05/05/2011 archive

Osama bin Laden may be dead but he’s still winning the economic war he started.

By Ezra Klein, Published: May 2

Did Osama bin Laden win? No. Did he succeed? Well, America is still standing, and he isn’t. So why, when I called Daveed Gartenstein-Ross, a counterterrorism expert who specializes in al-Qaeda, did he tell me that “bin Laden has been enormously successful”? There’s no caliphate. There’s no sweeping sharia law. Didn’t we win this one in a clean knockout?

Apparently not. Bin Laden, according to Gartenstein-Ross, had a strategy that we never bothered to understand, and thus that we never bothered to defend against. What he really wanted to do – and, more to the point, what he thought he could do – was bankrupt the United States of America. After all, he’d done the bankrupt-a-superpower thing before. And though it didn’t quite work out this time, it worked a lot better than most of us, in this exultant moment, are willing to admit.

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Nobel laureate Joseph Stiglitz estimates that the price tag on the Iraq War alone will surpass $3 trillion. Afghanistan likely amounts to another trillion or two. Add in the build-up in homeland security spending since 9/11 and you’re looking at another trillion. And don’t forget the indirect costs of all this turmoil: The Federal Reserve, worried about a fear-induced recession, slashed interest rates after the attack on the World Trade Center, and then kept them low to combat skyrocketing oil prices, a byproduct of the war in Iraq. That decade of loose monetary policy may well have contributed to the credit bubble that crashed the economy in 2007 and 2008.

Then there’s the post-9/11 slowdown in the economy, the time wasted in airports, the foregone returns on investments we didn’t make, the rise in oil prices as a result of the Iraq War, the cost of rebuilding Ground Zero, health care for the first responders and much, much more.

By John Hanrahan

Nobel laureate economist Joseph Stiglitz wants Americans not to be diverted by much of the rhetoric in the political debate over deficits and the calls for harsh austerity from Republican members of Congress and some GOP governors.

In contrast to the austerity hawks’ proposals, Columbia University professor Stiglitz says, “There are principled ways of cutting the deficit” and reducing the nation’s overall debt while at the same time “putting Americans back to work,” making life better for the millions of Americans in precarious economic circumstances, and halting growing economic inequality where one percent of the population controls 40 percent of the wealth and takes one-fourth of the nation’s income every year.

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“The deficit didn’t cause the downturn,” he said, “the downturn caused the deficit.”

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A few years ago, Stiglitz and Linda Bilmes, a public policy professor at the Harvard Kennedy School, wrote a book, “The Three Trillion Dollar War,” the title a reference to what they estimated would be the ultimate cost of the Iraq and Afghanistan wars. Since then, he said, they have come to realize “we were much too conservative” in estimating the costs.

• Making sure all corporations pay their share of taxes, and requiring the nation’s wealthiest 1 percent of individuals to pay more in income taxes. Even after ending the Bush tax cuts for the wealthiest Americans, Stiglitz said, those highest-income taxpayers “would still be ahead of where they were a decade ago.”
• Imposing “moderate increases” in capital gains and estate taxes and establishing a “small financial transactions tax,” all of which could raise substantial revenue, he said.
• Stopping “government giveaways of natural resources” – oil, gas, minerals, forests – through well-structured auctions that would bring in “serious revenue.”
• Curtailing corporate welfare, “which makes our economy more inefficient and increases unemployment.”
• Increasing enforcement of federal antitrust laws. Regarding the Bowles-Simpson Commission deficit reduction recommendations, Stiglitz noted that panel’s proposal to do away with the homeowners’ mortgage deduction. He said, “Eventually, we must deal with the mortgage deduction, but not now.” Eliminating the mortgage deduction in this troubled economy “would amount to an increased tax,” hitting hardest on the already hard-hit middle-class “and would make the housing market even worse,” he said.

Even before the economic crisis hit in 2007, Stiglitz said, the vast majority of Americans “year after year were getting poorer.” Household income today, on average, is lower than it was in 1997, at the same time income and wealth inequality have became even more pronounced in the United States. Yet, he said, we “told people to pretend their income was going up and to consume more.” And people did that, going into debt while at the same time believing they were getting wealthier because of the housing bubble.

In those days before the housing bubble collapsed, “We were on artificial respiration and we didn’t even know it,” Stiglitz said.

Keith’s new show, Countdown, appears June 20th on Al Gore’s Current TV.  This Special Comment is from Friends of Keith.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”

John Nichols: Paul Ryan Gets an Earful as Tour Bombs

KENOSHA, WI – Paul Ryan, the smooth-if-not-always-substantive congressman, is the darling of the D.C. talk shows. The House Budget Committee chair, chosen by GOP House leaders to respond to President Obama’s State of the Union Address, is the prime pitchman for the Wall Street lobbying agenda on everything from privatization of Social Security to tax cuts for the rich. During Congress’ spring break, he took his show on the road.

Ryan, R-Janesville, may have thought that his carefully crafted sales pitch for pulverizing Medicare would play perfectly in Paddock Lake and Milton and Kenosha – Wisconsin towns where the congressman expected to be greeted with cheers for a conquering hero from inside the Beltway.

As it happens, hundreds of Ryan’s constituents were turned away from the town hall meetings, which were packed to capacity long before their starting time. But the crowds that did get in to the sessions did not exactly come to hail their congressman as an American idol.

Dahlia Litwick: Still Stupid, Still Wrong, Still Immoral

Why the death of Osama Bin Laden shouldn’t change our views about torture-or of the people who approved it.

Do we have to have another big national debate about torture? Really, do we have to? Headlines like this one, in the New York Times no less, inform us that the Osama Bin Laden raid has “revived” the arguments over the “value of torture.” That’s strange, because until now, the only people “reviving” the debate over the wonders of torture were the same people whose names are actually on the torture memos or who were in the room when torture methods were being approved. This does not constitute a “debate.” A better term would be self-serving propaganda.

Still, the subject of illegally torturing people for information appears to be open for discussion yet again. So before I rehearse my argument, allow me to suggest that the only reason we are having this discussion at all is because we have tortured people. That’s the problem with doing stupid things: You spend the rest of your life trying to convince yourself that maybe they weren’t so stupid after all. Had we not water-boarded prisoners eight years ago, nobody would be making the argument that water-boarding “worked.” The reason you don’t order up torture in the first place is that once you do, it stays on the menu for years.

A year on, flash crash didn’t prove transformative

By Jonathan Spicer, Reuters

Thu May 5, 2011 8:55am EDT

In the hours and days after last year’s “flash crash,” it seemed like Wall Street’s high-tech marketplace was in for big changes.

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Yet a year later, little has changed — suggesting that while the flash crash was historic, it was not transformative.

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With Europe’s debt crisis keeping markets on edge on May 6, 2010, a big futures sale sparked a cascade of selling in the stock market. The high-frequency algorithmic traders that now supply much of the market’s orders started bailing out, leaving nothing to stop the stampede to sell at any cost.

The Dow Jones industrial average plunged nearly 700 points in minutes that afternoon, eliminating $1 trillion in paper value before rebounding nearly as quickly. Blue-chip stocks hit record lows while others such as Accenture Plc traded for a penny, prompting thousands of trade breaks and wrecking havoc on investments.

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The U.S. Securities and Exchange Commission has so far made only one structural adjustment to markets: trading pauses known as circuit breakers. The regulator also made some noncontroversial nips and tucks around the edges and is mulling further changes, but for now at least, an overhaul is nowhere on the horizon.

“Not enough has been done,” said Andrew Brooks, head of U.S. equity trading at T Rowe Price, a big Baltimore-based asset manager.

“Do we know who trades all the large stuff? Do we know the nature of the counterparties in the marketplace today? The answer is no, and it’s crazy.”

So much for free, efficient, and transparent markets.

The solution is a transaction tax.  Not only would it force high churn traders to reconsider their gambling bets “investment” decisions, but it would also solve our revenue (not deficit) problem at a stroke.

What we have to do structurally is make it impossible (or prohibitively expensive) to gamble ‘on the house’ by using leverage as a money multiplier unless you are prepared to pay off your private debts when you lose.

I have no sympathy at all for those who sold Accenture at a penny.  You were fucking stupid to let a computer make your decisions for you.  Master of the Universe my ass, you’re a con man with a gambling addiction, a moron, and you deserve to be kicked to the gutter penniless and homeless like your Randian philosophy demands.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

Click on images to enlarge

May 5 is the 125th day of the year (126th in leap years) in the Gregorian calendar. There are 240 days remaining until the end of the year.

On this day in 1862, the Mexican Army defeated the French forces at the Battle of Puebla

Certain that French victory would come swiftly in Mexico, 6,000 French troops under General Charles Latrille de Lorencez set out to attack Puebla de Los Angeles. From his new headquarters in the north, Juarez rounded up a rag-tag force of loyal men and sent them to Puebla. Led by Texas-born General Zaragoza, the 2,000 Mexicans fortified the town and prepared for the French assault. On the fifth of May, 1862, Lorencez drew his army, well-provisioned and supported by heavy artillery, before the city of Puebla and began their assault from the north. The battle lasted from daybreak to early evening, and when the French finally retreated they had lost nearly 500 soldiers to the fewer than 100 Mexicans killed.

Although not a major strategic victory in the overall war against the French, Zaragoza’s victory at Puebla tightened Mexican resistance, and six years later France withdrew. The same year, Austrian Archduke Ferdinand Maximilian, who had been installed as emperor of Mexico by Napoleon in 1864, was captured and executed by Juarez’ forces. Puebla de Los Angeles, the site of Zaragoza’s historic victory, was renamed Puebla de Zaragoza in honor of the general.

Mexico

Cinco de Mayo is a regional holiday limited primarily to the state of Puebla. There is some limited recognition of the holiday in other parts of the country.

United States

In a 1998 study in the Journal of American Culture it was reported that there were more than 120 official U.S. celebrations of Cinco de Mayo, and they could be found in 21 different states. An update in 2006, found that the number of official Cinco de Mayo events was 150 or more, according to Jose Alamillo, professor of ethnic studies at Washington State University in Pullman, who has studied the cultural impact of Cinco de Mayo north of the border.

In the United States Cinco de Mayo has taken on a significance beyond that in Mexico. The date is perhaps best recognized in the United States as a date to celebrate the culture and experiences of Americans of Mexican ancestry, much as St. Patrick’s Day, Oktoberfest, and the Chinese New Year are used to celebrate those of Irish, German, and Chinese ancestry respectively. Similar to those holidays, Cinco de Mayo is observed by many Americans regardless of ethnic origin. Celebrations tend to draw both from traditional Mexican symbols, such as the Virgen de Guadalupe, and from prominent figures of Mexican descent in the United States, including Cesar Chavez. To celebrate, many display Cinco de Mayo banners while school districts hold special events to educate pupils about its historical significance. Special events and celebrations highlight Mexican culture, especially in its music and regional dancing. Examples include baile folklorico and mariachi demonstrations held annually at the Plaza del Pueblo de Los Angeles, near Olvera Street. Commercial interests in the United States have capitalized on the celebration, advertising Mexican products and services, with an emphasis on beverages, foods, and music.

How profile of bin Laden courier led CIA to its target

Mysterious Kuwaiti matched many criteria for al-Qaida leader’s contact with outside world

By Michael Isikoff

National investigative correspondent

The courier who led the CIA to Osama bin Laden’s doorstep was identified through years of painstaking detective work that included developing a composite “profile” of what an ideal courier for the al-Qaida leader would look like.

“It was like doing the profile of a serial killer,” said one U.S. official, who provided new details to NBC News about how the agency was able to track down the courier and, ultimately, bin Laden himself. The official, who spoke on the

condition of anonymity, was one of the three U.S. officials to describe the intelligence community’s search for the courier.

The GOP really hates women so much that they have been barely able to focus on little else at times. They managed to stop the District of Columbia from using its own money to assist poor women in obtaining the procedure by attaching a rider to the continuing resolution to fund the government throwing Democrats the bone of removing the rider that would have defunded Planned Parenthood.

Tonight Think Progress reports the House passed H.R. 3 which proposes some of the most radical and draconian restrictions on women’s rights:

– Redefinition Of Rape:

The bill sponsor Rep. Chris Smith (R-NJ) faced serious backlash after he tried to narrow the definition rape to “forcible rape.” By narrowing the rape and incest exception in the Hyde Amendment, Smith sought to prevent the following situations from consideration: Women who say no but do not physically fight off the perpetrator, women who are drugged or verbally threatened and raped, and minors impregnated by adults.

Smith promised to remove the language and while it is not technically in the bill, Mother Jones reports that House Republicans used “a sly legislative maneuver” to insert a “backdoor reintroduction” of redefinition language. Essentially, if the bill is challenged in court, judges will look at the congressional committee report to determine intent. The committee report for H.R. 3 says the bill will “not allow the Federal Government to subsidize abortions in cases of statutory rape” – thus excluding statutory rape-related abortions from Medicaid coverage.

– Tax Increase On Women And Small Businesses:

H.R. 3 prevents women from using “itemized medical deductions, certain tax-advantaged health care accounts or tax credits included in last year’s health care law to pay for abortions or for health insurance plans that cover abortion.” In doing so, the bill forces women and small businesses that provide health insurance that covers abortion to pay more in taxes than they would otherwise.

– Rape Audits:

Because H.R. 3 bans using tax credits or deductions to pay for abortions or insurance, a woman who used such a benefit would have to prove, if audited, that her abortion “fell under the rape/incest/life-of-the-mother exception, or that the health insurance she had purchased did not cover abortions.” Essentially, the bill turns Internal Revenue Service agents into “abortion cops” who would force women to give “contemporaneous written documentation” that it was “incest, or rape, or [her] life was in danger” that compelled an abortion.

Former House Speaker Nancy Pelosi has called this bill the “most comprehensive and radical assault on women’s health in our lifetime” and the president has already said that he would veto this bill if it made it to his desk which is doubtful since the Senate would never pass it. That doesn’t mean they won’t try to attach it to the Debt Limit Compromise. As David Dayen reports Rep. Trent Franks R-AZ) has already proposed just that with the blessing of House Speaker John Boehner:

   The decision to put the measure on the floor is giving new hope to some social conservatives who want their issues swept up into the debt limit debate.

   Rep. Trent Franks, an anti-abortion advocate, said that House Republicans “have some leverage” to get the Democratically controlled Senate to take up the legislation, similar to the way House Republicans forced an amendment onto the continuing resolution that would defund federal funding for Planned Parenthood. As part of a larger agreement on the final CR, Senate leaders agreed to hold a separate vote on the Planned Parenthood amendment […]

   While Franks, a two-term lawmaker from Arizona, acknowledged that a balanced budget amendment may be better suited to be part of a compromise debt limit vote, he still has hope for a Senate vote on an anti-abortion bill.

   Franks isn’t alone in hoping that H.R. 3 is part of the discussion on the debt ceiling extension.

   “What we use the debt limit to leverage is really up to the leaders, [but] I would think this would be one of the bills that we could be asking for,” said Rep. Joe Pitts (R-Pa.), an ardent anti-abortion supporter.

I really despise these people.

Those of you that read this regular series know that I am from Hackett, Arkansas, just a mile of so from the Oklahoma border, and just about 10 miles south of the Arkansas River.  It was a redneck sort of place, and just zoom onto my previous posts to understand a bit about it.

I never write about living people except with their express permission, but since these folks are long gone, they are fair game.  They were actually very nice folks, but had some huge quirks, as most folks in my little town did.

Francis Worthen is one of those people.  I did not know her as well as I did many of the others in town, but well enough to write about her.  My memories of her are sort of skewed, as you will see as you read the piece.

Evening Edition is an Open Thread

1 Libya’s Misrata pounded as ICC eyes crimes

by W.G. Dunlop, AFP

17 mins ago