Posted by Mother Jones on 09/19/08 at 10:40 AM | | Comments (10) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

Biden Aggressively Defends Upper Class Tax Raise

From the department of you-don't-see-that-everyday, here's a politician running for national office willing to stick to his guns on a tax raise:

Katie Couric: Your vice presidential rival, Governor Palin, said "To the rest of America, that's not patriotism. Raising taxes is about killing jobs and hurting small businesses and making things worse."

Joe Biden: How many small businessmen are making one million, four hundred thousand—average in the top 1 percent. Give me a break. I remind my friend, John McCain, what he said—when Bush called for war and tax cuts—he said, it was immoral, immoral, to take a nation to war and not have anybody pay for it. I am so sick and tired of this phoniness. The truth of the matter is that we are in trouble. And the people who do not need a new tax cut should be willing, as patriotic Americans, to understand the way to get this economy back up on their feet is to give middle class taxpayers a break. We take the tax cut they're getting and we give it to the middle class.

Points for courage, certainly. More on the taxes-as-patriotism line from Jonathan Cohn.

Posted by Jonathan Stein on 09/19/08 at 9:56 AM | | Comments (10) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

Polling Tidbits: Sarah Palin Now Least Popular of the Big Four

If Democrats are good at anything its wailing, beating their chests, and tearing their garments (no, that isn't like "flagging the molecules"). But it's clear now the despair over Obama's supposedly doomed presidential chances was silly. The main reason? Palin is simply not the giant-killer we thought she was. Take a look at this chart (via Wonkette). Due to weeks of unrelenting vetting by the media (i.e. sustained negative press), she now has the lowest approval rating of any member of either ticket.

And this is the end-result of hiding her from the press. Can you imagine what would have happened if the McCain campaign had treated her like an adult and put her in front of reporters?

In other numbers-related news, the quant geeks over at FiveThirtyEight.com report that the possibility of a 269-269 electoral tie is climbing. The reason is relatively simple: the election is nearing but the race is still close in key states, meaning that the likelihood of one of the two candidates winning in a blowout is going down. FiveThirtyEight points to one tie scenario above all others:

...there is one specific scenario that is driving this outcome. That is the scenario wherein Barack Obama wins the Kerry states plus Iowa, New Mexico and Colorado, but loses New Hampshire. Of the 320 times that our simulation ended in a tie, this particular scenario was responsible 294 times. Indeed, we presently have Obama winning precisely the Kerry states plus Iowa, New Mexico and Colorado, so all that would be needed to make a tie occur is to flip New Hampshire back to McCain, and entirely reasonable possibility.

What an absolute horror show that would be.

Posted by Jonathan Stein on 09/19/08 at 9:18 AM | | Comments (20) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

Is McCain More the Populist than Obama?

Is John McCain out-populisting Barack Obama?

On Friday morning, McCain, at a rally in Green Bay, Wisconsin, delivered a speech on the financial crisis. He tore into Wall Street and Washington, proclaiming, "The crisis on Wall Street started in the Washington culture of lobbying and influence peddling." And he named names. He blasted Freddie Mac and Fannie Mae:

These quasi-public corporations led our housing system down a path where quick profit was placed before sound finance. They institutionalized a system that rewarded forcing mortgages on people who couldn't afford them, while turning around and selling those bad mortgages to the banks that are now going bankrupt. Using money and influence, they prevented reforms that would have curbed their power and limited their ability to damage our economy.

McCain noted that years ago he had tried to reform these institutions and had run smack into Washington's same-old/same-old:

At the center of the problem were the lobbyists, politicians, and bureaucrats who succeeded in persuading Congress and the administration to ignore the festering problems at Fannie Mae and Freddie Mac.

Moreover, McCain accused Obama of having been pals with Freddie and Fannie. Obama, McCain pointed out, has taken large amounts of campaign contributions (a total of $165,400) from donors associated with the two institutions. In addition, Obama put a former Fannie CEO, Jim Johnson, in charge of his vice presidential search committee. McCain also charged that Obama has been receiving policy advise from Franklin Raines, another former Fannie CEO. The Obama camp says Raines is no adviser to Obama and that earlier this week Raines sent an email to Carly Fiorina, a McCain adviser, informing her of this. Still, McCain declared:

Senator Obama may be taking their advice and he may be taking their money, but in a McCain-Palin administration, there will be no seat for these people at the policy-making table. They won't even get past the front gate at the White House. My friends, this is the problem with Washington. People like Senator Obama have been too busy gaming the system and haven't ever done a thing to actually challenge the system.

McCain went on to propose a Mortgage and Financial Institutions trust that will work with troubled companies and institutions to help them avoid collapse. He called for greater transparency and better regulation regarding financial markets. "Many in the financial services industry also either forgot or neglected their duty to act ethically and honorably," he said. "This shortcoming was aided and abetted by the creation of financial instruments that allowed lenders to escape any responsibility for the risk of their loans."

Forget for a moment all of McCain's connections to the current crisis. (He seems to do so easily enough.) Forget that his pal and adviser Phil Gramm helped create this mess. That his top advisers and campaign staffers lobbied for Fannie Mae and Freddie Mac. And that over 80 lobbyists for top financial industry firms--including AIG, Lehman Brothers, Merrill Lynch, and Washington Mutual--have worked for McCain's campaign. McCain is showing anger, vowing to knock heads together (on Wall Street and Washington), and, by the way, tying Obama to the mess. McCain is no William Jennings Bryan. But for a Republican, he's coming on like a populist gangbuster. Given his track record as a deregulator, this is faux populism. But that doesn't mean it can't work politically.

Let's look at Obama's response. The other day, his campaign released a two-minute ad in which Obama sits in a generic living room (in front of a generic couch and a generic lamp). In a calm tone, he notes,

Wall Street's been rocked as banks closed and markets tumbled...This isn't just a string of bad luck. The truth is as you have been living up to your responsibilities, Washington has not. That's why we need change...This is no ordinary time.....Much of this campaign has been consumed by petty attacks and distractions that have nothing to do with you.

Obama then proposes a $1000 tax break for the middle class ("instead of showering more on oil companies"), putting an end to the "anything goes culture on Wall Street with real regulation," fast-tracking a plan for "made-in-America" energy, instituting a "crack down on lobbyists once and for all so that their backroom dealing no longer crowds out the voices of the middle class," and bringing a responsible end to the Iraq war.

There's not much passion or outrage expressed. Obama asks viewers to visit his website for details of his economic plan. But following the link led to a page that contained nothing about lobbyists, the culture of Washington, or regulating Wall Street. The plan was a package of his core economic proposals: that middle-class tax cut, energy rebates, a fair trade initiative, green jobs, cracking down on mortgage fraud and predatory lending.

At the end of the ad, Obama says, "Bitter partisan fights and outworn ideas of the left and the right won't solve the problems we face today. But a new spirit of unity and shared responsibility will."

Obama's approach is cerebral--a term not often well received within political circles. In the ad, he does not directly connect to and tap into the frustration or anxiety of voters. His message: let's rise above our politics and solve this thing together. There's not much talk of punishment or consequences for those who messed up. And there's no slap at McCain, George W. Bush, or the Republicans for leading the system that failed. (The McCain camp has produced a television ad assailing Obama for his tie to Jim Johnson, and another for his purported--but denied--connection to Franklin Raines.)

On the campaign trail, Obama has been more pugilistic. At a campaign rally on Thursday, he slapped McCain for his recent comment that "the fundamentals of our economy are strong." And he assailed McCain for holding "the same philosophy" as George W. Bush "that says we should give more and more money to those with the most and hope that prosperity trickles down...that says even common-sense regulations are unnecessary and unwise...that lets Washington lobbyists shred consumer protections and distort our economy." Obama noted that "Phil Gramm, one of the architects of the de-regulation in Washington that led directly to this mess on Wall Street, is also the architect of John McCain's economic plan." He pointed out that McCain "took seven of the biggest lobbyists in Washington from that [old-boy] network and put them in charge" of his campaign. Obama derided McCain's call for a commission to review the financial crisis, and he called McCain out on his late-to-the-party proposal for better regulation of financial markets.

Obama went after McCain's hypocrisy. (And an ad the campaign released ton Friday morning blasted McCain for relying on the policy advice of Gramm and Fiorina, who received a $42 million package after being fired as Hewlett-Packard CEO.) He did not, though, direct much anger at the financial players and their Washington pals who recklessly steered the US economy into a ditch. Obama must be careful not to come across as an angry black man. But he still needs to show some gut-level outrage: not only at McCain and his lobbyist friends but against all the Big Finance screw-ups who got rich on Wall Street while placing the economy in peril.

Right now, McCain is keeping up--if not ahead of--Obama in displaying fury concerning the ongoing economic meltdown. And he's also playing even when it comes to proposing policy responses to the crisis at hand. But it sure takes chutzpah--and selective amnesia--for McCain to position himself as the enraged scourge of Wall Street greed-meisters and Washington influence-peddlers. After his speech on Friday morning, a New York Daily News reporter blogged, "Our jaw dropped just now listening to McCain blame lobbyists and Obama advisers. Just consider that McCain advisers (chief among them Phil Gramm) wrote the laws that deregulated these markets and lobbied hard to keep scrutiny to a minimum."

But McCain's campaign has already signaled it doesn't give a damn about its reviews in the press. Reality doesn't matter; impressions do. And McCain is trying to create the impression he is indeed a mad-as-hell populist maverick and reformer. Obama cannot stop the McCain camp from attempting this extreme makeover. He can only control his own reaction to the crisis. But it would pose trouble for the Democrats if Obama's response leaves any opening for McCain the Populist to stomp through.

Posted by David Corn on 09/19/08 at 9:01 AM | | Comments (30) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

Hey Rush Limbaugh: Keep Digging

I enjoyed this.

Rush Limbaugh is quoted in a new Spanish-language Obama ad that ties John McCain to the nativist fringe of the Republican Party. The ad itself isn't exactly fair — McCain has showed a willingness to kowtow to that nativist fringe, but he's still probably the GOP's leading advocate for a humane approach to immigration reform. But Limbaugh doesn't believe in that humane approach, and in a Wall Street Journal op-ed published today, he isn't standing up for John McCain's record on immigration issues.

Instead, he's arguing that he isn't as big a jerk as the quotes in the Obama ad make him look. Limbaugh notes the quotes and then provides the full paragraphs from which they came, with the mistaken belief that somehow the context proves he isn't a bigot. In fact, the context just reinforces the original point. See for yourself.

Supposedly out-of-context quote:

"...stupid and unskilled Mexicans."

Supposedly exculpatory context:

"If you are unskilled and uneducated, your job is going south. Skilled workers, educated people are going to do fine 'cause those are the kinds of jobs Nafta is going to create. If we are going to start rewarding no skills and stupid people, I'm serious, let the unskilled jobs that take absolutely no knowledge whatsoever to do -- let stupid and unskilled Mexicans do that work."

Second supposedly out-of-context quote:

"You shut your mouth or you get out!"

Supposedly exculpatory context:

"And another thing: You don't have the right to protest. You're allowed no demonstrations, no foreign flag waving, no political organizing, no bad-mouthing our president or his policies. You're a foreigner: shut your mouth or get out! And if you come here illegally, you're going to jail."

Turns out, the full paragraphs are just as xenophobic and hateful as the isolated quotes. Why? Because Rush Limbaugh is xenophobic and hateful. Funny how that works.

Posted by Jonathan Stein on 09/19/08 at 8:12 AM | | Comments (22) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

September 18, 2008

Palin Proposes "Google For Government," Unaware Obama Already Created It

CNN has a lesson for Sarah Palin:

"We're going to do a few new things also," she said at a rally in Cedar Rapids. "For instance, as Alaska's governor, I put the government’s checkbook online so that people can see where their money’s going. We'll bring that kind of transparency, that responsibility, and accountability back. We’re going to bring that back to D.C."

There's just one problem with proposing to put the federal checkbook online – somebody's already done it. His name is Barack Obama.

In 2006 and 2007, Obama teamed up with Republican Sen. Tom Coburn to pass the Federal Funding Accountability and Transparency Act, also known as "Google for Government." The act created a free, searchable web site — USASpending.gov — that discloses to the public all federal grants, contracts, loans and insurance payments.

Posted by Jonathan Stein on 09/18/08 at 2:02 PM | | Comments (30) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

Mission Creep Dispatch: Steven Metz

As part of our special investigation "Mission Creep: US Military Presence Worldwide," we asked a host of military thinkers to contribute their two cents on topics relating to global Pentagon strategy. (You can access the archive here.) The following dispatch comes from Steven K. Metz, a strategic military theorist whose latest book is titled Iraq and the Evolution of American Strategy.

America's Global Military Footprint Is the Lesser Evil

Throughout US history, Americans have periodically reassessed their nation's strategy. We are once again involved in this process, debating tough issues that emerged at the end of the Cold War but remained unresolved. Foremost among these is the militarization of American statecraft. Unfortunately, much of the discussion of the vital topic misleads rather than illuminates. Take the global deployment of US troops:

Chalmers Johnson led the way in suggesting that the US has embarked on some sort of imperial offensive based on the number of nations that currently have an American troop presence. But there is presence and there is presence. Most of the deployments shown on the map in Johnson's The Sorrows of Empire and other places consist of Marine embassy guards and defense attachés working out of the embassy. By that logic, a hundred or more nations have a military presence in the United States. The map may be technically accurate, but without explanation is misleading. Its intent is to shock readers at the extent of the American "empire" rather than accurately portray the role of the US military.

Much better analysis of the militarization of American statecraft is available in the brilliant work of Andrew Bacevich. But once we accurately understand the contours of this process, we must ask ourselves why it has taken place. The answer is not because of nefarious conspiracies, evil intent, or a desire to control the world's resources, but because there are things that need to be done to sustain security and stability which neither international organizations nor the nonmilitary component of the US government can do. The US military is the peacemaker, stabilizer, and reconstructer of last resort. The vast majority of the troops would love to be stationed at home and to avoid protracted, frustrating activities like stabilization operations, disaster relief, training, and advising the security forces of other nations. But if they were, these things would not be done.

Where, then, are we? In the broadest sense, the United States has three options. It can accept the militarization of its statecraft and focus on methods to assure that this takes place with rigorous concern for human rights and respect for partner states. It can, as Secretary of Defense Gates advocates, invest in the State Department, the Agency for International Development, and other nonmilitary government organizations so that the US military can concentrate on what it alone can do—prepare for war. Or the United States could simply disengage from stabilization, peacekeeping, disaster relief, and the training and advising of foreign security forces. But would the world then be a better place?

I, for one, think not. That Russia did not simply replace the government of Georgia indicates that America's partnerships with foreign security forces are playing a positive role in the evolution of global norms. Ultimately, critics of American strategy must provide a better alternative if they want to be taken seriously. Winston Churchill once said that democracy is the worst possible form of government, save all the others. A world order heavily dependent on the global presence of the American military may be a terrible idea. But it is, I believe, less terrible than the alternatives.

Robert Kaplan
Katherine McCaffrey
Winslow Wheeler
C. Douglas Lummis
Douglas Macgregor
John Nagl
William Hartung
John Lindsay-Poland
John Feffer
Catherine Lutz
Peter Beck
Nick Turse
John Pike
Mark Selden

Posted by Mother Jones on 09/18/08 at 1:32 PM | | Comments (2) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

It's Safe to Say a President Obama Would Improve Relations With Latin America...

News of the weird: At least six Brazilian politicians have changed their names to "Barack Obama."

Posted by Jonathan Stein on 09/18/08 at 12:59 PM | | Comments (4) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

McCain Hearts FDR. What's the (New) Deal?

How the times are changing. At a General Motors assembly plant in Lake Orion, Michigan yesterday, Sen. John McCain gave a shout-out to none other than Franklin Roosevelt, the original big-government guy:

One of our great presidents, Franklin Roosevelt, expressed this optimism even at the height of the Great Depression. He said, and I quote, "Plenty is at our doorstep but a generous use of it languishes in the very sight of the supply." . . .My friends, that's true again today."

Indeed it is, but, of course, McCain pointing that out is like Milli Vanilli singing "Girl You Know It's True"--the love just isn't real. Take the Social Security Act, passed under FDR in 1935. McCain (before he reversed himself recently) wanted to replace it with "private savings accounts," which would have caused millions of retirees to lose their shirts this week. As recently as July, he even said that "paying present-day retirees with the taxes paid by young workers in America" is "an absolute disgrace"

A "great president" whose legacy is an "absolute disgrace?" I thought that was supposed to be Bush. Here's what FDR's grandson has to say:

The other irony upon the irony to all of this is the creepy parallel between the McCain/Palin campaign and the 1936 Republican presidential campaign against FDR. That year, the Republican vice presidential nominee was a pit bull named Frank Knox. The Democratic Party under FDR "has been seized by alien and un-American elements," Knox said. "Next November, you will choose the American way." Yikes. Sounds familiar. The Washington Post said Knox meant ". . .that the New Deal represented an ideology outside the pale of American thinking,

and that the New Deal coalition, which represented record numbers of foreign-born, non-Protestant Americans, was therefore un-American.

Even as the first half of the argument has lost traction--McCain is scrambling to present himself, against all evidence, as a pro-regulation guy--the second half remains truer than ever. And it shows where their priorities lie. If McCain and Palin really wanted to revive America's optimism like FDR did, they'd stop questioning Obama's patriotism and start questioning their party.

Posted by Josh Harkinson on 09/18/08 at 12:48 PM | | Comments (1) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

McCain-Spain, Continued

McCain said in June that Zapatero, the president of Spain, would be welcome at his White House. This bolsters my argument that McCain didn't intend to give Spain the cold shoulder in the Spanish-language radio interview. He simply didn't know what was going on.

Of course, the McCain campaign had to respond to this situation and they couldn't say, "Our candidate misheard the interviewer or misunderstood what was going on, so let's just forget this little senior moment, shall we?" So they claimed that McCain intentionally refused to sit down with Zapatero, who is a socialist:

"The questioner asked several times about Senator McCain's willingness to meet Zapatero (and id'd him in the question so there is no doubt Senator McCain knew exactly to whom the question referred). Senator McCain refused to commit to a White House meeting with President Zapatero in this interview," the Senator's foreign policy adviser Randy Sheunemann told the Washington Post.

Okay, that's insane. Lumping Spain — a member of NATO and thus a country we are bound to defend militarily in the event of crisis — in with Iran, Venezuela, and North Korea is clearly crazy. And it's a position, apparently, John McCain didn't endorse as recently as June. So we know what's going on here, right? The campaign put out a self-serving, cover-your-ass statement and John McCain is old but not so militaristic he wants to sever ties with one of our oldest allies. Everyone clear?

Posted by Jonathan Stein on 09/18/08 at 9:21 AM | | Comments (15) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

American Royalty Endorses American Royalty, Citing Rednecks

The jilted Clinton supporter Lady Lynn Forester de Rothschild recently endorsed John McCain, saying Barack Obama is elitist and unable to connect with everyday people. De Rothschild certainly knows something about elitism — the wife of British banking scion Sir Evelyn de Rothschild, she reportedly splits her time between homes in New York and London — but it's unlikely she knows all that much about everyday people. Here she is on CNN explaining her endorsement of McCain:

"The people out, you know, who are the rednecks or whoever, are bitter."

Surely the rednecks or whoever recognize this woman as one of their own. Video after the jump.

Posted by Jonathan Stein on 09/18/08 at 8:34 AM | | Comments (13) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

Palin Blames Wall Street Woes on Lobbyists — The Same Ones Who Now Work for the McCain-Palin Campaign?

In her third media interview (first two: ABC and People magazine), Sarah Palin talked Wall Street with Sean Hannity. The Fox News host wanted some answers on the current economic upheaval:

HANNITY: How connected is it, though, to Washington? You have 354 lawmakers got money from Fannie and Freddie. 354. If you look at the years from 1989 to 2008, second-top recipient was Senator Barack Obama. Should there be an investigation in terms of the relationship between the political donations and then of course the bankruptcy that ensued and the impact on the economy?

PALIN: I think that’s significant, but even more significant is the role that the lobbyists play in an issue like this also. And in that cronyism — it’s symptomatic of the grade of problem that we see right now in Washington and that is just that acceptance of the status quo, the politics as usual, the cronyism that has been allowed to be accepted and then it leads us to a position like we are today with so much collapse on Wall Street. That’s the reform that we’ve got to get in there and make sure that this happens. We’ve got to put government and these regulatory agencies back on the side of the people.

Set aside the fact that she says nothing of substance about the economy or conditions on Wall Street. She says, "even more significant is the role that the lobbyists play in an issue like this... the cronyism that has been allowed to be accepted and then it leads us to... so much collapse on Wall Street." There's some confusing language in there but when you filter it out you get one inescapable conclusion.

Sarah Palin blames Wall Street lobbyists for a major part of the financial industry's "collapse."

If that's the case, why does she let 83 Wall Street lobbyists work for her campaign? McCain and Palin are slamming the "greed" of Wall Street and its lobbying pals on a daily basis, saying that they are hurting average Americans. Wouldn't you think McCain and Palin owe it to those average Americans to keep the lobbyists in question off the campaign payroll?

Photo by Ryan McFarland used under a Creative Commons license.

Posted by Jonathan Stein on 09/18/08 at 8:15 AM | | Comments (46) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

A More Generous Interpretation of the McCain-Spain Gaffe

If you haven't heard about the McCain-Spain snafu, highlighted by Talking Points Memo overnight, here's a quick rundown. My take on the whole thing follows.

McCain did an interview with a Spanish-language radio station. He was asked about a series of Latin American troublemakers, in response to which McCain gave the standard conservative boilerplate about standing up to those that oppose liberty, freedom, etc. The interviewer then asks about Spain and President/Prime Minister Zapatero. McCain appears confused by the question or unclear on who Zapatero is and covers by providing more boilerplate about Latin America. He never embraces Spain as an ally, possibly because he doesn't know the questions are about Spain.

At this TPM post, you can hear the interview in English and evaluate for yourself.

Some in the media are already jumping on McCain. I'm more charitable. I don't think McCain can't identify Spain's correct hemisphere. I don't think McCain is uncertain about Spain's status as an ally. I don't think McCain is unaware of Spain's leader. Honestly? I think he didn't hear the interviewer, who was talking quickly and with an accent, when she transitioned to Spain. And after he missed the transition he got confused and either misheard or misunderstood the rest of what was going on.

I think this whole thing is a symptom of McCain's age.

And to be frank, I think it would work better as an attack on McCain if it was framed that way. Is any voter really going to believe that a 20+ year Senator doesn't know where Spain is? They're likely to dismiss that as the (over)zealotry of the liberal media. Questions about age and fitness are much more believable.

Posted by Jonathan Stein on 09/18/08 at 7:32 AM | | Comments (12) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

September 17, 2008

Federal Action Against Iranian Global Procurement Network Suggests That Deadly Iraq IED Components of US Origin

Today, the Commerce Department Bureau of Industry and Security (BIS) announced that, in cooperation with the US attorney in Miami and other federal agencies, it had broken up an Iranian global procurement network used to illegally acquire US-origin dual use and military components. "This extensive, effective government effort has broken up a lethal international ring seeking to harm American and allied forces as well as innocent civilians by acquiring sensitive U.S. technology capable of producing improvised explosive devices (IED) similar to those being used in Iraq and Afghanistan," said Commerce Under Secretary Mario Mancuso.

A corresponding Justice Department press release today announced the unsealing of a 13-count indictment "charging eight individuals and eight corporations in connection with their participation in conspiracies to export U.S.-manufactured commodities to prohibited entities and to Iran. ... The defendants are charged with purchasing and causing the export of U.S. goods to Iran through middle countries, including the United Arab Emirates, Malaysia, England, Germany, and Singapore." None of the eight defendants reside in the U.S.

The announcements were forwarded by a Washington trade lawyer, aware of my interest in the issue. A couple months ago I reported on a curious phenomenon: why was so much US sensitive military equipment and technology ending up in Iran, the subject of extensive US sanctions? One major soft underbelly of US efforts to restrict the sale of US military equipment to Iran turns out to be the United Arab Emirates, where both the US and Iran have extensive trade ties. In my report, I cited a former Commerce Department official who noted:

"The rhetoric from Commerce…is all about national security ... US bureaucrats don't want to find their names in press for not enforcing when a US soldier is killed [in Iraq] by US technology that was exported to Iran through UAE. So, the rhetoric is very tough for UAE enforcement. On the other hand, we desperately want the oil dollars…So, mixed messages galore."

The scenario the former Commerce Department official suggested in passing was disturbing. Were some of the components in the improvised explosive devices (IEDs) blamed for killing US forces in Iraq - that the US military alleged were being supplied to Shiite militants in Iraq by Iran - in fact of American origin? Is that why the US military has repeatedly indicated it would display the evidence of the Iranian origin of some of these weapons, and then halted the full presentation?

Today's announcement by the Commerce Department raises just such questions. Stay tuned.

Posted by Laura Rozen on 09/17/08 at 2:43 PM | | Comments (6) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

Dow Finishes Day Lower Than When Bush Took Office

The Dow Jones Industrial average just closed for the day at 10609.66, about 50 points lower it was the week George W. Bush took office as president of the United States.* In seven and a half years, GOP stewardship of the economy has produced negative results in the stock market. Remember, this is the same stock market that the Bush administration (and John McCain) wanted to invest your Social Security money in. That money would have been managed, in part, by now-bankrupt Lehman Brothers and no-longer-independent Bear Sterns and Merrill Lynch.

If you invested in the stock market in 2001, betting that Republicans are better for the economy, you bet wrong. Instead, we're in the midst of what Alan Greenspan has called a "once-in-a-century" crisis. But since you're a well-informed reader of MoJo Blog (or perhaps of Kevin Drum), you already know that Democrats are better for the economy.

Remember, it's not just the stock market that's done poorly under Republican leadership. It's also most Americans. GOP economic policies have redistributed wealth upwards, benefiting the private-jet-and-personal-megayacht set but leaving almost everyone else, including many who would technically be considered "rich", behind. Between 2002-2006, the bottom 90 percent of Americans got 4 percent of the nation's income growth, according to figures from the Center for American Progress (PDF). (The great chart to the right is from that same report). The 15,000 richest families in America got 25 percent of the income growth, and the median household income was 0.6 percent lower in 2007 than in was in 2000. And all these figures were calculated before the turmoil of 2008 and the chaos of the past week.

Not only did the middle class suffer, but people actually fell out of the middle class and into poverty during the Bush years. 5.7 million more Americans lived in poverty in 2007 than in 2000. Six million more Americans are uninsured. The bottom line is that most Americans have suffered under the Bush economy. Now Wall Street is suffering, too.

A lot of people can get as far as acknowledging the weakness of the Bush economy, but can't link the problems to John McCain, who they see as a different character altogether. But the important thing to remember is that McCain supports all the same economic policies Bush does: massive tax cuts for the megayacht crowd and peanuts for the rest of us; social security privatization (he thinks it's a "disgrace); the continued presence of the corrosive influence of lobbyists in Washington politics; and, despite his recent "conversion," massive deregulation of the financial sector. Plus he has no solution for the tens of millions of Americans who lack health insurance. Bill Clinton won the election in 1992 by promising that he would deliver better economic performance for more people that George H.W. Bush had delivered in his four years as president. Clinton kept his promise. Barack Obama needs to do a better job of making his.

*Correction: An earlier version of this post said that 10,659 was what the Dow was on January 20, 2001. January 20, 2001 was a Saturday, so that's obviously wrong—the 10,659 number is where the Dow closed after Bush's first week in office. Sorry.

Posted by Nick Baumann on 09/17/08 at 1:00 PM | | Comments (10) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

Can the FDIC Weather the Financial Storm?

The federal bailout of American Insurance Group (AIG) is like putting a finger in the dike. Next to potentially require government intervention is Washington Mutual, the nation’s sixth largest bank with some $143 billion in deposits, which hangs by a thread. When—not if—it goes, the government is committed to protecting its depositors through the Federal Deposit Insurance Corporation. According to one estimate in The New York Timeson Wednesday morning, paying off Washington Mutual depositors could eat up half the FDIC's reserves, which currently stand at $45.2 billion. In August, the FDIC identified 117 banks and thrifts that could be in trouble. "A few more IndyMacs or 20 or 30 smaller collapses will wipe out [FDICs] reserves," predicts Dean Baker of the Center for Economic and Policy Research. That means the FDIC could bottom out, unless Congress steps in.

Commercial banks, already straining from the crisis, are now being encouraged by Treasury Secretary Henry Paulson, to take on crumbling Wall Street investment companies. That was the message in the Bank of America’s recent takeover of Merrill Lynch. One of Washington Mutual’s oft-mentioned suitors is Chase. That means that bank portfolios could become swollen with the junk bonds, lousy mortgages, and other speculative investments held by the unregulated collapsing investment banks on Wall Street. The already weakened commercial banks will find it difficult to survive with this additional load. If they fail, the FDIC's reserves are not big enough to cover the deposits of their customers.

With an election approaching, politicians in Congress can’t possibly allow widespread banking failures. The crisis right now may seem abstract to many, but when Americans finally get the picture that their checking and money market accounts could be in jeopardy, then candidates for the presidency and other offices will have to come up with something beyond the empty rhetoric that passes for proposed policy to date. (Obama has promised leadership; McCain has promised a commission.)

Congress isn’t likely to let the FDIC go down the drain. But how to save the day?

Inevitably, there will be a deal, which is likely to mirror some version the savings and loan bailout of the 1980s and 1990s, with the creation of an institution like the Resolution Trust Corporation into which the banks can dump subprime mortgages, junk bonds, and other speculative holdings. The RTC seized the assets of more than 700 S&Ls, worth some $400 billion, then sold them off to private investors. Far from a perfect solution, it was plagued by charges of contract corruption and mismanagement. On Tuesday, Rep. Barney Frank (D-Mass.), who heads the House Financial Services Committee, raised the possibility of a creating an RTC-like entity to handle the current crisis. In an interview with the New York Times, Frank said such an agency would need “tough new regulations” to prevent risky investments, but he did not delve into specifics.

Meanwhile, the AIG takeover opens another can of worms for unprepared federal regulators. The insurance industry has long fought successfully to avoid federal regulation. Currently, the industry is nominally regulated by weak state commissions, which can easily be bullied into submission by the big insurance firms. For years the insurance industry's point man on the Hill was Senator Thomas Dodd. Now, his son, Connecticut Senator Chris Dodd, who's also viewed as an ally to the insurance business, is the chairman of the Senate's banking committee.

Posted by James Ridgeway on 09/17/08 at 12:01 PM | | Comments (7) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

Sarah Palin's Yahoo Accounts Hacked

So, you know those Yahoo accounts Sarah Palin was using to keep her official business safe from subpoenas? Turns out they're not so safe after all. Palin's Yahoo accounts (gov.palin@yahoo.com and gov.sarah@yahoo.com) were successfully hacked last night and you can see the screengrabs here. Since then, the accounts have been deleted, which could be considered destruction of evidence if a court chose to pursue it.

The evidence, at first glance, looks pretty solid that the accounts were authentic. Photos of Palin's family were pulled from e-mails, plus a "sent" e-mail to aide Amy McCorkell was confirmed by a call to McCorkell herself, reports Wired.

Who knew the GOP was so in favor of government transparency? Maybe the McCain/Palin team is a real "maverick" ticket after all.

Posted by Jen Phillips on 09/17/08 at 10:34 AM | | Comments (35) | E-mail | Print | Digg | Del.icio.us | Reddit | Yahoo MyWeb | StumbleUpon | Newsvine | Netscape | Google |

Mission Creep Dispatch: Winslow Wheeler

As part of our special investigation "Mission Creep: US Military Presence Worldwide," we asked a host of military thinkers to contribute their two cents on topics relating to global Pentagon strategy. (You can access the archive here.)

The following dispatch comes from Winslow T. Wheeler, director of the Straus Military Reform Project at the Center for Defense Information in Washington, DC, and author of Wastrels of Defense: How Congress Sabotages US Security.

It's Not Just the Bases—or the Nukes

The sprawl of American bases, both wanted and unwanted by their international hosts, is an important consideration in understanding and then limiting the obnoxious overreach of the American empire. But as with nuclear proliferation, the other issue the left in American politics has latched onto, even were the matter to be solved to the complete satisfaction of the advocates (which I would strongly welcome), there would be hardly a scratch on the foreign policy and defense ills that drag America down.

Consider the following:

• America's defense budget is now larger in inflation-adjusted dollars than at any point since the end of World War II, and yet our Army has fewer combat brigades than at any point in that period; our Navy has fewer combat ships; and the Air Force has fewer combat aircraft. Our major equipment inventories for these major forces are older on average than at any point since 1946—or in some cases, in our entire history.
• The effectiveness of America's supposedly high-tech weapons doesn't compensate for these reduced numbers. The Air Force's newest fighter, the F-35, can only be regarded as a technical failure; the Navy's newest destroyer cannot protect itself effectively against aircraft and missiles, and the Army's newest armored vehicle cannot stand up against a simple anti-armor rocket that was first designed in the 1940s.
• Despite years, nay decades, of acquisition reform from the best minds in Congress, the Pentagon, and the DC think tanks, cost overruns on weapons systems are higher today (in inflation-adjusted dollars) than ever. Not a single major system has been delivered on time, on cost, and as promised for performance.
• The Pentagon refuses to tell Congress and the public exactly how it spends the hundreds of billions of dollars appropriated to it each year; the reason is simple; it doesn't know how the money is spent. Technically, it doesn't even know if the money is spent. President George W. Bush's own Office of Management and Budget has labeled the Pentagon as one of the worst-managed federal agencies.
• At the start of the wars against Afghanistan and Iraq, the Pentagon's senior military leadership failed to warn civilian leaders of the tremendously difficult mission they were being asked to perform. Indeed, most did not even perceive the difficulties of those missions and misperceived that the key issue was the number of military personnel sent to invade and then occupy an alien land in the Middle East. Many of these senior officers then publicly complained—from the comfort of a retirement pension—that their civilian bosses had made a mess of things.
• In Congress and the office of the Secretary of Defense, there have been acrimonious hearings and meetings but no real oversight to appreciate just how and where programs and policies ran off the tracks. Except for a very, very small handful, no one has been held accountable. Indeed, it is not even apparent that anyone in Congress knows how to conduct oversight. If so, they apparently lack the spine to do it in a manner that then-Senator Harry Truman, a superb Pentagon watchdog during World War II, would call competent.
• Perhaps most damning of all, America has permitted itself—and most leaders from both political parties have aggressively pursued—a national security strategy that has torn us apart domestically, isolated us from our allies, made us an object of disrespect in the eyes of those not committed to our cause, and caused our enemies to find motivation for greater provocations on their own part. In fact, it is not even clear whether our leadership understands what an effective national security strategy is, much less how to put one together and exercise it effectively.
• A collapse of the grotesque American exercises in Iraq and Afghanistan is only a matter of time. The architects of the war in Iraq glibly proclaim victory in sight thanks to the success of the "surge." Politically motivated to their very core, they studiously ignore the internal dynamics in Iraq and the region that have been inestimably more powerful in lowering the violence there. Blind as the proverbial bat, they—and even opponents to the Iraq misadventure—now proclaim that more of the same in Afghanistan will rescue the imploding situation there.

As Pentagon wags used to remark inside the building, "It's data-free analysis and analysis-free decisions" driving US national policy. That is especially true of the mindless talk about expanding the size of the Marines and Army and maintaining the Pentagon budget at anything near its current hyperbloated size.

Bases? Nukes? Have at it. Do not pretend for a minute, however, that fully addressing those worthwhile issues will change America's course to something future historians will describe as appropriate to the world situation we are in, or enabling America to survive on its own terms in a troubled world.

The fundamental problem is one of ethics. Across the political spectrum, our national security experts in Washington have failed the nation, utterly and totally. These men and women and their failed agendas now clamber all over the McCain and Obama presidential campaigns like rats desperate to keep a sinking ship afloat. The best way out of the mess they all have created is not just to think about our problems in new ways, but to have different minds doing it.

More Dispatches

Robert Kaplan
Katherine McCaffrey
Steven Metz
C. Douglas Lummis
Douglas Macgregor
John Nagl
William Hartung
John Lindsay-Poland
John Feffer
Catherine Lutz
Peter Beck
Nick Turse
John Pike
Mark Selden