescue. In essence, Barofsky, whose title is special inspector general for TARP (SIGTARP), calls the Treasury hypocrites for failing to extract concessions from AIG's counterparties (like Goldman Sachs and Societe Generale) when they did just that with General Motors and Chrysler's creditors during the automotive bailout. Barofsky's report also criticizes the Treasury for failing to anticipate the backlash over AIG's post-bailout executive compensation, especially to its Financial Products division that was at the epicenter of the financial meltdown.
But arguably the most fascinating finding in the SIGTARP report is the extent to which the federal government now backstops the housing market—in short, the federal government today is the housing market. According to SIGTARP, in the past two years, the private sector has shed $1.5 trillion in mortgage assets, and it's the government who's filled that massive void. "Between net mortgage lending and existing mortgage management," the report says, "the Federal Government now completely dominates the housing mortgage market, with the taxpayer shouldering the risk that had once been borne by the private sector." As the above chart shows, the government's support of the housing market nears a staggering $11.5 trillion.
More worrying than the size of that support, without which frankly there wouldn't be a housing market, is the fact that it could be ending soon. As the Washington Postrecently reported, the federal government plans to wind down some of that backing in the next couple of months, and when that time comes, officials say they hope the industry will stand on its own. But as the SIGTARP report shows, that's blind optimism; a major pullback in housing support could very well send the industry into freefall again and derail the glimmers of recovery we're now seeing. It could undercut the Obama administration's stimulus efforts, and possibly drag Obama's support down with it. Even with government support, housing's future is very much unclear—foreclosures set new records last year, too many homeowners still owe more than their houses are worth, more people are voluntarily defaulting and walking away from their homes. Yet the federal government wants to walk away from the industry itself sooner rather than later.
If SIGTARP's findings reveal anything, it's how much the government's backstopping is critical to economic recovery. Without it, we could see shades of 2007 and 2008 all over again.
Anand Gopal, a war correspondent in Afghanistan for the Wall Street Journal and formerly the Christian Science Monitor, has a superb, year-long investigation out today on the US' raids, "black site" detention cetners, and "Black Jail" at the Bagram air base in eastern Afghanistan. The story, co-published by TomDispatch.com and The Nation magazine, is the first of its kind to report on the shadowy counterterror and torture methods used by the US in Afghanistan, a war led in large part by a general, Stanley McChrystal, who made a name for himself leading these same kinds of under-the-radar missions. For his report, supported by the Fund for Investigative Journalism, Gopal interviewed dozens of Afghans, some of whom had either been kidnapped and tortured themselves (and lived to tell about it) or who knew people who'd been disappeared or killed during this night-time raids.
As Gopal points out, these kinds of missions undermine the US' entire presence in Afghanistan:
Sometime in the last few years, Pashtun villagers in Afghanistan's rugged heartland began to lose faith in the American project. Many of them can point to the precise moment of this transformation, and it usually took place in the dead of the night, when most of the country was fast asleep. In the secretive U.S. detentions process, suspects are usually nabbed in the darkness and then sent to one of a number of detention areas on military bases, often on the slightest suspicion and without the knowledge of their families.
This process has become even more feared and hated in Afghanistan than coalition airstrikes. The night raids and detentions, little known or understood outside of these Pashtun villages, are slowly turning Afghans against the very forces they greeted as liberators just a few years ago.
In addition, he reports on the presence of a "Black Jail" at Bagram air base and nine official holding jails in Afghanistan, known as Field Detention Sites, usually comprised of a few cells walled off with plywood and used for interrogation purposes. Gopal's story retells the experiences of individual Afghans who were detained and tortured by US forces:
One of these former detainees is Noor Agha Sher Khan, who used to be a police officer in Gardez, a mud-caked town in the eastern part of the country. According to Sher Khan, U.S. forces detained him in a night raid in 2003 and brought him to a Field Detention Site at a nearby U.S. base. “They interrogated me the whole night,” he recalls, “but I had nothing to tell them.” Sher Khan worked for a police commander whom U.S. forces had detained on suspicion of having ties to the insurgency. He had occasionally acted as a driver for this commander, which made him suspicious in American eyes.
The interrogators blindfolded him, taped his mouth shut, and chained him to the ceiling, he alleges. Occasionally they unleashed a dog, which repeatedly bit him. At one point, they removed the blindfold and forced him to kneel on a long wooden bar. “They tied my hands to a pulley [above] and pushed me back and forth as the bar rolled across my shins. I screamed and screamed.” They then pushed him to the ground and forced him to swallow 12 bottles worth of water. “Two people held my mouth open and they poured water down my throat until my stomach was full and I became unconscious. It was as if someone had inflated me.” he says. After he was roused from his torpor, he vomited the water uncontrollably.
This continued for a number of days; sometimes he was hung upside down from the ceiling, and other times blindfolded for extended periods. Eventually, he was sent on to Bagram where the torture ceased. Four months later, he was quietly released, with a letter of apology from U.S. authorities for wrongfully imprisoning him.
The piece is absolutely worth reading in full. It sheds light on the secrecy surrounding these detention centers, the torture taking place in this facilities, and the fear among Afghans of being the next person swept up in a violent night-time raid—all crucial elements of the US war in Afghanistan that haven't been reported anywhere else yet without which our understanding of the Af-Pak war is incomplete.