Today's Stories

November 24, 2008

Mike Whitney
You Ain't Seen Nothing Yet

Pam Martens
The Rise and Fall of Citigroup

November 21 / 23, 2008

Alexander Cockburn
The Honeymoon is Looking a Bit Wan

Michael Hudson
Paulson's Cascade of Lies

Mike Whitney
Time to Move to Plan B ... If There is One

Barbara Rose Johnston /
Holly M. Barker
Cautionary Tales From a Nuclear War Zone

Serge Halimi
The Gloom of Empire: Downhill All the Way

Alan Farago
The Suburbs March On

Ralph Nader
Changing With Retreads: the Third Clinton Administration

Saul Landau
When Old Axioms Don't Apply

Robert Bryce
From LBJ to Obama: the End of Texas Dominance

Shannon May
Ecological Crisis and Eco-Villages in China

Binoy Kampmark
The End of the Yugo

Jack Ely
The Fate of the West's Wild Horses

Ramzy Baroud
The Rights of Women in War Zones

Missy Beattie
Why Vote, Anyway?

Larry Portis
Women Soldiers Serving in (and Barely Surviving) the Israeli Army

James McEnteer
Colombia's Laboratory of Failure

Christopher Brauchli
A Tale of Two Whales

David Yearsley
Real Swords, Fire and Don Giovanni

Adam Engel
Power Down

Ron Jacobs
The Continuing Saga of the White Album

Lorenzo Wolff
Honky Tonk Heroes: When Country Got Real

Poets' Basement
Raza Ali Hasan

Website of the Weekend
Lips and Fingers

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?

November 24, 2008

Enter Geithner and Summers

You Ain't Seen Nothing Yet

By MIKE WHITNEY

"The problems we face today cannot be solved by the minds that created them" 

--Albert Einstein

Obama hasn't even been sworn in yet, and already the Wall Street cheerleaders are celebrating his first great triumph. According the pundits, the stock market staged a surprise 494 point rally on Friday because--get this--it was announced that Timothy Geithner would be appointed Obama's Treasury Secretary.

What nonsense. The sudden turn-around in stocks had a lot more to do with short-covering than anything else, but don't let that get in the way of a good story.  Even so, the last minute surge on the NYSE couldn't stop another week-long bloodbath that ended with the Dow and S&P 500 tumbling another 5 percent. That's not to say that Geithner is not bright and talented guy. He is; and so is his White House counterpart, Lawrence Summers. But the media hype is way overdone. Geithner doesn't drive the markets and he isn't "change you can believe in". In fact, he's a protege of Henry Kissinger, a member of the Council on Foreign Relations, and has the same political pedigree as his predecessor, Henry Paulson. They're both part of the ruling fraternity and their views of the world are nearly identical.  There's no doubt that Geithner will be more competent and effective than Paulson but, then again, who wouldn't be? Paulson may be the biggest flop at Treasury since Andrew Mellon steered the country onto the reef during the Great Depression. The recent flap over the Troubled Assets Relief Program (TARP) just proves the point. After convincing Congress to pass a $700 billion bailout plan--by invoking the specter of economic Armageddon and martial law--the former G-Sax chairman proceeded to set up a program for buying back mortgage-backed securities (MBS) and other junk paper from his banking buddies. Paulson argued that removing the crappy loans would help the banks get back on their feet and start lending again. Of course, no one could really figure out how the process was going to be executed, but maybe that's just nit-picking.  Fortunately, Paulson never got a chance carry out his plan. He was torpedoed by the stock market which plunged seven days in a row losing nearly 20 percent of its value until Paulson threw in the towel and did what 200 economists had suggested from the very beginning---buy preferred shares in the banks so they could rev-up their credit engines again. 

Will Geithner be that stubborn? Not likely. And Paulson is a hard-nosed class warrior, too. Notice how every dime of the bailout has gone to banksters while all the efforts to provide relief to autoworkers, consumers or struggling homeowners have been blocked. Anyone who isn't in the upper 1 percent income bracket can forget about getting a helping hand.  

Paulson shoveled $25 billion to Citigroup without even sending in the regulators to see if they were solvent or not. How smart was that? Citi's stock has dropped 93% from its all-time high in May 2007 and ended Friday at a measly $3.77 per share. Its market cap. has gone from $280 billion to a skinny $20 billion in less than a year. Without a lifeline from the government, they won't make it through December; the short-sellers will carve them up like a smoked ham. Will Paulson come to Citi's rescue with more public cash? Absolutely. So why won't he support a similar bailout for the Big Three auto-makers who employ nearly a million people?

There was a clue in Sunday's paper as to why Paulson is stiffing the car companies.  According to UPI :

"GMAC Financial Services said Thursday it had applied to the U.S. Federal Reserve for bank holding company status, a step toward securing federal aid. The auto and home financing company said it had also submitted an application to the U.S. Treasury to participate in the Capital Purchase Program set up in the $700 billion financial firm bailout program known as the Emergency Economic Stabilization Act.

"As a bank holding company, GMAC would obtain increased flexibility and stability," the company said in a statement." (UPI)

So why would GMAC want to become a bank holding company if General Motors is headed for the chopping block? Could it be that the government is working out a secret deal with management to put the company through Chapter 11 (reorganization) just so it can crush the union and eliminate their pension and health care benefits in one fell swoop?

You bet. Car workers will be reduced to slave wages just like they are in sunny Alabama where sharecropping has moved indoors. And--no surprise--the Democrats are right on board with this labor-busting charade. The auto industry isn't going to be shut down. That's just more fear-mongering like the blather about martial law and WMD. Detroit is going to be transformed into a workers gulag; Siberia on Lake Michigan, which is why Paulson is withholding the $25 billion. It's plain old class warfare. 

Paulson has tried to spread the myth that his bailout eased the credit crunch, but it's not true. The stress in the credit markets was caused by very precise factors (Libor, the TED Spread, OIS-Libor) which were intentionally allowed to rise to perilous levels so Paulson could coerce Congress into giving him his bailout loot. It wasn't until Congress caved in that the FED addressed those market indicators by (setting up a new facility and) providing an explicit government guarantee on commercial paper and money markets. That's what made Libor go down, not Paulson's misguided TARP program which did absolutely nothing.

So, yes, the banks do need to be recapitalized. But, no,  TARP did not address the specific conditions in the credit markets which were causing the problems. And, Yes, Congress is too blind to see that they were duped by a top-hat Wall Street land-shark who pulled the wool over their eyes and made off with $350 billion. 

Geithner is unlikely to engage in the same cynical antics as Paulson. It was Paulson who set up the Super SIV (Structured Investment Vehicle) after 2 Bear Stearns hedge funds blew up so he could help Citigroup and other financial institutions pawn-off their off-balance sheets garbage to investors by placing the US treasury's seal of approval on the rotten paper; another shameless rip-off shrink-wrapped in the Stars and Stripes.

Paulson's "Hope Now" (1-888-995-HOPE) was another scam that was supposed to help banks and homeowners work out the details for a rate freeze on mortgage resets. Paulson assured the public that 500,000 homeowners would take advantage of the program which would dramatically reduce rate of foreclosures. As it stands, Hope Now hotline has provided counseling to just 36,000 borrowers. Representatives have suggested loan workouts for fewer than 10,000 of them, a small fraction of borrowers in need." (Earlier Subprime Rescue Falters; Wall Street Journal)

Only 10,000 homeowners; and Paulson promised 500,000?

Another slight miscalculation. The real purpose of Hope Now was to derail Shiela Bair's FDIC from enacting a program that has a real chance of helping people stay in their homes. Paulson doesn't like that idea; after all, there's still plenty of freeway overpasses for people to sleep under.

Paulson also initiated "Project Lifeline", which targeted homeowners who were delinquent 90 days or more on their mortgages. Here's the run-down of how it works:

"Project Lifeline involves servicers sending letters to borrowers -- prime, Alt-A, or subprime, we're past pretense on that part -- who are very seriously delinquent (90 days or three payments down or more). The letter says that if the borrower contacts the servicer within ten days, agrees to homeowner counseling, and provides sufficient financial documentation that the servicer can consider a case-by-case, deep-analysis style modification of the mortgage terms, the servicer will agree to put the foreclosure process on hold for 30 days while the workout is considered. If the borrower fails to respond to the letter, foreclosure proceeds."

Ever heard of Project Lifeline? No one else has either. That's because it was just another one of Paulson's PR chimeras that passed into oblivion as soon as it served its purpose of making it look like the administration really gives a damn. That's a laugh.

ENTER GEITHNER

Geithner is nothing like Paulson. He's discreet, practical, non ideological and diplomatic. His job is to find a way to plug the holes in a banking system that is undercapitalized by a whopping $2 trillion dollars while trying to keep the broader economy from crashing to earth.  He's already concocted a stimulus plan (with Summers help) that should be big enough to get the country through the first quarter of '09 ($700 billion), but it will take sustained government spending via infrastructure and green technologies programs to make up for the staggering losses to consumer spending. Expect the red ink to flow knee-deep from the purple mountains majesty all across the fruited plains, and pray that China and Japan keep buying US Treasurys or the country will face historic hyper-inflation.

Geithner knows that his mandate far exceeds his job description. Consumer confidence is at record lows because the public has lost faith in their institutions. The fear-mongering and the deception of the last 8 years have taken their toll; the pessimism is palpable. But market-based systems require confidence to function properly, otherwise people withdraw their savings and hoard their money. And that is exactly what is happening. We have entered a period of extreme risk aversion where there's been a steady run on the financial system; investors have pulled their money out of commercial paper, structured investments, money markets, corporate bonds, and securities. The markets are in a state of panic. Investors are moving into safe havens like Treasurys while consumers are cutting back on spending. The whole system is contracting. The same thing happened during the Great Depression. The similarities are stunning. In Jason Zweig's "1931 and 2008: Will Market history Repeat Itself" the author says:

"Over the two weeks ended Nov. 20, 2008, the Dow Jones Industrial Average fell 16%. Over the two weeks ended Nov. 20, 1931, the Dow fell 16%.

If you think that is scary, consider this: In the final five weeks of 1931, the Dow fell 20% further. Then it went on to lose yet another 47% before it finally hit rock-bottom on July 8, 1932

It is vital to realize that markets are never under some obligation to stop falling merely because they have already fallen by an ungodly amount. It also is vital to explore how bad the worst-case scenario can get and to think about how you would respond if it comes to pass.

When it comes to worst-case scenarios, 1931-1932 is it. When the Dow finally stopped going down, in July 1932, it had lost 88% in 36 months. At that point, only five of the roughly 800 companies that still survived on the New York Stock Exchange had lost less than two-thirds of their value from their peak in 1929." (Wall Street Journal)

Geithner's job is to restore confidence through transparency and consistency. No more lying. No more fudging the numbers to keep the public in the dark. Investors are already voting with their feet. It will take trust to get them to come back. Geithner has a clean slate to work with, but if he chooses Paulson's route--the path of deception--he'll fail, too. He's got one chance to make good; otherwise....To his credit, he has made statements confirming his determination to reform the system. This is what he said to Congress in recent hearings:

"The United States will have to have to undertake substantial reforms to our financial system. There was a strong case for reform before this crisis, our system was designed in a different era for a different set of challenges. But the case for reform is stronger today. Reform is important because a strong and resilient financial system is integral to the performance of any economy. ...I think the severity and complexity of this crisis makes a very compelling case for a broad and comprehensive reassessment of how we use regulation to achieve an appropriate balance between efficiency and civility. This is extremely complicated both in terms of the tradeoffs involved but also in terms of building the necessary consensus involved both here in the United States and around the world. It is going to require significant  changes in the way we regulate and supervise financial securities; changes that in my view, need to go well-beyond modest adjustments to some of the specific capital charges in the existing capital regime as it applies to banks."

Good. Investors want rules, guidelines, supervision, regulations and most of all accountability. Justice should be the organizing principle in the financial system just as it is in the legal system. That means securities fraud has to be investigated and prosecuted. No free passes for banking mandarins and toffee-nose fund managers. Break the law and go to jail, just like Jeffrey Skilling. This is the biggest financial meltdown in US history and not one CEO or CFO has even been indicted. Instead, the SEC wastes its time harassing Dallas Maverick's owner Mark Cuban in a politically-motivated witch hunt. What a fiasco. Why not clean up the cesspool on Wall Street first. That's where the problem is and that's how one reestablishes credibility. 

Then there's the heavy lifting of rebuilding financial markets while hedge fund redemptions are approaching 50 percent, corporate bonds have dropped by nearly half, commercial property is tanking, consumer spending is in the dumps, and the housing market continues to crumble. That's not an easy task. And, at the same time, banking behemoth Citigroup needs an immediate injection of capital just to maintain operations. Once again, the Treasury will assume a gigantic liability to avoid wider damage to the system. According to the Wall Street Journal:

"The federal government agreed Sunday to take unprecedented steps to stabilize Citigroup Inc. by moving to guarantee close to $300 billion in troubled assets weighing on the bank's books, according to people familiar with details of the plan.

Treasury has agreed to inject an additional $20 billion in capital into Citigroup under terms of the deal hashed out between the bank, the Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corp....

In addition to the capital, Citigroup will have an extremely unusual arrangement in which the government agrees to backstop a roughly $300 billion pool of its assets, containing mortgage-backed securities among other things. Citigroup must absorb the first $37 billion to $40 billion in losses from these assets. If losses extend beyond that level, Treasury will absorb the next $5 billion in losses, followed by the FDIC taking on the next $10 billion in losses. Any losses on these assets beyond that level would be taken by the Fed."

What a nightmare. In a conference call held last Friday, Citi's chief executive Vikram Pandit boasted that Citi "had a fantastic business model" and that "we are one of the best counterparties in the world based on our capital, and based on our liquidity." Indeed, Pandit can count on virtually limitless liquidity from this point on.

Also, keep in mind, that when 2 Bear Stearns hedge funds went belly up in July 2007, the experts all agreed that there were probably only $200 to $300 mortgage backed securities (MBS) in the whole system. Now we find out that there are $300 billion on Citi's balance sheet alone! More lies. In truth, there were more than $5 trillion in MBS created between 2000 and 2006. A large portion of those are held by banks. That means more trouble ahead.

YOU AIN'T SEEN NOTHING YET

So how will Geithner and Summers deal with the problems they'll be facing just two months from now?

They'll do whatever they need to do to stabilize the financial system and to get consumers spending again. That means at least another $2 trillion added to the ballooning national debt and some extremely dodgy ways of getting liquidity into the system.(With the Fed Funds rate already at 1 percent, monetary policy is limited)

Larry Summers, who will serve as Obama's chief economics advisor, summed up his plan like this to Bloomberg News:
        
"At first I believed that any stimulus package should be timely, targeted, and temporary. But the situation has deteriorated so significantly from that point that I would now go for speedy, substantial, and sustained over a several year interval."  

But how will Summers get money into the system if monetary policy has been ineffective and the banks are not providing sufficient credit?  

Economist Nouriel Roubini answers that question in his latest blog entry on Global EconoMonitor web-site:

"The Fed (will) directly purchase long term government bonds as a way of pushing downward their yield and thus reduce the yield curve spread. But even such action may not be very successful in world where such long rates depend as much as anything else on the global supply of savings relative to investment. Thus, even radical action such as outright Fed purchases of 10 or 30 year US Treasury bonds may not work as much as desired. (MW: In other words, the Fed will buy its own debt to control long-term rates)

Next, the Fed could make "outright purchases of corporate bonds (high yield and high grade); outright purchases of mortgages and private and agency MBS as well as agency debt; forcing Fannie and Freddie to vastly expand their portfolios by buying and/or guaranteeing more mortgages and bundles of mortgages; one could decide to directly subsidize mortgages with fiscal resources; the Fed (or Treasury) could even go as far as directly intervening in the stock market via direct purchases of equities as a way to boost falling equity prices. Some of such policy actions seem extreme but they were in the playbook that Governor Bernanke described in his 2002 speech on how to avoid deflation. They all imply serious risks for the Fed and concerns about market manipulation."

"Finally, the Fed could try to follow aggressive policies to attempt to prevent deflation from setting in: massive quantitative easing; such as letting the dollar weaken sharply, flooding markets with unlimited unsterilized liquidity; talking down the value of the dollar; direct and massive intervention in the forex to weaken the dollar." (MW: Intentionally weakening the dollar to spur consumer spending and exports)

The bottom line is that Geithner and Summers will have to recapitalize the banks and deal with the massive corporate defaults at the same time they initiate their strategy for pumping liquidity into the system to keep the economy limping along. It's a tall order and there's no guarantee of success.

Mike Whitney lives in Washington state. He can be reached at fergiewhitney@msn.com.

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