Today's Stories

November 21 / 23, 2008

Alexander Cockburn
The Honeymoon is Looking a Bit Wan

November 20, 2008

P. Sainath
The Jurassic Auto and Idea Park

Brian McKenna
How Dow Chemical Defies Homeland Security and Risks Another 9/11

Paul Craig Roberts
What Uncle Sam Has to Say to His Creditors

Andy Worthington
How Guanántamo Can be Closed

Peter Lee
India Doubles Down in Afghanistan ... Maybe

Dr. Eyad al-Serraj
At the Erez Crossing

Sen. Russ Feingold
The Bush Pardons

Lance Selfa
Who Made the New Deal?

Ray McGovern
Keeping Gates

Benjamin G. Davis
Ending Torture; Prosecuting the Torturers

Tracy McLellan
Obama's Crony Democracy: the Return of Tom Daschle

Website of the Day
Finally, a Victory for Palestinians

November 19, 2008

M. Shahid Alam
Obama and the Politics of Race and Religion in America

Mario A. Murillo
Holder, Chiquita and Colombian Death Squads

Martine Boulard
Escaping the Dollar's Shadow

Robin D. G. Kelley
Will Obama be the First "Freedom" Democrat?

Behrooz Ghamari-Tabrizi
Obama and the Iron Cage

Jonathan Cook
Who Will Stop the Settlers?

Steve Conn
Spare Change or No Change at All

George Wuerthner
The NYT and the Beetles of Mass Destruction

Michael Winship
This Just in From Middle Earth

Stephen Martin
The Other Side of the Pleasure-Dome

Website of the Day
An Important Holiday Message From Kristen Johnston

November 18, 2008

Chellis Glendinning
Cheering for Morgan Stanley

George C. Wilson
Perils of Pakistan: Will It Prove to be Obama's Cambodia?

Franklin Lamb
Who Will Evict Israel from Lebanon: Hezbollah or the UN?

Bill and Kathleen Christison
The Irresponsibility of Appointing Hillary Clinton Secretary of State

Roger Burbach
Orchestrating a Civic Coup in Bolivia: How Bush Tried to Bring Down Morales

John Ross
Drilling vs. Direct Democracy in Mexico

Wajahat Ali
Is Obama the Muslim World's Superman?

Damien Millet /
Eric Toussaint
What Really Happened in Washington? The G20 and the Inconsistent Script

Marc Gardner
When Mooning is a Sex Crime

Eric Walberg
Courting the Bear: a New Era for Russian/Western Relations?

Wendy Williams
The Bottled Water Con

Website of the Day
Where's Zappa When We Need Him?

November 17, 2008

Michael Hudson
Bankers Shake Down Congress and the G-20

Paul Craig Roberts
When It's a Clear Day and You Can't See GM

Mike Whitney
Busted in Washington

Steve Conn
Where is Nader Country 2008? Mapping the Nader Votes

Andy Worthington
Closing Guantánamo: Advice for Obama

Jonathan Cook
The Real Goal of Israel's Blockade of Gaza: "They Are All Hamas"

Rannie Amiri
Dual Loyalties Will Doom Obama

David Macaray
Bailing Out the Automakers

David Michael Green
Twelve Victories

Charles Modiano
Sports Illustrated and Sexism: Tokenism or a New Day?

Website of the Day
The South Sea Bubble

November 14 / 16, 2008

Alexander Cockburn
Heading for the First Hundred Days

Jeffrey St. Clair
How Bill Clinton Doomed the Spotted Owl: a Cautionary Tale for Greens in the Age of Obama

Mike Whitney
Paulson the Bungler

Sasan Fayazmanesh
RIP: the Experts, 1929-2008

Moshe Adler
Keynes: China's Greatest Export?

Anthony DiMaggio
Transcending Race?

Jean Bricmont
Cats, Dogs and Creationism

Sheldon Rampton
The Eisenstadt Hoax: a Real Life Example of a "Fake Fake"

Douglas Valentine
Let the Trials Begin!

Joseph Nevins /
Timothy Dunn
Barricading the Border

Tom Barry
Rahm Emanuel's Political Pragmatism on Immigration

Ron Jacobs
Che Guevara Meets Trashman: the Genius of Spain Rodriguez

Larry Portis
The State of the Israeli State

Mary Lynn Cramer Obama's Brain Trust: Seems Like Old Times

Sherry Wolf
The Myth of the Black/Gay Divide

Peter Cervantes-Gautschi
Secretary of Greed: How Larry Summers Championed Wall Street by Impoverishing the Mexican People

Jacob Hornberger
The Conservative Malaise: Hey, Brother, Can You Spare Some Habeas Corpus?

Lance Selfa
The Center-Right Nation Con

Benjamin Dangl
Vermont Against General Dynamics

Seth Sandronsky
Lifelines in Hard Times

Russell Mokhiber
Time to Give the Friends of Big Coal the Boot

Allan Stellar
Nuke a Gay Whale for the Navy

Kelly Overton
Get Thee to a Shelter: the Obamas and the Million-Mutt March

Martha Rosenberg
Why Mink are Cheering the Economic Crisis

Richard Rhames
Palling Around with Ray the Plumber

David Yearsley
How I Played Hooky from "High School Musical 3"

Lorenzo Wolff
Zach is Back: Songs of Hurt, Rage and Resistance

Poets' Basement
Gibbons, Ford and Buknatski

Website of the Weekend
The Eyes Have It

November 13, 2008

Pam Martens
The Two Trillion DollarBlack Hole

Vijay Prashad
Guilt by Participation: Sonal Shah's Membership Has Expired

Patrick Cockburn
Who is Paying for the Iraqi National Intelligence Service?

Jonathan Cook
The Withering Palestinian Economy

Ralph Nader
Obama and the Rogue Regime

Bill Quigley
McCain Owes America an Apology

Lee Sustar
Bailing Out the Big Three

Omar Barghouti
Boycotting Israeli Settlement Products

Steve Conn
More Alaska Fun

Howard Lisnoff
The Last Bastion of Hate

Jeff Cohen
What Indy Media Heroes Can Teach Us

Website of the Day
Who are the Obamagelicals?

November 12, 2008

Johanna Berrigan
Scattered Families: the Iraq Refugee Crisis

Steve Conn
The Big Mystery Election in Alaska

Patrick Bond
Against Volcker

Bokar Ture /
Dedrick Muhammad
Remembering a Black Radical in a Barack Obama America

Alan Farago
The Hispanic Vote in South Florida: Not Dyed Blue Yet

Dave Lindorff
Rescuing Joe Lieberman

Karl Grossman
Break Up Big Oil: Tyranny in the Tank

David Macaray
An Obama Litmus Test: Will Labor Have a Seat at the Table?

George Wuerthner
Act Now to Save America's Public Forests

Susie Day
Heavy Weather

Website of the Day
Does the Planet Have a Future? an Interview with Derrick Jensen

November 11, 2008

James G. Abourezk
How to Vote Against Your Own Interests

Allan J. Lichtman
What Obama Can Learn From FDR

Eric Toussaint
Financing the Bailout: a Holy Union for a Deuce of a Swindle

Ron Jacobs
Moving Beyond Hope: a Leftist Looks at the Near Future

Peter Montague
Green Coal?

Corporate Crime Reporter
BP's Big Spill on the North Slope

Laura Carlsen
Latin America Sends Obama a Piece of Its Mind

Col. Dan Smith
A New Unifying Paradigm?

Morton Skorodin
The Machine Grinds On

David Michael Green
My Michelle Moment

Charles R. Larson
Ask Your Doctor for a Free Sample

Website of the Day
Will Old Faithful Be Sucked Dry?

November 10, 2008

David Roediger
Obama's Victory and the Future of Race in the United States

Paul Craig Roberts
Conned Again?

Peter Lee
Obama's Man in Afghanistan

Corey D. B. Walker
And We Are Not Saved

Jeff Halper
A Bone in America's Throat

Bill Hatch
Look on the Bright Side, Dammit!

Andy Worthington
Guilty By Torture

Bill Quigley
Anger and Hope: Haitian Families Furious Over School Collapse

Peter Morici
Paulson's Folly

Anthony Olszewski
The Advent of a New Black Politician

Kim Nicolini
Exile and Displacement on Bunker Hill

Cpt. Paul Watson
Farley Mowat's Last Book? Maybe Not

Website of the Day
Boondocks, Another Banned Episode

November 7 / 9, 2008

Alexander Cockburn
Hail to the Chief of Staff

Jeffrey St. Clair
The Politics of Fire

Vijay Prashad
Obama's Indian: the Many Faces of Sonal Shah

Tariq Ali
Great Expectations

Jean Bricmont
Our Obama Problem

John V. Whitbeck
Obama, Emanuel and Israel

Saul Landau
Politics Among the Ruins: Obama Faces an Economic Disaster

Peter Morici
Gone, Baby, Gone: Another 240,000 Jobs Lost

Lawrence Velvel
Obama and Afghanistan: the Return of Clintonia?

Karyn Strickler
Don't Govern From the Middle

Nativo V. Lopez
Banking on Obama with Open Eyes: Latinos and Obama

Christopher Fons
A Generational Moment: From Jackson to Obama

Alan Farago
Sarah Palin's Limited Engagement

David Yearsley
Where Late the Sweet Birds Sang

Christopher Brauchli
Pardoning Industry: Bush's Latest Executive Orders

Samah Sabawi
Gaza's New Cemetery

Dave Lindorff
Getting the Change We've Earned

Deepak Tripathi
A Revolution to Remember

Beth Sherouse
In the Wake of Lost Initiatives: the Gay Glass is Half Empty

Patrick Irelan
La Belle Dame Sans Regrets: Back to Alaska

Stephen Martin
Barack and the Temple

Richard Rhames
Meet the New Boss, Same as the Old Boss

J. Murray
White Cherokee Mythology

Lorenzo Wolff
Anthems for the Average Kid

Kim Nicolini
Exile and Displacement on Bunker Hill: Art Meets Realism in "The Exiles"

Poets' Basement
Farrelly, Fleming and Browne

Website of the Day
Take Who Takes You (For the New Big O)

November 6, 2008

Frank J. Menetrez
Now What?

John Chuckman
The Big Leap: From Hope to Change

P. Sainath
A Magic Moment (But Still Behind the Global Curve)

Joshua Frank
A Look Under the Hood of an Obama Administration

Edna Canetti
Come, Obama, Change My Life: a Plea from Israel

John Ross
Brad Will is Still Dead

Norman Solomon
Sorry Joe: a Mandate for Spreading the Wealth

Fawzia Afzal-Khan
The Morning After: Pakistan and Its New Bedfellow

Robert Weissman
Mordor Brightens: Obama's Challenge--and Our Own

Harvey Wasserman
A Blow to Nuclear Power in Chicago

Website of the Day
Pot Wins Big

November 5, 2008

Cockburn / St. Clair
Why McCain Lost

Chuck Spinney
How Obama Won

Ishmael Reed
Morning in Obamerica: the Promised Land?

Chris Floyd
A Prism for the New Paradigm: "What If Bush Did It?"

Binoy Kampmark
Obama's Victory: a Nation Divided

Michael Donnelly
The Rebooting of America, 2008

David Macaray
Who Should be Secretary of Labor?

Peter Morici
Obama's First Moves on the Economy

Manuel Garcia, Jr.
What Real Change Should Bring

William Willers
Will We be Forced to Sell Off the Public Lands?

Website of the Day
The Killing Fields of South Africa

November 4, 2008

Kathleen Christison
McCain, Obama and Khalidi

James Ridgeway
A New World?

Winslow T. Wheeler
Cleaning Out the Pentagon Pig Sty

Mike Whitney
Obama's Little Red Book

Conn Hallinan
A New Foreign Policy

Holly M. Barker
The Inequities of Climate Change and the Small Island Experience

Ashley Smith
Where is the Occupation of Iraq Heading?

Andy Worthington
Guilty Verdict Fails to Justify Gitmo Trials

Martha Rosenberg
AIG: Too Big to Play Fair

Stephen Martin
Breakdown of the Globalisation Agenda

Doug Lummis
Full Moon Over Okinawa

Carlos Fierro
An Anarchist View of Elections

Website of the Day
La Pequeña as Sarah Palin

November 3, 2008

Patrick Cockburn
Friends Like These

John Kennedy O'Hara
Voter Lockdown: Prosecuting Voters

Peter Montague
Is Nuclear Power Green?

Steve Conn
Nader and the Youth Vote

Andrew Gebhardt
How Much Do the Differences Between Obama, McCain and Bush Really Matter?

Ron Jacobs
Bombing Syria: Borders are for Sissies

Ralph Nader
Between Hope and Reality: an Open Letter to Senator Obama

Niranjan Ramakrishnan
Cleaning Up After Bush

Uri Avnery
Obama and the Order of the Optimists

Dave Lindorff
Studs and Me

Fred Gardner
Adieu, Rimonabant

DC Larson
You Are How You Vote

David Michael Green
McCain Finally Gets Tough

Val Strange
Hopeless Hoi Polloi or Step in the Right Direction?

Tuli Kupferberg /
Jeffrey Lewis
Wailing Wall Street:
Bring Spare Money!

Website of the Day
Pranking Palin (the Uncut Version)

October 31 , 2008

Alexander Cockburn
Change You Can See

Jeffrey St. Clair
Killing Leroy Jackson: the Indian Wars Have Never Ended

Douglas Valentine
Giving Aid and Comfort to the Enemy: McCain's 14th Amendment Problem

Ismael Hossein-Zadeh
The Great Bailout Fraud: Misrepresenting the Financial Crisis

Dr. Ignacy Nowopolski
Is the Global Economy a Mistake? an Interview with Paul Craig Roberts

Alan Maass
What's So Funny About Peace, Love and Spreading the Wealth?

William P. O’Connor
Reflections of an Average Joe

Patrick Irelan
Johnny's Tantrums: McCain the "Gook Hater"

Brian Cloughley
Out of Control: Memo From Islamabad

Mats Svensson
The Last Dance in Ramallah

Binoy Kampmark
Into Syria We Went

Steve Conn
The Future of Ted and Sarah

Alan Farago
The Division of Florida: the Politics of Growth

Morton Skorodin
The Bush-Obama-McCain Administration

Robert Bryce
Not McCain

Wajahat Ali
Dear John McCain, Please Stop...

David Yearsley
Palin's Flute, Obama's Voice

Dennis Loo
What to Do with Bush and Cheney?

Pam Martens
Why 2008 Feels Like 1932

Stephen Martin
Defense Strategies in Economic Warfare

Richard Rhames
Nothing for Something: the Doomed Rustic's Lament

Ramzy Baroud
A Third Palestinian Intifada

Missy Beattie
I'm Sick of Their Voices

Howard Lisnoff
Burning Reason: More From the Religious Right

Richard Neville
Pickled Heads: First the Revelation, Then the Revolution

Saul Landau /
Farrah Hassan
Bush Ultra Lite: Oliver Stone's Oedipal Problem

Kim Nicolini
Max Payne: Vigilante Violence as Sex Story

Lorenzo Wolff
Dance to the Music--or Else!

Poets' Basement
Four Poems from the Japanese Trans. by Rexroth

Website of the Weekend
Art Against Empire

October 30, 2008

Cockburn / St. Clair
McCain's Women Problems

Vijay Prashad
Smearing Rashid Khalidi

Paul Craig Roberts
World Tires of Rule by Dollar

Glen Ford
Turning the Tide of Ethnic Cleansing in America's Cities

Stanley Heller
Wall Street Bonus Madness

William Loren Katz
"Kill Him!:" a Political Chronicle

Joshua Frank
Memo to Progressives for Obama: What Happens After the Election?

James McEnteer
The Year of Unreliable Witnesses

Felice Pace
The Big Change: Can "Civic Unreasonableness" Save the Earth?

Jonathan Cook
The Executions at Kafr Qassem

Reza Fiyouzat
Boycott the Elections!

Website of the Day
An Open Letter to Whole Foods

October 29, 2008

Arno J. Mayer
The US Empire will Survive Bush

Eric Toussaint
How the Food and Financial Crises are Interconnected

Matt Gonzalez
What Do They Have to Do to Lose Your Vote?

Steven Conn
Obama and the Camp Followers

Jonathan Cook
Israel Bars Visit to a Father's Grave

Patrick Bond
Strauss-Kahn Strikes Again!

Ramzi Kysia
A Freedom Rider in Gaza City

Douglas Valentine
A Glimpse Inside the Head of Joe the Plumber

Stephen Martin
What America is Owed

Margaret Dooley-Sammuli
Alternatives to Incarceration

Amee Chew
Support Obama, Vote McKinney?

Website of the Day
N-Word Chant Doesn't Phase Palin

October 28, 2008

James G. Abourezk
How to Bail Out the Taxpayers

Andy Worthington
The Empty Chair at Guantánamo

Gary Leupp
The Specter of the Sixties: Palin v. Ayers

Paul Craig Roberts
The End of the American Road

Mike Whitney
Meet the World's New Currency

Gregory V. Button
What the Next President Must Do to Save FEMA

Ralph Nader
Share the Sacrifices, Share the Benefits

P. Sainath
Haunted by Socialism

Martha Rosenberg
Melting Pot in Hell

Charles R. Larson
Palin/Wurzelbacher 2012!

Website of the Day
Why You Can't See Across the Grand Canyon

October 27, 2008

Michael Hudson
Scenes From the Global Class War

Barbara Rose Johnston
The Clean, Green Nuclear Machine?

John Dinges
Palling Around with Dictators: McCain and Pinochet

Mike Whitney
Chickenhawks and the Horrors of War

Mary Lynn Cramer Greenspan's Higher Power

Alan Farago
Origins of the Fall

David Michael Green
Remind Me Again: Who Won the Cold War?

Andy Worthington
The Collapse of Omar Khadr's Guantánamo Trial

George Wuerthner
Is Ranching Sustainable? The Story of Bob the Rancher

Niranjan Ramakrishnan
The Obamanations of Barack

Website of the Day
Heartland of Darkness

October 24 / 26, 2008

Alexander Cockburn
Waiting for the Curtain to Rise

Ishmael Reed
Boogiemen: How Lee Atwater Perfected the G.O.P.'s Appeal to Racism

Mike Whitney
Down for the Count

Don Santina
How Maria Fell: Death in the Central Valley

Scott Boehm
Manufacturing Sympathy: Palin, Special Needs and Identity Politics

Saul Landau
Faith-Based Surge: Whining About Winning in Iraq

Ron Jacobs
Iraq and the Arrogance of Washington

Binoy Kampmark
Afghanistan the Un-Winnable

Linn Washington Jr.
The Great Vote Fraud Hoax

Nicole Colson
Mocking Our Rights: McCain's Disdain for Women's Health

Bernard Chazelle
The Humorology of Power

Brian Jones
Campaign by Codeword

Christopher Brauchli
Down the Drain with McCain's Vetters

Benjamin Dangl
Bolivia Rejects Neoliberalism

Val Strange
The Fraternity of John McCain: Scenes from North Carolina

Joe Mowrey
Name That Candidate: He Supports Petraeus, the Death Penalty, the Bailout, Nuclear Power, the Occupation...

Steve Early
SEIU Learns the Meaning of "No"

David Macaray
Patriotism and the Labor Movement

Allison Kilkenny
You Have the Right to Airport Harassment

Richard Rhames
Open Season

Jim Bell
Nuclear Power's Big Con

Kris De Welde
Domestic Violence and Financial Stress

Barry Clemson
John Wayne Syndrome

Adam Engel
Last Exit to Disneyland

Mark Scaramella
The World's Weirdest Pipe Organ?

Tuli Kupferberg
Nobody for President: the Original Version (Annotated)

Lorenzo Wolff
A Frustrated, Broken-Hearted Joy from Kidnapkin

Poets' Basement
Gibbons, Swartzfager and Payne

Website of the Weekend
Patrick Cockburn Dismantles the Surge

October 23, 2008

Allan J. Lichtman
What Voter Fraud?

Todd Chretien
Why I'm Not Voting for Obama

John Ross
No Child Left Behind, Mexican-Style

Peter Morici
Strategies to End the Crisis

Mats Svensson
Short Film Clips at a Checkpoint

Marlene Martin
Don't Let Them Execute an Innocent Man

Robert Jensen /
Pat Youngblood
Looking Beyond the Election and Beyond Elections

Margaret Kimberley
Rightwing Obama Love

Deepak Tripathi
Post-Bush Scenarios

David Morris
Why Joe the Plumber is a Socialist (And You Are, Too)

Website of the Day
Voting While Black in North Carolina

October 22, 2008

Brian Cloughley
Kid Killers are Barbarians

Heather Gray
Raising Hell in the South: the Legacy of J. L. Chestnut, Jr.

Jeff Birkenstein
McCain's Disdain for Spain

Ralph Nader
The Song Remains the Same: Convergence and Avoidance in the Presidential Election

DC Larson
The Growing of a Heartland Nader Raider

David Swanson
Colin Powell, Not Qualified for Government Service

Keeanga-Yamatta Taylor Race and the Election: When the "Real" America Enters the Voting Booth

Larry Everest
9/11 and the Imperial Adventure in Afghanistan

Robert Fantina
Anything to Win

Martha Rosenberg
The Financier's Playbook

Stephen Martin
Giving It Up to the Combine

Website of the Day
Brokers with Hands on Their Faces

October 21, 2008

Vijay Prashad
Wealth's Apostles

Paul Craig Roberts
How Inflation Works: Why I Can't Buy an Old Ferrari

Corey D. B. Walker
Empire and White Supremacy

Steve Breyman
How to "Win" in Afghanistan

Eric Toussaint
The Economic Crisis and Latin America: Time to Delink

Wajahat Ali
Boo Radley Comes Out to Play: the Emerging Muslim-American Electorate

Robert Weitzel
Wasting a Vote for Lincoln's Radical Ideal (Or Why I'm Voting for Nader)

Brendan Cooney
Palinoscopy: an Exploration of Why Liberals are So Obsessed with Sarah Palin

Dave Lindorff
Cuba's Oil Reserves: a Game-Changer?

Marqueece Harris-Dawson / Bob Wing
When You're a Black Candidate There's No Such Thing as a Safe Lead

Patrick B. Barr
Socialist, Socialist, SOCIALIST!

Omar Barghouti
The Boycott and Palestinian Groups: Countering the Critics

Website of the Day
How to Dismantle a US War Plane (and Get Away With It)

October 20, 2008

Michael Hudson
The ABCs of Paulson's Bailout

Anthony DiMaggio
The Scandal That Never Was: ACORN, Rightwing Media and Election "Fraud"

Tariq Ali
Zardari Bans My Books

Uri Avnery
Is Akko Burning?

Bill Quigley
Hammered by the Swedes

Ben Rosenfeld
The Politics of St. Joe, Martyr to a Lie

David Michael Green
Payback's a Bitch: McCain on the Ash Heap

William S. Lind
The Afghanistan Advantage

Chris Genovali
Drill, Baby, Drill (Wink, Wink)

Stephen Martin
The Last Man in America

Howard Lisnoff
Bad News for War Resisters

David Yearsley
Organ Meat

Website of the Day
Our Brother is Sick: the Steve Ferguson Cancer Fund

October 17 / 19, 2008

Alexander Cockburn
Blow Ups and Bombers

Jeffrey St. Clair
Inside Hanford: a Trip to America's Most Toxic Place

Pam Martens
How the Banksters are Making a Killing Off the Bailout

Paul Craig Roberts
Government of Thieves

Mike Whtney
No More Investment Banks

Michael D. Yates
Bowling Alley Blues: Racism Dies Hard in Johnstown, PA

Suzanne Smith
The Energy-War Connection: McCain Said It, Why Don't We?

Carl Boggs
Prosecuting Bush

Ralph Nader
Closing the Courthouse Doors

Fidel Castro
The Global Crash

Dave Marsh
The Great Levi Stubbs

Saul Landau
Denial, the Election Musical Comedy

Jo Guldi
The Floods of Heaven

Kevin Zeese
Now the Cost of War Really Matters

Larry Everest
Afghanistan, Not a Good War Gone Bad

Steve Early
Stop, in the Name of Joe!

David Macaray
Hey, Joe

Ben Terrall
When Ike Hit Haiti

Missy Beattie
Palin and God's Children

Don Monkerud
American Exceptionalism

Helen Redmond
Health Care Now's Big Con

Dan Bacher
Schwarzenegger's Delta Vision: Canals and Dams to Bail Out Big Ag

Wajahat Ali
Bush Gets Stoned

Farzana Versey
The White Tiger's Stripes and Gripes

Vladimir Frolov
Medvedev to Obama: We Come Not to Bury America, But to Buy It

Kim Nicolini
Frozen River: At Last, a Great Movie That's Neither Hip Nor Cool

Poets Basement
Gibbons, Corsale, Davis and Fleming

Website of the Day
The Real Sarah Palin?

Weekend Edition
November 21 / 23, 2008

Locking in the Loot at the Reagan Library

Paulson's Cascade of Lies

By MICHAEL HUDSON

On Thursday, November 20, Treasury Secretary Henry Paulson presented, even by his own lamentably low standards, an amazingly deceptive speech at the Ronald Reagan Presidential Library in Simi Valley, California. In its false  framing of Washington’s financial giveaway to Wall Street it rivaled some of the outstanding fables created by the Master Imagineer himself, for whom the library is named.

What prompted the speech seems have been Congressional criticism of Mr. Paulson’s bait-and-switch transfer of public funds to Wall Street, and the Federal Reserve’s transfer of an amount twice as high as Congress’s $700 billion. His most urgent aim was to ward off accusations that the Treasury and Federal Reserve have acted illegally. “Federal law, and in particular the Anti-Deficiency Act, prohibits Treasury from spending money, lending money, and guaranteeing or buying assets without Congressional approval. The Federal Reserve can and does lend on a secured basis, but only if it expects not to realize losses.” (Italics added.)

But Congress did not approve the Treasury’s $250 billion of “preferred” stock investments in Wall Street banks. The  happy recipients, their stockholders and officers evidently worried precisely that this “investment” would end up taking losses. That is why the Treasury stands in back of bona fide creditors. That is why “preferred” stock was preferred by existing stockholders to loans and guarantees (which have priority in case of bankruptcy), not to mention the conditions that Congress thought it had laid down calling for these institutions to renegotiate mortgages to bring them in line with the debtor’s ability to pay.

The Fed has refused to let Congress know any details – any details at all – about its cash-for-trash swaps with these institutions. This is what concerns Congress, and what has prompted  reporters at Bloomberg to bring a lawsuit in order to discover and publicize the details. It is not hard to see why this curiosity exists. The only reasonable explanation as to why investment banks, American International Group (A.I.G.) and commercial banks apparently headed by Citibank (whose shares plunged yet  another 26 per cent on Thursday) have turned over a trillion dollars worth of illiquid mortgage securities, junk bonds and who knows what other junk to the Fed is to avoid taking a loss on these bad loans and investments. As Mr. Paulson explained matters, “the Federal Reserve has statutory authority to lend against a pool of mortgage loans on a fully secured basis. The Fed was able to assist the JPMorgan purchase because they believed that there was a reasonable prospect of avoiding losses.”

What time frame are we talking about here? Evidently one in which Mr. Paulson will have left the administration, sticking his successor with the losses and, presumably, the blame.

Everything seems to have been unexpected to Mr. Paulson – as if ignorance is a defense. “When I came to Washington in 2006,” he reminisced, “markets were benign.” We were still in Alan Greenspan’s idea that inflating asset prices on credit constitutes “wealth creation.” At that time I myself was only one of many who warned that the real estate market had come to rest on a foundation of junk mortgage lending. Every banker with whom I spoke at the time knew this. But most were still seeking to make hay while the making was good, and it was still quite good – for the banks, that is. Matters were not benign for the increasingly debt-ridden U.S. economy, but at least they were rosy for Wall Street. Bank executives were paying themselves enormous salaries and even larger stock options. Meanwhile, the smarter money managers were beginning to shift their funds out of the U.S. economy in a wave of capital flight of a magnitude not seen since Russia in the mid-1990s.

Acting as if all this could not have been foreseen, Mr. Paulson assured his mistake-friendly audience, “There was no playbook for responding to a once or twice in a hundred year event.” A kind of random historical earthquake seems to have been at work, a financial San Andreas fault. Mr. Paulson then trivialized this, however, with the euphemism “housing correction.”

The key is, what is to be corrected? Is it not the financial market itself?

Mr. Paulson then set about dissembling the character of the U.S. and global financial system. “Our financial system,” he claimed, “is built on the hard work of our citizens; it is built on the savings of our citizens.”

This is where he seeks to spread the disinformation about the explosion of debt that now burdens the U.S. economy, which  is the result of autonomous credit-creation by the commercial banking system and has nothing to do with the savings habits of “our citizens”. The basic financial principle of modern banking is that “loans create deposits.” The bank loan comes first – then the deposit or “saving.”

Here’s how it works. A bank’s marketing department seeks to drum up customers for debt. A borrower will go into a bank and sign a promissory note, and the bank then creates a checking account in the amount that is stipulated. The note calls for a specific rate of interest to be paid – a rate much higher than that which the bank can borrow from the Federal Reserve or in the money market in general. One benchmark global rate to bankers is the London Interbank Borrowing Overnight Rate (LIBOR), and the other is the Federal Reserve’s discount rate to banks. (Japanese banks also provided loans to large financial institutions at under 1% per year, spurring the international “carry trade,” borrowing cheap in yen and then converting the funds into other currencies and lending at a higher rate.)

None of this involves saving. It involves credit creation in which banks have a legal monopoly, with funding monetized by the U.S, Japanese and other major foreign central banks. This free credit creation is at the root of the problem, not the natural growth of savings.

What have banks done with this credit-creating privilege? Nearly all their loans have been to enable buyers to purchase assets (real estate, stocks and bonds or entire companies) already in place, or to enable hedge funds to play the mathematical games that have come to characterize today’s casino capitalism. Mr. Paulson depicts the resulting financial system as being essential for the good functioning of “Main Street.” But surely he must know some lawyer who might explain to him that only very, very wealthy speculators are allowed to play the hedge fund game of financial derivatives that lies at the heart of today’s financial breakdown and negative equity for banks that have made bad gambles. The legal reality is that in order to invest in hedge funds and similar casino capitalism gambles (or in Broadway plays and other high-risk ventures, for that matter), prospective financiers must sign releases attesting to the fact that they can afford to lose their money.

“If the financial system were allowed to collapse,” Mr. Paulson warned, “it is the American people who would pay the price. This has never been just about the banks; it has always been about continued prosperity and opportunity for all Americans.” Not really. Wall Street is hardly  so altruistic. It has increasingly made its money off Americans by engaging in increasingly predatory, extractive lending to the economy. That is what has caused the U.S. debt burden to soar so far ahead of the ability of debtors to pay. It also is what is now diverting spending away from consumption and (for companies) new capital investment to pay creditors.

Not content with misrepresenting how the U.S. economy works, Mr. Paulson then drew a picture of the global economy that also is a travesty. “The world was awash in money looking for higher return,” he explained, “and much of this money was invested in U.S. assets.”

Not exactly. The world economy has been awash in the U.S. payments deficit, which has swollen the reserves of central banks in the creditor nations from Asia to Western Europe. These central banks have recycled $4 trillion of their dollar inflows to the United States under dollar hegemony. Rather than seeking a “higher return,” central banks have found themselves obliged to invest in low-yielding U.S. Treasury securities, or somewhat higher Fannie Mae and Freddie Mac securities. These returns are much lower than U.S. investors have sought in buying up foreign companies and their stocks, whose price appreciation far exceeded the rate that foreign economies were able to recoup on their dollar recycling to the United States.

Mr. Paulson wants above all to deter foreign economies from breaking away from this dysfunctional system. “The second important priority,” he explained to his Reagan Library audience, “must be continued reform of the International Financial Institutions like the World Bank and the IMF to allow for greater participation of developing nations.” The aim here is to make the financial sector’s lobbying control over the world’s financial system global. “A final reform priority must be consistent liberalization of policies on trade and investment, with an emphasis on avoiding new protectionist measures and achieving a breakthrough in the Doha round of global trade talk.”

“New protectionist measures”! Even as U.S. auto companies are advocating special subsidies for the U.S. auto industry in Detroit and pursuing beggar-my-neighbor financial policies (let foreign banks and economies absorb the financial loss from playing in the Wall Street casino), foreign countries are not to develop a financial system more highly regulated, an agriculture more aimed at feeding their own people. They are not to block capital outflows from the United States based on “free” credit creation to buy out the commanding heights of their economies as the IMF imposes austerity plans and forced privatization sell-offs on Third World and post-Soviet countries, while cutting taxes at home in the face of an escalating U.S. trade deficit and rising foreign military spending.

Mr. Paulson’s speech looks like a major salvo in the Bush Administration’s attempt to make both the Wall Street bailout and the U.S. predatory finance irreversible, while the government replaces public debt (Treasury bonds) for Wall Street’s bad gambles. His errors are calculated to misinform, as are most lobbying efforts by the banking and financial sector. One can only hope that Congress will question his testimony that has repeatedly followed this line with more acumen than prompted its earlier acceptance of the Treasury’s bailout act. It’s time to clean up this act.

PS: As I watched  Citibank's stock (C ) take yet another plunge  of 10 per cent in the firsthour of Thursday morning, my wife showed me something that a Citibank advertiser was handing out to students at New York University yesterday afternoon: A flyer begging them to put their money in at 3.10 per cent per year. (Vanguard's Treasury-money market fund offers under 1 per cent at present.) I told Grace that our net worth was higher than Citibank's, but I'm not able to draw down a $10 million a year salary like their jokers do.

The Citibank handout (when have you ever heard of street hawkers for banks says, "You'll have the safety of FDIC insurance and your CD's term is just 6 months. So you can keep your money secure at a great rate. ...Citi never sleeps."

Citi’s stock has fallen 84 per cent this year, and the company is on the rocks. I'd be sleepless too, if I were them!

Michael Hudson is a former Wall Street economist. A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) He can be reached via his website, mh@michael-hudson.com

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