Goldman Sachs' bankers receiving multimillion bonuses

Goldman Sachs is ready to hand out a £7bn ($11.45 billion) bonus package for its 2008 year-end bonuses... after its £6bn ($9.83 billion) bail-out, it emerged yesterday.

The Daily Mail reports that Goldman Sachs is on course to pay its top bankers multimillion-pound bonuses - despite asking the U.S. government for an emergency bail-out.

Each of the firm's 443 partners is on course to pocket an average Christmas bonus of more than £3million ($4.9 billion).

The size of the pay pool comfortably dwarfs the £6.1billion lifeline which the U.S. government is throwing to Goldman as part of its £430billion ($703 billion) bail-out.

As Washington pours money into the bank, the cash will immediately be channeled to Goldman's already well-heeled employees. The same bankers who have brought the global economy to its knees seem to pocketing the same kind of rewards they got during the boom years.

[The Daily Mail]

McCain's Endorsement From Hell

John McCain isn't boasting about a new endorsement, one of the very, very few he has received from overseas. It came a few days ago: "Al Qaeda will have to support McCain in the coming election," read a commentary on a password-protected Islamist Web site that is closely linked to Al Qaeda and often disseminates the group's propaganda.

Nicholas D. Kristof of the NY Times reports that the endorsement of Mr. McCain by a Qaeda-affiliated Web site isn't a surprise to security specialists. Richard Clarke, the former White House counterterrorism director, and Joseph Nye, the former chairman of the National Intelligence Council, have both suggested that Al Qaeda prefers Mr. McCain. "From their perspective, a continuation of Bush policies is best for recruiting," said Professor Nye.

Washington Post staff writers Joby Warrick and Karen DeYoung add that Al-Qaeda gloated that the Arizona Republican would continue the "failing march of his predecessor," President Bush.

In language that was by turns mocking and ominous, they also tell us that Al-Qaeda is watching the U.S. stock market's downward slide with something akin to jubilation, with its leaders hailing the financial crisis as a vindication of its strategy of crippling America's economy through endless, costly foreign wars against Islamist insurgents, having lured Washington into a trap that had "exhausted its resources and bankrupted its economy."

Doubts about the Federal Reserve have been around a long time

"Some people think the Federal Reserve Banks are US government institutions. They are not... they are private credit monopolies which prey upon the people of the US for the benefit of themselves and their foreign and domestic swindlers, and rich and predatory money lenders. The sack of the United States by the Fed is the greatest crime in history. Every effort has been made by the Fed to conceal its powers, but the truth is the Fed has usurped the government. It controls everything here and it controls all our foreign relations. It makes and breaks governments at will."
-- Louis McFadden (1876-1936) US Congressman, Chairman of House Banking and Currency Committee. (Poisoned in 1936.)


"The Federal Reserve Bank System. That system is not owned by the Government. Many people think that it is because it says ‘Federal Reserve.’ It belongs to private banks, private corporations. So we have farmed out to the Federal Reserve Banking System - one hundred percent to the private banks - the privilege of issuing the Government's money!" -- Wright Patman (1893-1976) US Congressman

The Fed’s artificially controlled financial market

The following statements by the Chairman of the Federal Reserve, made during hearings of the House Committee on Banking and Currency, September 30, 1941, illustrates the Fed's ability to "create" money. [Marriner Eccles being Chairman of the Federal Reserve Board at the time.]

Congressman Patman: "How did you get the money to buy those two billion dollars worth of Government securities in 1933?"
Marriner Eccles: "Out of the right to issue credit money."
Patman: "And there is nothing behind it, is there, except our Government's credit?"
Eccles: "That is what our money system is. If there were no debts in our money system, there wouldn't be any money."
Congressman Fletcher: "Chairman Eccles, when do you think there is a possibility of returning to a free and open market, instead of this pegged and artificially controlled financial market we now have?"
Eccles: "Never. Not in your lifetime or mine."

500 People Responsible For All Of U.S. Woes

Have you ever wondered why, if both the Democrats and the Republicans are against deficits, we have deficits? Have you ever wondered why, if all the politicians are against inflation and high taxes, we have inflation and high taxes?

One hundred senators, 435 congressmen, one president and nine Supreme Court justices - 545 human beings out of the 235 million - are directly, legally, morally and individually responsible for the domestic problems that plague this country.

[I exclude the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered but private central bank.]

I can't think of a single domestic problem, from an unfair tax code to defense overruns, that is not traceable directly to those 545 people.

It seems inconceivable to me that a nation of 235 million cannot replace 545 people who stand convicted -- by present facts - of incompetence and irresponsibility.

[Charley Reese, The Orlando Sentinel Star]

Secretary of the Treasury Paulson's $125 billion "giveaway" to country's largest banks

The stock market is gyrating more wildly than anytime in history. In the last few weeks, the broader economy has deteriorated faster than anytime in the last 70 years.

Meanwhile, Secretary of the Treasury Paulson's $125 billion capital "giveaway" went to nine of the country's largest banks. According to the New York Times, the banks probably won't even use Paulson's money to extend loans to consumers and businesses (as intended), but will hoard it to make sure they are sufficiently capitalized when their mortgage-backed assets are downgraded. Even worse, the banks may use the money to gobble up smaller local and regional banks.

Paulson knows what the banks are up to; after all, these are his friends. The Treasury Secretary is using his authority to reward his friends rather than doing what is best for the country.

The truth is, the $125 billion was not given to the banks to soften the effects of the recession or increase lending. It was given to make the strong banks even stronger so they could monopolize the industry.

Paulson's real plan is "more consolidation" and less competition, or as economist Michael Hudson says, "Big fish eat little fish".

[Mike Whitney]

A call for drastic action for the poor of the world

U.N. Secretary-General Ban Ki-moon called Friday for "drastic" measures to shore up banks and extend lines of credit to the world's poorest states. Ban spoke at a closed meeting with top U.N. agency heads, economic advisers and the heads of the World Bank and International Monetary Fund focusing primarily on the global financial crisis.

"The danger is a succession of cascading financial crises," Ban warned. "This demands drastic measures … substantial standby lines of credit … so that banks in developing nations, too, have adequate funds to draw on in emergency."

The credit crisis engulfing nations from central Europe to Latin America and emerging markets ranging from Turkey to South Africa "compounds the food crisis, the energy crisis, the crisis of development in Africa," Ban said.

Earlier in the week, Ban sought advice from economists Nancy Birdsall, Dani Rodrik, Kenneth Rogoff, Jeffrey Sachs and Joseph Stiglitz on how to limit the depth and length of the economic downturn and ease the burden on developing countries.

Ban said in a statement, "It would be unacceptable that the least developed countries and the most vulnerable populations were asked to pay for the consequences of a crisis the making of which was entirely outside of their control."

[AP]

International Aid world balance shifting to China

Pakistan is on the verge of bankruptcy and may shortly default on its debt.

The world balance of power is shifting. Pakistan's new president, Asif Zardari, went cap in hand this week to China, seeking up to $6 billion in emergency loans.

Pakistan's patron, the United States, which has been renting that nation's politicians and army for $1.2 billion per annum to support the occupation of Afghanistan, can't spare any cash for Pakistan.

Pakistan's move into China's financial embrace is a harbinger of things to come.

How ironic that the Chinese Communists have ended up with a so far sound financial system while the Wall Street bandit capitalists have gone bust.

[Excerpt of an article by Eric Margolis, Toronto Sun]

Generous International Aid to Georgia

Georgia's Western backers led by the United States and the European Union promised $4.5 billion in new aid at an international donors conference to help the ex-Soviet republic rebuild after its war with Russia.

The pledges raised exceeded the asked-for $3.2 billion based on an assessment made by the World Bank and the United Nations, despite the financial crisis that has forced many governments to pour billions into rescuing national banks and lending institutions over recent weeks.

The large pledges were seen as a new affront to Moscow by the United States and the EU, which vehemently opposed Russia's move last August to invade Georgia.

Georgia also aspires to join the NATO alliance.

Georgia's Prime Minister Lado Gurgenidze said "We are deeply moved and humbled by the demonstration of solidarity and support that we have received.” He added that the total aid "far exceeded the expectations" especially given the financial crisis.

Georgian groups opposing President Mikhail Saakashvili appealed to donors in Brussels to ensure the aid was not used to pay for rebuilding Georgia's armed forces or to prop up Saakashvili's government but to improve the dire human rights situation in Georgia and allow better press freedom.

[AP]

Islamic banking escapes financial fallout

Islamic banking has largely escaped the fallout from the global financial crisis, thanks to rules that forbid the sort of risky business that is felling mainstream institutions.

The rules of Islamic banking and finance read like a how-to guide on avoiding the kind of disaster that is currently gripping world markets.

Islamic law prohibits the payment and collection of interest, which is seen as a form of gambling, so highly complex instruments such as derivatives and other creative accounting practices are banned.

Transactions must be backed by real assets - not shady repackaged subprime mortgages - and because risk is shared between the bank and the depositor there is an incentive for the institutions to ensure the deal is sound.

Investors have a right to know how their funds are being used, and the sector is overseen by dedicated supervisory boards as well as the usual national regulatory authorities.

But experts say that because of its heavy reliance on property investments and private equity, the booming 1 trillion dollar global industry could be hit if the turmoil worsens and real assets start to crumble.

[Straits Times]

Little evidence of belt-tightening in Washington

Signs of hard times getting harder in the U.S. are appearing every day. Home construction has dropped to its lowest level in roughly 60 years. Industrial production has fallen by rates unseen since the early 1970s. Consumer spending continues to decline month after month, even as the holiday season approaches.

But there is little evidence of belt-tightening in Washington. While the rest of the country switches into austerity mode, there's almost a boomtown feel in the capital, where a federal spending spree is rapidly driving the federal deficit to the largest deficit since the end of World War II.

And the red ink will continue to rise, thanks to panicky raids of federal coffers by policymakers trying to stem the financial crisis. When other bailouts, including the recently passed $700 billion financial rescue plan, are counted, Washington is set to shell out some $1.5 trillion in the near term.

Projections for the next fiscal year's deficit start at roughly $550 billion and go as high as $1 trillion, depending on the government's current obligations, expected further spending measures and falling tax revenues related to the slowing economy.

At some point, most economists argue, the U.S. will have to balance its budget and repay what it has borrowed to fund the spending spree. Neither presidential candidate can convincingly argue that a balanced budget is possible in the next few years. Both are advocating economic programs that will probably increase the deficit even more. Republican candidate John McCain is calling for some $52 billion in economic recovery spending, while Democratic candidate Barack Obama's plan would cost roughly $175 billion. Both McCain and Obama have vowed to cut taxes, which is likely to drive the deficit higher.

[TIME]

The Pinochet principle: no one is above the law

On October 16 1998, a magistrate signed a warrant for the arrest of Senator Augusto Pinochet and changed the course of history. The former Chilean head of state was arrested a few hours later, at the request of a Spanish prosecutor who charged him with a raft of international crimes, some dating back to the early 1970s.

One central question lay at the heart of the whole affair: was a former head of state entitled to claim immunity before the English courts, where it was alleged that he had participated in crimes, in violation of international conventions, such as torture? This question had never before been decided.

In March 1999, the House of Lords ruled that Pinochet's loss of immunity arose not from some unstated general rule of international law, but rather from the terms of a treaty to which Britain, Chile and Spain were party – the 1984 convention outlawing torture – the terms of which were inconsistent with immunity for a former head of state. It is impossible to overstate the significance of that ruling, which reflected a new balance of global priorities, a shift in favor of principle over pragmatism. It has been followed by international indictments against other former heads of state [including] Slobodan Milosevic and Charles Taylor.

Nevertheless, it seems that Pinochet's case caused concerns at the highest levels of the Bush administration, as described in a revealing account by a former lawyer in the Bush administration, Jack Goldsmith. He describes how, during 2002, Henry Kissinger found himself on the sharp end of the Pinochet case. Reportedly livid, a rattled Kissinger complained to his old chum Donald Rumsfeld.

We now know that while this was going on, Rumsfeld and Haynes and others at the Pentagon were secretly circumventing international laws like the Geneva conventions and the torture convention and removing international constraints on the interrogation of detainees at Guantánamo and in Iraq. Torture and other international crimes followed. So did the Abu Ghraib photos.

The legacy of the arrest warrant signed in Hampstead 10 years today, is the Pinochet principle, that no one is above the law. It may one day come to haunt the very people who sought to set it aside. If, that is, they ever dare to set foot outside the United States.

[The Guardian]

Bush administration explicitly endorsed CIA’s waterboarding

The Bush administration issued a pair of secret memos to the CIA in 2003 and 2004 that explicitly endorsed the agency's use of interrogation techniques such as waterboarding against al-Qaeda suspects -- documents prompted by worries among intelligence officials about a possible backlash if details of the program became public.

The classified memos, which have not been previously disclosed, were requested by then-CIA Director George J. Tenet more than a year after the start of the secret interrogations, according to four administration and intelligence officials familiar with the documents.

As early as the spring of 2002, several White House officials, including then-national security adviser Condoleezza Rice and Vice President Cheney, were given individual briefings by Tenet and his deputies, the officials said. Rice, in a statement to congressional investigators last month, confirmed the briefings and acknowledged that the CIA director had pressed the White House for "policy approval." The repeated requests for a paper trail reflected growing worries within the CIA that the administration might later distance itself from key decisions.

As recently as last month, the administration had never publicly acknowledged that its policymakers knew about the specific techniques, such as waterboarding.

[Washington Post]

Wall Street fiddles while America burns

In the midst of Wall Street's agonizing slide, there was at least one place in Manhattan where the liquor was flowing, the cigar smoke was billowing and the theme of the evening was simple: Work hard. Play hard.

"It's like fiddling. Nero fiddled while Rome burned," said Thomas Graf, vice president and producer of Northmarq Capital. "We're smoking cigars while we're losing our shirts, literally."

He was among hundreds of mid-level Wall Street executives and traders gathered for a party thrown by Cigar Report magazine. "It is a great time," said Adam Marsh of Empire Capital Partners. "I think for at least a couple of hours in the evening, we can kind of sit back, have a few drinks, forget what's facing us on the Street tomorrow."

Nearly all did very well, they say, at the top of the Wall Street bubble. And their bosses, along with those who managed Wall Street hedge funds, did even better.

"These guys were spending more than $250 billion a year," Robert Frank said. "They bought mansions in Greenwich and Palm Beach. They bought art for $100 million a painting." Frank, author of "Richistan," says the enormous amounts of money earned by Wall Street elite made them practically a nation unto themselves.”

One prominent example is the CEO of Lehman Brothers, Richard Fuld. In 2007 alone, according to the executive compensation firm Equilar, he earned total take-home compensation of more than $45 million in salary and bonuses. Congressional researchers said he earned nearly $500 million from 2000 through 2007.

[CNN]

Draft pact between U.S. and Iraq

The U.S. and Iraq are working against a deadline of year's end when the U.N. mandate authorizing the U.S.-led mission expires.

The draft calls for U.S. troops to leave Iraqi cities by the end of June and withdraw from the country entirely by Dec. 31, 2011, unless the government in Baghdad asks some of them to stay for training or security support, Iraqi officials familiar with the accord said.

It also would give the Iraqis a greater role in U.S. military operations and full control of the Green Zone, the 3-square-mile area of central Baghdad that includes the U.S. Embassy and major Iraqi government offices.

American troops could face trial before Iraqi courts for major crimes committed off base and when not on missions, under a draft security pact hammered out in months of tortuous negotiations.

Discussing the security pact, a senior Iraqi official said Baghdad may demand even more concessions before the draft is submitted to parliament for a final decision.

[Washington Times]

Compare August

Iraqi society has been destroyed

While there has been a reduction in violence in Iraq -- now down to a level that virtually any other society in the world would find horrible and intolerable -- we must keep in mind that more than half the population of Iraq is either dead, crippled, traumatized, confined in overflowing American and Iraqi prisons, internally displaced, or in foreign exile.

Thus, the number of people available for being killers or victims is markedly reduced. Moreover, extensive ethnic cleansing has taken place in the country. Sunnis and Shiites are now living more in their own special enclaves than before, so violence of the sectarian type has also gone down.

On top of all this, US soldiers, in the face of numerous "improvised explosive devices" on the roads, have been venturing out a lot less, so the violence against our noble lads is also down.

No American should be allowed to forget that Iraqi society has been destroyed. The people of that unhappy land have lost everything -- their homes, their schools, their neighborhoods, their mosques, their jobs, their careers, their professionals, their health care, their legal system, their women's rights, their religious tolerance, their security, their past, their present, their future, their lives.

[Excerpt of an article by William Blum, author]

World Bank pledges $1.4 billion in support to Pakistan

Trade deficits, galloping inflation, increase in the level of poverty, power outages, water shortages, closure of industries and food insecurity. A worsening economic crisis in Pakistan is pushing millions more people into poverty, and experts fear that it could help Islamic extremists recruit new converts.

Inflation is running at 25 percent, according to official figures, electricity is in short supply, and Pakistan's currency, the rupee, has been devalued 25 percent against the dollar. Investor confidence has fallen so low that on Monday, police had to surround the Karachi Stock Exchange to protect it from angry investors.

Pakistan is looking for at least $10 billion to bail it out and is pinning its hopes on a meeting in Abu Dhabi likely either later this month or early in November, of a newly-established consortium known as "Friends of Pakistan" which includes the United Arab Emirates , China and the U.S., economic experts said.

The World Bank has promised to provide $1.4 billion aid to Pakistan in the current year to overcome its ongoing economic crises. The amount includes $600 million for investment and $800 million for budget support as macroeconomic stabilization program moves forward.

Long-time critic of Bush admin. wins Nobel economic prize

Paul Krugman, the Princeton University scholar and New York Times columnist, won the Nobel economic prize Monday, also commenting on the global economic meltdown:

In contrast to his treatment of the Bush Administration and U.S. financial officials, Krugman has praised leaders in Britain for their response to the global financial crisis.

He commends British Prime Minister Gordon Brown and Chancellor Alistair Darling who "defined the character of the worldwide rescue effort, with other wealthy nations playing catch-up."

Whereas U.S. Treasury Secretary Henry Paulson rejected a "sort of temporary part-nationalization" involving governments giving financial institutions more money in return for a share of ownership, the British government "went straight to the heart of the problem ... with stunning speed."

Krugman said the major European economies have "in effect declared themselves ready to follow Britain's lead, injecting hundreds of billions of dollars into banks while guaranteeing their debts."

"And whaddya know," Krugman continued, "Mr. Paulson -- after arguably wasting several precious weeks -- has also reversed course, and now plans to buy equity stakes rather than bad mortgage securities."

[AP]

Closing the world's financial markets while they “rewrite the rules”

Bloomberg reports that Italian Prime Minister Silvio Berlusconi said political leaders are discussing the idea of closing the world's financial markets while they "rewrite the rules of international finance."

Group of Seven finance ministers and central bankers are meeting in Washington, and will stay in town for the International Monetary Fund and World Bank meetings.

Berlusconi didn't give any details about what kind of rules leaders were looking to change, except to say that leaders are "talking about a new Bretton Woods."

The Bretton Woods Agreements* were adopted to rebuild the international economic system after World War II. The IMF was set up later to help manage the international financial system.

[* footnote courtesy Noam Chomsky: Bretton Woods collapsed when the US suspended convertibility from dollars to gold. This created the unique situation whereby the US dollar became the "reserve currency" for the other countries within Bretton Woods.]

Brazil and Argentina do away with US dollar as a medium of exchange

Brazil and Argentina have launched a new payment system in their bilateral trade, doing away with the US dollar as a medium of exchange.

The two Latin American nations started the Payment System on Local Currency (SML) following a last month agreement inked by their presidents to use local currencies in a bid to end transaction in dollars.

On Thursday, Argentine Central Bank President Martin Redrado and his Brazilian counterpart Henrique de Campos Meirelles signed the enforcement of the agreement for the SML, under which exports and imports between the two countries will take place with the Brazilian real (BRL) and the Argentine peso (ARS).

According to the Central Bank of Argentina, the trade between the two major South American economies stands at about 25 billion US dollars per year.

Although the SML seeks to gradually eliminate the dollar from the bilateral trade, the currency will continue its presence in transactions between Brazil and Argentina, as their central banks will set the exchange rate for the real and the peso with respect to the dollar.

President George W. Bush echoing a tune from the past

[Jan 4, 2008] "This economy of ours is on a solid foundation." President Bush - After meeting with the President's Working Group on Financial Markets.

“There is no cause to worry. The high tide of prosperity will continue." - Andrew W. Mellon, Secretary of the Treasury. September 1929;

=

[Jan 30, 2008] "I hope you're confident about our economy. I am." President Bush. At the Robinson Helicopter Co. in Torrance, Calif.

"While the crash only took place six months ago, I am convinced we have now passed the worst, and with continued unity of effort we shall rapidly recover.” - President Hoover - May 1, 1930

=

[March 7, 2008] "I know Americans are concerned about our economy; so am I. It's clear our economy has slowed, but the good news is, we anticipated this and took decisive action to bolster the economy, by passing a growth package that will put money into the hands of American workers and businesses." President Bush - On news that the economy lost 63,000 payroll jobs in February.

CNN vote for Heros, changing the world one life at a time

What can just one person do?

CNN has vote going for unsung heros, changing the world one life at a time.

Some inspiration in the midst of so much other bad news these days.

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Carso Health Institute: Latin America’s answer to the Gates Foundation

The Carso Health Institute -- Latin America's answer to the Bill & Melinda Gates Foundation -- operates from calm and stylish offices set in gardens facing a colonial-era mansion. But it has plenty of work even just outside its walls.

Carlos Slim - who, by some accounts, is now wealthier than Mr Gates - has concentrated on the growing epidemic of chronic disease in Mexico and globally.

By expanding the extent and profile of his philanthropy, Mr Slim has set an example for billionaires from emerging markets who are beginning to show interest in the field, notably in Latin America. The region is better known for sharp inequalities in wealth than for private initiatives to help bridge the gap.

[The Financial Times]

The U.S. Economic Problem: Addicted to Credit

Some politicians -- and a few economists -- would say that America is drunk on credit and just needs to go cold turkey. But it's more accurate to say we're addicted to credit. Too much credit. Good credit, bad credit, anything that lets us live the high life. We have mistaken growth in the value of financial paper for real economic growth.

Getting clean will not be so easy. When credit is quickly withdrawn, everyone in the business of lending panics. Credit becomes scarce and is not available at a reasonable interest rate. Institutions that need to use credit daily start to fall like dominoes. The financial fallout -- bank failures, risking a stock market crash, worthless retirement and pension funds -- could kill us. We need to reduce our dependence on credit gradually but steadily and with no excuses.

--U.S. Rep. Jim Marshall (Dem)

The U.S. on the road to serfdom?

So here we are: a phony monetary system, $3 trillion wasted on wars, and a citizenry mired in debt.

And what does Congress do? It adds more debt – a trillion dollars, just for starters, since once starting down this slippery slope, it won't be able to stop.
It then gives the Treasury the green light to buy securities that are trading as low as 20 cents on the dollar at the hold-to-maturity value, i.e., par!

Not surprisingly it has engaged in a media blitz to "sell" this boondoggle, convincing the taxpayer that this bucket of dross will one day turn to platinum. Sensing that working stiffs are a little perturbed about the fleecing, it has leapt to the offense: "No, this is not a bailout of Wall Street. This is a rescue plan for Main Street." By embracing the mortgage waste dump, U.S. citizens are supposedly saving jobs and retirement dreams. They are told that interest-free car loans will stream from dealerships and refi windows will again beckon, even to those with homes worth half the value of mortgage paper.

With Congress granting the Treasury (along with an "oversight" board) almost unlimited power over the country's financial landscape, the U.S. has terminated its democracy and is well on the Road to Serfdom.

[Excerpt of an article by Ann Berg, Anti War]

The Bush Doctrine

Thanks to the interview of Sarah Palin by Charles Gibson of ABC News, the “Bush Doctrine” has become part of American political discourse, which New York Times reporter Philip Shenon has pointed out, was used to “justify a preemptive strike on Iraq.”

According to international law as reflected in the charter of the United Nations, a preemptive war is legal in only one situation: if a country has certain knowledge that an attack by another country is imminent---too imminent for the matter to be taken to the UN Security Council.

Preemptive war, thus defined, is to be distinguished from “preventive war,” in which a country, fearing that another country may some time in the future become strong enough to attack it, attacks that country in order to prevent that possibility. Such wars are illegal under international law and were declared at the Nuremburg trials to constitute the “supreme international crime.”

In 1997, William Kristol founded a neocon think tank called the Project for the New American Century (PNAC). In 1998, a letter signed by 18 members of PNAC---including Kristol, Wolfowitz, John Bolton, Richard Perle, Donald Rumsfeld, and James Woolsey---urged President Clinton to “undertake military action” to eliminate “the possibility that Iraq will be able to use or threaten to use weapons of mass destruction.”

The idea of preemptive-preventive war, came to be known as the “Bush doctrine.”

[David Ray Griffin]

Contrary to Gordon Gecko, greed is not good

The outrage against the Wall Street bailout is also directed at the high salaried chief executive officers and the middle rung bosses who make multi-million-dollar salaries, with stock options and perks that set them up in a privileged class by themselves.

According to one report, the lowest salary on Wall Street was around 280,000 dollars a year in a country where the average low or middle class employee would go home with a pay packet of 50,000 or 75,000 dollars per year.

In 2007, the chief executive officer (CEO) of Goldman Sachs, Lloyd Blankfein, was paid 68.7 million dollars -- described as "the most ever for a Wall Street CEO."

The White House has been called upon to save some of the biggest financial institutions in the country and, at the same time, redress the excesses of Wall Street business tycoons who earned multi-million-dollar salaries and extravagant bonuses. The greed factor in the crisis is that these same tycoons, who are responsible for mismanaging their companies, still insist on continuing with their same lavish lifestyles and lofty salaries even after the massive taxpayer-funded bailout.

[Excerpt of an article by Thalif Deen, Common Dreams]

Paulson bailout does not address the core problem

As one reader put it,“We have debt at three different levels: personal household debt, financial sector debt and public debt. The first has swamped the second and now the second is being made to swamp the third. The attitude of our leaders is to do nothing about the first level of debt and to pretend that the third level of debt doesn't matter at all.”

The argument for the bailout is that the banks will be free of the troubled instruments and can resume lending and that the US Treasury will recover most of the bailout costs, because only a small percentage of the underlying mortgages are bad. Let’s examine this argument.

In actual fact, the Paulson bailout does not address the core problem. It only addresses the problem for the financial institutions that hold the troubled assets. Under the bailout plan, the troubled assets move from the banks’ books to the Treasury’s. But the underlying problem--the continuing diminishment of mortgage and home values--remains and continues to worsen.

The origin of the crisis is at the homeowner level. Homeowners are defaulting on mortgages. Moving the financial instruments onto the Treasury’s books does not stop the rising default rate.

The bailout is focused on the wrong end of the problem. The bailout should be focused on the origin of the problem, the defaulting homeowners. The bailout should indemnify defaulting homeowners and pay off the delinquent mortgages. As Koppell and Goetzmann point out, the financial instruments are troubled because of mortgage defaults. Stopping the problem at its origin would restore the value of the mortgage-based derivatives and put an end to the crisis.

This approach has the further advantage of stopping the slide in housing prices and ending the erosion of local tax bases that result from foreclosures and houses being dumped on the market.

[Excerpt of an article by Paul Craig Roberts, former Assistant Secretary of the Treasury in the Reagan administration]

Wall Street woes hit charities and nonprofits

Financial services firms and their well-paid executives have historically been generous givers to museums, colleges, hospitals and social service organizations, both in New York and around the globe. Now, nonprofit administrators are watching the crisis on Wall Street with queasy stomachs as reliable donors like Lehman Brothers, American International Group, Merrill Lynch and Bear Stearns change hands or go belly up.

It may be months before charities learn whether pledges are being honored. Troubled firms may slash corporate giving while they focus on their own problems. Wealthy individuals may scale back as well as their stock portfolios lose value and their pay bonuses vanish.

And with tens of thousands of layoffs expected, local income tax revenues are expected to slide, meaning there will be less government money for social service organizations, even as the number of needy people rises.

The Center on Philanthropy said that in 2007, out 74.8 percent of the total came from individuals; 7.6 percent were from bequests; 12.6 percent was from foundations and 5.1 percent from corporations. The Giving USA Foundation released a report last week noting that the drop-off in overall charitable donations by Americans during economic slowdowns is generally mild.

[AP]

Bailout or no bailout, Taxpayers get left with the tab

By voting down the first $700 billion financial bailout package — and causing a spectacular stock market rout — a majority of members in the House of Representatives made a clear statement that they didn't want to put taxpayers on the hook for the failures of financial institutions.

But there's a catch: taxpayers are already on the hook for the failures of financial institutions, and it's possible that the bill will actually be larger without bailout legislation than with it.

That's because the regulators who mind the financial industry — the Federal Reserve, Treasury and FDIC — will keep doing what they've been doing: stepping in to prevent the chaotic failure of banks and other large financial institutions. This means continuing to put hundreds of billions of taxpayer dollars at risk, but in a way that adheres to no clear plan of action and doesn't require members of Congress to explicitly approve their actions.

[TIME]

Wall Street economics and Extreme Poverty Economics

At a time when the United Nations is seeking increased financial assistance from rich nations to help developing countries meet the faltering Millennium Development Goals (MDGs), including a 50-percent reduction on extreme poverty and hunger by 2015, the current U.S. economic crisis and its predictably negative fallout overseas is expected to be a major setback.

Addressing delegates last week, U.N. Secretary-General Ban Ki-moon warned that the current gloomy outlook threatens the well-being of billions of people, "none more so than the poorest of the poor. This only compounds the damage [already] being caused by much higher prices for food and fuel", he added.

Ban has called for 72 billion dollars per year in additional external financing to achieve the MDGs by 2015. As one Asian delegate put it: "The 72 billion is peanuts compared to the 700 billion the White House wants to dish out to save some of the Wall Street firms from going belly up. And the urgent needs of developing nations will now be the least of the priorities of the United States and other Western donors," he predicted.

"It is always the poor who pay the price for the unbridled greed and irresponsibility of the powerful," Father Miguel d'Escoto Brockman of Nicaragua, the newly-elected president of the General Assembly said, taking a passing shot at the staggering 700-billion-dollar bailout.

Norwegian Prime Minister Jens Stoltenberg told delegates “There is something fundamentally wrong, when money seems to be abundant, but funds for investment in people seem so short in supply".

[Inter Press Service]

When Republicans join with Democrats

Everyone said the bailout bill would pass. But what they didn't know was that hundreds of thousands of Americans woke up and decided it was time for revolt. Millions of phone calls and emails hit Congress. [The Congressional races are coming up!]

A lot of people are wondering why the right wing of the Republican Party joined with the left wing of the Democratic Party in voting down the thievery. Forty percent of Democrats and two-thirds of Republicans voted against the bill.

Here's what happened: The Republican reps are so scared of losing their seats, when this "financial crisis" reared its head two weeks ago, they realized they had just been handed their one and only chance to separate themselves from Bush before the election, while doing something that would make them look like they were on the side of "the people."

It was rare and historic; no one could remember a time when a bill supported by the president and the leadership of both parties went down in defeat. That just never happens.

[Excerpt of an article by Michael Moore, Common Dreams]