Tuesday, June 19, 2007

Matt Taibbi

The American Left's Silly Victim Complex May 23, 2007

The biggest problem with modern American liberalism may be the word itself. There’s just something about the word, liberal, something about the way it sounds – it just hits the ear wrong. If it were an animal it would be something squirming and hairless, something that burrows maybe, with no eyes and too many legs. No child would bring home a wounded liberal and ask to keep it as a pet. More likely he would step on it, or maybe tie it to a bottle-rocket and shoot it over the railroad tracks.

The word has a chilling effect even on the people who basically agree with most of what it stands for. I myself cringe, involuntarily as it were, every time someone calls me a liberal in public. And I’m not the only one. When I called around for this article about the problems of American liberalism to various colleagues who inhabit the same world that I do – iconoclastic columnists and journalists who’ve had bylines in places like The Nation – they almost universally recoiled in horror from the topic, not wanting to be explicitly linked in public with the idea of the American left.

“Fuck that,” responded one, when I asked if he wanted to be quoted in this piece. “I’d rather talk about my genital warts. I’d rather show you pictures of my genital warts, as a matter of fact.”

“Ugh. Not sure I want to go there,” read one e-mail.

“I really wish I wasn’t associated with the left,” sighed a third.

When the people who are the public voice of a political class are afraid to even wear the party colors in public, that’s a bad sign, and it’s worth asking what the reasons are.

A lot of it, surely, has to do with the relentless abuse liberalism takes in the right-wing media, on Fox and afternoon radio, and amid the Townhall.com network of newspaper invective-hurlers. The same dynamic that makes the junior high school kid fear the word “fag” surely has many of us frightened of the word “liberal.” Mike Savage says liberalism is a mental disorder, Sean Hannity equates liberals with terrorists, Ann Coulter says that “liberals love America like O.J. loved Nicole.” These people have a broad, monolithic audience whose impassioned opinions are increasingly entrenched. In the pseudo-Orwellian political landscape that is modern America, to self-identify as a liberal is almost tantamount to thoughtcrime, a dangerous admission that carries with it the very real risk of instantly and permanently alienating a good half of the population, in particular most of middle America. That reason alone makes it, in a way, wrong and cowardly to abandon liberalism and liberals. If Ann Coulter wants to call all of us fags, well, then, fine, I’m a fag. For the sake of that fight, I’ll stay a liberal till the end of time. But between you and me, between all of us on that side of things, liberalism needs to be fixed.

At a time when someone should be organizing forcefully against the war in Iraq and engaging middle America on the alarming issue of big-business occupation of the Washington power process, the American left has turned into a skittish, hysterical old lady, one who defiantly insists on living in the past, is easily mesmerized by half-baked pseudo-intellectual nonsense, and quick to run from anything like real conflict or responsibility.

It shies away from hardcore economic issues but howls endlessly about anything that sounds like a free-speech controversy, shrieking about the notorious bugbears of the post-9/11 “police state” (the Patriot Act, Total Information Awareness, CARNIVORE, etc.) in a way that reveals unmistakably, to those who are paying close attention, a not-so-secret desire to be relevant and threatening enough to warrant the extralegal attention of the FBI. It sells scads of Che t-shirts ($20 at the International ANSWER online store) and has a perfected a high-handed tone of moralistic finger-wagging, but its organizational capacity is almost nil. It says a lot, but does very little.

The sad truth is that if the FBI really is following anyone on the American left, it is engaging in a huge waste of time and personnel. No matter what it claims for a self-image, in reality it’s the saddest collection of cowering, ineffectual ninnies ever assembled under one banner on God’s green earth. And its ugly little secret is that it really doesn’t mind being in the position it’s in – politically irrelevant and permanently relegated to the sidelines, tucked into its cozy little cottage industry of polysyllabic, ivory tower criticism. When you get right down to it, the American left is basically just a noisy Upper West side cocktail party for the college-graduate class.

And we all know it. The question is, when will we finally admit it?

Here’s the real problem with American liberalism: there is no such thing, not really. What we call American liberalism is really a kind of genetic mutant, a Frankenstein’s monster of incongruous parts – a fat, affluent, overeducated New York/Washington head crudely screwed onto the withering corpse of the vanishing middle-American manufacturing class. These days the Roosevelt stratum of rich East Coasters are still liberals, but the industrial middle class that the New Deal helped create is almost all gone. In 1965, manufacturing jobs still made up 53 percent of the US economy; that number was down to nine percent in 2004, and no one has stepped up to talk to the 30 million working poor who struggle to get by on low-wage, part-time jobs.

Thus, the people who are the public voice of American liberalism rarely have any real connection to the ordinary working people whose interests they putatively champion. They tend instead to be well-off, college-educated yuppies from California or the East Coast, and hard as they try to worry about food stamps or veterans’ rights or securing federal assistance for heating oil bills, they invariably gravitate instead to things that actually matter to them – like the slick Al Gore documentary on global warming, or the “All Things Considered” interview on NPR with the British author of Revolutionary Chinese Cookbook. They haven’t yet come up with something to replace the synergy of patrician and middle-class interests that the New Deal represented.

Bernie Sanders, the new Senator from Vermont and one of the few American politicians in history to have survived publicly admitting to being a socialist, agrees that this peculiar demographic schism is a fundamental problem for the American political opposition.

“Unfortunately, today, when you talk about the ‘American left,’” he says, “as often as not you’re talking about wealthy folks who are concerned about the environment (which is enormously important) who are concerned about women’s rights (which are enormously important) and who are concerned about gay rights (which are enormously important).

“But you’re not really referring to millions of workers who have lost their jobs because of disastrous trade agreements,” he says. “You’re not talking about waitresses who are working for four bucks an hour.” As often as not, he says, you’re talking about “sophisticated people who have money.”

David Sirota, author of Hostile Takeover: How Big Money and Corruption Conquered Our Government – and How We Can Take it Back, is a guy who frequently appears on television news programs defending the “left” in TV’s typical Crossfire-style left-right rock-‘em-sock-‘em format. Like a lot of people who make their living in this world, he’s sometimes frustrated with the lack of discipline and purpose in American liberalism. And like Sanders, he worries that there is a wide chasm between the people who speak for the left and sponsor left-leaning political organizations, and the actual people they supposedly represent.

“Perhaps what the real issue is that the left is not really a grassroots movement,” he says. “You have this donor/elite class, and then you have the public . . . You have these zillionaires who are supposedly funding the progressive movement. At some point that gets to be a problem.”

Sanders agrees, saying that “where the money comes from” is definitely one of the reasons that the so-called liberals in Washington – i.e. the Democrats – tend not to get too heavily into financial issues that affect ordinary people. This basically regressive electoral formula has been a staple of the Democratic Party ever since the Walter Mondale fiasco in the mid-eighties prompted a few shrewd Washington insiders to create the notorious “pro-business” political formula of the Democratic Leadership Council, which sought to end the party’s dependence upon labor money by announcing a new willingness to sell out on financial issues in exchange for support from Wall Street. Once the DLC’s financial strategy helped get Bill Clinton elected, no one in Washington ever again bothered to question the wisdom of the political compromises it required.

Within a decade, the process was automatic – Citibank gives money to Tom Daschle, Tom Daschle crafts the hideous Bankruptcy Bill, and suddenly the Midwestern union member who was laid off in the wake of Democrat-passed NAFTA can’t even declare bankruptcy to get out from the credit card debt he incurred in his unemployment. He will now probably suck eggs for the rest of his life, paying off credit card debt year after year at a snail’s pace while working as a non-union butcher in a Wal-Mart in Butte. Royally screwed twice by the Democratic Party he voted for, he will almost certainly decide to vote Republican the first time he opens up the door to find four pimply college students wearing I READ BANNED BOOKS t-shirts taking up a collection to agitate for dolphin-safe tuna.

But money and campaign contributions aren’t the only reason “liberal“ politicians screw their voters.

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“It’s also a cultural thing,” Sanders says. “A lot of these folks really don’t have a lot of contact with working-class people. They’re not comfortable with working-class people. They’re more comfortable with environmentalists, with well-educated people. And it’s their issues that matter to them.”

This is another dirty little secret of the left – the fact that, at least when it comes to per-capita income, those interminable right-wing criticisms about liberals being “elitists” are actually true. According to a 2004 Pew report, Americans who self-identify as liberals have an average annual income of $71,000 – the highest-grossing political category in America. They’re also the best-educated class, with over one in four being post-graduates.

The same is true of the political media in Washington – not just the few journalists on the left, but all of the media. Reporters in Washington of both the liberal and conservative variety tend mostly to be interested in issues that they themselves care about, and as a result they end up defining the political landscape in terms of orthodoxies that make sense to them.

“With the media, it’s like, ‘Are you pro-choice? Yes? Then you’re a liberal.’ It’s bullshit,” scoffs Sanders. The senator went on to point out that a recent Senate hearing on veterans’ issues attracted over 500 angry war veterans – and no reporters. “It’s just not their thing,” he sighs.

Progressive politicians in Washington frequently complain that the political mainstream’s abandonment of working-class issues opens the door for Republicans to seize the ignored middle-American electorate, mainly by scaring them with bugaboo images of marrying queers, godless commie academics, dirty bearded eco-terrorists, and so on.

To them, the essentially patrician structure of the political left is mostly a logistical political problem, one that can theoretically be solved, as Sanders solved it in his state, by shunning corporate campaign donors, listening to voters again, and re-emphasizing working-class issues.

But having rich college grads acting as the political representatives of the working class isn’t just bad politics. It’s also silly. And there’s probably no political movement in history that’s been sillier than the modern American left.

What makes the American left silly? Things that in a vacuum should be logical impossibilities are frighteningly common in lefty political scenes. The word “oppression” escaping, for any reason, the mouths of kids whose parents are paying 20 grand for them to go to private colleges. Academics in Priuses using the word “Amerika.” Ebonics, Fanetiks, and other such insane institutional manifestations of white guilt. Combat berets. Combat berets in conjunction with designer coffees. Combat berets in conjunction with designer coffees consumed at leisure in between conversational comparisons of America to Nazi Germany.

We all know where this stuff comes from. Anyone who’s ever been to a lefty political meeting knows the deal – the problem is the “spirit of inclusiveness” stretched to the limits of absurdity. The post-sixties dogma that everyone’s viewpoint is legitimate, everyone‘s choice about anything (lifestyle, gender, ethnicity, even class) is valid, that’s now so totally ingrained that at every single meeting, every time some yutz gets up and starts rambling about anything, no matter how ridiculous, no one ever tells him to shut the fuck up. Next thing you know, you’ve got guys on stilts wearing mime makeup and Cat-in-the-Hat striped top-hats leading a half-million people at an anti-war rally. Why is that guy there? Because no one told him that war is a matter of life and death and that he should leave his fucking stilts at home.

alt

Then there’s the tone problem. A hell of a lot of what the left does these days is tediously lecture middle America about how wrong it is, loudly snorting at a stubbornly unchanging litany of Republican villains. There’s a weirdly indulgent tone to all of this Bush-bashing that goes on in lefty media, a tone that’s not only annoyingly predictable in its pervasiveness, but a turnoff to people who might have tuned in to that channel in search of something else.

“I share the position of a lot of those people, and some of that feel-good Bush-bashing is okay, I guess, but also – can I get some information here?” says Christian Parenti, a journalist who frequently writes for The Nation. “I think just reporting the facts can be enormously empowering, but there’s not enough of that. That moralistic thing . . . I think it’s something that’s built deep into the culture, not just on the left but everywhere.”

But to me the biggest problem with American liberalism is that it hasn’t found a new legend for itself, one to replace the old one, which is more and more often no longer relevant. I’ve got no problem with long hair and weed and kids playing “Imagine” on acoustic guitars at peace marches. But we often make the mistake of thinking that the “revolution” of the sixties is something that rightly should continue on to today.

While it’s true that we’re still fighting against unjust wars and that there’s unfinished business on the fronts of women’s rights, civil rights, and environmental preservation, there’s no generational battle left for America’s rich kids to fight. In the sixties, college kids had to fight for their right to refuse to become bankers, soldiers, plastics executives or whatever other types of dreary establishment lifestyles their parents were demanding for them. And because they had to fight that fight, the interests of white college kids were briefly and felicitously aligned with the blacks and the migrant farm workers and the South Vietnamese, who were also victims of the same dug-in, inflexible political establishment. Long hair, tie-dye and the raised black fist all had the same general message – screw the establishment. It was a sort of Marxian perfect storm where even the children of the bourgeoisie could semi-realistically imagine themselves engaged in a class struggle.

But American college types don’t have to fight for shit anymore. Remember the Beastie Boys’ Licensed to Ill album? Remember that song “Fight for Your Right to Party”? Well, people, that song was a joke. So was “We’re Not Gonna Take It” and “And the Cradle Will Rock.” The only thing American college kids have left to fight for are the royalties for their myriad appearances in Girls Gone Wild videos. Which is why they look ridiculous parading around at peace protests in the guise of hapless victims and subjects of the Amerikan neo-Reich. Rich liberals protesting the establishment is absurd because they are the establishment; they’re just too embarrassed to admit it.

When they start embracing their position of privilege and taking responsibility for the power they already have – striving to be the leaders of society they actually are, instead of playing at being aggrieved subjects – they’ll come across as wise and patriotic citizens, not like the terminally adolescent buffoons trapped in a corny sixties daydream they often seem to be now. They’ll stop bringing puppets to marches and, more importantly, they’ll start doing more than march.

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That, in sum, is why I don’t call myself a liberal. To me the word “liberalism” describes an era whose time is past, a time when a liberal was defined more by who he was fighting against – the Man – than what he was fighting for. A liberal wielding power is always going to seem a bit strange because a liberal always imagines himself in an intrepid fight against power, not holding it. I therefore prefer the word “progressive,” which describes in a neutral way a set of political values without having these class or aesthetic connotations. To me a progressive is not fighting Mom and Dad, Nixon, Bush or really any people at all, but things – political corruption, commercialism, pollution, etc. It doesn’t have that same Marxian us-versus-them connotation that liberalism still has, sometimes ridiculously. It’s about goals, not people.

In a few years it will be half a century since the 1960s began. The Baby-Boomer generation that shaped modern liberalism will soon be moving on to the nursing home, many of its battles – for civil, gay, immigrant and women’s rights, for workplace protections, and against the Vietnam war and Richard Nixon – already won. They did a lot of good things, but their fight doesn’t always make sense anymore. In any case, you can smell something new rising out of the mess in Iraq and the changed American labor market. From among the veterans of this new bad war and the refugees of the global economy, some kind of movement is bound to arise. Who knows what that will be called – but it’s safe to say it won’t be called liberalism.

_Matt Taibbi is a contributing editor to Rolling Stone. His next book, Smells Like Dead Elephants, is due out next year.

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Tuesday, June 12, 2007

Getting Greener and Greener by Bill Bonner

A man who doubts the global warming hypothesis is asking for trouble. He
might just as well question the virgin birth in St. Peter's or praise a
sirloin steak in Benares. He is sure to be damned by everyone.

The whole earth is going green. Every newspaper tells us so. And anyone
who stands in the way of this great trend will be treated like a holocaust
denier - that is, like a wicked kook.

Communism, famine, plague, the Huns - all the old enemies are in retreat.
Now, climate change and terrorism are the threats du jour. All a good
citizen has to do is pick one...or both. Then, he can be properly lined up
and enrolled in the crusade - cajoled, connived and conscripted into
fighting a battle in which he is almost sure to be the loser.

Climate change got off on the wrong foot in 1974, when TIME magazine's
cover pronounced the coming of "Another Ice Age," somewhat prematurely, it
turned out. Now, the same TIME magazine is warning us that the old globe
is on the verge of burning up, but no one giggles.

Instead, the media and the activists march along with the serene
confidence of a religious cult, convinced that the world is in imminent
danger and only they can save it. Politicians, corporate do-gooders, and
investors are not far behind...each hoping to get something out of the
whole things. And bringing up the rear guard are the yeomen soldiers...the
poor grunts who will go along with anything, so long as it's sufficiently
idiotic.

Our beat here at The Daily Reckoning is, of course, money...not politics.
But there are billions of dollars at stake in global warming...in
subsidies, tax incentives, contracts, taxes, carbon credits, the whole
shebang. Besides, like any great public spectacle, global warming has its
comedic dividends as well as its financial returns.

Why are rising temperatures a threat, anyway? Practically everyone we know
welcomes warm weather...and looks forward to the mosquito months more than
a white Christmas. You'd think a few more days of sunny skies and outdoor
barbecues would be to their liking.

Today, in Paris, we saw several groups of American tourists - dressed for
summer, with their shorts and flip-flops. How they must wish Europe were
more like Florida and not gray and chilly.

Rising temperatures would be good for tourism, and for more practical
reasons too. Growing seasons would be longer. The well-fed complainers
have fingered carbon dioxide as the culprit, but we know that plants are
fond of CO2. Longer growing seasons plus higher levels of CO2 boost crop
yields, say the experts. And that helps keep people from starving.

Nonetheless, for reasons never fully explained to us, global warming is
viewed not as a boon to humanity but as the dawn of its doomsday.

Mr. Ban Ki Moon, as we mentioned earlier this week, is both the current
Secretary General of the United Nations and a man whose feet seem to have
left Mother Earth. Writing in the IHT, the U.N. man asserts, "the science
is clear. The earth's warming is unequivocal; we humans are its principle
cause." We are always impressed with people like Mr. Moon. As a scholar of
climate change, we suspect his credentials are as good as ours, which is
to say - he has no idea what he is talking about. Most people would hedge
their bets...roll meal around in their mouths...mutter under their
breath...on one hand this, on the other that. But Mr. Moon comes down,
unequivocally, like a hammer on an egg, with a bold, powerful lie.

The science is anything but clear. Even some of the world's greatest
scientists are scratching their heads. The idea of global warming rests on
three major things: A series of observations - melting ice, rising
temperatures in certain places; a guess about how the earth's climate
works - the so-called greenhouse hypothesis; and a proof, of sorts, based
on some further observations that suggest that as CO2 levels have risen
over the last century or so, temperatures have, as well. The hypothesis
further supposes that higher CO2 levels are caused by humans.

But a quick reading of the literature yields more questions than proof.
Atmospheric CO2 concentrations have apparently risen 21% in the last
century. But, during the Depression of the 1930s, when human CO2 emissions
dropped 30%, CO2 in the atmosphere continued to rise. Maybe human activity
really doesn't contribute that much to global CO2 levels. Even during the
Eocene era, there was three to four times as much CO2 in the atmosphere,
and that was 20 million years before the first SUV was built.

One of the great scientists of our time, Freeman Dyson, concludes:

"Concerning the climate models, I know enough of the details to be sure
that they are unreliable. They are full of fudge factors."

Yet, those very same climate models are now read by many as passing
Biblical judgment on the entire planet. "The Big Thaw," proclaims the
cover of this month's National Geographic. The cover shows a photo of a
polar bear on a melting iceberg. The reader thinks the poor animal is
doomed...and guesses that he must be doomed too.

But no problem is so pressing and so monumental that heads of state can't
get together and turn it into a carnival sideshow. Today's International
Herald Tribune carries a photo of George W. Bush, Vladimir Putin and
Angela Merkel sitting together, apparently enjoying a lighthearted moment.
The headline tells us that they are getting close to solving the problem;
the American president has signed on to "consider" cutting carbon-dioxide
emissions.

This is surely a historic moment. Future historians will look back and
label it a turning point. For now, the chief of the world's chief carbon
dioxide-emitting tribe, has taken the first step towards saving the planet
from the evil of warmer weather. The world still has a chance, dear
reader.

Meanwhile, at the grass-roots level, the fight against carbon dioxide
takes on an absurdity of its own. A group was formed recently to campaign
against airline traffic, especially on short-hauls, on the theory that
airplanes use too much fossil fuel and thus leave big "carbon footprints"
all over the skies. The activists made one good decision, deciding to call
themselves "Plane Stupid." From there on, things went into a tailspin.

To draw attention to their cause, the group decided to occupy the London
headquarters of EasyJet. They invaded the building, hung out a banner, and
locked arms around it so that neither customers nor employees could enter.
At that point, someone should have pointed out to the saps that EasyJet's
headquarters were in Luton, not London. The world-improvers had targeted
the headquarters of EasyGroup, which has nothing to do with air travel.

Is global warming worth worrying about? What do we know? But, we wouldn't
be so suspicious if there weren't so many billions of dollars at stake.
Not that we doubt the sincerity of Al Gore or the other earth savers; in
fact, we don't know how the old planet survived so long without them. But
pile up so much bread in one place and it is bound to attract rats.

The most likely remedy is a new tax on carbon-based fuels, designed to
raise prices and discourage users. Who will collect the money?
Politicians. Who will they redistribute it to? The needy and sick? No,
they will tell you that the money will go into wind, sun and sea
energy...into hydrogen and hydroelectric. But neither wind nor water makes
campaign contributions.

No, dear reader, the high-minded money will pass through the usual low,
greasy palms - cronies and contractors, oil companies, honey-tongued
lobbyists, fleet-footed hustlers, and private equity investors. Gradually
and inevitably, the Holy Cause for which the tax was imposed will be as
forgotten as the Bill of Rights and the loot will make its way into the
customary lost causes and holes in the ground, most prominently at the
Pentagon - the biggest gas guzzler this side of Hell.

Regards,

Bill Bonner
The Daily Reckoning

Saturday, June 09, 2007

Blood, Sweat and Tears at New US Embassy

Blood, Sweat and Tears at New US Embassy
by David Phinney

The US Justice Department is actively investigating allegations of forced labor and other abuses by the Kuwaiti contractor now rushing to complete the sprawling 592-million-dollar US embassy project in Baghdad, numerous sources have revealed.

Justice Department trial attorneys Andrew Kline and Michael J. Frank with the civil rights division have been contacting former employees of First Kuwaiti General Trading and Contracting and other witnesses for interviews and documents, but declined to comment on the investigation other than to say they are looking into allegations of labor trafficking.

The two investigators are said to be looking for actual workers around the world who claim they were misled or pressured to work in Iraq against their will by the company.

Rumors of forced labor in Iraq have plagued First Kuwaiti General Trading and Contracting for several years, but US government officials have discounted such allegations by workers from Nepal and the Philippines in the past, even as the company continued to rack up contracts now totaling several billion dollars from the Pentagon and US State Department.

Late last year, several US citizens also said they boarded separate chartered jets in Kuwait loaded with work crews from the Philippines, India, Pakistan and Africa holding boarding passes to Dubai, but the planes then flew directly to Baghdad.

More recently, another US citizen told IPS that he was told by workers from Ghana on the embassy site that they thought they would have jobs in Dubai but were then taken to work in Iraq.

First Kuwaiti's general manager, Wadih al Absi, flatly dismisses the accusations as unfounded and false.

"I am telling you that First Kuwaiti has never violated any visa violations or forced people to work," he said during a telephone interview last January. "In the coming months you will see that First Kuwaiti is the best company working in the Middle East."

Since landing the Baghdad project, First Kuwaiti has won additional contracts worth roughly 200 million dollars more for embassy projects in Africa, India and Indonesia. The company also is believed to be competing for another large new US embassy in Lebanon.

Soon after the State Department awarded the Iraq embassy contract to First Kuwaiti in July 2005, thousands of low-paid migrant workers recruited from South Asia, the Philippines and other nations poured into Baghdad to begin building the gargantuan new embassy within two years time. When completed later this summer, it will be the most fortified US diplomatic mission ever constructed, spanning 104 acres on the banks of the ancient Tigris River and holding more than 20 buildings. It will be comparable in size to the Vatican.

But during First Kuwaiti's frenzied rush to the finish the project on schedule, US managers and specialists involved with the project began protesting about the living and working conditions of lower-paid workers sequestered and largely unseen behind security walls bordering the embassy project inside the US-controlled Green Zone.

Among those complaints: construction crews lived in crowded quarters, ate substandard food, and had little medical care. When drinking water was scarce in the blistering heat, coolers were filled at the banks of the Tigris, a river rife with waterborne disease, sewage and sometimes floating bodies.

Others questioned why First Kuwaiti held the passports of workers. Was it to keep them from escaping? Some laborers had turned up "missing" with little investigation. One US citizen said laborers told him they had been misled about their job location. When recruited, they were unaware they were heading for war-torn Iraq.

After hearing similar allegations during much of 2006, Howard J. Krongard, the State Department's inspector general, flew to Baghdad for what he describes as a "brief" review on Sep. 15. His review was recently made public after inquires from Al-Jazeera about the embassy for an upcoming hour-long documentary, and he reported that the complaints had no substance.

"Nothing came to our attention," he wrote in a nine-page memorandum posted on the State Department's Web site. More importantly, after interviewing an unstated number of workers from the Philippines, India, Nepal and Pakistan, Krongard said no evidence was found of labor smuggling, trafficking or other abuses. Krongard makes no mention of an ongoing investigation by the US Justice Department of First Kuwaiti and others for such alleged practices and other matters.

One former labor foreman at the embassy site who recently read Krongard's review called it "bulls**t." Another former First Kuwaiti employee viewed it as "a whitewash."

Had Krongard visited earlier than last September and unannounced, he may have witnessed something very different then what his memorandum relates.

"Most of the allegations (from the US citizens) were true before he arrived," claims Juvencio Lopez, who says he was a high-level project manager under the US State Department over the course of two years.

During a telephone interview, he said that protests over First Kuwaiti's bad food, abusive treatment from managers and unsafe working conditions were routine among many of the 2,700 workers during much of 2005 and 2006.

"There were strikes and sit-downs every month," Lopez said. He left Iraq in November 2006 and is now home in San Antonio, Texas. "Sometimes there were almost riots."

Lopez vividly recalls a First Kuwaiti security guard unholstering his 9mm handgun and walking among the squatting protesters telling them to get back to work. Had the guard fallen or workers tackled him to the ground, the gun might have gone off. Lopez said he immediately reported the incident to First Kuwaiti. "Someone could gotten killed or injured," he said.

On another occasion, a company manager roughed up a Filipino worker, sources say. All of the other Filipinos nearby began loudly protesting as bewildered workers from other countries watched. "The workers were from 36 different countries and everyone spoke a different language," Lopez said.

Supplementing Krongard's review, the coalition Multi-National Force inspector general in Baghdad interviewed 36 workers from seven different countries at the new embassy site in December. The MNF-I IG claimed it found no evidence to indicate the presence of severe forms of labor trafficking, but did find that workers from Nepal, Pakistan, Bangladesh and Sri Lanka reported deceptive hiring practices by recruitment agencies in their home countries.

They said they had been promised higher pay, shorter hours and days off. "A large majority of workers" from the Indian subcontinent incurred recruiting fees of up to one year's salary.

Paul Chapman, a subcontractor working with First Kuwaiti, said he is also struck by the lack of interest in workers that First Kuwaiti had listed as "missing" on its company rosters. Now home in South Carolina, Chapman said seven workers from India, Pakistan and the Philippines "just disappeared."

Fearing they may have been killed and dumped into the Tigris, he began pressing embassy officials overseeing the project to investigate. "They told me to forget about it because the workers had probably found other jobs."

Chapman and others also claim that standard safety procedures on the project frequently went unobserved. Many worked without safety harnesses when off the ground and had no hardhats or boots. Work clothes were dirty and tattered. Those that had them had only one set of work clothes so they were rarely washed. They became dirty and tattered, causing rashes and sores.

Some worked in sandals, others in bare feet. "They had their toes curled around the rebar like birds," Lopez remembers.

"Every US labor law was broken," charged one US foreman, John Owens, who said that he never witnessed a single safety meeting. Once an Egyptian worker fell and broke his back and was sent home. No one ever heard from him again.

"The accident might not have happened if there was a safety program and he had known how to use a safety harness," said Owen, who left the embassy project last June.

Friday, June 08, 2007

State Department Tries To Ease Backlog

Why anyone believes that we can rely on the government to protect us, in any way shape or form is beyond me especially when you read a story like this one. When the idiots that run the government don't have the foresight to realize that as soon as they require passports for any destination outside the US that there would be a flood of applications, how can we expect them to have any kind of ability to respond to emergency situations they had no forewarning of?

POSTED: 8:07 am MDT June 8, 2007
There's been a summer's reprieve for people heading to Canada, Mexico the Caribbean or Bermuda. The Bush administration has decided to temporarily suspend its requirement that travelers carry passports to fly to and from those countries, after the State Department was overwhelmed with millions of passport applications. Until the end of September, passengers will be allowed to fly without passports if they present a State Department receipt, showing they have applied for a passport, and a government form of identification, such as a driver's license. The suspension will give the State Department time to deal with the recent massive surge in applications. Between March and May, the department issued more than 4.5 million passports.The backlog has caused three-month delays for travelers and spoiled vacation plans for thousands of Americans.

Tuesday, June 05, 2007

Housing Bubble Bust

Bloomberg.com

In March, Countrywide Financial Corp., the biggest U.S. mortgage provider, stopped taking applications for no-money-down loans from risky borrowers without proof of income.

Question is, how'd it ever start doing that?

General Electric Co.'s WMC Mortgage said it would refuse mortgages to borrowers with credit scores below 600. Wells Fargo & Co., the largest U.S. subprime lender, said it changed standards effective Feb. 16 for some risky customers.

The Fed's Open Market Committee is still likely to keep its target rate for overnight loans between banks at 5.25 percent when it next meets June 27-28, according to the median forecast of economists surveyed by Bloomberg News.

Goldman Sachs Group Inc. Chief U.S. Economist Jan Hatzius today ditched his call for rate cuts this year, joining his counterpart David Rosenberg of Merrill Lynch & Co. yesterday.

Bernanke said in his speech he's open to imposing tougher regulation of lenders to prohibit ``unfair'' practices.

The Fed, which has authority to write rules for all lenders, is under pressure from Congress to further restrict predatory lending and toughen up standards. The Fed's Board of Governors in Washington will hold a public hearing on mortgage rules next week.

`Additional Measures'

``Combating bad lending practices, including deliberate fraud or abuse, may require additional measures,'' he said today. Still, the Fed must ``walk a fine line'' on regulation, Bernanke said, repeating remarks made in Chicago last month.

The Fed chief noted that he favors better disclosure and consumer education, and said regulators will continue to use supervisory guidance to remind lenders of standards.

``We have an obligation to prevent fraud and abusive lending,'' he said. ``We must tread carefully so as not to suppress responsible lending or eliminate refinancing opportunities for subprime borrowers.''

Economists say Fed policies contributed to the housing boom and bust. Former Chairman Alan Greenspan, Bernanke -- at the time a Fed governor -- and others were concerned in 2003 that deflation could hit the U.S., as it did Japan for a seven-year period. They cut the key rate to 1 percent and held it there for a year.

`Measured' Pace

When they did raise rates, from June 2004, the Fed committed to a ``measured'' pace of a quarter percentage point per meeting. That helped ``hold down long-term interest rates,'' said Brian Sack, who as a Fed staff economist in 2004 helped Bernanke research the effect of communication on interest rates. Sack is now a vice president at Macroeconomic Advisers LLC in Washington.

As borrowing costs stayed low even as economic growth accelerated, home-buyers took on a record amount of mortgage debt. From 2004 to 2006, lenders wrote a $2.8 trillion in new home loans, unprecedented for any three-year period.

``The Fed was too easy for too long,'' said Ethan Harris, chief U.S. economist at Lehman Brothers and former New York Fed staff economist. The Fed's gradual pace of lifting rates ``contributed to the lack of bite from monetary policy.''

To contact the reporters on this story: Craig Torres in Washington at ctorres3@bloomberg.net .

Last Updated: June 5, 2007 14:48 EDT

Monday, June 04, 2007

THE END OF DOLLAR HEGEMONY, PART I

by Hon. Ron Paul of Texas

A hundred years ago it was called "dollar diplomacy." After World War II,
and especially after the fall of the Soviet Union in 1989, that policy
evolved into "dollar hegemony." But after all these many years of great
success, our dollar dominance is coming to an end.

It has been said, rightly, that he who holds the gold makes the rules. In
earlier times it was readily accepted that fair and honest trade required
an exchange for something of real value.

First it was simply barter of goods. Then it was discovered that gold held
a universal attraction, and was a convenient substitute for more
cumbersome barter transactions. Not only did gold facilitate exchange of
goods and services, it served as a store of value for those who wanted to
save for a rainy day.

Though money developed naturally in the marketplace, as governments grew
in power they assumed monopoly control over money. Sometimes governments
succeeded in guaranteeing the quality and purity of gold, but in time
governments learned to outspend their revenues. New or higher taxes always
incurred the disapproval of the people, so it wasn't long before Kings and
Caesars learned how to inflate their currencies by reducing the amount of
gold in each coin - always hoping their subjects wouldn't discover the
fraud. But the people always did, and they strenuously objected.

This helped pressure leaders to seek more gold by conquering other
nations. The people became accustomed to living beyond their means, and
enjoyed the circuses and bread. Financing extravagances by conquering
foreign lands seemed a logical alternative to working harder and producing
more. Besides, conquering nations not only brought home gold, they brought
home slaves as well. Taxing the people in conquered territories also
provided an incentive to build empires. This system of government worked
well for a while, but the moral decline of the people led to an
unwillingness to produce for themselves. There was a limit to the number
of countries that could be sacked for their wealth, and this always
brought empires to an end. When gold no longer could be obtained, their
military might crumbled. In those days those who held the gold truly wrote
the rules and lived well.

That general rule has held fast throughout the ages. When gold was used,
and the rules protected honest commerce, productive nations thrived.
Whenever wealthy nations - those with powerful armies and gold - strived
only for empire and easy fortunes to support welfare at home, those
nations failed.

Today the principles are the same, but the process is quite different.
Gold no longer is the currency of the realm; paper is. The truth now is:
"He who prints the money makes the rules" - at least for the time being.
Although gold is not used, the goals are the same: compel foreign
countries to produce and subsidize the country with military superiority
and control over the monetary printing presses.

Since printing paper money is nothing short of counterfeiting, the issuer
of the international currency must always be the country with the military
might to guarantee control over the system. This magnificent scheme seems
the perfect system for obtaining perpetual wealth for the country that
issues the de facto world currency. The one problem, however, is that such
a system destroys the character of the counterfeiting nation's people -
just as was the case when gold was the currency and it was obtained by
conquering other nations. And this destroys the incentive to save and
produce, while encouraging debt and runaway welfare.

The pressure at home to inflate the currency comes from the corporate
welfare recipients, as well as those who demand handouts as compensation
for their needs and perceived injuries by others. In both cases personal
responsibility for one's actions is rejected.

When paper money is rejected, or when gold runs out, wealth and political
stability are lost. The country then must go from living beyond its means
to living beneath its means, until the economic and political systems
adjust to the new rules - rules no longer written by those who ran the now
defunct printing press.

"Dollar Diplomacy," a policy instituted by William Howard Taft and his
Secretary of State Philander C. Knox, was designed to enhance U.S.
commercial investments in Latin America and the Far East. McKinley
concocted a war against Spain in 1898, and (Teddy) Roosevelt's corollary
to the Monroe Doctrine preceded Taft's aggressive approach to using the
U.S. dollar and diplomatic influence to secure U.S. investments abroad.
This earned the popular title of "Dollar Diplomacy." The significance of
Roosevelt's change was that our intervention now could be justified by the
mere "appearance" that a country of interest to us was politically or
fiscally vulnerable to European control. Not only did we claim a right,
but even an official U.S. government "obligation" to protect our
commercial interests from Europeans.

This new policy came on the heels of the "gunboat" diplomacy of the late
19th century, and it meant we could buy influence before resorting to the
threat of force. By the time the "dollar diplomacy" of William Howard Taft
was clearly articulated, the seeds of American empire were planted. And
they were destined to grow in the fertile political soil of a country that
lost its love and respect for the republic bequeathed to us by the authors
of the Constitution. And indeed they did. It wasn't too long before dollar
"diplomacy" became dollar "hegemony" in the second half of the 20th
century.

This transition only could have occurred with a dramatic change in
monetary policy and the nature of the dollar itself.

Congress created the Federal Reserve System in 1913. Between then and 1971
the principle of sound money was systematically undermined. Between 1913
and 1971, the Federal Reserve found it much easier to expand the money
supply at will for financing war or manipulating the economy with little
resistance from Congress - while benefiting the special interests that
influence government.

Dollar dominance got a huge boost after World War II. We were spared the
destruction that so many other nations suffered, and our coffers were
filled with the world's gold. But the world chose not to return to the
discipline of the gold standard, and the politicians applauded. Printing
money to pay the bills was a lot more popular than taxing or restraining
unnecessary spending. In spite of the short-term benefits, imbalances were
institutionalized for decades to come.

The 1944 Bretton Woods agreement solidified the dollar as the preeminent
world reserve currency, replacing the British pound. Due to our political
and military muscle, and because we had a huge amount of physical gold,
the world readily accepted our dollar (defined as 1/35th of an ounce of
gold) as the world's reserve currency. The dollar was said to be "as good
as gold," and convertible to all foreign central banks at that rate. For
American citizens, however, it remained illegal to own. This was a
gold-exchange standard that from inception was doomed to fail.

The U.S. did exactly what many predicted she would do. She printed more
dollars for which there was no gold backing. But the world was content to
accept those dollars for more than 25 years with little question - until
the French and others in the late 1960s demanded we fulfill our promise to
pay one ounce of gold for each $35 they delivered to the U.S. Treasury.
This resulted in a huge gold drain that brought an end to a very poorly
devised pseudo-gold standard.

It all ended on August 15, 1971, when Nixon closed the gold window and
refused to pay out any of our remaining 280 million ounces of gold. In
essence, we declared our insolvency and everyone recognized some other
monetary system had to be devised in order to bring stability to the
markets.

Amazingly, a new system was devised which allowed the U.S. to operate the
printing presses for the world reserve currency with no restraints placed
on it - not even a pretense of gold convertibility, none whatsoever!
Though the new policy was even more deeply flawed, it nevertheless opened
the door for dollar hegemony to spread.

Realizing the world was embarking on something new and mind boggling,
elite money managers, with especially strong support from U.S.
authorities, struck an agreement with OPEC to price oil in U.S. dollars
exclusively for all worldwide transactions. This gave the dollar a special
place among world currencies and in essence "backed" the dollar with oil.
In return, the U.S. promised to protect the various oil-rich kingdoms in
the Persian Gulf against threat of invasion or domestic coup. This
arrangement helped ignite the radical Islamic movement among those who
resented our influence in the region. The arrangement gave the dollar
artificial strength, with tremendous financial benefits for the United
States. It allowed us to export our monetary inflation by buying oil and
other goods at a great discount as dollar influence flourished.

This post-Bretton Woods system was much more fragile than the system that
existed between 1945 and 1971. Though the dollar/oil arrangement was
helpful, it was not nearly as stable as the pseudo gold standard under
Bretton Woods. It certainly was less stable than the gold standard of the
late 19th century.

During the 1970s the dollar nearly collapsed, as oil prices surged and
gold skyrocketed to $800 an ounce. By 1979 interest rates of 21% were
required to rescue the system. The pressure on the dollar in the 1970s, in
spite of the benefits accrued to it, reflected reckless budget deficits
and monetary inflation during the 1960s. The markets were not fooled by
LBJ's claim that we could afford both "guns and butter."

Once again the dollar was rescued, and this ushered in the age of true
dollar hegemony lasting from the early 1980s to the present. With
tremendous cooperation coming from the central banks and international
commercial banks, the dollar was accepted as if it were gold.

Fed Chair Alan Greenspan, on several occasions before the House Banking
Committee, answered my challenges to him about his previously held
favorable views on gold by claiming that he and other central bankers had
gotten paper money - i.e. the dollar system - to respond as if it were
gold. Each time I strongly disagreed, and pointed out that if they had
achieved such a feat they would have defied centuries of economic history
regarding the need for money to be something of real value. He smugly and
confidently concurred with this.

In recent years central banks and various financial institutions, all with
vested interests in maintaining a workable fiat dollar standard, were not
secretive about selling and loaning large amounts of gold to the market
even while decreasing gold prices raised serious questions about the
wisdom of such a policy. They never admitted to gold price fixing, but the
evidence is abundant that they believed if the gold price fell it would
convey a sense of confidence to the market, confidence that they indeed
had achieved amazing success in turning paper into gold.

Increasing gold prices historically are viewed as an indicator of distrust
in paper currency. This recent effort was not a whole lot different than
the U.S. Treasury selling gold at $35 an ounce in the 1960s, in an attempt
to convince the world the dollar was sound and as good as gold. Even
during the Depression, one of Roosevelt's first acts was to remove free
market gold pricing as an indication of a flawed monetary system by making
it illegal for American citizens to own gold. Economic law eventually
limited that effort, as it did in the early 1970s when our Treasury and
the IMF tried to fix the price of gold by dumping tons into the market to
dampen the enthusiasm of those seeking a safe haven for a falling dollar
after gold ownership was re-legalized.

Once again the effort between 1980 and 2000 to fool the market as to the
true value of the dollar proved unsuccessful. In the past 5 years the
dollar has been devalued in terms of gold by more than 50%. You just can't
fool all the people all the time, even with the power of the mighty
printing press and money creating system of the Federal Reserve.

Even with all the shortcomings of the fiat monetary system, dollar
influence thrived. The results seemed beneficial, but gross distortions
built into the system remained. And true to form, Washington politicians
are only too anxious to solve the problems cropping up with window
dressing, while failing to understand and deal with the underlying flawed
policy. Protectionism, fixing exchange rates, punitive tariffs,
politically motivated sanctions, corporate subsidies, international trade
management, price controls, interest rate and wage controls,
super-nationalist sentiments, threats of force, and even war are resorted
to-all to solve the problems artificially created by deeply flawed
monetary and economic systems.

Regards,

Congressman Ron Paul
for The Daily Reckoning

Saturday, June 02, 2007

THE LIFE AND DEATH OF GREAT CITIES

By Bill Bonner

"Funny how time changes...rearranges everything."
- The Supremes

"You can't go wrong with property in Central London," is an expression you
hear often on the banks of the Thames. "You can't go wrong with property
in central Detroit" has the same number of syllables. Eight out of nine
words are exactly the same. The final one, though, makes a big difference.
It changes the meaning, from delusional faith to desperate comedy.

Detroit was once one of the world's great English-speaking cities. But
then, Kaifeng, China, was once a great city too. A thousand years ago, it
was the world's most important city. While London had only 15,000 soggy
inhabitants...Kaifeng was the capital of the Song Dynasty, with more than
a million people. At the time, Detroit didn't even exist.

Today, London is a great city...Kaifeng is a now a small, grimy, poor
city...not even a provincial capital...without an airport. But look at
Detroit:

A friend reports:

"Detroit is a contrarian utopia - needles, drug baggies, gangs on street
corners, boarded up businesses, empty office buildings, vacant mansions.
For Sale signs everywhere. It is a hellhole. Wayne County, Michigan, home
to Detroit, lost more people from the beginning of 2005 to the end of 2006
than any U.S. county except the four counties in Louisiana and Mississippi
devastated by Hurricane Katrina, according to Census figures released in
March. Since 2001, Michigan lost more jobs than any other state in the
Union.

"Away from downtown, things are not much better. Lots of homes in the
burbs have been on the market for 2, 3, and 4 years with NO offers, and
not even so much as a low ball offer. Larger existing homes in Macomb
County can be purchased for about 40% less than replacement cost. "

There was a time, of course, on the chilly shores of Lake Michigan, when
you could say "you can't go wrong buying property in central Detroit" with
a straight face. In the early 20th century, Detroit was on top of the
world, the capital of the auto age. The internal combustion engine was
developed at first for boats and the Great Lake region was a natural place
for an industry manufacturing boat engines to emerge. There was already a
thriving carriage-making center, too. From those beginnings, Detroit soon
became the Motor City, home to the biggest new industry since the
invention of the mechanical loom. Even during wartime, the assembly lines
didn't slack off - instead, they sped up, working around the clock to
provide trucks, jeeps, tanks, to armies all over the world. War or peace,
everyone seemed to want more and more vehicles. How could you go wrong
buying property in the city that made them?

There were once dozens of automakers in Coventry, England, too. Now, there
are only a handful in the whole country and every one of them is
foreign-owned. America's automakers consolidated sooner in Detroit. They
are still operating and still in American hands, but probably not for
long.

We remember, in our own lifetimes, when the first funny-looking cars came
into the U.S. market from Germany and Japan. Cheap and stingy on fuel
consumption, the little autos gained a beachhead in the United States
during the oil crisis and inflation of the '70s. I bought a Honda Accord
in 1975. My father, a Pearl Harbor veteran, saw the thing and was
appalled. "Those people tried to kill me for three years," he said.

Congress wanted to protect the U.S. automakers in the worst possible way -
by placing a per-car tariff on imports. Both the Japanese and the Germans
responded by moving up-market so as to make more profit per car sold.
Soon, the foreign automakers were going head-to-head with America's big
luxury models too - and winning. And now, the motor city is sputtering
and threatening to conk out completely.

But investors are an arrogant and opportunistic lot. Some speculators look
upon Detroit and think they see an overturned liquor truck; they imagine
they should help themselves before the cops come. After all, cities have
good times and bad times. Detroit might be suffering nothing more than a
cyclical setback in the life of a great city. People thought Harley
Davidson was finished too...and look how it's come back. Now, it's worth
more than GM.

Let the U.S. auto industry go broke, say the optimists, as soon as
possible. Then, new, more vigorous entrepreneurs, without all GM's and
Ford's baggage, can climb into the drivers seat. And Mo'town will rock and
roll again.

If you believe that, you should get on a plane to Detroit now. Whole
skyscrapers change hands for less than the price of a 3-bedroom apartment
in Mayfair. The 65-story David Stott building, for example, is on the
market for $3.5 million. For less than a million you can buy a 12,000
square foot Italian renaissance-style mansion, complete with an intricate,
hand-carved walnut main staircase and imported wood paneling throughout.

"That may seem like a bargain," says a CNBC reporter, "considering the
1915 limestone house sits on over 2 acres and is just 3 miles from the
city center. But then again, this is Detroit, Michigan."

Speculators hope that Murder City might once again become Motor City. But
they should ask instead why it is that last year, as rental rates across
the United States rose an average of more than 6%, in Detroit, rents
couldn't even climb 1%.

Investors might do better to look at Liuzhou, China, where GM is producing
its new Wuling Sunshine mini-van. In 2002, China made a million cars and
trucks. By 2020, it's expected to produce 15 million units, more than the
United States. How can Detroit stage a comeback with that kind of
competition?

Instead, maybe, the city will join the ranks of the dead, along with
Ctesiphon, Mesa Verde, Persepolis, Kish, Harappa, Babylon, Sodom, and
Gomorrah. Soon, its apartments and mansions may sell for no more than
places in Mapungubwe, Tiahuanaco, Tyre, Nineveh, Troy, Golconda and
hundreds of other defunct metropolises.

Meanwhile, back in modern world, financial services is where the money is.
And London and New York is where the financial service industries are.
Is there any better game to be in? And is there a better place to be than
in the capital cities of this new, new money-shuffling commerce? Not in
2007. Business is booming. All over the world, companies are getting set
up, financed, bought out, refinanced, IPO'ed, taken private, merged,
acquired, re-IPOed and leveraged in more ways than you can count. It will
be a cold day in Hell when the Chinese can compete in this industry.

London and New York are on top of the world - just like Detroit once was.
Just like Kaifeng once was. Prices can only go up, right?

Bill Bonner
The Daily Reckoning

Tuesday, May 29, 2007

We Want Solutions! by Howard Kunstler

May 28, 2007

Wherever the environmentally-informed gather these days (i.e., the clusterfuck-aware), a nervous impatience often mounts, and ends up expressing itself as an outcry for "solutions." For example, at the Telluride Mountain Film Festival, where I happened to be this past weekend, along with a couple of hundred other people who spewed airplane exhaust across the stratosphere to get there. This year's twin themes were the Castor-and-Pollux of Clusterfuck Nation, Global Warming and Peak Oil.
Many frightening documentary films and Powerpoint talks were served up in the opening symposium (including ones by Dennis Dimick, the editor of National Geographic, Daniel Nocera of MIT, and yours truly) and, as the morning wore on, the audience grew visibly impatient, until one speaker dropped the word "solutions," and the audience gave out a big whoop of approbation.
It only made me more nervous, because this longing for "solutions," strikes me as a free-floating wish for magical rescue remedies, for techno-fixes that will allow us to make a hassle-free switch from fossil hydrocarbon power to something less likely to destroy the Earth's ecosystems (and human civilization with it). And I think such a wish is, in itself, at the root of our problem -- certainly at the bottom of our incapacity to think clearly about these things.
I said so, of course, which seemed to piss off a substantial number of my fellow festival attendees.
My position on this can be easily misunderstood. I don't want civilization to collapse (I like Mozart and access to root canal). I don't want Homo sapiens to go extinct, or the planet to parboil. I certainly don't believe in doing nothing in the face of this emergency. But I also don't believe we are going to make any hassle-free switch in the way we run things -- or that we should want to. Would the USA be a better place if we could run Wal-Mart and Las Vegas on wind power? I don't think so. Would the public benefit from another hundred years of suburban living -- and an economy based largely on creating ever more of it? All the Prozac in the universe would not avail to offset the diminishing returns of that bullshit.
In my travels, I have noticed a disturbing theme among the educated minority of eco-advocates: they are every bit as dedicated to the status quo (in their own way) as the NASCAR morons and shopping mall developers. The eco-advocates want cars, too, and all the prerogatives (like free parking and country living) that go with them, just like the WalMart shoppers. If this were not so, then why do the eco-advocates cream in their jeans whenever somebody presents a snazzy new vehicle that runs on a fuel other than gasoline? Indeed, why are some of the eco-friendly pouring all their efforts into the invention of such things instead of into walkable communities and the reform of our stupid land-use laws?
I encountered this ethos most strikingly a few years back at Middlebury College in Vermont, where angry biodiesel advocates assailed my lack of enthusiasm for their particular "solution" -- which seemed geared mainly to allow them to continue to drive their dad's old cast-off SUVs to the snowboarding venues of that progressive little state. But the wish to keep running all our cars permeates what little public discussion there is of the global warming / energy crisis issues at all levels. Even the elder statesmen of the eco-movement talk it up incessantly. The first great victory will come when they shut up about it and put their minds to other tasks.
The eco-advocate community is still hooked into the Faustian bargain of technology with little consciousness of its diminishing returns, and to some extent have made themselves unwitting tools of the truly clueless and wicked who run business and politics in our land. With this particular group in Telluride, which was composed heavily of Boomer eco-adventurers (mountain climbers, trekkers, kayakers), the infatuation with ever-cooler adventuring techno-gear extended naturally, it seemed, to their uncritical view of magical techno-fixes aimed at "solving" the climate / oil mess.
And the setting of the festival -- the Rocky Mountain ski resort town of Telluride -- itself induced some eerie moments of reflex nausea as one contemplated the many 10,000 square-foot peeled-log dream palaces built by Hollywood producers, who derive their fortunes by selling violent masturbation fantasies to fourteen-year-olds. One couldn't fail to notice that three-quarters of the storefronts along the little main street were occupied by real estate sales offices.
But I don't want to be doubly or triply misunderstood as appearing to twang on the kind people who invited me there, or to evade the obvious fact that I went (by airplane and shuttle van). I thought it was worth going to carry this one little message: let's stop talking about making better cars and start talking about occupying the landscape differently -- which we're going to have to do anyway.

Saturday, May 26, 2007

Neighborhood Swayed by 'Liar's Loans'


By Adam Geller, AP National Writer

AP Impact: Drawn Into Real Estate Frenzy, a Neighborhood Finds Home Loans Too Good to Be True BOSTON (AP) -- Upstairs at Victory Chapel Church -- a cinderblock bunker converted from a long-ago Ford dealership -- the pews are reserved for praising heaven. But downstairs, in a basement rental hall, a pair of women preached of worldly wonders.

At 11 a.m. on alternating Saturdays, they set out rows of folding chairs and spread tables with urns of coffee and boxes of Dunkin' Donuts. And they offered testimony to the bounty of real estate, encouraging their growing flock to buy the wood-frame walk-ups and rowhouses surrounding this workaday stretch of Columbia Road, just down from the OJ Car Wash.

The key was trust, they told the faithful, as the voices of the practicing choir rang through the building.

Still, Valerie Hayes was a little skeptical.

"I really was thinking it would be at least a year before I'd get a mortgage," says Hayes, an executive secretary and mother of two. She was wary of borrowing because she was saddled with her own student loans.

But "on Saturday I went to the seminar," she says. By Sunday, she was preapproved to buy.

Soon after, Hayes did buy. The problem, prosecutors say, is that the women put Hayes and others into homes they couldn't possible afford. They did so by filling their loan applications with details of jobs, paychecks and bank accounts that were all so much fiction.

What happened in this church basement was no fluke; it happened elsewhere, too.

Much has been made of the very questionable lending that accompanied the rapid growth of subprime mortgages, a phenomenon that made homeowners of so many people. But less attention has been paid to the gimmickry and manipulation that delivered the loans an industry craved.

Some say this was nothing short of fraud. Those accused reject the charges. The case also raises tough questions of whether borrowers, too, should bear some responsibility.

But the bottom line is beyond dispute. Valerie Hayes can tell you about that. Just don't go looking for her at the home she bought, thanks to the women at Victory Chapel Church.

It's owned by the bank now, and there's a real estate agent's lockbox on the door.

Over the past decade, the mortgage industry has turned itself into a very big tent.

People who might have had trouble borrowing found it much easier to get a loan. Lenders devised new types of loans and eased standards to bring buyers into the market.

As a result, homeownership reached record levels. But as interest rates rise and the market cools, it becomes clear many people were put into punishing loans they couldn't afford.

That is particularly evident in the enormous growth of what the industry politely calls "stated income" loans -- also known as "liar's loans."

Stated loans -- whose borrowers list income and assets without having to prove anything -- were meant for solidly self-employed buyers. Then they "morphed into a huge monster," says Connie Wilson of Interthinx, a maker of mortgage fraud detection software. "Now we have stated income programs for everyone."

The loans have become a huge piece of the subprime market. Last year, nearly half of subprimes required little or no documentation of income, a share that has nearly tripled since the start of 2000, according to First American LoanPerformance.

But in its love of these quickly processed loans, the industry overlooked the pitfalls.

A study by the Mortgage Asset Research Institute Inc. of 100 stated loan applications last year found almost 60 percent exaggerated incomes by at least half. A study by BasePoint Analytics found that 70 percent of mortgage defaults were linked to "a significant misrepresentation on the original loan application."

Mortgage fraud is most visible in the spectacular cases that draw prosecutorial muscle, involving fake buyers, property flipping, vast amounts of money. But that overlooks smaller-scale foul play now costing many subprime borrowers their homes, experts say.

Often it's not considered fraud. It's pushing the envelope. It's a dollop of distortion topped with a measure of creative exaggeration. It's doing whatever it takes.

"There's a huge amount of broker fraud out there," says Kerstin Arusha of the Fair Housing Law Project in San Jose, Cal., which represents low-income homeowners stuck in such loans. "When you look at the applications of many of these borrowers, I see it reported that they make $10,000 or $12,000 a month, sometimes $20,000 a month. They always have $100,000 in personal assets ... You can see that these things are created by the broker."

Of course, most real estate agents and mortgage brokers are honest.

But there have been too many in the last few years "who stretch the truth ... that make deals happen that really shouldn't happen," says Jim Croft, founder of the Mortgage Asset Research Institute.

"And they always have the fallback that they're not dishonest," he says. "They're just helping Jill and Joe Six-pack get into the home -- and realize the American dream."

Frances Darden dreamed of buying a house. And not just any house.

It would be in Boston, because this was home now. But it would look and feel like her grandparents' place in the South Carolina of her childhood, because that's what home meant.

It would have a backyard for barbecues and a front porch for conversation. Its French doors would usher visitors from living room to dining room. It would not be a grand place, mind you, but thinking about it made Darden feel just grand.

Still, it was lot to imagine for a hair stylist on disability, reliant on a subsidized housing voucher and supporting two teenagers. Banks told Darden to scale back her dreams, offering to lend, but not enough to buy in her own neighborhood.

Then, in September 2004, she spotted an ad in the weekly Banner.

"Want to Buy a Home? Credit Less Than Perfect?" beckoned one of what would become a series of ads by Champagne & Associates, a real estate agency in her neighborhood of Dorchester. The slogan above the agency's name made Darden optimistic.

"Let's Make History," it said.

Darden went to Champagne's free seminar with her friend, Annie Neal. It was held in the agent's office, facing a traffic-filled avenue, between a storefront daycare center and Linda's African Braiding & Clothing. Agents had pushed the desks back to the green stucco to make room for an audience. The prospective buyers met two women who vowed to help them.

The first was Champagne's owner, Roberta Robinson, a former mortgage broker who'd started her own real estate shop.

"She had an answer for every question," Darden says.

The second was Rachel Noyes, a bartender-turned-mortgage broker who brought her toddler to some seminars, and promised to unlock the secrets of buying real estate.

"I really felt like I was helping people get into homes," Noyes said in a recent telephone interview. "The one question I always asked, to drill into your mind, is: How much can you afford?"

But those who attended the seminars -- describing the experience in interviews and court papers -- don't remember it that way.

"As long as you're honest with me," Valerie Hayes recalls Noyes saying, "I guarantee you I can you get you into a loan."

At session's end, organizers asked for Social Security numbers to run credit checks.

"We're not going to be approved to buy a home in Boston and I don't want to go out to Lowell," Darden recalls thinking.

But a couple of days later her phone rang. It was Robinson -- with good news.

Darden had been preapproved for a loan. Up to $360,000!

It only took a few weeks for Frances Darden to find her dream house -- a two-family set on a corner of Harvard Street with pale yellow siding, a small front porch and another on the back. But could she afford it?

Darden says Roberta Robinson calmly reassured her.

"I have always been about educating the consumer regarding real estate since I hit the scene," Robinson wrote of herself in an advertising directory. "I feel the first step in homeownership is working with an informed client."

Robinson did not return calls and her attorney declined to comment.

When another bidder pulled out of a deal for the house, Darden says Robinson called with more good news.

"She said, `You have some good credit, girl, because you got approved for two houses,'" Darden recalls.

"How is that possible?" wondered Darden, who says she first told the agents she could afford only $1,500 to $2,000 a month in payments.

Renters, she was told, would help her carry the load of her own home, and the costs would be further offset by a three-family rental property.

Soon, mortgage applications --almost entirely blank -- arrived in the mail. Darden signed and returned them. In November, Darden closed on the first house. In December, she closed on a second.

She'd been preapproved for $360,000. Now she was borrowing $894,000.

It would cost her $7,194 a month.

It wasn't until seven months later, though, after she struggled to find tenants and maintain the buildings, that Darden began to wonder just what had happened. It began to make sense only when she studied the finished paperwork.

When she bought, Darden was receiving $1,800 a month in disability payments -- as she recovered from a collapsed lung -- sometimes supplemented by child support of $150 a week.

But the mortgage application described a woman she did not recognize: an administration manager for a medical supply company, earning $114,000 a year.

Meanwhile, the real Frances Darden was quickly falling behind.

In June 2005, Darden says she went to the Champagne office to demand help in refinancing her loans. By now, though, the effort to recruit buyers had outgrown the space on Blue Hill Avenue and moved to the church. Some of the sessions were drawing 40 or 50 people.

Robinson tried to help her sell the second home. But Darden was going through a divorce, tying up the home's ownership. She was and falling farther behind.

Now it had been a year since she'd become a homeowner. Long enough for the lender to lay claim to the investment property and begin foreclosure.

One of the most notable things about Frances Darden's story is how much it echoes the others.

Valerie Hayes says she knew something was very wrong when she went to close on the $440,000 loan for her house, a two-family in East Boston. She'd agreed to $2,300 payments because of expected rental income. But the documents listed payments at $3,300 a month.

"I see the real mortgages and it's apparent to me I got robbed," Hayes says, "but I'm thinking I'm going to make this work."

Why didn't she walk out? Because she'd already given up her old apartment and had a tenant waiting to move in. Within months, though, maintaining the building depleted savings already strained by the mortgage payments. That's when she noticed the reference to a second job -- one she never had -- earning a fictional $1,846 a month working for Champagne.

Late last year, Hayes moved out and the lender began foreclosure.

Others are still trying to hold on.

There's Macdala Louis, a nursing assistant, who bought on Edwin Street. Her loan application said she had a second job working for a company, Hart Professional Cleaning, that does not appear to exist.

And Jennifer Stone, a medical assistant who bought a $489,000 home with her partner, a special police officer.

"They said we had accounts we didn't even have. They said we had $50,000 in the bank," Stone says. "I didn't even have $700 in my 401(k)."

Dorchester, a sprawling mostly black neighborhood where many families get by on tight paychecks, has many homeowners who struggle. So when Darden went to see a foreclosure prevention counselor at ESAC, a nonprofit chartered by a number of Boston churches, it was hardly out of the ordinary.

It looks like you make pretty good money, counselor Steve Bennett told her, studying the mortgage paperwork. No, Darden insisted, that's not me.

Bennett wondered. Then he heard the same story from a second homeowner. And a third.

"This was a huge learning curve," says Robert Pulster, the agency's executive director. "What the hell is going on here and how did this happen?"

In August, Massachusetts' attorney general filed a civil lawsuit in state Superior Court accusing Robinson, Noyes and their companies of using "unfair and deceptive tactics to target and deceive low-income consumers into committing to mortgages they could not qualify for or afford."

The women pocketed thousands of dollars in commissions and fees for putting together deals and loans bound to fail, the suit says.

Prosecutors have obtained court orders restricting the activities of the women and their companies, both of which have closed. While the case awaits trial, however, Robinson has resurrected her real estate business in a nearby Boston neighborhood under a new name -- Opulent Realty Inc.

Noyes, who moved to Florida, recently lost by default after she stopped appearing in court to contest the charges. But damages have not been set and she continues to deny any deception.

It was the real estate agents who "were pushing people into homes they shouldn't have been," Noyes says. Borrowers, too, bear responsibility, she says.

"With stated income loans ... because there's no documentation, you're going by what the buyer is saying," Noyes said. "Who am I to say: 'You're a liar. You don't make that.' Should I have had better judgment? I don't know."

The borrowers reject that argument outright. Darden rushes to her bedroom and returns with a bag full of documents, pulling out a copy of the mortgage application she signed. It is all but blank.

If they deserve blame, she and other buyers say, it's for being too willing to believe and too naive to ask questions.

On a cool spring evening, Hayes walks from the modest but tidy one-bedroom rental she shares with her college-age son and daughter, three blocks up to the home she lost. It takes just a few minutes, but confirms how far she has come.

If she gets another chance at ownership, she'll be wiser, Hayes says, recalling that Saturday morning listening to a pitch in the church basement.

Subprime loans?

Thursday, May 24, 2007

When canary's sing

WASHINGTON (AP) - A former Justice Department official told House investigators Wednesday that Attorney General Alberto Gonzales tried to review his version of the prosecutor firings with her at a time when lawmakers were homing in on conflicting accounts. Gonzales has testified he hasn't spoken with witnesses.

``It made me a little uncomfortable,'' Monica Goodling, Gonzales' former White House liaison, said of her conversation with the attorney general just before she took a leave of absence in March. ``I just did not know if it was appropriate for us to both be discussing our recollections of what had happened.''

In a daylong appearance before the Democratic-led House Judiciary Committee, Goodling, 33, also acknowledged crossing a legal line herself by considering the party affiliations of candidates for career prosecutor jobs - a violation of law.

And she said that Gonzales' No. 2, Deputy Attorney General Paul McNulty, knew more than he let on when he did not disclose to Congress the extent of White House involvement in deciding which prosecutors to fire. McNulty strongly denied that he withheld information, saying Goodling did not fully brief him about the White House's involvement.

Goodling's dramatic story about her final conversation with Gonzales brought questions from panel members about whether he had tried to align her story with his and whether he was truthful in his own congressional testimony.

Gonzales told the Senate Judiciary Committee last month that he didn't know the answers to some questions about the firings because he was steering clear of aides - such as Goodling - who were likely to be questioned.

``I haven't talked to witnesses because of the fact that I haven't wanted to interfere with this investigation and department investigations,'' Gonzales told the panel.

Goodling said for the first time Wednesday that Gonzales did review the story of the firings with her at an impromptu meeting she requested in his office a few days before she took a leave of absence.

``I was somewhat paralyzed. I was distraught, and I felt like I wanted to make a transfer,'' Goodling recalled during a packed hearing of the House Judiciary Committee.

Gonzales, she said, indicated he would think about Goodling's request.

``He then proceeded to say, 'Let me tell you what I can remember,' and he laid out for me his general recollection ... of some of the process'' of the firings, Goodling added. When Gonzales finished, ``he asked me if I had any reaction to his iteration.''

Goodling said the conversation made her uncomfortable because she was aware that she, Gonzales and others would be called by Congress to testify.

``Was the attorney general trying to shake your recollection?'' asked Rep. Artur Davis, D-Ala.

Goodling paused.

``I just did not know if it was a conversation we should be having and so I just didn't say anything,'' she replied. She added that she thought Gonzales was trying to be kind.

Democrats pounced.

``It certainly has the flavor of trying to get their stories straight,'' said Rep. Adam Schiff, D-Calif., a member of the committee.

The Justice Department denied that Gonzales did anything at that meeting other than try to help Goodling.

``The attorney general has never attempted to influence or shape the testimony or public statements of any witness in this matter, including Ms. Goodling,'' said spokesman Brian Roehrkasse. ``The statements made by the attorney general during this meeting were intended only to comfort her in a very difficult period of her life.''

Gonzales' resignation is being demanded by Democrats and some Republicans in part over the firings. Bush is standing by his longtime friend, but Democrats have pressed ahead with their probe, contending the firings may have been an attempt to exploit a loophole in the Patriot Act to install GOP loyalists as prosecutors without Senate confirmation.

Gonzales has denied that. But the furor has been costly nonetheless - Goodling and Sampson have resigned over it. McNulty, too, is leaving later this year. And many lawmakers who have not directly demanded Gonzales' resignation say he has lost their confidence.

Wednesday, May 23, 2007

Air Force Combat Troops?!

for those of us who were in the army, how ridiculous is this?




The Air Force has long billed itself as the most glamorous of the service branches.

Nowadays, with the wars in Iraq and Afghanistan, and the shortage in infantry manpower, the Air Force is marching to a different beat.

At Fort Dix in New Jersey, members of the Air Force are training to fight on the ground. In one combat-training exercise, Airman Travis Neeley's sergeant is down, bleeding to death and straining to stay alive. The convoy they were riding in has been hit and, though he's only 20 years old with just two stripes on his sleeve, Airman Neely is suddenly the squad leader.

And his squad is under heavy enemy fire.

Travis Neely signed up for the Air Force fresh out of high school in his hometown of Greenback, Tenn. He's an air transporter by training, which means he moves cargo and passengers, and rigs air drops.

Or as he whimsically describes it, "I tie knots and string all day long and make parachutes."

But within 10 days, Neeley and 200 other airmen at the Air Force Expeditionary Center at Fort Dix will become expert marksmen on the M-4 rifle. In short, they'll become urban warriors.

The Expeditionary Center is now retraining about 5,000 airmen per year, preparing them to fight on the ground in Iraq.

"There's no doubt that we've been asked to come in and help out," says Maj. Gen. Scott Gray, commander of the Expeditionary Center.

Like most high-ranking airmen, Gray is a pilot by training, but he's now overseeing the largest Air Force retraining center in the United States. The Iraq war has strained the Army and the Marine Corps. The Air Force is increasingly helping fill the gaps.

"The Army has felt some pressure, there's no doubt about it," Gray says. "So the fact that we can aid the Army and Marines — I see that personally as a good thing."

Since 2003, more than 30,000 airmen and sailors have been retrained to do things they normally wouldn't be called on to do, like run vehicle convoys, take part in street patrols, and get used to the sound of an AK-47 — the weapon of choice for insurgents in Iraq.

During the two-week course at the Expeditionary Center, the airmen will hear thousands of rounds of AK-47 blanks. They'll also receive hand-to-hand combat training and will be shot at by semunitions, or rubber bullets.

"These rounds travel at 300 feet per second, which is about a third of a speed of a real bullet," says Staff Sgt. Daniel Williamson. "They won't pierce you … but they will tear your skin off."

Williamson trains his fellow airmen on how to clear a village. They haven't been trained in infantry tactics like their counterparts in the Army and Marines, so Williamson makes sure that each airman gets hit by a rubber bullet at some point.

"We believe pain is an excellent teacher, so if they make a bad tactical mistake — they're not behind cover or if they tuck their elbows out or flag their weapon or maybe they don't take cover — they're actually gonna get hit and they're gonna remember it because it actually stings a little bit," Williamson says.

The Iraq war has been, by and large, the Army's burden. About two-thirds of all casualties have been soldiers. And the administration's decision to increase the size of ground forces means that the Army and the Marines won't be able to fight it alone.

The Air Force has more than 350,000 active-duty airmen, and though many aren't yet trained in ground combat, it's manpower the Pentagon is after now.

Wednesday, May 16, 2007

Ashcroft and the Night Visitors

By Dana MilbankWednesday, May 16, 2007;

As if Attorney General Alberto Gonzales didn't have enough trouble, now comes word that, before coming to the Justice Department, Gonzales preyed on the infirm.
In hair-raising testimony before a Senate committee yesterday, Jim Comey, the former No. 2 official at the Justice Department, described what might be called the Wednesday Night Massacre of March 10, 2004. Gonzales, then the White House counsel, and White House Chief of Staff Andrew Card staged a bedside ambush of Attorney General John Ashcroft while he lay in intensive care. Comey, serving as acting attorney general during Ashcroft's incapacitation, testified about how, on a tip from Ashcroft's wife, he intercepted the pair in Ashcroft's hospital room.
"The door opened and in walked Mr. Gonzales, carrying an envelope, and Mr. Card," Comey told the spellbound senators. "They came over and stood by the bed." They wanted Ashcroft to sign off on an eavesdropping plan that Comey and others at the Justice Department had already called legally indefensible.
Ashcroft "lifted his head off the pillow and in very strong terms expressed his view of the matter" -- that Comey was right. "And as he laid back down, he said, 'But that doesn't matter, because I'm not the attorney general. There is the attorney general.' And he pointed to me."
Gonzales and Card "did not acknowledge me," Comey testified. "They turned and walked from the room."
The Democrats on the Senate Judiciary Committee stared. The lone Republican in attendance, Arlen Specter (Pa.), looked down. The 6-foot-8 Comey, slightly hunched in the witness chair, swallowed frequently and kept his hands in his lap as he spun a narrative worthy of Dashiell Hammett.
"I thought I just witnessed an effort to take advantage of a very sick man," Comey told the quiet chamber. His voice grew thick and he cleared his throat as he explained how he prepared to resign. "I couldn't stay, if the administration was going to engage in conduct that the Department of Justice had said had no legal basis."
Comey had come before the committee to discuss Gonzales's botched firing of U.S. attorneys. Instead, under questioning from Sen. Charles Schumer (D-N.Y.), he gave his account of Gonzales's dark-of-night attempt to emasculate the department he would soon lead. The testimony had all the more impact because it came the morning after Deputy Attorney General Paul McNulty became the fourth senior official to resign in the prosecutor mess.
If Comey's testimony had the grip of mystery yesterday, Gonzales's defense had the feel of farce, as he heaped blame on McNulty for the mishandled firings. "The deputy attorney general is the direct supervisor of the United States attorneys," Gonzales volunteered at a National Press Club breakfast. He added: "I went back to the deputy attorney general and I asked Paul, 'Do you still stand by the recommendations?' And he said, 'Yes.' "
At the hearing, Specter offered a different view of McNulty's departure. "It's embarrassing for a professional to work for the Department of Justice today," he said, calling the resignation "evidence that the department really cannot function with the continued leadership or lack of leadership of Attorney General Gonzales."
Despite public pleas from a "lonely" Specter, the other Republicans on the committee didn't risk an appearance. Even the White House declined to counter Comey, who has a reputation for honesty. "You've got somebody who has splashy testimony on Capitol Hill -- good for him," presidential press secretary Tony Snow dodged.
In truth, nothing Snow could have said would have matched Comey's testimony. Comey recounted how, while driving home at 8 p.m. on that day in 2004, he got word that Mrs. Ashcroft had received a call -- possibly from President Bush himself -- to say Gonzales and Card were coming.
"I told my security detail that I needed to get to George Washington Hospital immediately. They turned on the emergency equipment and drove very quickly," Comey testified. "I got out of the car and ran up -- literally ran up the stairs with my security detail. . . . I raced to the hospital room, entered." The room was dark, and Ashcroft was "pretty bad off."
In Comey's account, he got FBI Director Robert Mueller to tell his agents guarding Ashcroft not to let Card and Gonzales evict Comey from the room. A few minutes after the bedside confrontation, Card called the hospital. He "demanded that I come to the White House immediately," Comey testified. "I responded that, after the conduct I had just witnessed, I would not meet with him without a witness present."
"He replied, 'What conduct? We were just there to wish him well.' " After Card demanded to know if Comey was "refusing to come to the White House," Comey, with the solicitor general, finally arrived at the West Wing at 11 p.m. His narrative covered the next two days, ending when Bush intervened and avoided a spate of resignations.
The senators had some trouble finding words for what they had heard. "This story makes me gulp," Schumer said.
Specter invoked the firing of the Watergate prosecutor. "It has some characteristics of the Saturday Night Massacre," he said. And the senator left little doubt about whom he blamed.
"Can you give us an example of an exercise of good judgment by Alberto Gonzales?" he asked.
This time, Comey had no narrative. "Let the record show a very long pause," Specter said.

Tuesday, May 08, 2007

Senate blocks bid to allow prescription drug imports, a victory for drug companies

By Andrew Bridges
ASSOCIATED PRESS
3:59 p.m. May 7, 2007
WASHINGTON – Prescription drug prices in the United States probably will remain among the highest in the world.

Overseas, brand-name prescription drugs can cost two-thirds less than they do in the United States. In many industrialized countries, prices are lower because they are either controlled or partially controlled by government regulation.

Lawmakers have pushed for years to allow drug imports, saying they would drive down prices in the U.S. Experts disagree by just how much, however.

Consumers won't have a chance to find out. The Senate on Monday killed a bid to allow competition from lower-priced imports.

In a triumph for the pharmaceutical industry, the Senate, on a 49-40 vote, neutralized the latest push to allow drug imports. The measure required the administration to certify the safety and effectiveness of imported drugs before they can be brought into the country. That's something officials have said they cannot do.

“Well, once again the big drug companies have proved that they are the most powerful and best financed lobby in Washington,” said Sen. David Vitter, a Louisiana Republican.

The vote nullified a second amendment, later passed on a voice vote, that would legalize the importation of prescription drugs manufactured in Canada, Australia, Europe, Japan and New Zealand.

Sen. Bernie Sanders, I-Vt., called the certification amendment, introduced by Sen. Thad Cochran, R-Miss., a “poison pill” for the drug-imports legislation. Sen. Byron Dorgan, D-N.D., acknowledged it nullified his bid to allow the purchase of drugs abroad.

“This is a setback for us. But the drug industry is one of the strongest industries in this town,” Dorgan said.

Sen. Mike Enzi, a Wyoming Republican, said the requirement for a safety certification was essential to protect the public.

“Under both Democratic and Republican administrations, secretaries of Health and Human Services have declined to certify that foreign drugs – like those allowed under the Dorgan Foreign Drug Act – are safe for American consumers. They realized, as I do, that close enough isn't good enough,” Enzi said.

The maneuvering occurred on broader legislation to renew the FDA's ability to collect fees from the drug industry to defray the cost of reviewing new drugs. Lawmakers have seized on the bill to overhaul the agency, including its handling of drug-safety issues highlighted in the wake of the withdrawal of the painkiller Vioxx.

Advocates of drug importation have argued for years that an existing ban is more a protection for the drug industry than a safety issue.

Dorgan held out Lipitor, saying 90 doses of the cholesterol drug cost $321 in the U.S. – about twice the cost in Canada.

The idea of allowing prescription drug imports enjoys broad popular support. However, lower prices overseas would not automatically translate into large savings for domestic consumers, according to a 2004 study by the Congressional Budget Office.

The study found that allowing drug imports from a broad set of countries would cut U.S. drug spending by $40 billion over 10 years, about a 1 percent savings. It said foreign governments could limit drug exports to protect their own domestic supplies, and that U.S. drug companies could respond to an importation bill by increasing prices abroad.

The pharmaceutical industry vehemently opposes allowing drug imports, arguing that they could leave the nation vulnerable to dangerous counterfeits.

Similar drug-import legislation is pending in the House.

Wednesday, May 02, 2007

Corzine Fined, at His Request, for Not Wearing a Seat Belt

May 2, 2007

TRENTON, May 1 — Gov. Jon S. Corzine voluntarily paid a $46 fine on Tuesday for failing to wear a seat belt, as required by law, on the day when his state vehicle crashed on the Garden State Parkway last month, state officials said.

Mr. Corzine, 60, a Democrat in his first term, was seriously hurt in the accident, losing half his blood and breaking more than a dozen bones. But his failure to wear a seat belt — and the question of whether he would be fined — became an obsessive water-cooler topic, as some people in even the staunchest Democratic neighborhoods criticized his behavior.

So on Tuesday, when Mr. Corzine met with Col. Joseph R. Fuentes, the state police superintendent; Attorney General Stuart Rabner; and two other officials investigating the April 12 accident, he asked for a summons. Colonel Fuentes wrote a ticket on the spot; Mr. Corzine, a multimillionaire and former co-chairman of the investment bank Goldman Sachs, paid by personal check, covering the $20 fine and related court costs.

“It’s been a good amount of time since the superintendent issued a summons,” said Capt. Al Della Fave, a spokesman for the state police.

Mr. Corzine’s decision came hours after a New Jersey resident dropped a complaint demanding that the governor be ticketed and not receive preferential treatment.

Larry Angel, a lifeguard from Egg Harbor Township who is known for his long speeches at public meetings, had originally filed a complaint in Municipal Court in Galloway Township, where the accident took place. But he told reporters on Tuesday that he had dropped the complaint because Mr. Corzine’s apology on Monday on his release from the hospital seemed sincere.

Mr. Corzine, who was discharged on Monday, is expected to spend the next few weeks, if not months, recovering from his injuries at Drumthwacket, the governor’s mansion in Princeton, and not the Hoboken apartment where he previously spent most of his time. As of Tuesday evening, officials said, he had not yet left the private second-floor residence of the mansion, since a hospital bed and assorted equipment related to his rehabilitation and physical therapy are all there.

He has spent most of the last two days with his family, closest aides and medical personnel, aides said. But when he met with law enforcement officials on Tuesday to talk about the accident, he told them that “he remembered some details, but not all of them,” said Anthony Coley, his communications director.

For now, two separate panels are investigating the accident. One, organized by Mr. Rabner and including such dignitaries as former Gov. Christie Whitman, will focus on reviewing the Executive Protection Unit, the elite cadre of state troopers assigned to drive the governor and provide security for him. The panel is scheduled to meet for the first time on Friday in Trenton.

The other panel consists of an internal state police review, to determine whether the accident could have been prevented. If so, disciplinary action may be meted out against the state trooper, Robert J. Rasinski, who was driving Mr. Corzine at 91 miles per hour when the crash occurred.

State officials expect both panels to produce findings within the next two months.