September 2013 archive

Grand Bargain Circus – Red Clowns Gone Wild!

Dogs and horses in usual circus act

Courtesy of the Boston Public Library, Leslie Jones Collection.

Step right up! Come one, come all to the continuing Grand Bargain Circus!  

Just as when last we checked, the red clowns are still refusing to get in the car and leave the ring until the Ringmaster makes an enticing offer.  Some of the red clowns have been imbibing in the fermented popcorn and their demands are becoming increasingly delusional.  Today the red clowns are going wild, making all of the outrageous demands that they can think of to force the Ringmaster to beat more concessions out of the audience.  

All the rage for the past couple of days has been the red clowns saying that they won’t get in the car if the Ringmaster reduces the number of those in the audience without health insurance to about 30 million and provides a sizable return to the Ringmaster’s donors in the health care sector rewards the insurance and pharmaceutical industries handsomely.

That simple demand which the Ringmaster refuses to countenance has festered into a raging torrent of demands, among them that the audience fork over more taxes to offset the tax liability of the rich and also acquiesce to more environmental destruction.

The drama here under the big top is growing as the demands rise…

Punting the Pundits

“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”.

Follow us on Twitter @StarsHollowGzt

Paul Krugman: Plutocrats Feeling Persecuted

Robert Benmosche, the chief executive of the American International Group, said something stupid the other day. And we should be glad, because his comments help highlight an important but rarely discussed cost of extreme income inequality – namely, the rise of a small but powerful group of what can only be called sociopaths. [.]]

So here’s what Mr. Benmosche did in an interview with The Wall Street Journal: He compared the uproar over bonuses to lynchings in the Deep South – the real kind, involving murder – and declared that the bonus backlash was “just as bad and just as wrong.” [..]

This is important. Sometimes the wealthy talk as if they were characters in “Atlas Shrugged,” demanding nothing more from society than that the moochers leave them alone. But these men were speaking for, not against, redistribution – redistribution from the 99 percent to people like them. This isn’t libertarianism; it’s a demand for special treatment. It’s not Ayn Rand; it’s ancien régime.

Vanessa Barbara: Have a Nice Day, N.S.A.

Like most Brazilians, I was annoyed to learn that the American government might have been gathering data from my computer and phone calls. But on the bright side, I am hoping that it has kept a backup of my files, since a few months ago I realized that I could no longer find an important video anywhere in my computer. (Mr. Obama, if you’re reading this, please send me the file “summer2012.wmv” as soon as you can.)  [..]

But for now, we citizens have our own plan. It has become something of a joke among my friends in Brazil to, whenever you write a personal e-mail, include a few polite lines addressed to the agents of the N.S.A., wishing them a good day or a Happy Thanksgiving. Sometimes I’ll add a few extra explanations and footnotes about the contents of the message, summarizing it and clarifying some of the Portuguese words that could be difficult to translate.

New York Times Editorial Board: A Republican Ransom Note

On Wednesday, Treasury Secretary Jacob Lew sent the House a very serious warning that, for the first time, the United States would be unable to pay its bills beginning on Oct. 17 if the debt ceiling is not lifted. House leaders responded on Thursday with one of the least serious negotiating proposals in modern Congressional history: a jaw-dropping list of ransom demands containing more than a dozen discredited Republican policy fantasies. [..]

But the absurdity of the list shows just how important it is that Mr. Obama ignore every demand and force the House extremists to decide whether they really want to be responsible for an economic catastrophe. He made a mistake by negotiating in 2011, hoping to reach a grand bargain; that produced the corrosive sequester cuts.

To prevent the House from making every debt-ceiling increase an opportunity to issue extortionist demands for rejected policies they can achieve in no other way, the president has to put an end to the routine creation of emergencies once and for all by simply saying no.

John Nichols: House GOP Debt-Ceiling Plan: Paul Ryan’s Losing Ideas From 2012

Was there a presidential election in 2012? Yes.

Who won? Barack Obama.

Who was elected vice president? Joe Biden.

Who lost for president? Mitt Romney.

Who lost for vice president? Paul Ryan.

Cool, just wanted to get that straight.

The latest scheme (pdf) from House Republicans might have confused folks.

House Speaker John Boehner, House Majority Leader Eric Cantor and House Budget Committee chairman Paul Ryan are not quite done threatening a government shutdown as part of the “Defund Obamacare” debacle. But they are already on to their next project: holding hostage any agreement to allow the debt-ceiling to rise.

Richard (RJ) Eskow: The Robots Are Coming – Now What?

A new study says that nearly half of all American jobs may soon be performed by robots. And the White House has just announced the formation of “the Advanced Manufacturing Partnership Steering Committee ‘2.0,’” which it describes as “part of a continuing effort to maintain U.S.leadership in the emerging technologies that will create high-quality manufacturing jobs and enhance America’s global competitiveness.”

That seems like a good idea, but it raises a number of questions. There is only one labor representative on the committee, as compared to eleven corporate CEOs, and it would be good to know why. What’s more, labor isn’t acknowledged in the President’s statement that “industry, academia, and government must work in partnership to revitalize our manufacturing sector.”

That’s unfortunate, because the working people of America should have a strong voice in designing the future of our manufacturing sector. In fact, that role is more important than ever, as a manufactured product – a range of devices commonly described as “robots” – may change the face of work in America.

Jill Filipovic: The way America eats is killing us. Something has to change

Another report confirms: we’re the United States of big meals, yet we do little to change our disastrous corporate food culture

It will shock no one to hear that Americans are remarkably unhealthy eaters. A new American Diet Report Card (pdf) confirms it: we eat far too much cheese, sugar, starch and red meat. We don’t eat enough fruits and vegetables. We consume almost 500 more calories per day than we did in the 1970s.

Our eating habits are poor, but it’s not because we’re a nation of lazy fools jonesing for our daily Big Mac fix, health be damned. It is because we are far too deferential to the interests of big companies, too invested in a corporate-serving narrative of personal responsibility with no parallel requirement of social responsibility, and too culturally wedded to a food model of quantity over quality. [..]

The message is getting through, but slowly: the way we’re eating is killing us. Something has to change.

On This Day In History September 27

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.

September 27 is the 270th day of the year (271st in leap years) in the Gregorian calendar. There are 95 days remaining until the end of the year.

On this day in 1922, Jean-François Champollion deciphered the hieroglyphs of the Rosetta Stone with the help of groundwork laid by his predecessors: Athanasius Kircher, Silvestre de Sacy, Johan David Akerblad, Thomas Young, and William John Bankes. Champollion translated parts of the Rosetta Stone, showing that the Egyptian writing system was a combination of phonetic and ideographic signs.

Thomas Young was one of the first to attempt decipherment of the Egyptian hieroglyphs, basing his own work on the investigations of Swedish diplomat Akerblad, who built up a demotic  alphabet of 29 letters (15 turned out to be correct) and translated all personal names and other words in the Demotic part of the Rosetta Stone  in 1802. Akerblad however, wrongly believed that demotic was entirely phonetic or alphabetic. Young thought the same, and by 1814 he had completely translated the enchorial (which Champollion labeled Demotic as it is called today) text of the Rosetta Stone (he had a list with 86 demotic words). Young then studied the hieroglyphic alphabet and made some progress but failed to recognise that demotic and hieroglyphic texts were paraphrases and not simple translations. In 1823 he published an Account of the Recent Discoveries in Hieroglyphic Literature and Egyptian Antiquities. Some of Young’s conclusions appeared in the famous article Egypt he wrote for the 1818 edition of the Encyclopædia Britannica.

When Champollion, in 1822, published his translation of the hieroglyphs and the key to the grammatical system, Young and all others praised this work. Young had indicated in a letter to Gurney that he wished to see Champollion acknowledge that he had made use of Young’s earlier work in assisting his eventual deciphering of hieroglyphics. Champollion was unwilling to share the credit even though initially he had not recognized that hieroglyphics were phonetic. Young corrected him on this, and Champollion attempted to have an early article withdrawn once he realized his mistake. Strongly motivated by the political tensions of that time, the British supported Young and the French Champollion. Champollion completely translated the hieroglyphic grammar based in part upon the earlier work of others including Young. However, Champollion maintained that he alone had deciphered the hieroglyphs. After 1826, he did offer Young access to demotic manuscripts in the Louvre, when he was a curator. Baron Georges Cuvier (1825) credited Champollion’s work as an important aid in dating the Dendera Zodiac.

Economic Populist: Consol Bonds are the Debt Ceiling Walk Off Home Run

cross-posted from Voices on the Square

The Debt Ceiling debate is Yet Another GOP Abuse of the System, but the entire debate runs under the pretense that the Treasury cannot sell new bonds if the Debt Ceiling is not raised.

Look at the history of the debt ceiling, and its easy to see where people get that idea. Way back when, the Treasury went to Congress for each and every new bond issue. Then in 1917, with war breaking out in Europe, Congress reformed the system to give the Treasury more freedom of action, establishing an overall ceiling within which it could issue bonds. It was like moving from a series of individually negotiated loans with a bank to obtaining an approved credit line with the bank.

From 1917 to 2010, the increase of the debt ceiling when required was a routine transaction. But after the radical reactionary wing of the Republican party ran under the successful “Tea Party” branding, a number of radical reactionary GOP Congressmen balked at this routine transaction, and took the full faith and credit of the US Government hostage. This resulted in the “sequester” debacle, in which spending cuts that were deliberately designed to punish the American people in case Congress could not agree on the insane policy of cutting spending in the middle of what is now a five year old Depression. Congress could not agree, and so the brain-dead punitive spending cuts were put in place instead.

After that experience, turning out as badly as progressive populist critics at the time said it would, now there are bold words from the White House demanding a clean debt ceiling vote, without any hostage taking.

The good news is that if the Treasury turns to Consol Bonds, they can win this fight no matter what the radical reactionary wing of the House Republicans decide to do.

Fail Whale

Once Again, Punishing the Bank but Not Its Top Executives

By PETER EAVIS, The New York Times

September 19, 2013, 3:48 pm

The government says there is wrongdoing at a large bank and makes it pay a fine. But senior executives who seemed to play a role in the missteps are not singled out for individual punishment.

It happened again on Thursday, when regulators in the United States and Britain hit JPMorgan Chase with nearly $1 billion in fines for the bank’s failure to properly handle a trading debacle last year.

The traders, based in JPMorgan’s London office, made wagers in complex financial instruments that saddled the bank with over $6 billion in losses. The bank’s problems became known as the London Whale affair, because the traders involved accumulated such large positions. In recent months, regulators have identified and gone after some of the employees who worked on the trades, saying that they had incorrectly valued the trades on JPMorgan’s books to make their losses look substantially smaller.



But not only did the agencies fail to take action against any of the executives, they did not even identify them (although it is clear who some of them are).



“JPMorgan failed to keep watch over its traders as they overvalued a very complex portfolio to hide massive losses,” George S. Canellos, co-director of the S.E.C’s division of enforcement, said in a statement. “While grappling with how to fix its internal control breakdowns, JPMorgan’s senior management broke a cardinal rule of corporate governance and deprived its board of critical information it needed to fully assess the company’s problems and determine whether accurate and reliable information was being disclosed to investors and regulators.”

Given language like that, those who favor stricter sanctions for bankers raised questions on Thursday about why the regulators did not take individual actions against the JPMorgan executives.

In JPMorgan Case, a Missed Opportunity to Charge Its Executives

By JESSE EISINGER, ProPublica, The New York Times

September 25, 2013, 12:30 pm

By cracking down on the bank for its faulty internal controls in the $6 billion London Whale trading loss, the S.E.C. can claim to be the ferocious regulator we have all been waiting for. JPMorgan and its chief executive, Jamie Dimon, got the best coverage they could have hoped for under the circumstances: the sense that the bank is beleaguered, surrounded by regulators, but at least it could put the trading loss behind it.

Yes, the S.E.C. wrung an admission of wrongdoing out of the bank, and the regulators scored a large settlement. It’s an improvement for a regulator to display the ferocity of a mealworm, rather than a banana slug, but let’s hold the celebrations until it reaches at least the level of a garter snake.



The admission was nice, but the S.E.C. did not charge any top executives with misleading disclosure. Why not?

Financial markets depend on true and accurate information. Disclosure isn’t some i-dotting, t-crossing regulatory nicety; it’s fundamental. And the Senate Permanent Subcommittee on Investigations, in its huge report on the trading loss, made a convincing case that the chief financial officer at the time, Douglas L. Braunstein, made several highly misleading statements in an April 13, 2012, conference call with shareholders and the public.



On that April 13 call, Mr. Braunstein made four statements that the Senate subcommittee found erroneous about the trades made by the bank’s chief investment office. He said the trading was “fully transparent to the regulators.” He said of the trading that “all of those positions are put on pursuant to the risk management at the firmwide level.” He said they were “made on a very long-term basis.” And most important, he emphasized that the traders were hedging.

It wasn’t only Mr. Braunstein. His comments mirrored talking points the bank had prepared days earlier. The Senate subcommittee report says the bank’s communications officer and chief investor liaison circulated talking points and met with reporters and analysts with the “primary objectives” to communicate that the chief investment office’s activities were ” ‘for hedging purposes’ and that the regulators were ‘fully aware’ ” of the trading. “Neither of which was true,” the Senate report says.



The trading wasn’t disclosed to regulators, the bank’s top risk managers had no window into it, and the traders were actively buying and selling. Most significant, it wasn’t hedging. The trading in the London group of the chief investment office was proprietary, intended to create profit for the bank. That’s the kind of activity that will presumably be banned under the interminably delayed Volcker Rule, should the regulators deign to finish it and not permit large exemptions.

“Given the information that bank executives possessed in advance of the bank’s public communications on April 10, April 13, and May 10, the written and verbal representations made by the bank were incomplete, contained numerous inaccuracies, and misinformed investors, regulators and the public,” the Senate report says.



The S.E.C. says it isn’t finished yet. The investigation has three parts: the case against the traders for mismarking the value of the trades, for which two have been charged criminally; the look into the company for internal controls, which was settled last week; and a third, against senior individuals for misrepresentations. The third continues. The agency may yet come down on top executives for their misleading statements.

I got a different sense from the company, however. The S.E.C. investigated the April 13 statements and the bank regards its senior executives to be in the clear, a person at JPMorgan told me. Mr. Dimon, for one, has been cleared, according to bank statements that were approved by the S.E.C.



The one unshakable talking point, repeated like a drumbeat, is the executives emphasizing their good faith.

The implications for the public are larger than this single case. One of the important aspects for the Volcker Rule, which aims to bar banks from speculating with money that is backed by taxpayers, will be how much disclosure regulators require.

Clear and complete disclosures would allow institutional investors, regulators, counterparties and financial experts to sort out whether the banks are complying with the law or not.

A slap for lesser sins darkens the future of the already enfeebled rule. Without serious disclosure and serious enforcement, the risk of another calamity rises.

You may think this represents the lamest sort of regulation.  Not so.

This is America’s worst regulator (and JPMorgan’s best pal)

By David Dayen, Salon

Wednesday, Sep 25, 2013 11:45 AM UTC

At times it doesn’t seem like JPMorgan Chase runs any legal businesses. The good news is that some in the federal government appear to be slowly catching up to their illicit enterprises. Unfortunately, there’s one regulator whose negligence is beyond problematic, and damaging the country. Meet Thomas Curry, head of the Office of the Comptroller of the Currency (OCC).

The OCC is the obscure yet powerful primary regulator for JPMorgan Chase and other national banks – and is frankly the reason why JPMorgan believes it can run multiple illegal businesses and get away with it. The OCC has been more of the mega-bank’s pal within the government, rather than a tough-minded regulator. And a settlement in yet another case of malfeasance at JPMorgan, released late last week, shows that nothing has changed.

The case involves litigation practices by JPMorgan in various collections, and a failure to comply with the Servicemembers Civil Relief Act (SCRA), a statute that protects members of the military in financial transactions. It turns out that JPMorgan conducted its credit card, auto and student loan collections in the same illegal fashion as it did its foreclosure operations: using affidavits where low-level employees testified to personal knowledge of the cases without actually knowing anything about them.

This is called “robo-signing,” and it means that fraudulent sworn documents were filed as evidence in court so JPMorgan could obtain judgments against borrowers. Often the sworn documents would have inaccurate financial information, so the bank was attempting to collect false sums from the borrowers. And it rarely complied with the SCRA, which sets maximum interest rates charged to service members and bans legal proceedings for service members in active duty in a war zone. JPMorgan couldn’t even manage that, suing soldiers while they served in Iraq or Afghanistan or elsewhere.

Unlike the SEC, the OCC agreed to a settlement without forcing JPMorgan Chase to admit or deny wrongdoing. Worse, they are giving the bank several months to design their own punishment, a fairly common but nonetheless appalling practice. It’s like arresting someone who knocked over a 7-Eleven and telling them they have 180 days to figure out how much of the money they stole they should have to give back. Needless to say, the criminal is an unreliable judge of the proper punishment.



The other federal agencies attempting to render judgment on JPMorgan Chase certainly aren’t doing enough. The Justice Department did indict two ex-traders of the bank after it admitted fault in hiding their London Whale derivatives trading loss from regulators and investors, but they are both living in Europe and don’t expect to get extradited, rendering ineffective any effort to pursue them or their superiors. Senior management has faced no punishment in the Whale case or any others, up to and including CEO Jamie Dimon, despite obvious culpability. The bank has been forced to sell their physical commodities business after questions about market manipulation, and Dimon has promised to further simplify JPMorgan’s lines of business, reflecting a cumulative effect of the constant fines and lawsuits to their reputation. They’ve suffered billions in litigation costs and plan to spend another $4 billion this year to comply with regulations (don’t cry for them; they make about $6.5 billion every quarter). That’s about the best you can say about this sorry attempt at taking down the biggest crook on Wall Street.



This negligence is particularly stark considering how many others are finally onto JPMorgan’s shenanigans. Just over the past week, it paid $920 million in fines and admitted fault in the aforementioned London Whale case; paid another $389 million in fines and reimbursements over charging credit card customers for services they never received; were informed of an imminent enforcement action over their manipulation of the commodities market; faced bribery investigations over hiring the children of well-connected Chinese politicians; faced another investigation from the state of Massachusetts over credit-card collection practices; were uncovered as the main beneficiary of ultra-cheap borrowing from the Federal Home Loan Banks, a program meant to help small community-based lenders; and just yesterday, learned of a civil lawsuit from the U.S. Justice Department over selling mortgage-backed securities to investors without informing them of the poor quality of the loans in the portfolio.

“A Naked Declaration of Imperialism”

On Tuesday, President Barack Obama addressed the world at the 2013 UN General Assembly meeting in New York City. He mostly touted the US policy in the Middle East and the so-called right of the US to interfere with the sovereign nations of the region. Even though the president has directed Secretary of State John Kerry to meet with Iran’s Foreign Minister over Iran’s nuclear program, he again declared that the US can use force to stop what there is no evidence of, an Iranian nuclear weapon. The speech, a neo-con’s dream, was littered with lies, as enumerated by David Swanson.

2. “(P)eople are being lifted out of poverty,” Obama said, crediting actions by himself and others in response to the economic crash of five years ago. But downward global trends in poverty are steady and long pre-date Obama’s entry into politics. And such a trend does not exist in the U.S. [..]

4. “Together, we have also worked to end a decade of war,” Obama said. In reality, Obama pushed Iraq hard to allow that occupation to continue, and was rejected just as Congress rejected his missiles-for-Syria proposal. Obama expanded the war on Afghanistan. Obama expanded, after essentially creating, drone wars. Obama has increased global U.S. troop presence, global U.S. weapons sales, and the size of the world’s largest military. He’s put “special” forces into many countries, waged a war on Libya, and pushed for an attack on Syria. How does all of this “end a decade of war”? And how did his predecessor get a decade in office anyway? [..]

6. “We have limited the use of drones.” Bush drone strikes in Pakistan: 51. Obama drone strikes in Pakistan: 323. (That they have admitted to. TMC [..]

8. “… and there is a near certainty of no civilian casualties.” There are hundreds of confirmed civilian dead from U.S. drones, something the Obama administration seems inclined to keep as quiet as possible. [..]

13. “How do we address the choice of standing callously by while children are subjected to nerve gas, or embroiling ourselves in someone else’s civil war?” That isn’t a complete list of choices, as Obama discovered when Russia called Kerry’s bluff and diplomacy became a choice, just as disarmament and de-escalation and pressure for a ceasefire are choices. Telling Saudi Arabia “Stop arming the war in Syria or no more cluster bombs for you,” is a choice. [..]

14. “What is the role of force in resolving disputes that threaten the stability of the region and undermine all basic standards of civilized conduct?” Force doesn’t have a role in civilized conduct, the most basic standard of which is relations without the use of force. [..]

17. “It is an insult to human reason – and to the legitimacy of this institution – to suggest that anyone other than the regime carried out this attack.” Really? In the absence of evidence, skepticism isn’t reasonable for this Colin-Powelled institution, the same U.N. that was told Libya would be a rescue and watched it become a war aimed at illegally overthrowing a government? Trust us? [..]

There are 45 cringe worthy lies in David’s dissection of the president’s speech.

Author and national security correspondent for The Nation, appearing with Amy Goodman and Nermeen Shaihk on Democracy Now! called the president’s speech “a really naked declaration of imperialism.



Transcript can be read here

During this section of the speech my jaw sort of hit the floor. He basically came out and said the United States is an imperialist nation and we are going to do whatever we need to conquer areas to take resources from around the world. I mean, it was a really naked sort of declaration of imperialism, and I don’t use that word lightly, but it really is. I mean, he pushed back against the Russians when he came out and said I believe America is an exceptional nation. He then defended the Gulf War and basically said that the motivation behind it was about oil and said we are going to continue to take such actions in pursuit of securing natural resources for ourselves and our allies. I mean, this was a pretty incredible and bold declaration he was making, especially given the way that he has tried to portray himself around the world. On the other hand, you know, remember what happened right before Obama took the stage is that the president of Brazil got up, and she herself is a former political prisoner who was abused and targeted in a different lifetime, and she gets up and just blasts the United States over the NSA spy program around the world.

Obama’s UN Speech: Packaging Neoconservative Values in the Language of Peace & Liberation

by Kevin Gosztola, FDL The Dissenter

The speech President Barack Obama delivered at the United Nations General Assembly was a neoconservative foreign policy speech, the kind of speech one might have heard President George W. Bush deliver in the midst of the Iraq War to defend decisions made by those ruling America.

Both Robert Kagan and William Kristol, leading American neoconservatives, argued in 1996, “Without a broad, sustaining foreign policy vision, the American people will be inclined to withdraw from the world and will lose sight of their abiding interest in vigorous world leadership. Without a sense of mission, they will seek deeper and deeper cuts in the defense and foreign affairs budgets and gradually decimate the tools of US hegemony.”

The hegemon or paramount power that neoconservative policy thinkers like Kagan and Kristol consider America to be passed on an opportunity to show “leadership” by striking Syria. Obama was acutely aware that the United States was not in control of the developing response to the crisis in Syria. His speech was an opportunity to reassert American power, especially in the Middle East and North Africa. [..]

Now, America has drone bases to make war permanent. It has a massive surveillance apparatus that Obama is more than willing to defend and utilize against any country in the world that threatens its power. Though all countries may seek to spy on one another to decide what to do diplomatically, no country can match the technological capabilities of the United States as it bugs and spies on diplomatic missions of countries to remain supreme.

The US Roll in the Nairobi Mall Attack

Three days of mourning were declared in the aftermath of the attack on the Westgate Mall in Nairobi, Kenya that has left at least 72 dead including six soldiers and five of the attackers.

The attack was perpetrated by the militant youth group, al-Shabaab, associated with Islamic extremists in Somalia and is regarde by the US and other nations as a terrorist group. The groups is targeting Kenya for providing troop that supported the Somali Transitional Federal Government.

While al-Shabab has turned into a largely violent organization, for a time it was run as a counter force to criminal gangs operating in Mogadishu, Somalia’s capital. Al-Shabab was once the military wing of the deposed Islamic Court Union (ICU), which controlled much of central and southern Somalia in late 2006.

But Al-Shabab’s fighters were eventually forced out of Somalia by Ethiopian troops in support of the largely powerless U.N.-backed interim government.

Though the group has carried out attacks in other countries, it has mostly focused on attacks within Somalia, using suicide bombs to kill dozens over the years. Its members have also assassinated international aid workers and others perceived to be friendly to Somalia’s transitional government.

Author and national security correspondent for The Nation, Jeremy Scahill joined Democracy Now!‘s Amy Goodman and Nareem Shaihk to discuss how the US meddling in the region is tied to the “rampage” at the Nairobi mall.



Transcript can be read here

Scahill says the Bush administration’s decision to back Ethiopia’s overthrow of Somalia’s Islamic Courts Union in 2006 helped fuel al-Shabab’s growth into the dominant militant group that it is today: “Al-Shabab was largely a non-player in Somalia and al-Qaeda had almost no presence there. The U.S., by backing [Somali] warlords and overthrowing the Islamic Courts Union, made the very force they claimed to be trying to fight.”

Jeremy also appeared on MSNBC’s All In with Chris Hayes further explaining the history of the region and al-Shabaab.

>>> at this hour, kenyan security forces claim to be in control of the west gate premier shopping mall in nairobi, kenya, the site of one of the most horrifying terror attacks in recent memory. kenyan interior ministry saying “our forces are combing the mall floor by floor looking for anyone left behind. we believe all hostages have been released.” this hour, the kenyan government hasn’t yet made a full accounting. midday saturday, nairobi, kenya, a mall that could easily be mistaken for any major mall in the u.s. or anywhere in the world, fell under attack by 10 to 15 gunmen, reportedly from the islamist al shabaab militia. one eyewitness was an american who had recently moved to nairobi from north carolina.

>> you could hear while we were back there them methodically kind of going from store to store, talking to people, asking questions, shooting, screams, and then it would stop for a while. then they would go to another store.

>> another eyewitness, a software engineer who was in the parking lot with his two daughters said they were throwing grenades like maize to chickens. he and his daughter survived. at last count, at least 62 people have died in the attack, mostly kenyans along with foreigners from britain, france, australia, canada and india. at one point, terrorists started a fire in the mall, which according to security forces, was meant as a diversion. a reported 175 people were wounded in a siege that entered its third day today. at least three assailants have been killed by security forces with at least ten suspects arrested. the attackers also took hostages as the standoff proceeded.

>> we have done search of the building and we can confirm that the hostages, almost all of them have been evacuated.

>> the kenyan foreign minister has since told al jazeera the mall attack was the work of al qaeda, not al shabaab. more on that in a second. president kenyatta said one of his nephews was in the mall and killed in the attack. the chief of the kenyan defense forces said the terrorists are clearly a multinational collection from all over the world. the fbi is looking into reports that americans were among the attackers. “the new york times” photographer tyler hicks happened to be nearby the mall when the siege began. he entered the mall along with police officers and captured these stunning images.

>> once i got inside the mall, i could see how tense everyone was, the army and police, how carefully they were moving. they were dashing across open areas, taking extreme care with their cover. it seemed kind of like anywhere you looked there would be another body. people were still hiding in shops. and as the police and the army were moving through, they would either discover people or they would sense that help had arrived and then they would flood out. so, you get kind of moments of silence and then other moments of big streams of people who they were trying to get out as quickly as possible. it really seemed like everywhere we went, more people came out of the woodwork. at one sense it seemed very abandoned. for example, the music that plays in the shopping mall, the typical kind of music, was still playing on the intercom. so, it was kind of this eerie silence with this music interrupted occasionally by gunfire. terrified people were crying, screaming, just running for their lives, really. i never thought that i would encounter this kind of tragedy in a public place like this, where completely innocent civilians were just gunned down and murdered. it’s not like a conventional war, where you expect combatants to get hurt or expect there to be collateral damage in those kinds of situations. this is just a suicide mission and murder.

>> joining me now is jeremy ask a hill, my colleague at “the nation” magazine, where he’s national security correspondent. he is also author of “dirty wars,” producer and writing of the film by the same name. jerry, you were in somalia. there’s footage of you being on a rooftop with incoming fire from al shabaab fighters, basically. what do you make of the conflicting reports about whether al shabaab or al qaeda did it, and who is al shabaab and how are they different from al qaeda?

>> right, well, first of all, al shabaab was a group of relative nobodies in 2006 during the bush administration. they were a sort of outlier in a group called the islamic courts union, which was largely made up of, almost exclusively made up of somali actors. and these actors meaning players on the scene in somalia. and al shabaab was the sort of group among those that sort of had the most allegiance to al qaeda or affinity for osama bin laden’s message, but they had no political sway whatsoever domestically within somalia. the u.s. partnered with the ethiopian military in 2006- 2007 and staged an invasion of somalia, and they dismantled this government of the islamic courts union, which was the only government that brought stability in somalia since the blackhawk down episode. so, what happened as a result of that is that the shabab became the vanguard of what was viewed as a movement to fight off a crusading force backed by the united states. so, al shabaab started to get street credibility within somalia because they were the only ones fighting. the rest of the networks had been disrupted, co-yopted, killed or imprisoned by the americans or ethiopians. so, what happened at the end of the day is that al qaeda was able to get a foothold in somalia and it had never been able to before. bin laden desperately wanted to get into somalia and somalis rejected him. the u.s. invasion with ethiopia opened the door and al shabaab has gotten more militant as the years have gone on.

>> and they clearly seem to have an agenda if, in fact, this is somali al shabaab fighters behind this. why would they attack a kenyan mall?

>> well, there’s a long history of al qaeda in east africa and eventually al shabaab staging attacks in kenya and elsewhere in africa.

>> of course the embassy bombings.

>> yes, in ’98 in tanzania and kenya, but there was also a 2002 attempt to shoot down israeli aircraft in mombasa. then you had the bombing at the world cup in 2010 in uganda, an american citizen was killed in that as well as a number of ugandans. and i think that, you know, if you look at the past two years, kenya has been deeply involved with somali politics, funding warlords. i traveled with a kenyan-backed warlord who had brand new military equipment given to him in the summer of 2011, and then kenya staged an invasion of parts of southern somalia. and i think al shabaab has seized on this idea that kenya is a puppet or a proxy for the u.s., and that’s really the message that they’ve propagandized.

>> what does it say about the state of al qaeda or global ji jihadis in 2013 that this attack happened, that it’s coming from possibly somalia? it seems to me like it’s the situation which we smash one or disrupt one network and they seem to pop up somewhere else.

>> right. something interesting is that when i was last in somalia in the summer of 2011, the head of al qaeda in east africa was killed in mogadishu, fazul mohammed. and among the documents seized, and i reported on this in my book, were letters from fazul to ayman al zawahiri, number two in al qaeda. and what fazul said is shabaab is making a mistake trying to hold territory in somalia and you need to go back to managing savagery. there is a famous al qaeda paper called “the management of savagery,” and data is make it impossible for anyone else to govern. make people feel fear and that the government cannot protect them.

>> chaos.

>> and i think that’s part of what we’re seeing. but there’s no one al shabaab right now, which is why the kenyans —

>> being splintered, and it’s ann clear who is exactly krogh the organization. journalist jerry scahill,

Punting the Pundits

“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”.

Follow us on Twitter @StarsHollowGzt

New York Times Editorial Board: Lasting Damage From the Budget Fight

The budget crisis manufactured by Congressional Republicans will never succeed at halting health care reform, but it has already caused long-lasting harm. It will preserve the deeply damaging spending cuts, known as the sequester, that are costing jobs and hurting the lives of millions.

Most of the attention given to the House’s temporary spending resolution has focused on the provision in it to defund President Obama’s health law. The Senate plans to drop that wording, and, if the House doesn’t agree, the government will shut down on Tuesday. But even without the provision, the resolution itself is pernicious because it preserves through mid-December all the blunt and arbitrary sequester cuts that began in March, making it much less likely those cuts will be replaced with more sensible cuts and revenue increases for the rest of the 2014 fiscal year.

Gail Collins: Meet Dilly and Dither

This month, the pope made some sensible remarks about sex, and the president of Iran made some reasonable comments about nuclear weapons. Also, the Russians proved to be extremely helpful during an international crisis. Meanwhile, on the home front, our Congress appears too crazed by internal conflict to keep the lights on. [..]

Big deadline coming! In theory, by Monday, the House and Senate are supposed to have jointly approved 12 bills appropriating money for the various sections of government in 2014. The entire package should be a prudent rethinking of what various agencies really need to do their jobs efficiently and effectively.

This is probably not going to happen because, as of today, the number of said bills passed by both bodies is zero.

Norman Solomon: Obama’s Justice Department: Trumpeting a New Victory in War on Freedom of the Press

There’s something profoundly despicable about a Justice Department that would brazenly violate the First and Fourth Amendments while spying on journalists, then claim to be reassessing such policies after an avalanche of criticism-and then proceed, as it did this week, to gloat that those policies made possible a long prison sentence for a journalistic source.

Welcome to the Obama Justice Department.

While mouthing platitudes about respecting press freedom, the president has overseen methodical actions to undermine it. We should retire understated phrases like “chilling effect.” With the announcement from Obama’s Justice Department on Monday, the thermometer has dropped below freezing.

Lateefa Simon: When will the US stop building more prisons?

I was once a teen mom with an arrest record and few options. I know from personal experience how a job can change a life

America’s prison crisis isn’t about a lack of space; it’s a systematic lack of opportunity in poor communities. We have failed as a society to understand what it takes for previously incarcerated people to live meaningful, productive lives – and to keep them out of prison in the first place.

It sounds deceptively simple, but my own experience – and a growing body of research – shows that one thing can help keep people from entering prison and prevent those released from going back: jobs. Employment opportunities give people a sense of purpose, help build confidence and foster strong social connections and pay the rent.

William Pfaff: Time for the West to Cease Intervention

We have today entered a new political-or politico-religious-period in which the Muslim peoples of the Middle East are seizing control of their own fortunes, a control lost as a result of the First World War and the defeat of the Ottoman Empire, which, with its Arab Caliphate predecessors in Crusader times, traces back to the very origin of Islam in what now is Syria, Iraq and Arabia proper.

Few in the West seem to have grasped the significance of the fact that Muslims themselves have taken over the struggle against Islamic radicalism. The West did not start the war in Syria. Until chemical weapons were used in the war, it has had no direct implication in it, and feeble indirect ones, other than to assist the victims. It is the Syrians’ war, and that of the other Arabs who have chosen to take part.

Robert Sheer: Obama’s Friends in Low Places

That Barack Obama is such a kidder. No matter how awkward the moment, he’s got just the right quip to purchase some wiggle room. Remember when his old Chicago banking buddy Jamie Dimon, the CEO of JPMorgan Chase, first ran into that bit of trouble over his bank’s “London Whale” derivative scam? That scheme has already lost $6 billion with close to $1 billion more piled on by the SEC in fines last week after JPMorgan admitted it broke the law.  [..]

It should be remembered that this same Dimon, who appeared before a Senate committee wearing presidential cufflinks, once worked with Sanford Weill in engineering the reversal of the Glass-Steagall law to make Citigroup, a previously illegal merger of investment and commercial banks, possible. But despite his record as a leader in the radical deregulation of banking that caused all of the trouble, Obama turned to Dimon for direction on fixing the economy.

On This Day In History September 26

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.

September 26 is the 269th day of the year (270th in leap years) in the Gregorian calendar. There are 96 days remaining until the end of the year.

On this day on 1957, West Side Story premieres on Broadway. East Side Story was the original title of the Shakespeare-inspired musical conceived by choreographer Jerome Robbins, written by playwright Arthur Laurents and scored by composer and lyricist Leonard Bernstein in 1949. A tale of star-crossed lovers-one Jewish, the other Catholic-on Manhattan’s Lower East Side, the show in its original form never went into production, and the idea was set aside for the next six years. It was more than just a change of setting, however, that helped the re-titled show get off the ground in the mid-1950s. It was also the addition of a young, relatively unknown lyricist named Stephen Sondheim. The book by Arthur Laurents and the incredible choreography by Jerome Robbins helped make West Side Story a work of lasting genius, but it was the strength of the songs by Stephen Sondheim and Leonard Bernstein that allowed it to make its Broadway debut on this day in 1957.

There are no videos of the original Broadway production which starred Larry Kert as Tony, Carol Lawrence as Maria, Ken Le Roy as Bernardo and Chita Rivera as Anita (Ms. Rivera reprized her role in the movie), so here is the Prologue from the Academy Award winning movie. The area that the movie was filmed no longer exists. The 17 blocks between Columbus and Amsterdam Avenues, from West 60th to West 66th Street on the Upper West Side of Manhattan where he filming took place were demolished to build Lincoln Center for the Preforming Arts.

God’s Work, Part Deux

AIG CEO Robert Benmosche Compares Bonus Criticism to Lynch Mobs

By Matt Taibbi, Rolling Stone

POSTED: September 24, 3:50 PM ET

(W)hen you’re a white guy who just presided over a year of declining across-the-board sales but got a 24% pay raise anyway, to $13 million a year, largely because your company is invested in a market that’s overheating due to massive Fed intervention, and you’re so grateful for your cosmic good fortune that you immediately go out and publicly nail yourself to the cross of black victimhood – and not while stone drunk and with buddies at a bar, mind you, but sober and sitting in front of a Wall Street Journal reporter – that’s like a whole new category of asshole. Try to compute just exactly how obnoxious that is – you’ll be doing it until the end of time, like someone trying to figure pi.

Benmosche’s nooses-and-pitchforks fantasies have their origins in stories about some AIGFP executives who were made to feel uncomfortable by angry crowds on their way home from work, and one about a teacher somewhere in the Midwest who ridiculed in her third-grade class a child whose father worked at the firm. That last bit of course would be very wrong if it did happen, and it may very well have.

Still, comparing being leered at on a train for continuing to collect a huge undeserved bonus from the taxpayer to being taken from your wife and family and hung from a tree for no reason at all is preposterous on at least a hundred different levels.



Those FP workers would normally have been counting on performance bonuses, but since AIGFP not only didn’t perform that year, but created a historically bottomless suckhole of losses that nearly destroyed the universe, there were, alas, no performance bonuses to be had.

So management cooked up a bunch of “retention bonuses” for many of the unit’s employees. This always seemed like a scam, a way of yanking a little last bit of value out of a company most thought was headed for collapse. Moreover, the notion that anyone (but especially the taxpayer) needed to pay millions in “retention bonuses” to prevent other financial firms from poaching employees of the biggest financial disaster/PR-cancer firm since Enron or Union Carbide – and this at a time when mass layoffs on Wall Street had flooded the labor market with thousands of other highly-qualified financial professionals who would have taken huge pay cuts to fill those slots – was always absurd.



In tossing out this “everyone was a villain” line, the CEO, of course, only mentioned the small subset of ordinary people who were “villains” in those days, the low-level speculators who flipped houses and the homeowners who lied on their mortgage applications.

He conveniently left out the bigger institutional players who birthed this scheme, like the giant investment banks (including for instance Credit Suisse, where he worked) that not only knew that mass fraud was being committed at the mortgage application level but encouraged it, so that they could speed up the process of pooling and securitizing those mortgages and selling them off to unsuspecting third parties. Just to take the one example of his own former bank, investors in the mortgage securities sold by Credit Suisse incurred over $11 billion in losses, according to a complaint filed by New York AG Eric Schneiderman against the firm last year.

Banks knew, lenders knew, ratings agencies knew, and then of course firms like AIG knew that something was deeply wrong with the booming mortgage markets in the years leading up to 2008. The peculiar trade of AIGFP was the obviously crazy practice of selling hundreds of billions of uncollateralized insurance to the Goldmans and Deutsche Banks of the world, who in many cases were using these policies to bet against their own products. The 377-odd employees of that sub-unit of AIG took home over $3.5 billion in compensation for such socially-beneficial service in the seven years before it all went bust. If finance-sector pros in those years had reservations about where all that money came from, most, like Benmosche himself, kept them to themselves.

Stories like this “hangman nooses” thing give some insight into the oft-asked question of how the 2008 crisis could ever have happened, the answer being that the people who run our economy, like Benmosche, are basically idiots. They can read a spreadsheet and get through an investor conference call sounding like they know what they’re talking about, but in real-world terms, your average pimp is usually an Einstein in comparison.

These people are so used to being told by interns and finance reporters and other ballwashers that they’re geniuses that they pretty soon come to believe it, which is how concepts like “We’ll never lose a dollar – it’s all hedged” go unchallenged in rooms full of econ majors who’ve just bet the whole store on the mortgages of underemployed janitors and palm-readers. Somebody, please, tell these guys quick how smart they’re not, or else we’ll be in another crisis before we know it.

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