Mojo - November 2005

Why Bush is bad for business

| Fri Nov. 4, 2005 2:21 PM EST

New (and new-ish) at Mother Jones:

Mark Engler argues that George Bush and Dick Cheney, on top of their other shortcomings, aren't even good capitalists. (LINK)

Jarhead author Anthony Swofford says he's pleased with the movie version of his Gulf War memoir (though he admits it might be used as "war porn"). (LINK)

Stand-up comic and Mother Jones regular Bill Santiago alerts us to the latest public health threat: new car smell. (LINK)

Thomas Palley, who wrote earlier this week about Alan Greenspan's questionable legacy (LINK), says Greenspan's replacement, Ben Bernanke, is in for a tough time. (LINK)

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Pension Socialism?

| Thu Nov. 3, 2005 5:18 PM EST

Over at Tapped, Ezra Klein points out that as the Pension Benefit Guaranty Corporation starts bailing out more and more troubled companies by taking over their pensions, it will start controlling more and more stocks, which means that Congress will technically "own" a greater share of corporate America. Bam! Instant socialism! He also points out that privatizing Social Security would have had a very similar effect—if Congress could choose the index funds in which workers invested—thus "potentially wreaking all sorts of havoc."

Interesting thought, though it's hard to see how worried we should be about all of this. Here in California, the two big pension funds—CalPERS ($180 billion) and CalSTRS ($125 billion)—have, under Angelides, engaged in a limited bit of activism, dumping tobacco stocks and the like, but it never seems to go anywhere. Divesting doesn't have much effect on a company's share price. On the other hand, a government-run pension fund could acquire enough shares in a company to influence the vote on this or that. Maybe this is cause for concern, though I have a hard time believing that activist pension-funds could do any more damage to the economy than hedge funds that regularly buy up shares of a company, tip the vote in favor of bad mergers, and then reap the profits at the expense of shareholders—as might have happened with the Compaq-HP deal. So I'm conflicted. William Greider's "The New Colossus" made a decent case for activist public pension funds like CalPERS, but there also won't always be progressive activists at the helm, obviously.

At any rate, reading Roger Lowenstein's "The End of Pensions" reminded me of yet another way in which America's pension problem is related to Social Security privatization—or any mandatory savings plan. For years, many companies have been predicting wildly optimistic rates of returns for their pension-fund stock holdings so that they could scale back contributions to the fund and use the cash for other purposes. Which, in turn, drives up the price of their own stocks, many of which were held by… pension funds. Can we all say "Ponzi"? Right. But the system's falling apart now that those rates of return have failed to materialize, and there's no way out for corporate pensions, which are under-funded by some $450 billion.

The Bush administration, to its credit, wants to tighten the rules for pension funding. But if firms were required to set aside even more money for pensions, many might go bankrupt, or stock prices might decline, which would in turn further endanger pensions, and on and on. Conversely, if the PBGC started bailing more funds out—with taxpayer money—that would only increase the "moral hazard," causing more firms to make risky investments. Either way, disaster. One conceivable exit strategy, then, is for Congress to create mandatory savings accounts for all workers and hence pour all that taxpayer money—or the Social Security Trust Fund—into the stock markets, creating a bubble which could help some of those rickety pension funds out. It's not clear that this would actually work, though. So disaster's probably inevitable, unless someone dreams up a clever exit strategy.

Forgetting About Pakistan

| Thu Nov. 3, 2005 12:57 PM EST

The death toll from the October earthquake in Pakistan now stands at 73,000. The United States has pledged some aid already, but it's hard to think they couldn't be doing more—and be doing it more visibly. Assistant Secretary of State Anthony Wayne recently noted that the country would need about $5 billion in "near-term" relief, but would not say how much the United States would contribute. With Congress already set to pass $70 billion in new tax cuts, spend for Katrina reconstruction, and possibly grant the Bush administration $7.1 billion to fight avian flu, it's easy to imagine that the U.S. will be relatively stingy when it comes to Pakistan aid.

That would be a mistake. After the tsunami hit Southeast Asia last year, American aid and military support in Indonesia, besides doing a lot of humanitarian good, also brought the U.S. a considerable amount of goodwill among Indonesians. There's no reason to think Pakistan would be any different, as a letter-writer to Anne-Marie Slaughter notes:

[H]aving just visited the region and spoken to many community leaders across the NWFP and Pakistani-held Kashmir, it is apparent that there is a tremendous strategic opportunity for the United States and its allies. For a fraction of the cost of what is spent in other arenas of the War on Terror, an extremely volatile region and country's hearts and minds can be won over. All that is required is a very substantial, very visible US relief effort.

To date, the US has provided helicopters and commitments of up to $50 million. What is needed-- for adequate relief and for this opportunity-born-of-tragedy to be capitalized upon-- is not a contribution, but a massive US presence and effort. The entire country is desperate, the entire Muslim world is watching; I cannot overstate how glaring and massive the opportunity is.
My sympathies for Pakistan aside, the US can buy a great deal of affection and moral currency by responding to this emergency-- it must not let this be just another cause for further alienation.Obviously there are real challenges to just barging on in and creating a "massive US presence and effort," (see this story, for instance) but it's worth focusing on. For the time being, those winning "hearts and minds" in the Kashmir region—a hotbed, obviously, of terrorism and ethnic strife—are the Islamic militant groups. The Musharraf government has moved much too slowly. That the Bush administration, along with Congress, has apparently also made this a lesser priority speaks volumes about its lack of seriousness here.

Alito's failure to recuse himself looked at as possible conflict of interest

| Thu Nov. 3, 2005 11:40 AM EST

In 2002, Judge Samuel L. Alito Jr., who owned $390,000 in Vanguard mutual funds, ruled in favor of Vanguard in a case involving a Massachusetts woman who was trying to regain the assets of her late husband's IRA's. The funds were frozen by Vanguard following a court ruling in favor of the husband's business partner.

The woman, Shantee Maharaj, requested Alito's financial disclosure forms after he ruled against her appeal to the U.S. Court of Appeal, Third Circuit, and it was then that she discovered Alito's ownership of Vanguard funds. It turns out that in 1990, when Alita was seeking Senate approval for his judgeship on the appeals court, he told members of the Senate that he would recuse himself from any cases involving Vanguard. However, when Maharaj tried to have him removed from her case, Alito argued that he was not required to recuse himself.

In 2004, Alito said that his holdings did not constitute a conflict of interest because his investments were in mutual funds, making him an investor in Vanguard, not an owner. Federal judicial ethics rules permit judges to rule on cases involving some mutual funds in which they have a stake, but not those in which shares comprise ownership. The Vanguard Fund describes itself as owned by the ''fund's shareholders."

History Repeating Itself

Wed Nov. 2, 2005 8:29 PM EST

Throughout the Cold War, the United States government reached out to Arab leaders in an effort to combat the Soviet threat and increase goodwill in the Middle East towards capitalism and the West. State Department documents show the US government had a fairly astute grasp of the psychological state of the Arab world, a fact that makes our current fumbling even more disheartening. The paragraphs below refer to American actions in WWII, but could apply equally to the insurgency in Iraq.

These events gave the spur of bitterness and the enticement of prospective success to an intensely nationalistic, indeed a fanatical, drive to be free of Western control, a drive to which patriotic, racial, religious, and economic motives alike impelled nearly all classes. Final intensity was given [to] this drive by the explosive Arab reaction against Western and particularly American support for the partition of Palestine and the creation of Israel.

The primarily negative reaction against the West with which we need to deal therefore revolves around the belief that the West has over a long period sought to exploit the people and the resources of the Arab world for its own purposes, that this exploitation has involved the deliberate continuation of a quasi-colonial political status, and that it has produced or at least perpetuated and aggravated the poverty of the area. Envy has reinforced suspicion, and helplessness and frustration have made it irrational. To this set of attitudes has been added a hostility arising from religious sources—perhaps no longer primarily a zealous detestation of the infidel but rather a resentment of the contempt or indifference with which the West is thought to view Islam and Islamic civilization; coupled with a conservative aversion to what are thought to be the materialism, godlessness, and immorality of Western and particularly American life.

Poland's in Trouble...

| Wed Nov. 2, 2005 6:05 PM EST

So the Washington Post reported today that detainees in U.S. custody are being held in secret facilities around the world, including in a "Soviet-era compound" somewhere in Eastern Europe. Um, where in Eastern Europe? The Financial Times follows up:

A leading human rights group on Wednesday identified Poland and Romania as the likely locations in eastern Europe of secret prisons where al-Qaeda suspects are interrogated by the Central Intelligence Agency….

Poland's role, if confirmed, would be especially controversial, given that it has recently joined the European Union.Yeah, breaking the law never goes over well. Meanwhile, here's a thornier legal question: did the president break the law by authorizing these secret prisons? It's not clear. It is illegal for the government to hold prisoners in secret facilities within the United States. That's why they hold the detainees abroad. But at least in Poland, which is part of the European Union, it's illegal to deny prisoners the right to a lawyer and defense against allegations of law-doing. Says the Post:

Under U.S. law, only the president can authorize a covert action, by signing a document called a presidential finding. Findings must not break U.S. law and are reviewed and approved by CIA, Justice Department and White House legal advisers.
Looks dodgy, but maybe just barely within the law. This from the president who said in his first inaugural: "We must always ask ourselves not only what is legal, but what is right."

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Is It a Gulag Yet?

| Wed Nov. 2, 2005 1:05 PM EST

The Washington Post's report about the CIA's "covert prison system" around the world—including old Soviet-era prisons in Eastern Europe—is worth reading in full, but this paragraph gets right to the heart of the problem here:

[A]s the volume of leads pouring into the CTC from abroad increased, and the capacity of its paramilitary group to seize suspects grew, the CIA began apprehending more people whose intelligence value and links to terrorism were less certain, according to four current and former officials. The original standard for consigning suspects to the invisible universe was lowered or ignored, they said. "They've got many, many more who don't reach any threshold," one intelligence official said.
Right. The torture debate tends to focus on whether it's appropriate to hold without trial or even administer a dose of waterboarding to cartoonish villains like Khalid Sheikh Mohammed, but that misses the point. Mostly, it's just impossible to know who is being captured and thrown into some repainted gulag somewhere in the ex-USSR, and as the "war on terror" drags on without end, more and more very innocent people are going to fall into the net. It's inevitable—and as the intelligence official quoted above notes, that's what's happening.

That far-flung prison system, by the way, explains why Dick Cheney and his aides—including Scooter Libby's replacement, David Addington—are pushing to create a CIA exemption for the McCain anti-torture amendment. (Read the piece for a description of how Addison "ate for lunch" a Pentagon aide who meekly brought up the Geneva Conventions. How adorable.) If the Senate passes that exemption, they'll be offering a blanket endorsement of the "covert prison system" the Post has

Voters Say No to Alito

| Wed Nov. 2, 2005 11:32 AM EST

Via Atrios, a Gallup poll notes: "If it becomes clear Alito would vote to reverse Roe v. Wade, Americans would not want the Senate to confirm him, by 53% to 37%." Well, done and done. It's perfectly clear. Based on his Casey dissent, we can predict with near-certainty how Alito would vote in the upcoming Ayotte v. Planned Parenthood case, which would be essentially a vote to cripple Roe v. Wade. Democrats have no excuse for rejecting him now. Gallup also reports: "If most Senate Democrats oppose the nomination and decide to filibuster against Alito, 50% of Americans believe they would be justified, while 40% say they would not."

Myth of the Suitcase Nukes

| Tue Nov. 1, 2005 8:44 PM EST

In the Wall Street Journal yesterday, Richard Miniter kicked around what he calls the "myth" of the "suitcase nukes." Most likely, he says, the Russians never made any such thing, and what sort-of-portable nukes did exist have almost certainly been destroyed. Good news if he's right, of course, though some of his points seem less than airtight. For example, here's Miniter's account of the Denisov investigation in 1996, which looked into allegations by Alexander Lebed, a Russian general, that anywhere from 50-100 Rissoam "suitcase nukes" were unaccounted for:

Lebed's onetime deputy, Vladimir Denisov, said he headed a special investigation in July 1996--almost a year before Lebed made his charges--and found that no army field units had portable nuclear weapons of any kind. All portable nuclear devices--which are much bigger than a suitcase--were stored at a central facility under heavy guard.
Well there we have it. Or do we? Here's a less-glossy account from the Center for Non-Proliferation Studies in late 2002:
It should be noted that almost nothing is known about the methods of the [Denisov] commission's work: for example, whether it checked only records or was able to compare the actual inventory to records as well (if only records were checked, it cannot be said with certainty whether more warheads were missing or whether any warheads were missing at all). Since the commission was disbanded before it was able to complete its work, it has remained unclear whether it was able to confirm the alleged loss of warheads (i.e., it looked everywhere and failed) or simply did not have time to clarify the situation (Denisov's statement seems to imply the latter). It is not even known who the members of the commission were.
Not quite as comforting. Also, some scientists have claimed that any suitcase nukes would have been controlled by the KGB, and so not listed in the records Denisov looked at, although this seems unlikely. In the end, people have said all sorts of things about "suitcase nukes," and it's truly hard to separate fact from bluster. The CNS report concludes, persusasively, that "the existence of smaller devices custom-designed for [Russian] Special Forces, probably analogous to American small atomic demolition munitions (SADMs), should not be ruled out… with a caveat that their existence should not be taken as fact." Fair and balanced, that one. But there is evidence, for instance, based on artillery shell designs, that the Russians engineers could have created such a weapon. And the records are too patchy to prove that they didn't.

Whether any of these theoretical weapons actually could have been stolen after the crack-up of the Soviet Union, meanwhile, is "impossible to say," and I don't think Miniter refutes the concerns of CNS conclusively. But. One very encouraging point, which Miniter hammers on, is that any truly portable nuclear device—weighing around 60 lbs.—would have had a very short maintenance period, like most Soviet weaponry, and would probably have deteriorated by now. Another point: the most likely time and place for a stolen nuclear suitcase bomb would have been in or around Chechnya in the early 1990s. The Chechens, certainly, have had ample reason to threaten or actually use such a device. But they haven't. Huh. So the balance of hunches definitely favors Miniter's thesis, no doubt, although this is also the sort of thing we really, really don't want to get wrong, and it would be nice to get some more solid information on this.

Where's the Investigation?

| Tue Nov. 1, 2005 5:49 PM EST

Today at Mother Jones:

Winslow Wheeler calls for an independent investigation of the response to Hurricane Katrina. (LINK) By the way, you can now find Mother Jones' complete Katrina coverage on one page. (LINK)

David Cole considers a book by John Yoo, a former deputy-assistant attorney general in the Bush White House and author of the infamous "torture memo" to Alberto Gonzales. Says Cole: "Yoo persuaded the Bush administration to untie its hand and abandon the constraints of the rule of law." (LINK)

Finally, Greg Anrig, Jr. argues that the nomination of Samuel Alito to the Supreme Court is an opportunity to show that the right is trying to pursue a radical judicial agenda. (LINK)