The Trials of Henry Kissenger (Video)

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New GAO study exposes significant problems with Health Savings Accounts

The Center for Budget and Policy Pririties has a write-up on a recent Government Accountability Office study that dispels the notion that the working poor or even middle class Americans would benefit from implementation of Health Savings Accounts (HSAs) that were established by the Republican-led Congress' 2003 Medicare drug law. As you can already probably guess, given that the GOP pushed so hard for the bill, the independent government agency found that affluent Americans benefitted the most from it.

Not only that, the GAO findings also strongly suggest that HSAs are being used extensively as tax shelters (as opposed to being used as savings accounts). Finally, the GAO data suggest that HSAs can be beneficial to healthy individuals with relatively few health care costs, but not to people who have medical conditions and incur higher costs. Oops.

According to the GAO study, as reported by CBPP: "51% of tax filers making HSA contributions in tax year 2004 had adjusted gross income of $75,000 or more. This represents a decisive skewing toward higher-income individuals, since only 18 percent of all tax filers under age 65 had incomes of $75,000 or more in 2004. The average adjusted gross income of tax filers reporting HSA contributions in 2004 was $133,000, as compared to $51,000 for all tax filers under age 65 in 2004."

Nice. So much for health insurance reform for those who need it the most. But there's more. . .

"About 55 percent of tax filers reporting HSA contributions in 2004 did not withdraw any funds from their accounts and “appeared to use their HSA as a savings vehicle.”"

and. . .

The GAO reported that when individuals are given a choice between HSA plans and more traditional health insurance plans, HSA plans are attracting “higher-income individuals with the means to pay higher deductibles and the desire to accrue tax-free savings.”

It also turns out that HSAs also have "higher out of pocket costs for the less healthy:" due to adverse selection, inevitably leading to an increased risk of these individuals becoming either uninsured or underinsured.

Go read the whole report here. Unlike Social Security, Medicare really is a crisis that needs to be dealt with, and independent analysis shows that so-called "market-based" approaches like HSAs are exactly the wrong way to go.

National Intelligence Estimate: Iraq invasion increased terror threat

The New York Times has yet another scoop--reporting that leaked excerpts of the National Intelligence Estimates (NIE) confirm what most Americans hae known instinctually for the past three years. That is, the Iraq war, Bush's war of choice, has not made Americans safer by fighting terrorists "over there" so as not to have to fight them "over here". In fact, the effect has been exactly the opposite. By creating even more terrorists and fomenting hatred of the US among previously moderate Muslims in the Middle East, the war has put Americans at an even greater risk.

Be sure to check out this brief Daily Kos story by Dem From CT for a link to a draft of the NIE's "key Judgements" (in .pdf format).

New independent study blasts FDA safety enforcement

The New York Times has a mind-blowing report on the very serious systemic problems at the FDA agency, specifically in terms of their regulation of drug safety.

The article notes that according to a recent study by the well-respected, independent Institute of Medicine (part of the National Academy of Sciences), there are deep concerns about the federal agency's “organizational health” as well as its ability to ensure the safety of the nation’s drug supply (one of its most important responsibilities).

Not surprisingly, the multi-billion dollar pharmaceutical industry, through its powerful lobbying army on K Street, was quick to cast aspersions on the independent study's findings. Big Pharma, of course, very much likes the FDA's enforcement regime the way that it is--that is, with the FDA doing the bidding of the lobbyists as opposed to, say, regulating them like it is supposed to.

According to the Times, the IOM study validates the key concern among many watchdog organizations and FDA critics that the agency is too intent on rapidly approving every new drug that comes down the pike that it is failing to ensure the safety of the drugs.

The article goes on to note that one of the FDA’s most serious problems originated in a deal struck back in 1992 between Congress and the drug industry in which drug makers "agreed to pay millions in fees to speed reviews." This deal has increased pressures on drug reviewers to act quickly, and it has limited “the ability of reviewers to examine safety signals as thoroughly as they might like." If this sounds like a recipe for disaster, that's because it is.

Drug manufacturers create life saving drugs all the time, and I am all in favor of their being able to expeditiously get those products to market as quickly as possible. I don't want to see a federal bureaucracy get in the way of the private sector innovating and helping cure diseases and illnesses. But the upshot of the IOM study is that a balance needs to be struck between protecting industry incentives and profits and protecting the health and well-being of American citizens who have little knowledge of how the drugs they are taking work and are reliant upon the federal government to ensure their safety. And the FDA's current enforcement efforts are far out of balance in favor of industry.

This is something Congress should be acting upon immediately, but don't expect the industry to let much-needed reforms to occur without a tough fight. And as the article makes clear, any changes aren't likely to occur in the next year:

"There is little chance that Congress will act on any of these proposals before next year, when it must reauthorize the 1992 financing deal with the drug industry. Negotiations between the drug industry and agency about the parameters of that deal are already under way."

Why the growing trade deficit matters

Via Hale Stewart (AKA Bonddad), Bloomberg News is reporting that the US trade deficit widened to a record $68 billion in July. It's pretty normal for busy Americans to read such depressing news in the paper, shrug their collective shoulders and shift their attention to more immediately pressing concerns. But the growing trade deficit is a serious problem with serious ramifications for our economy, and many experts don't think the issue is going to be resolved any time in the near future.

As Stewart notes: "Essentially, a trade deficit means the US is consuming more than it produces. To make up the difference between what a country produces and what it consumes, the country first draws down its savings. However, the US doesn't have much savings anymore. The US consumer's savings rate has been negative for the last year and the federal government is issuing over $550 billion in bonds every year. Corporations are the only sector that is saving money in the current economy."

The fact that savings are currently non-existant in the US these days has tremendous importance in terms of how the deficit will play itself out in the coming years. Without savings, in fact, the US is essentially forced to rely on foreign capital inflows to finance the trade deficit.

According to Stewart, at the levels announced last week, the US needs to attract $2.2 billion dollars a day in foreign inflows just to finance its trade deficit. And even though the US has been able to continually attract foreign funds for investment in the US in the last few years, we shouldn't assume this will last forever.

In his post, Stewart also points out that according to the IMF, the US has been "the beneficiary of a convergence of economic events that started with the Asian financial crisis of the last 1990s [. . .] This event made emerging markets less attractive for direct investment, therefore making more stable countries like the US more attractive for international investment. In addition, contrary to Bernanke's "global savings glut" theory, the primary reason for the excess savings in the world is a drop in Asian internal investment. Money the Asian economies would traditionally invest in their own productive capacity was freed to move offshore. Finally, the US economy has grown faster than Asia and Europe over the last 5 years, making the US the de facto most attractive place for the excess savings to flow."

However, there is a general consensus among economic forecasters that the US economy (GDP growth) will slow in the coming year. Not only would this slowdown not be conducive to attracting overseas investment, at the very same time there are quite a few "developing" economies around the globe that are growing at faster rates than the US - China, India, Russia, several Eastern European countries, Brazil and Mexico. According to Bonddad, "as US growth slows, these faster growing economies may receive a boost in foreign direct investment at the expense of the US."

Suffice it to say, that is not a good scenario for a country with a huge federal deficit and a growing trade imbalance, and the IMF is already expressing concern over the impact such imbalances may have on the world economy.

When telecom executives are hostile toward customer privacy

I wrote a few months ago about the emerging picture of a "surveillance-industrial complex" in the US, that is, a link between the private telecommunications industry and the federal government's spy agencies, back in December (see here). More relevations about the extent of this highly suspect relationship are continuing to come out in the media.

Brian Beulter has a column up at Raw Story that contain some interesting revelations regarding the US telecommunications industry and some of its shady ties to US intelligence agencies including the CIA and the Department of Justice.

According to the article: "One of the highest-level executives at Verizon Communications [the company's Executive Vice President and General Counsel William P. Barr] —second largest of the three major telecommunications firms originally alleged to be providing the National Security Agency with customer phone records under contract and without a warrant—has strong, decades-long ties to Central Intelligence, Congress and the Department of Justice [. . .] the same official has acted in an advisory capacity to the government as a private citizen for over ten years since leaving office, arguing that restrictions to federal domestic surveillance capabilities be loosened, especially in cases involving terrorism.

Apparantly, Barr has connections with the CIA going back to 1977, after which he rapidly rose up through the corporate ranks. However, according to Beuler "he has maintained ties with officials in Washington who have repeatedly called upon his testimony when crafting anti-terror legislation."

So where does this senior executive at a major private telecom company (which possesses access to the personal information, including call logs and billing records, of millions of its clients) stand in terms of respecting customer privacy? Basically, he stands with the Bush administration and their criminal disregard for federal law and the US Constitution.

According to Beuleter, Barr had, in his 1995 testimony to Congress, lauded legislation that "created a window for emergency wiretaps before the issuance of a warrant in conspiracy cases"—legislation that is still in effect. In 2003, he testified that the FISA laws hurt US security because they required "the government to go to a judge to obtain an order," which "makes absolutely no sense since it is precisely in the terrorism context that the need for speed is most acute."

However, it is well-known to anyone interested in the matter that the FISA laws and the Comprehensive Antiterrorism Act of 1995 both allow for temporary surveillance to be conducted prior to and without a warrant under "emergency" situations. Furthermore, out of thousands of requests for wiretaps, the FISA Court has only rejected a handful. Beuleter notes that Barr's critique ignores both of these salient points (as do various right-wing ideologues and Bush administration water-carriers).

Do you feel safe with Verizon being privy to your personal communications, knowing how at least one of their senior execcutives feels about such quaint notions as the rule of law?

Another look at welfare reform

It's hard to believe that Clinton's Welfare Reform law was passed ten years ago (when I was in college). Now is as good a time as any to look back and review its successes and failures. Because its successes are considered received wisdom by both Democratic and Republican politicians as well as the mainstream media, it might be worth perusing Nathan Newman's recent blog post entitled, quite appropriately, "Welfare "Reform": Ten Years Later". Some of Newman's points well worth considering are:

While the booming economy in the late 1990s made initial cuts in welfare caseloads relatively easy as job growth surged, the real test came when the 2001 recession hit. And the result was that, after a reduction in poverty and some gains in income by the poor in the 1990s, child poverty began climbing again in the last few years.
And the new Temporary Assistance to Needy Families (TANF) program in many cases was no longer there to help. Where there were 4.6 million families receiving cash benefits in 1996, only 2.1 million were receiving benefits by 2002-- and estimates are that over half that reduction (57%) came from cutting off families still in need but no longer receiving help from TANF programs.

Of families receiving welfare, the good news was that more were finding work: 39% finding some work in the preceding 12 months in 2002 versus 31% back in 1997. But a large number of single-adult families had no work and no longer received any help. By 2002, one in five former welfare recipients had no job and no cash welfare, a total of 1 million poor single mothers in this "no work, no welfare" group across the country.

A Johns Hopkins study of current and former recipients in three cities found that when all former TANF recipients are considered — those with jobs and those without jobs — the average income gains of those who left TANF were about the same as those who had not left the TANF program.

Even most families previously on welfare that have found work have ended up in dead-end jobs, with median hourly wages hovering around $8.00 in 2002, and only one-third of these workers have health insurance through their jobs. As the Urban Institute writes, "Research suggests that many of these families will never 'grow out' of low-income status with age and experience."

Look, this is an incredibly complicated issue and I am far from being an expert in welfare policy. But it behooves politicians and policy analysts to consider the bad, along with the good, that has resulted from the most significant change in the welfare state in the last decade. While millions have left welfare and found jobs thanks to reform, millions more have been left behind. It's important to keep the complete picture in mind when evaluating the program's success.

Playing a winning hand

Larry Mischel, President of the progressive Economic Policy Institute is one of the most honest and astute economist and political thinker out there today, and if you don’t believe me, you simply need to read his recent column in the American Prospect.

For a little context, the Prospect Online occasionally hosts debates between Democrats/liberals on a number of political and economic issues, and the state of Middle Class America was the subject of such a discussion in early August. While it is worthwhile to read the contributions of the various participants, including labor economist Stephen Rose (who wrote a provocative but in my opinion quite ill-informed piece back in April titled "The Trouble with Class-Interest Populism", Mischel's thoughts are dead-on and are worth exploring in some detail.

The crux of Mischel's argument is that "unless there is a dramatic switch in economic policies, we will not be able to achieve a broadly shared prosperity that benefits both low-income families and the broad middle class."

Rose essentially argues that the beneficiaries of Democratic/progressive economic policy are the poor, not the Middle Class, but Mischel rebuts this claim quite effectively. He notes for example that the tightness of the labor market, social insurance (i.e. Social Security and Medicare, the level of the federal minimum wage and even trade issues are important economic policies Democrats can and should be involved in changing if they take over Congress, and these very issues have high salience for Middle Class as well as low-income Americans.

Populism is a winning issue for Democrats, primarily because the vast majority of Americans haven't gained ground in the last six years when Republicans have controlled the Executive and Legislative branches. Whether you want to talk about increased income inequality, manufacturing job losses, the wholesale destruction of workers' pensions or weak income growth, the bottom 70% of American workers are treading water. At the same time, millionaires and billionaires who are the beneficiaries of massive tax cuts--made despite simultanous cuts in social spending which benefits low-income and Middle Class workers--have seen their net worth explode. It is no coincidence that the Forbes 400 is now comprised entirely of billionaires.

Democratic candidates would do well to listen to Mischel and his compatriots and consider running on core economic issues, as opposed to focusing on GOP incompetence or worse yet irrelevant social issues like flag burning. We'll see what happens in a few weeks.

Wage and salary income (not really) up, while job growth down

Kevin Drum links to a report in the Wall Street Journal, which explains just how ridiculous the BEA's (Bureau of Economic Analysis) trumpeting of wage growth a few weeks ago. Specifically, the BEA announced that "wage-and-salary income had risen [7%] in the first half of the year more than they had initially estimated." Sounds pretty good, right? Wrong.

As the Journal explains, the likely explanation for this favorable trend was actually...wait for it...corporate executives cashing in their stock options. As the BEA admits, this is not exactly something that is going to help, say, your average middle-class working family feel more comfortable on the 15th and 30th of the month.

The BEA's associate director for national economic accounts is quoted thusly: "The stock market was strong in the first quarter, so that suggests probably quite a bit of stock-option exercise," and Drum points out that this also helps explains why corporate profits were strong despite the higher labor cost (employee salary) numbers, because cashing out options does not cost the company anything nor impact the bottom line.

On another depressing economy-related note, Jared Bernstein at the Economic Policy Institute reports that job growth is continuing to slow down, as did total hours worked and hourly wage growth. This creates a Catch-22 for workers, because the only way they can get ahead is to add more work hours to their week, but the availability of additional hours has decreased as well.

Bernstein concludes: "In the end, the group who might view this trend as a disappointment is the tens of millions of workers whose living standards have yet to reflect much gain at all from this recovery. If this slower job growth regime persists, it is unlikely that their bargaining clout will improve to the point where they have a chance to claim their fair share of the growth they have been instrumental in creating."

Iran watch

Josh Marshall links to an article in McClatchy that provides some perspective on how the Bush administration is continuing to view Iran as a threat that must be confronted militarily--no matter how obscene such thinking is.

Here's the rundown. According to the article, which depressingly is titled "In a replay of Iraq, a battle is brewing over intelligence on Iran", officials at the CIA, the Defense Intelligence Agency and the State Department are expressing "concern" that Rumsfeld and Cheney may be on the receiving end of “a stream of questionable information” originating from Iranian exiles. According to the officials interviewed, there is no reliable intelligence to support any of the exile group’s assertions.

The article concludes: “The officials said they fear a replay of the administration's mishandling of what turned out to be bogus information from Iraqi exiles in the run-up to the U.S.-led invasion of Iraq in 2003, documented earlier this month in a Senate intelligence committee report.”

In addition, according to former defense officials, airstrike plans for Iran are being “updated” and that the leader of a Persian Gulf country failed to get the assurances he was seeking, during a recent visit to Washington, that the military option was off the table.

According to a diaryist who met with General Wesley Clark (who I suppose might be in a position to know these type of things), there is a division among the hard-line neocons in the administration over how to handle the Iranian impasse. Specifically, Rice is showing some “misgivings about striking”, with Cheney apparently wanting war with Iran “ASAP”. I wrote a little while ago about a New York Times article that discussed Cheney’s waning influence over foreign policy matters vis-à-vis Rice and others, so this may unfortunately be a scenario to test the accuracy of this theory.

Also, Laura Rozen has more here and here.

New Report: China’s Pursuit of Natural Resources and Implications for the PRC’s Grand Strategy

Interesting report from the National Bureau of Asian Research entitled “Going Out: China’s Pursuit of Natural Resources and Implications for the PRC’s Grand Strategy".

It's a .pdf, 34 pages, and an interesting read IMHO.

Heres the Exec Summary and Intro:
Executive Summary
This essay explores China’s intensifying pursuit of natural resources and implications for
beijing’s post-Cold War grand strategy.
Main Argument:
• China’s post-Cold War grand strategy is characterized by four axioms:
- “avoid conflict,” primarily with the United states
- “build comprehensive national power”
- “advance incrementally” in order to consolidate a position of strength
- “maintain stability, defend sovereignty, achieve pre-eminence, and pursue parity”
• China faces a growing need to secure natural resources and raw materials, most notably
energy and minerals such as iron ore, copper, and aluminum. This need has driven beijing to
expand overseas trade and investment at a rapid pace even in areas where China’s presence
has traditionally been comparatively limited. The need for resources is accelerating China’s
emergence as a truly global power.
• China’s pursuit of natural resources is affecting the country’s grand strategy in various ways.
in the short term, the PrC’s increasing dependence on imported resources has reinforced
China’s inclination to avoid conflict with the United states. at the same time, beijing’s
heightened global economic profile and embrace of several dubious supplier regimes have
aroused concern in Washington. China’s massive market and increasing ability to invest
overseas are also providing beijing new sources of political leverage with which to pursue
the country’s grand strategic objectives.

Policy Implications:
• resource security concerns could provide a catalyst for deepening U.s.-PrC cooperation,
and this, in turn, might help to hasten China’s domestic political liberalization.
• an intensifying competition for global resources and fear of possible supply disruptions
and sharp price increases, however, could strengthen the hand of those in China who favor
a more aggressive and militant foreign policy—a development that might derail prospects
for genuine political reform within China.

Since the start of the 21st century, the People’s republic of China (PrC) has
entered a new phase in economic development and in the evolution of the country’s
role as a fast-rising world power. after over two decades of rapid, sustained growth
China’s economic engine is now so large and is running at such a high rate of speed
that it requires vast and expanding volumes of energy, minerals, and agricultural raw
materials to keep it going. although some of the country’s needs can be met from
domestic sources, an increasing fraction of what China requires to maintain forward
momentum must be brought in from beyond the PrC’s borders, either over land from
its continental neighbors or by sea from asia and beyond.

This ravenous appetite for resources is propelling China outward into the world
further and faster than most Western (and many Chinese) observers appear to have
anticipated. China’s explosive growth creates opportunities but also dangers. The
increasing pull of the PrC’s domestic market provides Chinese strategists possibilities
for exerting influence where, until recently, they have had little. China’s rapidly growing
dependence on imports from ever more far-flung sources, however, also creates potential
entanglements and vulnerabilities where none previously existed. in recent years,
China’s economic needs have expanded far more rapidly than the country’s strategic
reach. For the moment China lacks the military capabilities that would provide beijing
reasonable assurance of continued access to resources, regardless of circumstance. Thus
the nation’s political leaders and strategic planners must now navigate a period in which
their ability to maintain domestic growth and social stability will be hostage to external
events and, perhaps, to the forbearance of those they regard as potential foes.
rapid growth has put China on the fast track to becoming a global, as compared
to a merely regional, power. How China copes with the dangers inherent in this
accelerated emergence will not only reveal much about the beliefs and preferences of
its leaders, but will also go a long way to determining the future character of relations
between China and the world’s other major powers.

The purpose of this essay is to examine the possible implications for China’s grand
strategy of its rapidly growing need for resources. after first sketching the outlines
of China’s post-Cold War grand strategy, the essay goes on to explore the ways in
which China’s intensifying pursuit of resources may be simultaneously reinforcing,
undercutting, and transforming key aspects of this strategy. a concluding section
examines a number of possible pathways through which China’s increasingly active
resource diplomacy could lead the country toward either conflict or cooperation with
other nations and especially the United States.

American auto industry, RIP?

The big business news today is that Ford Motor Company announced it is slashing 10,000 additional non-management jobs as well as shutting down two plants. As the Associated Press reports, "The blue-collar cuts at Ford are another blow to organized labor, which has been losing members as the domestic auto industry reshapes itself amid fierce competition from lower-cost, non-union rivals."

A recent article in Labor Notes asks whether the American auto manufacturing industry is dead, and if so, what impact it will have on working-class America. The authors trace many of the problems currently plaguing labor relations at the Big Three US auto makers, as well as the massive lay-offs, concessions and termination of pension plans, to the UAW's selling out their members and "cooperation" with management. Now that the industry is in trouble, it will likely send shock waves across America as high-tech jobs of the "New Economy" employ far fewer workers than GM, Ford or Chrystler do. For the millions of workers without a college degree, the imminent demise of a competitive auto industry in this country will only exaserbate the trend toward increasing income inequality by putting downward pressure on already-stagnant wages, cause an increase in the number of workers without health insurance and pensions and increase unemployment.

Referring to the massive job cuts announced by auto makers in the past few years, as well as bankruptcies at vendors such as Delphi, the writers argue: "Cuts of this magnitude will reverberate throughout the Midwest, leaving a lasting economic and social hangover. And they will not be confined to auto, as other companies follow the Big Three’s lead."

The authors also offer a prescription for alleviating the financial crisis facing these companies due to high overhead, or "legacy" costs: having management lobby for universal healthcare plans for their employees.

GM is the largest private purchaser of healthcare in the country, providing coverage to 1.1 million people. Last year the price tag was $5.3 billion, which, as CEO Rick Wagoner is fond of pointing out, is more than GM pays for steel. Half of those covered are retirees, and the company claims to provide healthcare to 1 percent of America’s seniors.

The Big Three say that such “legacy costs,” which also include pension benefits, are choking their business, obscuring the fact that all three auto makers have pension and retiree health funds flush with cash--healthy for the foreseeable future. If health care is such a heavy burden, why not join the movement for a far cheaper national health care plan? Canada’s single-payer system makes it much less expensive to do business there and has spared most Ford and GM plants north of the border from the ax.

But despite promises to the UAW to pursue “universal coverage” in exchange for the union’s $1 billion in concessions on retiree health care last fall, GM’s CEO didn’t even mention national health care in testimony before a June Congressional special hearing on the nation’s healthcare crisis. Either free-market ideology is trumping good business sense, or paying for benefits is not such a burden after all—or the employers don’t mind having a propaganda hammer to use against the union.

The authors conclude: "With health care becoming less and less attainable for more and more working people, the fight for national single-payer health care has the potential to galvanize a new workers’ movement. Rekindling such a movement may be the only way to ensure that the UAW founders’ legacy doesn’t evaporate before our eyes."

Update: Robert Reich weighs in.

FCC hid study on concentration of media ownership from public

Incredible. The Associated Press reports that in 2004, the FCC ordered a draft study written by the agency (and paid for by US taxpayers) destroyed because it "suggested greater concentration of media ownership would hurt local TV news coverage". Of course, this assertion simply could not stand at the FCC, which appears to be ideologically driven to concentrate ownership into fewer and fewer hands, destroying diversity of opinion and the ownership of television stations by entities with ties to the city or region in which they operate.

The existance of this study came to light only after Senator Barbara Boxer received a copy of it from a disgruntled FCC employee.

One of the draft study's conclusions was that "[L]ocal ownership of television stations adds almost five and one-half minutes of total news to broadcasts and more than three minutes of "on-location" news." But the article notes that this conclusion was at odds with FCC arguments made when it voted in 2003 to increase the number of television stations a company could own in a single market. It was part of a broader decision liberalizing ownership rules.

According to the AP, at that time, the FCC pointed to evidence that "commonly owned television stations are more likely to carry local news than other stations."

The significance of this draft report's shelfing is hard to overestimate. This is because "When considering whether to loosen rules on media ownership, the agency is required to examine the impact on localism, competition and diversity."

Disney makes David Horowitz's delusions into a propaganda film

Be sure to check out this interesting story in Alternet by the great Max Blumenthal about right-wing propagandist David Horowitz instigated Disney/ABC to produce and air the mendacious docudrama "The Path to 9/11".

From the article:

"Since the inauguration of Bill Clinton in 1992, Horowitz has labored to create a network of politically active conservatives in Hollywood. His Hollywood nest centers around his Wednesday Morning Club, a weekly meet-and-greet session for Left Coast conservatives that has been graced with speeches by the likes of Newt Gingrich, Victor Davis Hanson and Christopher Hitchens. The group's headquarters are at the offices of Horowitz's Center for the Study of Popular Culture, a "think tank" bankrolled for years with millions by right-wing sugar daddies like billionaire Richard Mellon Scaife. (Scaife financed the Arkansas Project, a $2.3 million dirty tricks operation that included paying sources for negative stories about Bill Clinton that turned out to be false.)

In the immediate wake of the 9/11 attacks, Horowitz led the right's campaign to pin the blame for attacks on Clinton. On February 19, 2002, Horowitz's organization mailed 1,500 lengthy pamphlets to major media outlets which claimed to expose how "the left" in general and Clinton in particular had "undermined America's security," thus causing 9/11. Two years later, Horowitz penned a lengthy manifesto for his FrontPageMag blaming Clinton once again for having "accepted defeat" in the fight against Al Qaeda. Horowitz singled out Clinton's National Security Council Director, Samuel "Sandy" Berger, as especially culpable for allowing the terror threat to fester, casting him as "a veteran of the Sixties 'anti-war' movement" who "abetted the Communist victories in Vietnam and Cambodia."

I am tempted to feel pity for Horowitz, the man in clearly deranged. But it's hard to feel anything other than hatred for a man of obvious intellectual capacity who has used his talents to pollute public discourse, write books red-baiting professors he disagrees with politically and labeling anyone who disagrees with the war in Iraq as traitors or members of a "fifth column".

Rebranding California's Universal Health Bill

Discussing the California legislature's passage of a sweeping bill to provide all residents of the state with health care last month (a bill that was, as expected vetoed by Governor Schwarzenegger), Jerry Flanagan and Judy Dugan from the Foundation for Taxpayer and Consumer Rights argue in Tom Paine that:

Even with big money out of politics, California voters will support universal health care only if they can imagine it and trust it. To achieve that level of voter confidence, reform advocates must come up with a better name than single payer. For many people, eyes glaze over when the term is uttered. Even worse, to others it conjures up scary images of “DMV health care”—including underpaid government-salaried doctors. Many of those voters would support the goals of universal health care if they could just get past the name. “Medicare For All,” an early alternative that offers a familiar comparison, has now been sullied by the HMOs that are running the Medicare drug program into the ground.

The California universal health care concept is not a “socialized” health care system in which the government employs doctors and runs hospitals. Doctors and hospitals would remain private, but wasteful insurance-company middlemen would get the scalpel. Why take on the baggage of “single payer” when the name doesn’t fit? As one reform advocate has pointed out, we don't call other vital public services "socialized fire departments" or "single payer law enforcement."

The universal health care movement needs a new brand. Why not call it something simple like the “California Health Plan?” Wouldn't the public support a plan that allowed them to choose their doctors and hospitals, pay less for better quality and access, and not have to worry about losing coverage when they change jobs?

Why not help voters understand that under the California Health Plan the billions of dollars wasted by insurance companies and HMOs on middlemen, CEO pay, corporate profits, overhead and advertising would be redirected to providing care? What if voters knew that such a plan would pay for doctor visits, preventive screening, pregnancy coverage, hospitalization and emergency treatment?

The essence of the new brand is the cost efficiency of a health care system that will spend only 2 to 3 percent on overhead and prevent disease rather than treat it after it becomes chronic. Our advocacy must make the case for a government role in better allocating wasted resources and fixing crumbling infrastructure.

This is exactly right. The way in which these issues are framed is extremely important in selling health inusrance reform to the public, so it seems logical that "rebranding" the policy in order to allow people to understand it better would actually make the difference in getting it on to a ballot initiative, sidestepping the likely veto.

For the facts regarding potential savings from instituting Universal Healthcare in California, check out the Healthcare For All website here, which links to several studies.

Bush still obsessed with dismantling Social Security

Josh Marshall reads the Wall Street Journal Op-Ed page so you don't have to. Reviewing editor Paul Gigot's recent interview with George Bush, he notes the president is still dead-set on eliminating Social Security as we know it by privatizing the program. Tons of evidence demonstrates that there is no imminent crisis facing Social Security, (if aything, Medicare is a more pressing concern) and even if there was it could best be solved by tweaking the program as opposed to radically restructuring it.

But the bottom line is that the Bush administration, as well as the GOP-controlled (for now) Congress still have their singleminded fixation on the privatization route, in so small part in order to reward its big money donors in the financial services industry which stands to earn a windfall of hundreds of billions of dollars in administrative fees. The Democrats won round one of the fight to protect Social Security, but round two promises to be just as nasty if Bush and his colleagues in the legislature get their way.

Mother Jones creates interactive Iraq war timeline

Mother Jones has a new interactive database called Lie by Lie that charts the events over the past decade that led to the 2003 invasion of Iraq and overthrow of Saddam Hussein. Here is the description from the website:

"The first drafts of history are fragmentary. Important revelations arrive late, and out of order. In this timeline, we’ve assembled the history of the Iraq War to create a resource we hope will help resolve open questions of the Bush era. What did our leaders know and when did they know it? And, perhaps just as important, what red flags did we miss, and how could we have missed them? "

This is still very much a work-in-progress, and hopefully it will be fleshed out in the coming weeks and months. But kudos to MJ for undertaking such a worthwhile, and in my opinion, essential project. The magazine promises that this represents the first installment in its "Iraq War timeline project".

Another importat resource is Billmon's famous blog post "What a Tangled Web we Weave. . ." , also known as the WMD-quote post that won him the 2003 Koufax Prize for best post. You can read the whole thing here.

Iraq carnage continues

From AP:

The leader of Iraq's biggest Sunni Arab group demanded Wednesday that the beleaguered Shiite-led government take steps to disarm militias after police said the bodies of 65 tortured men were dumped in and around Baghdad.

On a violent day even by the standards of Baghdad, car bombs, mortars and other attacks also killed at least 39 people and wounded dozens. Two U.S. soldiers also were killed, one in enemy action in restive Anbar province on Monday and the other in a roadside bombing south of Baghdad on Tuesday, the U.S. military command said.

The attacks have been unrelenting despite a security crackdown around the capital by 12,000 U.S. and Iraqi troops. The more than 1,500 violent deaths last month at the height of the joint operation speak to the difficulties in restoring any semblance of security to this sprawling city of 6 million people.

Meanwhile, the Telegraph (UK) reports:

The United Nations has estimated that around 100 people a day are being killed in this sectarian dirty war [in Iraq]. Many of these, however, are never found and disappear into the Tigris or Baghdad's sewage pipes. Last month, the 4th Infantry Division, the US force responsible for the capital, started repairing exposed holes in the city's antiquated sewage system. Officers admitted that this would not cut the number of murders but might help families locate missing relatives.

Bush's war crimes

Blogger Mark Kleiman connects the dots and demonstrates that from the evidence already available to the public, based upon media reports as well as the President's own admissions, this administration has virtually confessed to committing war crimes against alleged al Qaeda prisoners in CIA custody.

This applies not only under international law (ie: Article 3 of the Geneva Conventions, which the US is a signatory of) but also US law (18 U.S.C. 2340, 18 U.S.C. 2441), as interpreted by the Supreme Court's Hamden decision.

Administration continues to assert Iraq-Zarqawi link

Blatantly ignoring the Republican-led Senate Intelligence Committee's report that found there was no relationship between Saddam Hussein and al Qaeda, the White House is continuing to insist there was, in fact, a "relationship".

AP (9/8/06):

There's no evidence Saddam Hussein had a relationship with Abu Musab al-Zarqawi and his Al-Qaida associates, according to a Senate report on prewar intelligence on Iraq. Democrats said the report undercuts President Bush's justification for going to war.


Financial Times (9/10/06):

In defending the decision to invade Iraq despite its lack of weapons of mass destruction, Mr Cheney said the fact that Abu Musab al-Zarqawi, the former head of al-Qaeda in Iraq who was killed in a US air strike this year, was in Baghdad before the war was evidence that Iraq had links to al-Qaeda.

9/12/06 White House Press Briefing (ThinkProgress):

QUESTION: Do you believe — does the president still believe that Saddam Hussein was connected to Zarqawi or Al Qaida before the invasion?

SNOW: The president has never said that there was a direct operational relationship between the two. And this is important.

Zarqawi was in Iraq…

QUESTION: (OFF-MIKE) relationship?

SNOW: The Senate report — rather than get — you know what? I don’t want to get into the vagaries of the Senate report. But it is pretty clear, among other things, again, that were Al Qaida operators inside Iraq, and they included Zarqawi, they included a cleric who had been described as the best friend of bin Laden who was delivering sermons on TV.

But we are simply not going to go to the point that the president — the president has never made the statement that there was an operational relationship, and that’s the important thing, because I think there’s a tendency to say, Ah-ha. He said that they were in cahoots and they were planning and doing stuff. There’s no evidence of that.

Update (9/21): ThinkProgress has video clips of the dissembling here.

Update #2: Dick Cheney's appointed biographer Stephen Hayes, writing at the Weekly Standard, has decided to go after the Senate Intelligence Report here. Not surprising, really, but it's pretty ironic that a thoroughly discredited "journalist" would have the temerity to question the premise of this document.

Fox guarding the henhouse

The Associated Press reports that "The Pentagon won't be restricted in the way it uses cluster bombs. An effort by Senate Democrats to ban their use near civilian targets failed today by a vote of 70 to 30."

This at the same time the US State Department is promising to investigate Israel's controvertial use of cluster bombs in and around civilian areas in Lebanon this summer. That's pretty interesting.

On August 25th, the AP reported that according to the UN Mine Action Coordination Center, cluster bombs have been found in 285 locations in south Lebanon. And 20 new locations are being added every day.

For a little background on the long-term threat to civilians unexploded cluster bombs pose, see this article here.

And for more on the US's (unrestricted) use of cluster bombs in both Afghanistan and Iraq, see here.

Rumsfeld told Iraqi war planners not to "bother planning for a long stay"

Kevin Drum cites news reports from the Hampton Roads Daily Press (the link is no longer active) that according to Brigadier General Mark Scheid--chief of the Logistics War Plans Division after 9/11, and one of the people with primary responsibility for war planning--shortly after the invasion of Afghanistan "Donald Rumsfeld told his team to start planning for war in Iraq, but not to bother planning for a long stay."

Drum opines: "The guy who was actually in charge of logistics has now directly confirmed that Rumsfeld not only didn't intend to rebuild Iraq in any serious way, but threatened to fire anyone who wasted time on the idea. Needless to say, he wouldn't have done this unless it reflected the wishes of the president.

And this also means that all of Bush's talk about democracy was nothing but hot air. If you're serious about planting democracy after a war, you don't plan to simply topple a government and then leave.

So: the lack of postwar planning wasn't merely the result of incompetence. It was deliberate policy. There was never any intention of rebuilding Iraq and there was never any intention of wasting time on democracy promotion."

This has been discussed quite a bit in Left circles since 2003, but to have a Brigader General in charge of planning for the war confirm it is pretty significant nonetheless.

New York Times: Cheney's sway has diminished

According to an article penned by David Sanger in the New York Times, Cheney no longer has the same amount of power and prestige at 1600 Pennsylvania Avenue that he had, in say, 2003. He quotes a bunch of (obviously) anonymous high-level administration officials to help buttress his case, and to an extent I think he's on to something. Secretary of State Rice clearly has a lot of sway with the president in setting foreign policy, and her replacement at as National Security Advisor Stephen Hadley has a lot of pull as well. But as Sanger admits quite candidly, "Measuring the accumulation or the erosion of power is an imprecise art."

Imprecise indeed. Perhaps on a scale of one to ten, in 2003 Cheney has a nine in terms of pull on Bush's decision-making regarding foreign policy (and especially in prosecuting the "war on terror").

Maybe now, it's an eight.

Also, it's not clear to me how Cheney and Rice differ in substantive ways on the issues with the highest level of importance. And it Cheney has been losing his way more frequently now than three years ago, it might be because he is incredibly off-base in his judgements regarding the application of the Geneva Convention to Guantanamo detainees, or the illegal electronic evesdropping program, not because he has lost his favor with Bush in ideology. It was the failure to deal with the growing Iraqi insurgency and the Lewis Libby scandals that may have tipped the balance of power, not a falling out with Bush per se.

Presidents need to do what works to get their agenda pushed forward (regardless of how disasterous and anti-democratic that agenda is), and cannot rely on taking any of their subordinate's ideas at the gospel. Cheney's failures at getting Congress to do the administration's bidding, as Sanger points out, are another big reason for this changing dynamic.

Nevertheless, an interesting article to read if you want a decidedly inprecise account of how Washington Establishment insiders view the winds of change in foreign policy making.

GOP has lost all crdibility on national security

David Sirota writes in a fit of well-warranted righteous indignation:

The idea that the Republican Party can run around telling people with a straight face that it is serious about national security is just too hard to swallow anymore.

This is the party that, according to the GOP-controlled Senate Intelligence Committee, lied us into the Iraq War - a war that counterterrorism officials have repeatedly said took our focus off the War on Terror, a war that removed special forces from the hunt for bin Laden in Afghanistan, a war that has served as one giant recruiting advertisement for radical Islamic jihadists.

This is the party that has refused to implement the 9/11 commission recommendations; a party that was trying to slash counterterrorism funding before 9/11 at the very same time it was receiving critical warnings about an imminent terrorist attack; a party that has cut taxes while refusing to fully fund basic homeland security priorities at our airports, ports and vulnerable infrastructure.

This is a party filled with the worst forms of armchair chickenhawks - pundits, politicians, operatives and pseudo-intellectual think tank staffers who avoided their chance to serve in the military and yet who now sit comfortably in their well-guarded Washington offices, talking tough about terrorism, prancing around at Beltway symposiums telling everyone around they are really gutsy hawks, applauding national security leaks as acts of "virtue," screaming "bring it on" from behind a security detail, corralling millions of dollars to air ads against those who raise questions about Iraq, and demanding more American troops be sent off to die in more wars.

This is a party that has absolutely no reservations about using the Homeland Security Department's terror warning alert system for its political goals - ultimately relegating the warning system to late-night comedy show punchline.

How the GOP has any credibility on matters of national security, or foreign policy for that matter, are simply beyond my ken.

More Gerstein lies

At Joe Lieberman's new unintentionally laugh-out-loud funny blog, professional liar and Lieberman press flack Dan Gerstein claims:

Some of our opponents have accused us of unfairly blaming the Lamont campaign for the disruption of our old website and email service. As far as we can tell, no campaign spokesperson ever suggested the Lamont campaign was responsible for whatever happened. However, if any one associated with the campaign made that accusation, it is wrong, and I will not hesitate to apologize to the Lamont campaign. If we make mistakes, we will do our best to own up to them..

Apparantly, Gerstein would have the American people believe he doesn't watch or read CNN, or shouldn't be expected to have any clue as to what Lieberman's campaign manager Sean Smith said on the eve of Lieberman's failed Democratic primary.

From CNN (8/8/06):

Officials with U.S. Sen. Joe Lieberman's re-election campaign blamed "dirty politics" and "Rovian tactics" for what they said was an online attack on their Web site as Connecticut voters headed to the polls Tuesday. [. . .] Lieberman campaign manager Sean Smith suggested that the campaign of the senator's primary opponent, Ned Lamont, or his supporters were responsible for the disruption.

"This type of dirty politics has been a staple of the Lamont campaign from the beginning, from the nonstop personal attacks to the intimidation tactics and offensive displays to these coordinated efforts to disable our Web site," said Smith in a statement e-mailed to reporters Monday evening.

"There is no place for these Rovian tactics in Democratic politics, and we demand that our opponent call off his supporters and their online attack dogs."

Of course Gerstein, who was actively working for his old boss Lieberman the day Smith gave his statement, knows all this, he is just so used to lying to people that he has stopped bothering to control himself in situations where the truth is very easy to find with an internet connection and a search engine.

Firedoglake has some fun dissecting Gerstein here.

And the New York Times Empire Blog exposes yet another Gerstein lie regarding Al Sharpton here. Basically, Lieberman originally asked Sharpton for his endorsement, and after Sharpton instead endorsed Lamont Lieberman had his minions attack the reverend as a "divisive" figure. As the post makes clear, Gerstein's initial claim that not only did Lieberman not ask for Sharpton's blssing before the primary, but that the two politicians hadn't even spoken, is patently false.

Romanticizing war

A spot-on historical analysis by Christopher Hayes in In These Times discussing how our collective nostalgia over World War II is continuing to mislead the public over the rationality and morality of the current war on terror and the Iraq war.

According to Hayes:

Making WWII the touchstone for martial combat allowed the militarists we politely call “neoconservatives” to imbue all wars with the same moral purpose. The Greatest Generation nostalgia succeeded in helping to subtly shift the burden of proof, such that wars were presumed innocent and righteous, as opposed to the far more sane position that war is guilty until proven innocent.

If there’s a single guiding ethos for the Bush’s administration’s foreign policy, it is this: that contrary to the age-old insight about the “fog of war,” war brings moral clarity even as it clouds the senses. In the first days of the escalating missile and rocket strikes between Israel and Hezbollah, Dan Bartlett, a White House aide, explained that “[The president] mourns the loss of every life. Yet out of this tragic development, he believes a moment of clarity has arrived.”

Through the crucible of battle, evil and good announce themselves. In the absence of violence, they remain hidden.

Exactly so. Even World War II was not devoid of "moral complexities" as Hayes calls them, which authors like Joseph Heller (Catch 22) and Kurt Vonnegut Jr. (Slaughterhouse Five) called attention to in their works of fiction. But even worse than merely whitewashing the past is using this uber-patriotic sentiment to justify reckless carnage across the globe to further US interests.

Bush failures have set US back in "War on Terror"

A new report out by the Project on Defense Alternatives (.pdf) has a sobering conclusion: The military engagements the US has prosecuted in the last five years, as well as a failure to engage in meaningful diplomacy have, on net, both hurt us more than they have helped us in terms of defeating the imminent threat of al Qaeda.

The report touches on a number of important topics, including: the failure to destroy a new, resurgent and (dangerously) decentralized al Qaeda; the operational "disasters" of both the Iraqi and Afghanistani theaters; and increased terrorism and decreased international support for the US post-9/11. There is a lot more covered by this wide-ranging report, and it does not paint a picture of a competent "War President" as George W. Bush has fashions himself to be.

Some particularly noteworthy facts:

Since 11 September 2001, Al Qaeda has directed, financed, or played an important role in 30 fatal operations in 12 countries causing 2500 casualties including 440 deaths. These figures, from the Rand-MIPT Terrorism Knowledge Base, do not include the activities of al-Zarqawi in Iraq, nor do they include the activities of independent groups friendly to al-Qaeda.

(Of course, this will be used by the administration to further their argument that we are fighting a still-dangerous enemy, while the important fact that we are failing to reach milestones indicative of success against these enemies and there does not seem to be a well-thought out or realistic plan in place to improve.)

The insurgency in Iraq is today conducting attacks at a higher rate than ever before. In Afghanistan, there has been a dramatic resurgence of Taliban activity, with the incidence of attacks up 74 percent from last year and the fatality rate up 140 percent, according to the Rand-MIPT terrorism database. There is little evidence of these problems abating.

The human cost of war in the two countries has been substantial. A reasonable estimate is that, at minimum, 70,000 Iraqis and Afghanis have died due to war-related violence (including excess criminal violence).

And then there's this extremely troubling conclusion:

As found in numerous polls, popular support outside the United States for the US-led “war on terrorism” has fallen precipitously since 2002 – as have positive sentiments toward the United States generally. This is true not only in most Muslim nations polled, but also among many of America’s key allies in Europe. Majorities or pluralities see the Iraq war as contributing to the problem of terrorism and, in many countries, now see the United States as having a mostly negative influence on world affairs. In many Arab and Muslim states, majorities commonly feel that the United States may actually pose a military threat to their homelands. Such perceptions might be expected of populations in Syria and Iran – but it is true as well for citizens of Indonesia, Pakistan, Turkey, Jordan, and Lebanon.

Although global public sentiments regarding the United States do not directly or immediately translate into policy change, voters in several allied countries – the United Kingdom, Italy, and Spain – have punished their governments for pro-American stances. Political effects are more evident in Arab and Muslim countries.

Parallel with America’s post-9/11 wars and counter-terror efforts, radical Islamic parties have increased their political influence substantially in more than a dozen nations, often campaigning explicitly against what they describe as a “war against Islam”. Winning more votes during the past five than ever before, such parties have advanced their positions in Bahrain, Egypt, Kuwait, Indonesia, Jordan, Morocco, the Palestinian territories, Pakistan, Saudi Arabia, and Turkey.

In Turkey and the Palestinian territories they now lead governments and probably could win power in Egypt, too, should fully free elections be conducted there. In Iraq, fundamentalist parties dominate government; in Iran, the conservative former mayor of Tehran, Mahmoud Ahmadinejad, rose to presidential office in a campaign explicitly challenging US policy. In Lebanon, the influence and popularity of Hizbullah grew substantially during the post-9/11 period. Even its miscalculation in raiding Israel in July 2006 has not dented its support, with one poll showing more than 80 percent of Lebanese backing its confrontational stance.

In Bangladesh, Islamic parties have consolidated their position in the post-9/11 period, after winning a major role in government in October 2001. And, in Somalia, the Supreme Islamic Courts Council has become the predominant force in the country, although not by electoral means. US support for the opposing Alliance for the Restoration of Peace and Counter-Terrorism and likely US support for the Ethiopian incursion into Somalia have only rebounded to the Courts’ favor, which is attracting increasing support from warlord groups on the basis of nationalist appeals.

Make no mistake, this report is a stinging indictment to the strategic and operational incompetence of the current administration in the areas of homeland security and foreign affairs--incompetence that is directly threatening the future safety and security of every American citizen. The findings of this report won't be welcome reading in the Pentagon, State Department or White House, but every concerned citizen should read them closely and understand the consequences that are likely to follow.

Is a "class war" looming in Mexico?

John Ross reports from Mexico City that "A Class War Looms" as a result of a corrupted judicial system in that country, as evidenced by a panel's decision to award the presidency to Felipe Calderón (PAN) over Andrés Manuel López Obrador (ALMO). Calderon was found to be the winner despite irregularities and fierce accusations of bribery, graft and corruption.

According to the judicial panel:

Outgoing President Vicente Fox's unconstitutional intervention in the electoral process on behalf of his handpicked successor, Felipe Calderón, had put the election "at risk." Moreover, the financing of months of commercial spots that labeled leftist Andrés Manuel López Obrador (AMLO) "a danger for Mexico" by transnational and national corporations was patently illegal and influenced voters.

The electoral tribunal also noted that Calderón, the PAN candidate who had been declared the winner by the much-criticized Federal Electoral Institute (IFE) by a razor-thin .55 percent of 41.6 million votes cast, had been awarded tens of thousands of votes that could not be substantiated. The TRIFE, in a partial recount of less than 10 percent of the 130,000 precincts held two weeks before the final decision, had annulled 237,000 votes, more than Calderón's supposed margin of victory.

The future course of Mexico looks shaky indeed, with a polarized population and a head of state without a real mandate:

For the new president, the task of governance will not be an easy one. The country is divided in half geographically (Calderón won the industrial north, López Obrador the highly indigenous, resource-rich south) and by critical issues of class and race. The breach between the brown underclass and the tiny white elite that Calderón represents will limit his ability to institute the free-market neoliberal policies that his campaign championed.

Of course Bush is eagerly congratulating Calderon as the victor, no doubt due to his "championing" of neoliberal trade policies that will benefit the elites in both the US and Mexico while increasing unemployment and poverty. But the legitimacy of the Calderon admistration is far from being assured among his own people.

Recalling Argentina's experience with the IMF

Alan Cibilis, writing at the International Relations Center offers up Argentina's disastrous run with the IMF, which serves as a useful case study for other countries in the global south to consider. Ciblis uses, as a point of departure, the country's highly publicized 2001 financial crisis and debunks the conventional wisdom that it occurred as the inevitable result of the public sector's inability to reduce its deficit. Instead, he explains how it was, in fact, the result of the policy prescriptions made by the IMF and the World Bank (which were enthusiastically implemented by Argentine officials) as well as exogenous shocks originating from U.S. interest rate hikes and financial crises in Asia, Russia, and Brazil. As the article notes: "These shocks led to spiraling costs of public sector borrowing and to massive capital flight as the system unraveled."

There is a fair amount of astute historical analysis present, tracing the origins of the debt crisis back to the countrys 1976 military dictatorship, as well as a review of the Cavallo "Convertibility Plan" in the 1990s. The plan did nothing to reign in the continued expansion of the country's debt load, which is quite instructive considering its core components represent standard IMF-neoliberal philosophy: 1) trade liberalization, 2) financial and capital account liberalization, 3) privatization of all state-owned enterprises, 4) a prohibition on printing money unless it was backed by dollars in the Central Bank's reserves, and 5) pegging the peso to the dollar by law on a one-to-one exchange rate.

Cibilis explains: "The success of the Convertibility Plan hinged upon attracting foreign capital inflows. Once this was achieved, it would allegedly set off a “virtuous cycle” of economic growth and general welfare improvements for the population through “trickle down” effects, which would then lead to further investment flows and so on. Solving the debt problem was seen as key to attracting foreign capital. Therefore, a “once-and-for-all solution” to the debt problem was devised, which hinged on two main components: first, privatization of state enterprises and second, a debt swap of the old loans for new “Brady” bonds."

But what actually happened was a worsening in economic conditions, due in large part to the privatization of the country's social security program. "The government lost most of the social security contribution revenues which, following privatization, were funneled to the private pension funds. However, the government's expenditures on social security remained the same, as all of the retirees on the pay-as-you-go system continued to collect their pensions from the government. In this way a gap was created that amounted to one percent of GDP each year between 1995 and 2001.

Due to restrictions on deficit financing imposed by the Convertibility regime, the government's only option was to borrow to cover the gap. This resulted in a debt spiral which, coupled with higher interest rates described earlier, produced the explosive debt accumulation process leading to the collapse in December 2001.

The role of the the previously-mentioned "exogenous shocks" is detailed as well, although from a policy standpoint it is unclear how relevant these events were in terms of evaluating the responsibility the IMF bears for the crisis.

Ciblis argues-quite convincingly-that the IMF bears at least "partial" responsibility for the instigation and worsening of the crisis. In fact, a case can be made that they bore substantial responsibility for the crisis.

Finally, and perhaps most importantly, there are some lessons to be drawn from this case study, which are outlined thusly:

Default can be a viable option: Clearly default should not be taken lightly, but it has been and will likely continue to be an option for sovereign borrowers. The Argentine case shows that defaulting was not as disastrous as many had predicted. Indeed, the default helped Argentina to end the unviable fixed exchange rate regime and it freed up resources to deal with the multiple dislocations that resulted from the devaluation. Whether the time and resources were put to their best use in Argentina is a different matter, but it is unquestionable that the default was the correct and most efficient option, given the circumstances.

As a corollary, public debt should be subject to strict scrutiny and rules, to avoid excessive indebtedness and financial cycles and crises which are costly and undesirable. Debt acquisition should be scrutinized by representative institutions and be subject to extensive sustainability analysis.

It is easier to default on foreign borrowers than on domestic borrowers: It is clear from the bailouts to privatized pension funds, banks, and the corporate sector that it is easier to default on foreign bondholders than on powerful domestic economic actors. The main consequence of a default on foreign borrowers is political and perhaps financial. Defaulting on domestic borrowers would almost certainly have substantial political repercussions in addition to economic and financial consequences.

Pleasing financial markets should not be the aim of debt restructuring processes: For a debt restructuring process to result in a sustainable and serviceable debt load in the long run it must be based on an economy that grows thanks to a strong internal market and an equitable distribution of income. This is opposite to the Washington Consensus prescriptions, centered on fiscal austerity, financial liberalization and the free flow of speculative funds—precisely the policies that feed financial cycles and crises.

Ending financial stop-and-go cycles and debt-led capital accumulation should become a priority: Argentina is a prime example of the failure of financial liberalization and “debt-led” development policies.15 Since dependence on foreign capital flows and indebtedness do not lead to sustainable development, it is of prime importance to abandon these policies in favor of economic policies that promote sustainable and egalitarian growth. It is essential to reclaim much of the language, ideas, and theory of development economics that neoliberal economists discarded for the last 30 years, beginning with a strong State capable of efficiently intervening and regulating economic activity.

The success of a debt restructuring process cannot depend on prolonged, large primary fiscal and trade surpluses: In the Argentine case, the success of the debt restructuring process depends on high primary fiscal surpluses for a prolonged period of time, a questionable strategy with dubious chances of success. Market economies are subject to economic cycles, and Argentina is certainly no exception. To assume that an economy will indefinitely have positive growth and primary and trade surpluses is unrealistic. Unfortunately, this is precisely the assumption made in the government's sustainability analysis.

The IMF is incapable of predicting financial crises and lacks the tools or knowledge to deal with the crisis once it erupts: Despite the IMF's refusal to admit this, its “one size fits all” approach to economic policy and crisis resolution has failed repeatedly around the world. Furthermore, the Fund's policies do not result in sustained growth or economic development, as the Argentine experience shows. Rather, deindustrialization, increased income inequality and poverty, and persistent, high unemployment are the hallmarks of IMF policies. Therefore, if sustained growth is a policy objective, the IMF's advice should be ignored.

The international financial institutions must be redesigned: The IMF's substantial mishandling of the Argentine (and other) financial crises clearly points to the need for institutional redesign. The Fund's and World Bank's grossly mistaken policy prescriptions point in the same direction. It is clearly desirable to create a true international lender of last resort that will provide financial assistance to countries experiencing a crisis. Additionally, IFIs should be accountable for the policies they prescribe and the results they produce.

August civilian death toll in Iraq

Meanwhile, in Iraq. . .
ThinkProgress reports that the Baghdad morgue has revised the civilian death toll in the city upward 300%.

Quoting the ABC News blog, ThinkProgress notes that "[T]he official toll of violent deaths in August was just revised upwards to 1535 from 550, tripling the total. Now, we’re depressingly used to hearing about deaths here, so much so that the numbers can be numbing. But this means that a much-publicized drop-off in violence in August - heralded by both the Iraqi government and the US military as a sign that a new security effort in Baghdad was working - apparently didn’t exist. […] Violent deaths now appear roughly in line with the earlier trend: 1855 in July and 1595 in June." (emphasis added)

Cut-and-run may not be the ideal policy course as far as our geopolitical (ie: military and oil) interests in the Middle East, but it is the best option among horrible choices foisted upon us by a President who invaded a country that was no threat whatsoever to us under demonstrably false pretenses.

Did Lieberman receive "secret funding" from GOP donors?

According to the right-wing tabloid Insight Magazine (which is a sister publication of the Washington Times):

The White House funneled millions of dollars through major Republican Party contributors to Sen. Joseph Lieberman’s primary campaign in a failed effort to ensure the support of the former Democrat for the Bush administration.

A senior GOP source said the money was part of Deputy White House Chief of Staff Karl Rove's strategy to maintain a Republican majority in the Senate in November. The source said Mr. Rove, together with Republican National Committee Chairman Ken Mehlman, directed leading pro-Bush contributors to donate millions of dollars to Mr. Lieberman's campaign for re-election in Connecticut in an attempt that he would be a "Republican-leaning" senator.

"Joe [Lieberman] took the money but said he would not play ball," the source said. "That doesn't mean that this was a wasted investment." [. . .]

The source said that under Mr. Rove's direction, the GOP has abandoned its Senate candidate in Connecticut, Alan Schlesinger, who has dropped to about five percent in the polls. Mr. Schlesinger has failed to win the support of any national Republican and has virtually no contact with the White House.

In contrast, Mr. Lieberman, who has called for the resignation of Defense Secretary Donald Rumsfeld, was deemed a major component of the GOP strategy in November. Mr. Lieberman is expected to win the general election after losing the Democratic primary to anti-war challenger Ned Lamont. However, the race with Mr. Lamont has been tightening considerably.[. . .]

In July, the Republican National Committee provided the Republican Party in Connecticut with $120,900, the eighth largest contribution that month. The RNC has raised $70 million, with a special fund designated to help keep its congressional majority. [. . .]

Mr. Lieberman has raised most of his money from outside Connecticut. The veteran senator has turned his re-election campaign into a test of patriotism and support for the U.S. military presence in Iraq.

The source said that under Mr. Rove's plan, Mr. Lieberman would vote with the GOP on national security issues and help provide the party with a 50-50 split on major legislation. The deciding vote would then be cast by Vice President Dick Cheney.

If true, Lieberman pocketing money from these unnamed GOP donors would be a huge disgrace for the three-term Senator, even if he claimed he wouldn't caucus with the party. Political donors don't waste "millions of dollars" in contributions, they are expecting some sort of return on their investment and there's something very sketchy about Lieberman leading them on like that.

That is, of course, assuming this story isn't completely bogus. Regardless, the fact that Lieberman's strongest ideological support is coming from conservative commentators and politicians doesn't exactly show off his "progressive" credentials.

Update (9/12): Sirotablog links to two more news reports on Lieberman's no-longer secret GOP donors here.

Gutting the War Crimes Act is un-American

Writing in The Nation, Jeremy Brecher and Brenden Smith explore the Bush administration's shameless and unpatriotic attempts to eliminate crucial portions of the 1996 War Crimes Act, which makes it a felony to commit "grave" violations of the Geneva Conventions (something the administration has been encouraging in the inprisonment and interrogation of terrorist suspects).

Ironically, as the article notes, the law was passed ten years ago by the Republican-controlled Congress as a way to hold dictators like Saddam Hussein to account for his crimes against humanity--specifically it defined a "war crime" as any "grave breach" of the Geneva Conventions.

And as David Cole, a professor at Georgetown Law Center argued in the August 10 issue of The New York Review of Books, the Supreme Court's decision in Hamdan v. Rusmfeld "suggests that President Bush has already committed a war crime, simply by establishing the [Guantánamo] military tribunals and subjecting detainees to them" because "the Court found that the tribunals violate Common Article 3-and under the War Crimes Act, any violation of Common Article 3 is a war crime." According to the Brecher and Smith, this would likely indicate that top US officials have also committed war crimes by justifying interrogation methods that, according to the testimony of US military lawyers, also violates Common Article 3.

So what does President Bush, who professes to be interested in ensuring justice and the rule of law, want to do? Well, of course, he wants to have Congress pass a law retroactively decriminalizing such crimes by providing immunity to key decision-makers in his administration.

The reason Bush's attempts to do so are un-American should be manifest, but the clearest evidence I think is that it allows the most powerful men and women in this country to commit war crimes with impunity.

Brecher and Smith sum it up quite well:

"The War Crimes Act has been a central focus of the Bush Administration's scorn for all Constitutional limits on the power of the President and the executive branch. It was the idea that the President could by fiat declare US and international law null and void that animated the Gonzales torture memo. It was this denial of constitutional limits that the Supreme Court resoundingly rebuked in Hamdan v. Rumsfeld. A rebuff to the Bush Administration's attack on the War Crimes Act is a reassertion of those constitutional limits.

The War Crimes Act can be a bridge to a more just and peaceful world. The incorporation of the Geneva Conventions' prohibitions on war crimes into national law affirms America's commitment to international law. It embodies an implementation of the global heritage of the Nuremberg trials, the UN Charter and the Geneva Conventions. It embeds that tradition within our own national law.

In the wake of World War II, Justice Robert Jackson, chief American prosecutor at the Nuremberg Tribunal, observed that "the ultimate step in avoiding periodic wars, which are inevitable in a system of international lawlessness, is to make statesmen responsible to law." Making statesmen responsible to law is what the War Crimes Act is all about."

Amen.

Update: Of course, the argument above doesn't even deal with the fact that some of these war crimes being committed by the US government such as torturing al Qaeda suspects, beside being illegal under international law, are also pointless and even counterproductive.

Update #2: Matthew Yglesias has more analysis. The money quote:

[T]he United States now presents itself as what amounts to the globe's largest and most powerful rogue state -- a nuclear-armed superpower capable of projecting military force to the furthest corners of the earth, acting utterly without legal or moral constraint whenever the president proclaims it necessary. The idea that striking such a posture on the world stage will serve our long-term interests is daft. American power has, for decades, rested crucially on the sense that the United States can be trusted and relied upon, on the belief that we use our power primarily to defend the community of liberal states and the liberal rules by which they conduct themselves rather than to undermine them.

A real-world perspective on the minimum wage

Here's an nteresting diary written by an economist over at Daily Kos discussing why raising the minimum wage does not necessarily lead to an increase in unemployment, and delves into the macroeconomic theory as to why this is the case. It also explains what the "labor market" really means. Go check it out if you have a moment.

Understanding US support for Israel (updated)

Do Republicans and conservatives "support" Israel (i.e. allow that country's leadership to take whatever military actions it deems to be essential in order to defend itself) more than Democrats or liberals? The answer is no.

From The Economist (Aug. 3 2006):

Opinion polls confirm that Americans are solidly on Israel's side. A USA Today/Gallup poll conducted on July 28th-30th showed that eight in ten Americans believed that Israel's action was justified—though a majority were worried about the scale of the action. A plurality (44%) thought that America was doing “about the right amount” to deal with the conflict. An earlier USA Today poll found that 53% put “a great deal” of the blame for the current crisis on Hizbullah, 39% put the blame on Iran and only 15% blamed Israel.

Similarly, Americans are far more likely than Europeans to side with Israel in the Israeli-Palestinian conflict. A Pew Global Attitudes survey taken between March and May found that 48% of Americans said that their sympathies lay with the Israelis; only 13% were sympathetic towards the Palestinians. By contrast, in Spain for example, 9% sympathised with the Israelis and 32% with the Palestinians.

The political establishment is even more firmly behind Israel than the public is. Support for Israel stretches from San Francisco liberals like Nancy Pelosi to southern-fried conservatives like Bill Frist. The House and Senate have both passed bipartisan resolutions condemning Hizbullah and affirming Congress's support for Israel. The House version passed by 410 to 8 (of which three were from districts in Michigan with concentrations of Arab-Americans). The Senate resolution, sponsored by 62 senators—including the leaders of both parties—passed unopposed.

Indeed, the parties are engaged in a competition to see who can be the most pro-Israeli. Twenty or so Democrats, including Ms Pelosi, the House leader, and Harry Reid, the Senate leader, demanded that Iraq's prime minister, Nuri al-Maliki, retract his criticisms of Israel or have his invitation to address Congress cancelled. (Mr Maliki, strongly backed by the administration, was eventually allowed to go ahead.) Several leading Democrats, including Hillary Clinton, have addressed pro-Israeli rallies. [. . .]

Seeing themselves in Israel
Americans instinctively see events in the Middle East through the prism of September 11th 2001. They look at Hizbullah and Hamas with their Islamist slogans and masked faces and see the people who attacked America—and they look at Israeli citizens and see themselves. In America the “war on terror” is a fact of life, constantly reiterated. The sense that America is linked with Israel in a war against Islamist extremism is reinforced by Iranian statements about wiping Israel off the surface of the earth, and by the political advance of the Islamists of Hamas in Palestine.

But the biggest reason why Americans are so pro-Israel may be cultural. Americans see Israel as a plucky democracy in a sea of autocracies—a democracy that has every right to use force to defend itself. Europeans, on the other hand, see Israel as a reminder of the atavistic forces—from nationalism to militarism—that it has spent the post-war years trying to grow beyond [. . .]

Yet all this unquestioning support does not mean that America will give Israel absolute carte blanche to do whatever it wills. Condoleezza Rice, the secretary of state, was visibly shaken after the tragedy in Qana where at least 28 civilians, half of them children, were killed by Israeli bombs. There are growing worries both about Israel's conduct of the war and its wider impact on the Middle East. Many of these anxieties are expressed by the “realist faction”. Chuck Hagel, a Republican maverick, has given warning that America's relationship with Israel “cannot be at the expense of our Arab and Muslim relationships”. Richard Haass, a State Department official under George Bush senior who now heads the Council on Foreign Relations, has laughed publicly at the president's “birth of a new Middle East” optimism about the crisis. Some of the worries extend to conservatives. Tony Blankley, a former press secretary for Newt Gingrich and a fire-breathing columnist for the Washington Times, says that “We ignore world opinion at our peril.”

Then, of course, there is the so-called left-wing Democratic politicians like Ned Lamont, who is running against former-Democrat Joe Lieberman for the CT Senate office. We all know he is strongly opposed to Bush's handling of the Iraq war, so surely he must be against Israel too, right? Wrong.

From Lamont's statement released regarding the Israel-Lebanon conflict this summer:

At this critical time in the Middle East, I believe that when Israel’s security is threatened, the United States must unambiguously stand with our ally to be sure that it is safe and secure. On this principle, Americans are united. [. . .]

All Americans want the kidnapped soldiers to be returned and this cycle of violence to end, based on the principles of U.N. Security Council Resolution 1559 of 2004, which calls for Hezbollah militias to be disbanded and disarmed, with the government of Lebanon taking full control of all of its territory. It is not for the United States to dictate to Israel how it defends itself. Nor is it my place to make tactical recommendations to the president. But I do have some strategic suggestions about what our country should do moving forward.

After the fighting stops, the President needs to reengage in this part of the world and work on a peace settlement and a response to the humanitarian concerns in Gaza and elsewhere. We should not seek to impose a resolution on Israel. But peace between Israel and its neighbors must be a priority.

Without negotiating with terrorist groups like Hamas and Hezbollah, President Bush and the Secretary of State ought to be working on a peace settlement with Israel, the Palestinians and others who might help. The outlines of a peace agreement are there; both sides agree: land for recognition, peace and security.

There's Howard Dean, who is supposedy another anti-Israel liberal, who has gone on the record supporting Israel's controversial policy of targeted assassinations of Hamas officials and supports Israel's right to engage in cross-border offenses in countries like Syria. He even called Iraqi PM Maliki an anti-Semite for his criticism of Israel's offensive in Lebanon. Sounds pretty supportive of Israel if you ask me.

Hillary Clinton, the Right's favorite bogeyman? She's was a very strong supporter of Israel's right to attack Lebanon, much to the chagrin of progressive activists.

And Tom Lantos, the ranking Democrat on the U.S. House of Representatives' International Relations Committee, blocked $230 million in aid money promised by Bush to the Lebanese last month until the country agreed to the deployment of international troops on its border with Syria.

Update: I realize my post seems to equate giving the Israeli government carte blanche in its military operations with being "supportive" of Israel. Of course, letting Israel invade Lebanon is about as supportive as as someone who gives his drunk friend his car keys so he can drive himself home. In other words, real friends don't let friends engage in self-destructive, violent behavior.

Stephen Zunes writes that the Democratic leadership in Washington, by unconditionally supporting Israel's attack on Lebanon, has "failed the Lebanese people". He makes a compelling case.

And writing in The Nation, Ari Berman analyzes the role AIPAC plays in setting US poilcy toward Israel.

I'm hoping to update this post with some facts regarding the Democratic party's history of providing financial aid for Israel, both in terms of military and non-military spending. If anyone has any suggestions of where I can access this information, I would appreciate it.

US foreign policy doctrine: Human rights vs. democracy promotion

Spencer Ackerman argues eloquently in the Daily Prospect that human rights should be the foundation of a moral and sensible foreign policy doctrine, as opposed to the democracy-promotion favored by both classical liberals on the left and neoliberals on the right. I strongly agree with his analysis and his judgment and I think it is worth carefully considering his words.

What liberal democracy-promoters want to see in foreign closed societies is more precisely located in the advance of human rights: the protection of basic human dignity, freedom, and justice. Indeed, liberal democracy-promoters frequently criticize their neoconservative cousins for their lack of concern with the social protections of civil and legal rights. But it's time to uncouple human rights from democracy, and recognize that democracy has value only to the degree to which it safeguards human rights -- which is to say the degree to which democracy is liberal. Democracy in that respect is a fine and worthy thing, but the emphasis for the United States and for liberalism should be on the end, not the means.

It should also go without saying that invading and occupying foreign countries to impose the promotion of human rights is an absurdity, since it is in the nature of occupation to be unconcerned with human rights. There will, however, be conditions of human-rights emergency that compel the consideration of military solutions -- namely genocide. Here is where the liberal conflation of democracy and human rights can go totally awry. Military intervention to halt genocide in Bosnia and humanitarian emergency in Kosovo ultimately worked. Some liberal advocates of those interventions, including some at my magazine, The New Republic, mistakenly concluded -- due to a sincere but misguided conflation of human rights with democracy -- that military occupation to impose democracy could work in Iraq as well. By strictly disaggregating democracy and human rights, liberals, and especially liberal hawks, can avoid advocating future calamities.

Historians will debate the degree to which the Bush administration has been sincerely committed to democracy promotion abroad. Regardless, when a U.S. secretary of state cheers the destruction of Lebanon as representing the birth pangs of a new Middle East, or when the president of the United States praises an Iraqi government that is complicit in sectarian murder, something has gone dangerously wrong. The Bush administration has taken both the United States and the world into catastrophe -- fetishizing instability today in the messianic promise of a democratic tomorrow. Liberals of all people should not be buying into the same illusion while promising to do it better. It's past time for liberals to get out of the shadow of democracy promotion and into the bright sunshine of human rights.

The only disagreement I have with Ackerman’s analysis is his belief that it is still an open question whether the Bush administration is “sincerely committed to democracy promotion abroad.” I think it’s miserable record in pursuing its own interests have set back democracy promotion—especially in the Middle East—back considerably. Between invading and destroying Iraq, calling for Palestinian elections and then rejecting diplomatic relations and aid, sitting back and allowing the wholesale destruction of Lebanon in a fruitless attempt by the IDF to destroy Hezbollah, and its steadfast refusal to engage US “allies” such as the dictatorial regimes in Egypt and Saudi Arabia with their lack of democracy and human rights, the Bush administration has managed to convince the world that our foreign policy is as hypocritical and insane as it is self-serving and naïve.