What’s Up: December 12, 2012?

To read the entire article click on the title or Story Continued. Enjoy as the world turns.

· The Sebelius Cover up – Obamacare’s insurance exchanges need scrutiny.


Many states are wisely signaling that they aren’t interested in doing the Obama administration’s bidding on Obamacare. As a result, many if not most of Obamacare’s insurance exchanges — the heart of the beast — will have to be set up and run by the Obama administration at the federal level.

States are not required to set up Obamacare exchanges, but it seems to have surprised observers that many are choosing not to. Politico reports that, with only 17 states so far having said they will set up the exchanges, the “Department of Health and Human Services role in bringing the law to life is going to be a lot bigger than originally thought.” More than a third of all states have already said they won’t set up the Obamacare exchanges. Among others, Republican governors Scott Walker, John Kasich, Sam Brownback, Rick Perry, Bobby Jindal, Nikki Haley, Nathan Deal, Paul LePage, Robert Bentley, Mary Fallin, and Sean Parnell have said they’ll refuse to set up the exchanges in their states.

In Missouri, voters took matters into their own hands, approving a ballot measure to vest authority over the decision in the Republican-led state legislature, rather than leaving it up to the Democratic governor. Missouri will not be establishing an exchange. Utah governor Gary Herbert, meanwhile, has opted for a sort of mild civil disobedience, saying that his state will continue to pursue “our version of an exchange based on defined contribution, consumer choice, and free markets” — a type of exchange that is rather plainly banned by Obamacare.

States’ refusal to be complicit in this crucial aspect of Obamacare should shine a spotlight on the development of the federal exchanges — and what it illuminates won’t be pretty.

The Obama administration’s congressional allies botched the drafting of this aspect of the health care overhaul, as the plain language of Obamacare doesn’t empower federal exchanges to distribute taxpayer-funded subsidies to individuals; it empowers only state-based exchanges to distribute the subsidies. (The administration pretends otherwise.) Moreover, the Department of Health and Human Services (HHS) is lagging behind in developing the federal exchanges.

It gets worse. HHS has contracted with a subsidiary of a private health care company to help build and police the very exchanges in which that company will be competing for business. The person who ran the government entity that awarded that contract has since accepted a position with a different subsidiary of that same company. An insurance industry insider (speaking on the condition of anonymity) says that HHS, in an attempt to hide this unseemly contract from public view until after the election, encouraged the company to hide the transaction from the Securities and Exchange Commission.

According to my source (the basis for most of this account), in January, HHS awarded Quality Software Services, Inc. (QSSI) what the Hill describes as “a large contract to build a federal data services hub to help run the complex federal health insurance exchange.” At that time, the director of Obamacare’s newly established Center for Consumer Information and Insurance Oversight (CCIIO) — which the Hill describes as “the office tasked with crafting rules for the national exchange” — was Steve Larsen. Larsen had been the insurance commissioner for Maryland when Obama’s HHS secretary, Kathleen Sebelius, was the insurance commissioner for Kansas, and the two are reportedly close. The CCIIO awarded the Obamacare exchange contract to QSSI while Larsen was the CCIIO’s director, and he played a central role in planning the construction of the exchanges — although it’s not known whether he made the decision to award the contract to QSSI or not.

Under the contract that it signed with HHS, QSSI’s power would be substantial — as QSSI would shape, run, and affect companies’ ability to compete to sell insurance through Obamacare’s federal exchanges. The Hill writes, “A draft statement of work for the contract awarded to QSSI states the contractor should provide services necessary to acquire, certify and decertify health plans offered on a federal exchange.” Moreover, “It stipulates the contractor should monitor agreements with health plans, ensure compliance with federal standards and” — somewhat strikingly — “take corrective action when necessary.”

QSSI, apparently realizing what a valuable asset it had in the contract, started shopping itself around. Meanwhile, Larsen left the CCIIO and took a highly paid position with Optum, a subsidiary of UnitedHealth Group, in June. Sometime this summer, UnitedHealth Group bought QSSI. Story Continued:

· Chinese bid wins auction for A123 – A Chinese car parts maker has won the auction for bankrupt US battery maker A123 Systems, in a further success in international deal making for Chinese groups.

Wanxiang Group bid about $257m to win the auction for the battery maker, which supplies electric cars. The sale still requires the approval of the Delaware court where A123 filed for bankruptcy.

The US group will formally submit the bid to the court for approval on Tuesday. The sale will also require the approval of the US Committee on Foreign Investment.

In an effort to ease political approval, Wanxiang will not be taking over A123’s defence business, which will be sold to Illinois-based Navitas for $2.25m.

“We think we have structured this transaction to address potential national security concerns expressed during the review of our previous investment agreement with Wanxiang announced in August, as well as to address concerns raised by the Department of Energy,” said Dave Vieau, chief executive of A123.

Wanxiang beat a joint bid by Johnson Controls of Milwaukee and Japan’s NEC. Its victory comes after Cnooc, the Beijing backed oil group, on Friday secured Canadian approval for its $18bn bid for Nexen, the biggest Chinese M&A deal on record.

China M&A in the year to December 7 reached $145bn, a record for any year to this point, according to Thomson Reuters.

In October, A123 – which was awarded a $249m grant from the US government – became the latest stimulus-backed company to file for bankruptcy, prompting a fresh round of attacks on President Barack Obama’s support for emerging energy technologies.

The company said it was seeking Chapter 11 bankruptcy protection “to provide for an orderly sale” of its operations and “help maximise the value of its assets for its stakeholders”.

The company had attempted to secure a rescue deal with Wanxiang before it went into administration.

The company had been a flagship of Mr Obama’s attempt to stimulate new environmentally friendly industries but ran into difficulties as a result of slower than expected sales of electric cars.

Its bankruptcy follows that of other companies backed by US government grants or loan guarantees, including Solyndra, a manufacturer of solar modules, Abound Solar, another panel maker, and Ener1, which also makes batteries for electric cars.

A123 did not get a loan guarantee but was awarded the $249m grant as part of the Obama administration’s stimulus in 2009. By the end of June it had drawn down only about $130m of the money because demand for its products was not strong enough to justify additional investment in manufacturing capacity.

It also received grants and tax credits from the state of Michigan of up to $141m. Story Continued:

· Google Revenues Sheltered in No-Tax Bermuda Soar to $10 Billion – Google Inc. (GOOG) avoided about $2 billion in worldwide income taxes in 2011 by shifting $9.8 billion in revenues into a Bermuda shell company, almost double the total from three years before, filings show.


By legally funneling profits from overseas subsidiaries into Bermuda, which doesn’t have a corporate income tax, Google cut its overall tax rate almost in half. The amount moved to Bermuda is equivalent to about 80 percent of Google’s total pretax profit in 2011.

The increase in Google’s revenues routed to Bermuda, disclosed in a Nov. 21 filing by a subsidiary in the Netherlands, could fuel the outrage spreading across Europe and in the U.S. over corporate tax dodging. Governments in France, the U.K., Italy and Australia are probing Google’s tax avoidance as they seek to boost revenue during economic doldrums.

Last week, the European Union’s executive body, the European Commission, advised member states to create blacklists of tax havens and adopt anti-abuse rules. Tax evasion and avoidance, which cost the EU 1 trillion euros ($1.3 trillion) a year, are “scandalous” and “an attack on the fundamental principle of fairness,” Algirdas Semeta, the EC’s commissioner for taxation, said at a press conference in Brussels.

‘Deep Embarrassment’

“The tax strategy of Google and other multinationals is a deep embarrassment to governments around Europe,” said Richard Murphy, an accountant and director of Tax Research LLP in Norfolk, England. “The political awareness now being created in the U.K., and to a lesser degree elsewhere in Europe, is: It’s us or them. People understand that if Google doesn’t pay, somebody else has to pay or services get cut.”

Google said it complies with all tax rules, and its investment in various European countries helps their economies. In the U.K., “we also employ over 2,000 people, help hundreds of thousands of businesses to grow online, and invest millions supporting new tech businesses in East London,” the Mountain View, California-based company said in a statement.

The Internet search giant has avoided billions of dollars in income taxes around the world using a pair of tax shelter strategies known as the Double Irish and Dutch Sandwich, Bloomberg News reported in 2010. The tactics, permitted under tax law in the U.S. and elsewhere, move royalty payments from subsidiaries in Ireland and the Netherlands to a Bermuda unit headquartered in a local law firm.

Last year, Google reported a tax rate of just 3.2 percent on the profit it said was earned overseas, even as most of its foreign sales were in European countries with corporate income tax rates ranging from 26 percent to 34 percent.

Foreign Taxes

At a hearing last month in the U.K., members of Parliament pressed executives from Google, Seattle-based Amazon.com Inc. (AMZN) and Starbucks Corp. (SBUX) to explain why they don’t pay more taxes there.

The U.K., Google’s second-biggest market, was responsible for about 11 percent of its sales, or almost $4.1 billion last year, according to company filings. Google paid 6 million pounds ($9.6 million) in U.K. income taxes.

Matt Brittin, Google’s vice president for Northern and Central Europe, testified that the company pays taxes where it creates “economic value,” primarily the U.S.

Still, Google attributes some profit based on technology created in the U.S. to offshore subsidiaries, lowering its U.S. taxes, according to company filings and people familiar with its tax planning. Google paid $1.5 billion in income taxes worldwide in 2011.

‘Fair Share’

In the wake of the parliamentary hearing, the House of Commons issued a report last week declaring that multinationals “do not pay their fair share” of tax. The committee also criticized the U.K.’s tax collection agency, Her Majesty’s Revenue & Customs, for “not taking sufficiently aggressive action” and called on the agency to “get a grip” on corporate tax avoidance.

A spokesman for HMRC said the agency “ensures that multinationals pay the tax due in accordance with U.K. tax law.”

The French tax authority this year proposed increasing Google’s income taxes by about $1.3 billion. The agency searched Google’s Paris offices in June 2011 and removed computer files as part of an examination first reported by Bloomberg last year. Google is cooperating with French authorities and works with them “to answer all their questions on Google France and our service,” the company said.

Italian Audit

In Italy, the Tax Police began an audit of Google last month and recently searched the company’s Milan offices, as well as the offices of Facebook Inc. (FB), according to a person familiar with the matter. “It’s very common for companies to be audited, and we have been working closely with the Italian authorities for some time,” Google said. “So far we have not had any demands for additional tax in Italy.”

Facebook, based in Menlo Park, California, is cooperating with the Italian tax authority and “we take our obligations under the Italian tax code very seriously,” a company spokeswoman said.

In Australia, the country’s assistant treasurer gave a speech last month outlining Google’s tax avoidance strategies.

The use of offshore shelters to avoid corporate taxes has prompted calls for reform in the U.S. as well. The Treasury Department has repeatedly proposed since 2009, with little success, to make it harder for multinationals to bypass taxes by shifting profit into tax havens.

Transfer Pricing

Multinational companies cut their tax bills using “transfer pricing,” paper transactions among corporate subsidiaries that allow for allocating income to tax havens and expenses to higher-tax countries.

In Google’s case, an Irish subsidiary collects revenues from ads sold in countries like the U.K. and France. That Irish unit in turn pays royalties to another Irish subsidiary, whose legal residence for tax purposes is in Bermuda.

The pair of Irish units gives rise to the nickname “Double Irish.” To avoid an Irish withholding tax, Google channeled the payments to Bermuda through a subsidiary in the Netherlands — thus the “Dutch Sandwich” label. The Netherlands subsidiary has no employees.

The Dutch unit’s payments to the Bermuda entity last year were up 81 percent to $9.8 billion from $5.4 billion in 2008. Google’s overseas sales have increased at about the same rate.

Google’s overall effective tax rate dropped to 21 percent last year from about 28 percent in 2008. That compares with the average combined U.S. and state statutory rate of about 39 percent. Story Continued:

· The Reality of the “Lesser Evil” – Is This Child Dead Enough for You?To all those now hailing the re-election of Barack Obama as a triumph of decent, humane, liberal values over the oozing-postule perfidy of the Republicans, a simple question:

Is this child dead enough for you?


This little boy was named Naeemullah. He was in his house — maybe playing, maybe sleeping, maybe having a meal — when an American drone missile was fired into the residential area where he lived and blew up the house next door.

As we all know, these drone missiles are, like the president who wields them, super-smart, a triumph of technology and technocratic expertise. We know, for the president and his aides have repeatedly told us, that these weapons — launched only after careful consultation of the just-war strictures of St. Augustine and St. Thomas Aquinas — strike nothing but their intended targets and kill no one but “bad guys.” Indeed, the president’s top aides have testified under oath that not a single innocent person has been among the thousands of Pakistani civilians — that is, civilians of a sovereign nation that is not at war with the United States — who have been killed by the drone missile campaign of the Nobel Peace Prize Laureate.

Yet somehow, by some miracle, the missile that roared into the residential area where Naeemullah lived did not confine itself neatly to the house it struck. Somehow, inexplicably, the hunk of metal and wire and computer processors failed — in this one instance — to look into the souls of all the people in the village and ascertain, by magic, which ones were “bad guys” and then kill only them. Somehow — perhaps the missile had been infected with Romney cooties? — this supercharged hunk of high explosives simply, well, exploded with tremendous destructive power when it struck the residential area, blowing the neighborhood to smithereens.

As Wired reports, shrapnel and debris went flying through the walls of Naeemullah’s house and ripped through his small body. When the attack was over — when the buzzing drone sent with Augustinian wisdom by the Peace Laureate was no longer lurking over the village, shadowing the lives of every defenseless inhabitant with the terrorist threat of imminent death, Naeemullah was taken to the hospital in a nearby town.

This is where the picture of above was taken by Noor Behram, a resident of North Waziristan who has been chronicling the effects of the Peace Laureate’s drone war. When the picture was taken, Naeemullah was dying. He died an hour later.

He died.

Is he dead enough for you?

Dead enough not to disturb your victory dance in any way? Dead enough not to trouble the inauguration parties yet to come? Dead enough not to diminish, even a little bit, your exultant glee at the fact that this great man, a figure of integrity, decency, honor and compassion, will be able to continue his noble leadership of the best nation in the history of the world?

Do you have children? Do they sit your house playing happily? Do they sleep sweetly scrunched up in their warm beds at night? Do they chatter and prattle like funny little birds as you eat with them at the family table? Do you love them? Do you treasure them? Do you consider them fully-fledged human beings, beloved souls of infinite worth?

How would you feel if you saw them ripped to shreds by flying shrapnel, in your own house? How would you feel as you rushed them to the hospital, praying every step of the way that another missile won’t hurl down on you from the sky? Your child was innocent, you had done nothing, were simply living your life in your own house — and someone thousands of miles away, in a country you had never seen, had no dealings with, had never harmed in any way, pushed a button and sent chunks of burning metal into your child’s body. How would you feel as you watched him die, watched all your hopes and dreams for him, all the hours and days and years you would have to love him, fade away into oblivion, lost forever?

What would you think about the one who did this to your child? Would you say: “What a noble man of integrity and decency? I’m sure he is acting for the best.”

Would you say: “Well, this is a bit unfortunate, but it’s perfectly understandable? The Chinese government (or Iran or al Qaeda or North Korea or Russia, etc. etc.) believed there was someone next door to me who might possibly at some point in time pose some kind of threat in some unspecified way to their people or their political agenda — or maybe it was just that my next-door neighbor behaved in a certain arbitrarily chosen way that indicated to people watching him on a computer screen thousands of miles away that he might possibly be the sort of person who might conceivably at some point in time pose some kind of unspecified threat to the Chinese (Iranians/Russians, etc.), even though they had no earthly idea who my neighbor is or what he does or believes or intends. I think the person in charge of such a program is a good, wise, decent man that any person would be proud to support. Why, I think I’ll ask him to come speak at my little boy’s funeral!”

Is that what you would say if shrapnel from a missile blew into your comfortable house and killed your own beloved little boy? You would not only accept, understand, forgive, shrug it off, move on — you would actively support the person who did it, you would cheer his personal triumphs and sneer at all those who questioned his moral worthiness and good intentions? Is that really what you would do?

Well, that is what you are doing when you shrug off the murder of little Naeemullah. You are saying he is not worth as much as your child. You are saying he is not a fully-fledged human being, a beloved soul of infinite worth. You are saying that you support his death, you are happy about it, and you want to see many more like it. You are saying it doesn’t matter if this child — or a hundred like him, or a thousand like him, or, as in the Iraqi sanctions of the old liberal lion, Bill Clinton, five hundred thousand children like Naeemullah — are killed in your name, by leaders you cheer and support. You are saying that the only thing that matters is that someone from your side is in charge of killing these children. This is the reality of “lesser evilism.”

Before the election, we heard a lot of talk about this notion of the “lesser evil.” From prominent dissidents and opponents of empire like Daniel Ellsberg and Noam Chomsky and Robert Parry to innumerable progressive blogs to personal conversations, one heard this basic argument: “Yes, the drone wars, the gutting of civil liberties, the White House death squads and all the rest are bad; but Romney would be worse. Therefore, with great reluctance, holding our noses and shaking our heads sadly, we must choose the lesser evil of Obama and vote accordingly.”

I understand that argument, I really do. I don’t agree with it, as I made plain here many times before the election. I think the argument is wrong, I think our system is so far gone that even a “lesser evil” is too evil to support in any way, that such support only perpetuates the system’s unconscionable evils. But I’m not a purist, not a puritan, not a commissar or dogmatist. I understand that people of good will can come to a different conclusion, and feel that they must reluctantly choose one imperial-militarist-corporate faction over the other, in the belief that this will mean some slight mitigation of the potential evil that the other side commit if it took power. I used to think that way myself, years ago. Again, I now disagree with this, and I think that the good people who believe this have not, for whatever reason or reasons, looked with sufficient clarity at the reality of our situation, of what is actually being done, in their name, by the political faction they support.

But of course, I am not the sole arbiter of reality, nor a judge of others; people see what they see, and they act (or refrain from acting) accordingly. I understand that. But here is what I don’t understand: the sense of triumph and exultation and glee on the part of so many progressives and liberals and ‘dissidents’ at the victory of this “lesser evil.” Where did the reluctance, the nose-holding, the sad head-shaking go? Should they not be mourning the fact that evil has triumphed in America, even if, by their lights, it is a “lesser” evil?

If you really believed that Obama was a lesser evil — 2 percent less evil, as I believe Digby once described the Democrats in 2008 — if you really did find the drone wars and the White House death squads and Wall Street bailouts and absolution for torturers and all the rest to be shameful and criminal, how can you be happy that all of this will continue? Happy — and continuing to scorn anyone who opposed the perpetuation of this system.

The triumph of a lesser evil is still a victory for evil. If your neighborhood is tyrannized by warring mafia factions, you might prefer that the faction which occasionally doles out a few free hams wins out over their more skinflint rivals; but would you be joyful about the fact that your neighborhood is still being tyrannized by murderous criminals? Would you not be sad, cast down, discouraged and disheartened to see the violence and murder and corruption go on? Would you not mourn the fact that your children will have to grow up in the midst of all this?

So where is the mourning for the fact that we, as a nation, have come to this: a choice between murderers, a choice between plunderers? Even if you believe that you had to participate and make the horrific choice that was being offered to us — “Do you want the Democrat to kill these children, or do you want the Republican to kill these children?” — shouldn’t this post-election period be a time of sorrow, not vaulting triumph and giddy glee and snarky put-downs of the “losers”?

If you really are a “lesser evilist” — if this was a genuine moral choice you reluctantly made, and not a rationalization for indulging in unexamined, primitive partisanship — then you will know that we are ALL the losers of this election. Even if you believe it could have been worse, it is still very bad. You yourself proclaimed that Obama was evil — just a bit “lesser” so than his opponent. (2 percent maybe.) And so the evil that you yourself saw and named and denounced will go on. Again I ask: where is the joy and glory and triumph in this? Even if you believe it was unavoidable, why celebrate it? And ask yourself, bethink yourself: what are you celebrating? This dead child, and a hundred like him? A thousand like him? Five hundred thousand like him? How far will you go? What won’t you celebrate?

And so step by step, holding the hand of the “lesser evil,” we descend deeper and deeper into the pit. Story Continued:

· The Petraeus Saga, Epitaph for a Four Star – by Col. DOUGLAS MACGREGOR, Ret.

When Major General David H. Petraeus, commander of the 101st Airborne Division met Lieutenant General William Wallace, commander of the U.S. Army’s V Corps on 27 March 2003 at a site near Najaf, only five days after American forces began the attack to Baghdad Petraeus and Wallace were deeply pessimistic. They concluded, “The war was in dismal shape.” Petraeus, an officer who had risen to Major General and Division Command with no previous combat experience, was deeply worried about the level of Iraqi resistance.

The fact that 3rd Infantry Division (mechanized), an armored force of hundreds of tanks and armored fighting vehicles was already 50 miles south of Baghdad and poised to attack the city did not seem to matter. Gen. George S. Patton, Jr. would have flown into a rage and fired them on the spot. Yet both men went on to four stars.

Was General David Petraeus the heroic figure his press releases suggested or a piece of fiction created, packaged and presented to the American people by the Bush Administration and its Neocon allies in the media and academia as the poster boy for counterinsurgency? Was he simply a world class aid de camp, military assistant and speech writer, a slick briefer who successfully cultivated dozens of Army four stars and political appointees on the ladder to four stars? Or is Petraeus simply the victim of his own press releases?

Consider these points: The Shiite dominated government of Iraq is not only more corrupt today than its secular Baathist predecessor. It’s also among the most corrupt states in the world, far worse than North Korea or Russia. And, unlike Saddam Hussein’s Iraq it is unambiguously tied to and aligned with Iran. In Afghanistan, Afghan National Security Forces (ANSF) continue to run from fights with pathetic Taliban in bed sheets and flip flops and more Afghan civilians died during the 18 months of Petraeus’s “Afghan Surge” than at any time in the previous ten years.[i] How did these things come about? Who is responsible for this debacle?

How many times have Americans read the flattering assessments of Petraeus on the editorial pages of The Washington Post, The New York Times, The Wall Street Journal or heard Journalists repeat Petraeus’s assertions of “progress” and “success” on CNN, Fox News and MSNBC? Whenever Petraeus wanted to show that his alleged “counterinsurgency” strategy was delivering significant progress in Iraq or Afghanistan, the mainstream media offered unconditional support for whatever narrative Petraeus provided.[ii]

Vacuous statements removed from the facts were routinely treated like sermons on the mount, “It’s about being comfortable with a degree of chaos,” he [Petraeus] said in the interview. “And the whole point is that I am comfortable with that kind of situation. What you want to do is constantly push the envelope in every respect.”[iii] Huh?

When the Surge in Iraq began, no one in Washington was interested in explaining why the world’s most powerful military establishment led by Petraeus was buying off its Sunni Arab opponents with hundreds of millions of dollars, effectively supplanting counterinsurgency with cash-based cooptation.[iv] When the Surge in Iraq ended, no one in Washington wanted to discuss why Tehran’s Shiite allies in Baghdad restrained their fighters, and waited until the U.S. occupation ended before consolidating their control of Arab Iraq. In 2009, an Iraqi journalist described the outcome in terms no serious observer of the conflict could ignore:

“Observers not steeped in Iraqi history might be bemused to find that six years after the toppling of a dictator, after the death of several hundred thousand Iraqis, a brutal insurgency, trillions of wasted dollars and more than 4,000 dead US soldiers, the country is being rebuilt along very familiar lines: concentration of power, shadowy intelligence services and corruption.”[v]

A year later, Al-Qaida together with its Sunni Islamist affiliates in Iraq was also making a comeback recruiting scores of Sunni Muslim Arabs to rejoin the fight against the “crusaders and the Shiites” by paying them more than the monthly salary they received from the Maliki Government.[vi] Petraeus had brought the country back to where it started. Members of the House and the Senate privately acknowledged Iraq was a failure,[vii] but this tragic outcome did not obstruct the Petraeus proposal to repeat the folly of Iraq in Afghanistan.

On 7 October 2009 before the surge in Afghanistan began, Marc Sageman, a veteran intelligence officer with years of experience in Pakistan and the region warned the Senate Foreign Relations Committee, “The proposed counter-insurgency strategy in Afghanistan is at present irrelevant to the goal of disrupting, dismantling and defeating al Qaeda, which is located in Pakistan. None of the plots in the West has any connection to any Afghan insurgent group, labeled under the umbrella name “Afghan Taliban.”[viii] Reason and facts took a back seat. Sageman was ignored.

A year later, when I asked a field grade officer in Washington, DC with experience in Afghanistan if the simultaneous departure of General Petraeus and Ambassador Eikenberry from their posts in Kabul at the start of the security transition and after two high-profile assassinations (Jan Mohammad and Ahmed Wali) would undermine the Afghan population’s confidence in the U.S. leadership, he answered, “Absolutely not! There is no public confidence to lose. Read the local media translated every day in open source.gov. The matter is absolutely irrelevant to the population-Uzbek, Tajik, Huzzara or Pashtun.”[ix]

Sadly, what happened in Afghanistan was also irrelevant to the American people. By now, Americans had figured out that large-scale U.S. military occupations of non-Western societies to transform them into images of the West inevitably provoke resentment and breed violence; even when the U.S. pays $25 million a month in hard cash to its enemies not to fight.

Why did these things happen?

The short answer involves the skillful use of data and information to create a false picture of military action in faraway places. It’s not a new practice,[x] but in Iraq, Petraeus elevated it to an art form. With the backing of the Bush Administration, Petraeus created a narrative based on the illusion the he, David Petraeus, had “discovered” a military solution to Iraq’s societal misery in the form of counterinsurgency.

Secretary of State Dean Acheson said it best, “Americans are suckers for good news.” And P.T. Barnum insisted, “A sucker is born every minute.” Both were right.

However, in Afghanistan, Petraeus overestimated his ability to control the narrative even with a friendly U.S. press. True, the chronic absence of accountability for lost funds and failed nation building projects persisted as they did in Iraq,[xi] but when Marjah, the alleged test case for the Afghan Surge faltered badly, IED strikes multiplied and U.S. casualties rose, the Afghan narrative fell apart.[xii] Unfortunately for General Stanley McChrystal, he arrived in Kabul just in time to embrace Petraeus’s false counterinsurgency strategy and supporting narrative, an act that brought him down as much as any imprudent remarks he made under the influence.

When Petraeus finally left joined the CIA, a place from which he could direct black operations that are largely unmonitored and uncontrolled by the president and congress, Americans simply tuned out operations in Afghanistan that were going nowhere. If such disastrous leadership did not result in the pointless loss of American life in uniform,[xiii] undermine American strategic interests abroad, and empty the U.S. Treasury of its hard earned tax dollars,[xiv] it would almost be comedic.

Of course, these observations still don’t completely explain the meteoric rise of Dave Petraeus, or how his carefully crafted image swayed American public opinion. One reason is very that few Americans know much about the military. Most are conditioned to see generals through the prism of Hollywood films. They are easily persuaded that today’s generals are indistinguishable from the battle-hardened leaders of the Second World War or the Korean conflict. Nothing could be more inaccurate.

Directing air strikes, raids and patrols from the safety of the Green Zone, a place that compares favorably with any number of elaborate shopping malls and motels in the United States, is not waging war. Suppressing hostile Muslim populations that resent Western occupation is not the same as confronting the Waffen SS in the Ardennes or hundreds of thousands of Chinese troops on the Korean Peninsula. In Iraq and Afghanistan, there are no opposing armies, air forces or air defenses.

In truth, only a fraction of the soldiers, sailors, airmen and Marines who deploy, are ever under fire. Their courage and devotion are never in question, but confusing them with generals is tantamount to equating senators and Wall Street Bankers with American citizens struggling to survive the economic meltdown. In such an artificial war environment, sacred cows like Petraeus are never slain, they simply vanish.

In addition, Petraeus made a common mistake that is all too common in the Army’s four star ranks. He concluded he was the smartest guy in the room and he made sure everyone in the room knew it. Petraeus was always one of those guys who wanted to be a general for the sake of being a general and he was prepared to do anything to secure the stars,[xv] the product of extreme careerism coupled with the façade of false humility. President Bush and the Neocons in his administration needed a “hero,” an alleged “great captain” to make the case for victory in Iraq when there was none.

Petraeus was eager to play the role and, the otherwise unknown Paula Broadwell, a former Army officer and West Point graduate, was anxious to tell Petraeus’s story. Broadwell and Petraeus were simply two people with converging agendas.

Petraeus wanted a biographer who would cultivate the myth he worked so hard to create, someone who would glorify him, his “surges” and legitimate the Neocon policy of occupation and nation building with which he identified himself. Broadwell wanted the fame and fortune that access to Petraeus and his narrative would bring. Both got what they wanted, at least, for a while.

However, given that amateur hour in Benghazi is taking center stage on Capitol Hill, there’s little reason for the Obama Administration to keep up appearances with its generals. The latest revelations cast doubt on General John Allen’s future.

It turns out that in two years Allen sent approximately 30,000 pages containing hundreds of emails to Jill Kelley, a volunteer social organizer at the MacDill Air Force Base, in Tampa, and a bit player in the Petraeus-Broadwell affair. How many emails a day is anyone’s guess, but how could Allen have any time left over to focus on operations in Afghanistan when he was sending so many messages to the magnetic Mrs. Kelley!

None of the generals’ peccadillos is newsworthy, but for its commentary on the generals. The affairs are genuinely irrelevant. But the events demonstrate that the readiness of four stars like David Petraeus and John Allen to enthusiastically push utterly foolish and self-defeating policies conceived in Washington, DC is not the result of individual failures, but the crisis of an entire institution.[xvi]

Americans must wake up. The contemporary American military is not led by a Roman or Prussian class of hardened professionals. On the contrary, for the most part, the senior leadership is really an overgrown bureaucracy committed to jobs for generals. But these bureaucrats in uniform have gone too far. They are now responsible for the extraordinary loss of American blood, treasure, as well as, strategic ground in Iraq and Afghanistan at a point in time when the American people just cannot afford it.

Douglas Macgregor is a retired Army colonel, a decorated combat veteran, a PhD and the author of four books. His latest work, Warrior’s Rage from Naval Institute Press describes the generals’ failure in 1991 to exploit the victory in the Battle of 73 Easting and destroy the Iraqi Republican Guard.


[i] http://www.afgnso.org/2011/ANSO%20Q2%202011.pdf

See the first paragraph on page 1, then, look at the charts on page 7 showing the overall trends in violence. See the graphic on page 8 and note the information on RC-Southwest (and, in fact, all of the regional commands). Page 9 provides a province by province breakdown. Once again, Petraeus and his staff did not tell the truth.

[ii] David Wood, “Auditors Despair over Pentagon’s Books,” San Diego Union-Tribune, 21 July 2004, page 1.

[iii] Yochi J. Dreazen, “The General’s Playbook,” National Journal, 30 October 2010.

[iv] Michael Vlahos, “Fighting Identity: Why we are losing our wars.” Military Review, November-December 2007, 7.

[v] Ghaith Abdul-Ahad, “Six years after Saddam Hussein, Nouri al-Maliki tightens his grip on Iraq,” The Guardian, 30 April 2009.

[vi] Martin Chulov, “Fears of al–Qaida return in Iraq as US–backed fighters defect. American allies the Sons of Iraq being offered more money by al–Qaida to switch sides,” The Guardian, 10 August 2010, page 2.

[vii] Daniel Tencer, “GOP congressmen: Everyone agrees Iraq war a ‘horrible mistake,” The Raw Story, 19 March 2010.

[viii] Marc Sageman, M.D., Ph.D., Testimony to the Senate Foreign Relations Committee, 7 October 2009, “Confronting al-Qaeda: Understanding the Threat in Afghanistan and Beyond.”

[ix] The officer declines to be identified for obvious reasons.

[x] Robert Maginnis, “Distrust Corroding The Military,” Washington Times, 2 March 200, page 11.

[xi] Marisa Taylor, “U.S. Spending In Afghanistan Plagued By Poor U.S. Oversight,” McClatchy Newspapers (mcclatchydc.com), 15 January 2010.

[xii] Alex Strick van Linschoten, “Five things David Petraeus wants you to believe,” Current Intelligence, 22 November 2010.

[xiii] Pauline Jelinek, (AP), “Army’s Suicide Rate at 26-Year High,” Boston Globe, 16 August 2007, page 1. The failure to devise a more humane rotational system is a case in point. Jelinek writes: “In addition, there was a significant relationship between suicide attempts and number of days deployed’ in Iraq, Afghanistan, or nearby countries where troops are participating in the war effort, it said. The same pattern seemed to hold true for those who succeeded in killing themselves.”

[xiv] Paul B. Farrell, “America’s Outrageous War Economy! Pentagon can’t find $2.3 trillion, wasting trillions on ‘national defense,”MarketWatch, 28 August 2008, page 13.

[xv] Thom Shanker, “Concern Grows Over Top Military Officers’ Ethics,” New York Times, 13 November 2012, page 2. Also see:David Barstow, “One Man’s Military-Industrial-Media Complex,” New York Times, 30 November 2008, page 1.

[xvi] LTC Paul Yingling, “A Failure in Generalship,” Armed Forces Journal, May 2007, page 27. Story Continued:

· The Supreme Court and Gay Marriage: Fearing Fear ItselfMichelangelo SignorileEditor-at-large, HuffPost Gay Voices.

It’s an understatement to say that there’s some apprehension among many gays and lesbians about the Supreme Court’s decision to take up the Prop 8 case. Forget what you’ve heard from gay leaders: They’re showing a unified front, particularly because it was Chad Griffin, now the president of the largest group, the Human Rights Campaign, who spearheaded the challenge to Prop 8 as co-founder of the American Foundation for Equal Rights. Gay leaders aired their public disagreements about the case back in 2009, when it was first launched, sometimes bitterly. The case has gone great, and that has melted away much of the tension. Still, though on the record they’re all on the same page now, and no one wants to cross the biggest and most influential gay group, privately the fear is palpable.

Legal experts expected that the court would hear a challenge to the rulings that Section 3 of the Defense of Marriage Act (DOMA) is unconstitutional, and most LGBT activists have been relatively comfortable that they’ll prevail on that case. However, few legal experts thought that the court would hear the Prop 8 case. The Ninth Circuit Court had narrowed the ruling to apply solely to California, giving the Supreme Court a perfect out to leave the issue of whether marriage is a constitutional right or not to another day, when there would be more acceptance of marriage equality and the court wouldn’t be getting too far out front. But the court defied the experts yet again.

Is the fear warranted? That’s a tricky question and depends on what it is you’re afraid of. Is it quite possible that the court will hand down a sweeping decision upholding marriage bans in over 30 other states, ruling that marriage is not a fundamental right for gays? Absolutely, and if that’s what you’re afraid of, then be very afraid. Such a ruling could have a broad and enduring impact.

From everything I’ve read, it seems more likely that the Supreme Court would hand down a sweeping decision in that direction than in the other direction: throwing out marriage bans across the country. Many experts seem to think that the court will do something more restrained: affirming the Ninth Circuit’s ruling, which would make it apply only to California, a state that had granted marriage rights to gays and lesbians and then took them away at the ballot. Alternatively, there’s the issue of standing, which the Supreme Court is taking up again. Do the Prop 8 proponents even have legal standing to challenge Judge Walker’s ruling that Prop 8 is unconstitutional, given that the attorney general and the governor didn’t file a challenge? If the Supreme Court thinks not, then the case goes back to Walker’s ruling and would not apply beyond California.

But none of us has any idea why the Supreme Court took up this case. It only takes four justices to decide to take a case. Did the four most conservative justices believe they could get Justice Kennedy’s swing vote? Or did the four liberal-leaning justices decide to take it up, thinking they’d in fact get Kennedy? Or did all nine justices believe they needed to take up the case for various reasons? We don’t know, and the legal experts have been wrong on this issue and many others, so don’t put much stock in speculation.

But I’m not afraid of the Supreme Court, and I am completely prepared for the worst possible outcome while hoping for the best. The court can’t hold us back, nor can it stop a movement, even if it becomes an ugly impediment. Public opinion is shifting rapidly, and the movement for LGBT equality has come very far in such a short period of time. Few imagined it would happen so fast, and if there’s a chance it may take longer by taking some risks that could bring full equality, I’m all ready for that. The alternative is to do nothing and continue without rights, perhaps indefinitely. Our current president supports full equality, and a previous great president, FDR, once wisely told Americans that “the only thing we have to fear is fear itself.” That and the latest polling showing that Americans are with us should be enough for us to boldly move forward. Story Continued:

– This issue is driven by the legal community as a method to increase revenue for all the family-law attorneys. With the increase in marriages the end result will be the increase in the divorces. It is a commonly understood principle that the only people that win in divorces are the attorneys. PdC

· Chevy and the Argonne: The Quest to Create the Volt Battery


The following is a sponsor generated post by Chevrolet

The simple brick building on Argonne National Laboratory’s 1,700-acre forested campus famous for its white deer population looks more like an outdated high school than a cutting-edge research facility. But inside the walls of this modest structure, located just outside Chicago, Illinois, scientists are working in a number of different labs (one so dry its humidity levels mimic Antarctica)–sticking their hands into aquarium-like “glove boxes” to manipulate chemicals; slicing electrodes, and performing all manner of other scientific magic–in their quest to create the best and most advanced battery technology to power plug-in electric vehicles with a gas generator, such as the Chevy Volt.

Argonne’s history is as ripe with mystery and intrigue as its present. Born of Enrico Fermi’s Manhattan Project–which produced the first atomic bomb–the lab’s work began at the University of Chicago on Chicago’s South Side, but later moved out of town to continue concentrating on its potentially dangerous experiments in relative seclusion. Since its beginnings in 1942, three Argonne physicists have gone on to receive Nobel Prizes for physics, including Fermi himself.

Today, the lab, which is managed by the University of Chicago for the Department of Energy, concentrates on projects revolving around energy, the environment and national security. It has received extensive attention in recent years for its advances in battery technology–particularly car battery technology.

These sorts of advances will lead to upwards of 70 percent savings in the near future, making electric and hybrid cars and trucks more affordable for more Americans, This will also mean more jobs and less dependence on oil.

Argonne has been working to optimize energy storage (via batteries) for more than 40 years, following the Arab oil embargo. For the past 15 years, their focus has been on lithium ion batteries, where the United States is competing with Asia and Europe for a piece of the business, which is expected to grow to $100 billion a year in the next two decades.

General Motors has helped America stake its claim in the global advanced battery race. In 2011, GM signed an agreement with Argonne to license the lab’s patented cathode material technology. The move furthered the automobile manufacturer’s role as a tech leader, pushing innovation and making breakthroughs that are changing the auto industry and society.

“The Chevy Volt is the first serious foray into the extended-range electric vehicle since the GM EV1 in the ’90s here in the U.S.,” says Jeff Chamberlain, the leader of Argonne’s Energy Storage Initiative. Because of that, the Volt has brought deserved attention to both American-made vehicles and American-made batteries.**

Named 2011 North American Car of the Year and 2012 European Car of the Year, the Volt is powered by two sources of energy: the lithium ion battery and an on-board gas generator. With the lithium ion battery, the vehicle can drive gas-free for up to an EPA-estimated 35 miles, while the gas generator produces enough electricity to cover nearly 375 miles on a single full tank.* Together, on average, Volt drivers who charge regularly are traveling nearly 900 miles between fill-ups.

Eventually, the scientists at Argonne hope to invent a battery that lasts 10 years and yields 200 to 250 miles per charge. That, says Chamberlain, could be 20 years in the future, and Argonne isn’t alone in trying to make it happen. “It’s a very vigorous, well-fought, aggressive competition around the world, in both academic and industrial circles–but I think more importantly in the national realm.” The result, he adds, could be a noticeable economic boom.

*EPA-estimated 35-mile range based on 94 MPGe (electric); 340-mile range based on 35 MPG city, 40 highway (gas). Actual range varies with conditions.

**The Chevy Volt is assembled in the U.S. of U.S. and globally sourced parts.

The trademarks mentioned in this story are held by their respective owners. Story Continued:

– This article was included for one reason. The Obama Administration pushed and spent considerable money on the stimulus for several battery companies in the USA with the HOPE that the electric market could be pushed into existence and they would be proven as truth Sayers with their goal of making the world more Green. There is an article listed above that indicates the battery manufacturer for the auto market A123 is being sold to the Chinese. Whenever governments try to implement market introduction products they fail more often than succeed. The stimulus to produce a battery for the electric car market is another example of the arrogance of the government getting involved in an area with no expertise. Thus the complete and total waste of stimulus money. PdC

· Why Is the Failed Monti a ‘Technocrat’ and the Successful Correa a ‘Left-Leaning Economist’? William K. Black, Assoc. Professor, Univ. of Missouri, Kansas City; Sr. regulator during S&L debacle.

The New York Times produces profiles of national leaders like Italy’s Mario Monti and Ecuador’s Rafael Correa. I invite readers to contrast the worshipful treatment accorded Monti with the Correa profile. The next time someone tells you the New York Times is a “leftist” paper you can show them how far right it is on financial issues.

Mario Monti’s New York Times profile

Rafael Correa’s New York Times profile

The New York Times’ slant in describing Monti as a “technocrat” and Correa as a “left-leaning economist” is typical of the dominant media. Monti and Correa both have doctorates in economics from U.S. universities and both have been professors of economics. Why does the New York Times treat Monti reverentially and Correa dismissively?

There are a series of factors that the U.S. media normally uses to judge relative merit among those with elite qualifications and national leaders. The media normally values most highly national leaders who demonstrate:

A track record of success

Courage and leadership in making the tough decisions that produce success

Rising from humble circumstances through hard work and self-sacrifice

Repeated success in democratic elections

Dedication to the interests of those with the greatest needs rather than to the wealthy

Bold, innovative policies

A track record of success

Readers of the Monti and Correa profiles would not be able to judge their relative success as economists and national leaders, but that is not because the facts are not readily available. Under Monti, Italy’s economy sank back into a serious recession because of the self-destructive austerity policies that Monti strongly supported. The “troika” forced Monti’s predecessor, Mr. Berlusconi, to adopt austerity and Monti doubled and tripled down on austerity. The largest banks then staged a de facto coup that forced Berlusconi to resign. The Troika pressured Italy to make Monti its leader without any elections. Under Monti, unemployment has risen to 11.1 percent and the unemployment rate for young Italians exceeds 36 percent. Many of Italy’s best and brightest emigrate as soon as they graduate. That means that the 36 percent figure substantially understates the extent of unemployment among young Italians because those that emigrate are not counted. The loss of Italy’s greatest asset, its already scarce young people will damage Italy for decades.

The Monti profile tries hard to make it appear that Monti led a successful campaign against German’s insistence on austerity. That is false. Monti did not get German approval to adopt the essential fiscal stimulus programs. Monti imposed serious austerity programs that had the effect he predicted — they increased unemployment, deepened the recession, and increased emigration.

Monti’s recent failures do not stand in distinction to much of his career. He deserves credit for his time as an anti-trust official, but his record on the key financial issues of his time is disastrous. He is a neo-liberal economist who supported Italy’s adoption of the fatally flawed euro design and financial deregulation and desupervision.

Correa’s track record is one of dramatic success. Ecuador did not fall into recession even when the financial crisis caused the Great Recession. This was a remarkable achievement, for Ecuador uses the dollar as its currency, has extensive trade with the U.S., and was harmed greatly by the fall in oil prices in 2008. Since 2008, Ecuador has demonstrated fairly robust growth of real GDP, substantially reduced unemployment, reduced poverty, and established a far more effective safety net to reduce misery for the poor. Unemployment in Ecuador (4.6 percent) is less than half of Italy’s rate (11.1 percent). Unemployment in Ecuador has been falling under Correa while it has risen in Italy under Monti.

Correa inherited a more crippling debt crisis than did Monti. He used his skills as an economist to devise a default on that debt and a buy-back of the debt at a dramatically discounted rate. He did all of this while producing robust growth. Ecuador was not frozen out of obtaining credit. Correa convinced China to loan money to Ecuador after the default to provide the credit Ecuador desired. He tossed out the World Bank (which warned him not to default) and took steps to maintain Ecuador’s reserves when the U.S. suffered the Great Recession. Ecuador lacks a sovereign currency it is potentially exposed to the bond vigilantes. This makes Correa’s success all the more impressive.

It is important to understand that Monti failed and Correa succeeded because Correa is a skilled technocrat and Monti is a believer in neo-liberal dogmas that have been repeatedly falsified. Monti is no more a technocrat than the medical quacks who continued to bleed patients in the late 19th century were doctors. Prescribing austerity as a means of “recovering” from a Great Recession is delusional — it is not economics. Paul Krugman has repeatedly emphasized this point in his New York Times column, but most New York Times writers cannot understand this point. Monti’s profile, for example, has this clunker about Monti’s appointment in November 2011 to run Italy: “But even the change in leadership — and a $40 billion package of austerity measures, including tax increases and a sweeping pension overhaul — has not calmed [financial] markets.” The writer is shocked that Monti’s promise to throw Italy into recession through self-destructive austerity has not “calmed markets.” It is beyond me why a journalist would think that financial markets (lenders) would be “calmed” by knowing that their borrower was about to go into recession.

The financial policies that Monti supported prior to the onset of the Great Recession were failures. His support for financial deregulation and de-supervision, the euro, and the efficient market hypothesis were further examples of theoclassical economics.

The Correa profile, however, begins with multiple efforts to picture Correa as the leader peddling dubious economics.

“Rafael Correa, a left-leaning economist, took office as the president of Ecuador in January 2007, becoming one of a growing number of Latin American leaders who came to power by running against the free-market policies backed by the United States and their countries’ traditional elites.”

I have no difficulty with using the term “left-leaning” – even in the first clause of the profile where it is obviously designed to set a defining tone of hostility. More precisely, I have no problem with it if the paper does three things: states its bias openly, acts consistently (e.g., the first line of Monti’s profile should describe him as a “neo-liberal economist”), and the article should explore analytically whether the “left-leaning” or “neo-liberal” approaches to economics has demonstrated greater predictive success in contexts that are the subject of the profile. The New York Times’ profiles fail on each of these requirements for journalism.

The Correa profile then compounds its bias with false statements and an analysis-free statement of great analytical significance. It falsely claims that Correa’s “left-leaning” policies are in derogation of the “free-market policies backed by the United States and [Ecuador’s] traditional elites.” I’ll begin with the preposterous assertion that Ecuador’s “traditional elites support “free-market policies.” The profile is a fact rather than an opinion column so making asserted factual statements that would cause anyone in Ecuador to burst into snickers is particularly egregious. Ecuador is a nation characterized by immensely powerful economic and political elites who have dramatic market power and often act in a concerted anti-competitive fashion. I did a recent column on how the managers that control their four largest banks acted in concert to attempt to extort the government not to increase their taxes and restrict their compensation. The very last thing Ecuador’s wealth elites want is market competition.

Similarly, the Washington Consensus’ policies of deregulation, desupervision, and privatization do not produce a “free-market.” In the U.S. we have just run a domestic experiment in which we implemented the theoclassical economic policies of the Washington Consensus. It proved massively criminogenic. The resultant epidemic of accounting control fraud hyper-inflated the bubble and drove the Great Recession. It produced crony capitalism — the antithesis of “free markets.”

Effective financial regulation, supervision, and prosecutions are essential to “free” financial markets. When cheaters prosper honest firms are driven from the markets, a point that the Nobel Laureate George Akerlof explained in his famous 1970 article on markets for “lemons.” He described a “Gresham’s” dynamic in which bad ethics drove good ethics from the marketplace.

“[D]ishonest dealings tend to drive honest dealings out of the market. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence.”

The results of our domestic Washington Consensus were so disastrous that they caused most of the U.S. electorate to repudiate the policies. The same thing happened in most Latin American nations because Latin America was the (failed) test bed for the Washington Consensus. The failures of the faux free markets in Latin America caused many electorates to repudiate the policies and elect leaders who promised to oppose the Washington Consensus. This is the analytics-free clause of the first sentence of the Correa profile: “becoming one of a growing number of Latin American leaders who came to power by running against the free-market policies…” The New York Times does not believe that the fact that Latin American electorates’ experience with faux “free-trade policies” produced such severe policy failures and revulsion for the faux “free-trade” policies that it led overwhelmingly to the election of leaders pledged to oppose those failed policies should lead us to reexamine the validity of the cynical label “free-market policies” and the actual impact of those policies.

Courage and leadership in making the tough decisions that produce success

The Monti profile is positively glowing about his courage and willingness to take on the powerful in order to push austerity. Here is one of key passages — see if you can spot the missing group in this supposed profile in courage.

“He said that his government of unelected technocrats was determined to force various entrenched interests — from labor unions to professional guilds to public employees — to give up their privileges, and that it was uniquely qualified to push through the changes because it had no natural constituency to protect.”

Note the not-so-broad range of “entrenched interests” Monti took on – all of them workers. Corporations, particularly the elite banks and banksters that drove the global crisis are the most destructive, most powerful, and most entrenched interests in Italy. Monti, however, is a creature of the banking industry. His father was a banker and he was a consultant to Goldman Sachs. He chose for his cabinet as his principal economic advisor the head of one of Italy’s largest banks.

Who were Monti’s key “unelected technocrats?” Monti assigned himself as the minister responsible for the economy. I’ve explained that he is the worst kind of failure as a “technocrat.” He knew better. He knew that austerity would hurl Italy into a gratuitous recession, but he imposed it pursuant to the theoclassical dogmas he venerated.

Consider the profile’s uncritical adoption of Monti’s claim that his government of (supposed) technocrats “was uniquely qualified to push through the changes because it had no natural constituency to protect.” We all understand why Monti’s press flacks pushed this meme, but I cannot understand why any sentient journalist would allow such a meme to go unchallenged. Monti ensured that his government was dominated by bankers, indeed executives and advisors of enormous banks. It is apparently credible to the New York Times that bankers have no “natural constituency to protect.”

The quoted passage was written after the movie Inside Job made a mockery of the claim that neo-liberal economists are devoid of bias and have no “natural constituency to protect” even though their funding comes from the Federal Reserve, industry, or the largest banks. Even if they missed the movie, however, the journalists knew that Monti’s claim was false. Here is the key passage from the Monti profile.

“Angela Merkel, found herself facing a tenacious opponent: Mr. Monti — whom Ms. Merkel had helped to install in office.

Mr. Monti has emerged as the uncontested leader of the “pro-growth” forces, and he has persuaded Ms. Merkel to take perhaps one of the largest steps toward European integration since the euro crisis began.

Mr. Monti came to Brussels with a simple plan based on the knowledge that Europe’s leaders could ill afford to come away from the summit meeting empty-handed. Italy and Spain, as he eventually made clear to Ms. Merkel, would block all agreements — including a growth pact that they fully supported — until European leaders agreed to allow Europe’s new bailout funds to directly recapitalize ailing banks, rather than going through the governments.”

What a series of pro-Monti myths concocted by his press flacks and accepted as divine truth by the New York Times reporters. Consider first the implications, ignored by the reporters, that the bond vigilantes forced out Italy’s elected leader and Germany determined his replacement. That is a remarkable and outrageous indication of Italy’s crippled democracy (Berlusconi and the power of the elite banks and bankers. Merkel chose Monti because Monti was German bankers’ favorite ally. (A nation that elects Berlusconi its leader already has a severe democratic deficit.)

Consider next the epic terms in which Monti is described in his New York Times profile. He is the “tenacious opponent” of Merkel’s austerity policies and the “uncontested leader” of “pro-growth” forces. The obvious problem with this Monti myth is that Monti imposed austerity on Italy and told the nation that there was “no alternative” to it. The reporters are using an Orwellian definition of the term “tenacious opponent.”

There is no “growth pact” — unless the reporters are adopting an Orwellian definition of “growth.” Merkel insists on austerity and insists that there is “no alternative” to throwing the Eurozone back into a gratuitous recession through her anti-growth policies. The reporters cite only a single achievement of Monti’s supposed tenacity: “European leaders agreed to allow Europe’s new bailout funds to directly recapitalize ailing banks, rather than going through the governments.” The reporters describe this in heroic terms as “one of the largest steps toward European integration since the euro crisis began.”

Inept “European integration” — the euro — put nations that adopted the euro at the mercy of the bond vigilantes, so there is no reason to assume that increased integration is desirable. Note that the “increased integration” is not a pro-growth measure. It is a measure to bail out banks. Indeed, it is a measure designed to bail out banks rather than provide funds to the nations that are suffering from the recessions. It turns out that Monti’s supposed act of valor was getting a more direct way for the Troika to bail out banks. The Troika had been using the member nations to launder the bail out proceeds to the banks. The Troika would lend money to a distressed nation with the understanding that the nation would use the proceeds to bail out the banks. The banks would then use much of the proceeds to buy the distressed nation’s sovereign debt. The Troika, the banks, and the distressed nations would then pretend that all was well and austerity was a great success. Monti’s monumental accomplishment is that the Troika can lend directly to the banks, pretend that all is well, and proclaim austerity a great success. Transformative! No?

But the Monti myth’s hype is not the critical analytical point that can be derived by Monti’s efforts to make it easier to bail out banks. The central point is that when one dispels the hype it turns out that the New York Times reporters knew that Monti’s act of faux bravery was making it easier to bail out banks. This means that the same credulous reporters, who accepted the Monti myth that Monti’s unelected government of bankers could be trusted to act solely in Italy’s national interest because they had “no natural constituency to protect” knew the claim was a lie. The reporters knew that the Monti’s paramount strategy was protecting his “natural constituency” — bankers — by making it easier to give them public bailouts.

Correa followed the opposite policies — successfully. He took on the wealthiest entrenched interests in Ecuador, particularly the banks.

Correa took enormous political and safety risks when he took on these entrenched interests. Whether or not the U.S. fomented the coups in Venezuela and Honduras, it has demonstrated its support for coups designed to remove democratically-elected leaders from power in Latin America if they oppose the Washington Consensus. The U.S. pro-coup policy has placed the lives of a number of Latin American leaders, including Correa, at great risk. Correa was the target of what he and many observers believe was an attempted coup by police officers. Correa was cut off, badly outnumbered, and surrounded by a large force of police officers. He responded to the police officers’ action by demonstrating exceptional courage. In order to defeat the attempted coup, Correa personally confronted the most aggressive officers and dared them to murder him in public. His courage helped defeat the coup.

One might think this pattern would lead the New York Times to laud his courage. Instead, the passage describing the event in his profile appears to be written to imply that the critical fact was that he gratuitously chose to engage “in a shouting match” with the police.

“That array of paradoxes reached a climax in September 2010 after the Socialist president proposed a raft of benefit reduction measures, setting off an uprising of police officers that nearly took his life.

The searing image left by the uprising was not that of the protesters but of Mr. Correa, who waded into the angry scrum of protesting officers at the police barracks in the capital, engaged in a shouting match with the police, opened his shirt and dared the officers to kill him. They nearly did.”

Rising from humble circumstances through hard work and self-sacrifice

Americans love rags-to-riches stories. Our elected politicians brag of their humble origins. Monti was born with the silver spoon. He was the son of a banker with the connections and wealth to attend top Italian and U.S. universities (his Ph.D. is from Yale).

Correa is the exemplar of everything the U.S. cherishes. His father was often unemployed. He worked hard and was able to get a doctorate at a fine, but far less prestigious U.S. school.

Repeated success in democratic elections

Monti was not elected. None of the ministers he appointed were elected. Monti was made a “Senator for Life” so that he could hold office. His popularity has fallen so sharply that his political opponents turned on him and he has announced his intention to resign.

Correa was elected in 2007, re-elected in 2008, and has a very large lead in the polls projecting that he is about to again win reelection. His electoral success is remarkable because he inherited the global financial crisis when he came into office and Ecuador had a recent track record of immense political instability.

“Despite the police rebellion and recent protests by student and indigenous groups, polls show that he retains a solid majority of support and is Ecuador’s strongest leader in decades. He has brought calm and stability to a country that had eight presidents in the decade before he was elected, and then, remarkably, re-elected, in 2009.”

Dedication to the interests of those with the greatest needs rather than to the wealthy

Monti’s austerity policies attacked the least powerful and least well-off Italians. His emphasis was on getting bailouts for Italy’s largest banks in the form of direct lending from the ECB (instead of indirect bailouts through ECB loans to the Italian government that would then make loans to the banks). That is the grand concession he obtained from Angela Merkel. The results of his policies are a deep recession, rapidly growing unemployment, increasing inequality, and growing emigration.

Correa’s policies have led to increased employment for large numbers of Ecuadorians, reduced poverty, and an improved safety net. The least politically powerful people in Ecuador now have political champions.

Bold, innovative policies

The profiles would lead a reader to believe that Monti exemplified flexibility and innovation and that Correa is the ideologue. The reality is that the opposite is true. Monti is pictured as the leader of a successful insurrection against Merkel’s austerity policies, but he lacked the courage to adopt fiscal stimulus and actually implemented the self-destructive austerity policies that Merkel insisted Italy adopt. Indeed, Monti famously misinformed Italians that there was “no alternative” to austerity.

The contrast between Monti’s timidity and Correa’s boldness is stark. Correa threw the World Bank out of Ecuador. He threw the U.S. out of its military base in Ecuador. He led the default on Ecuador’s debt and a successful buy-back of the debt at a huge discount. He arranged a large loan from China to provide access to credit. He imposed a tax on banks in order to fund an increase in social spending that helps the poor the most. He did all this in an environment in which he was risking his life because of the serious dangers of a coup and where most observers believed he was dooming his chances for reelection. Correa’s bold policies s have produced high growth in real GDP, significantly reduced unemployment and poverty, political stability, and strong political support.


Correa is the economist who has demonstrated the complete package: the head to get the economic policies correct, the heart to act on behalf of the people with the greatest need and the least power, the guts to risk his life on behalf of his nation, and the soul to take on the most powerful and entrenched interests in his nation in order to liberate his nation from their toxic grip. Correa is exceptionally popular with the Ecuadorian people and has won multiple elections.

Monti is the economist who has gotten the most important economic issues of his time wrong. He has worked on behalf of the world’s largest banks and banksters, the wealthiest and most powerful and destructive entrenched interests in Italy. His policies have caused increased unemployment, a gratuitous recession, and high emigration. Monti has never been elected. He was placed in power through the extortion of the world’s largest banks and intervention by Germany. The great majority of Italians oppose his rule and his policies.

So why does the New York Times continue to praise Monti and disparage Correa? The New York Times’ hagiographic praise of Monti’s purported act of courage – insisting that Germany allow the Troika to bail out Italian banks directly — is further proof of our family’s rule that it is impossible to compete with unintentional self-parody.

Readers, however, may share my belief that the supreme example of unintentional self-parody contained in the profiles is the related claim that Monti, an elite banker who used his power to ease public bail outs of banks, is a selfless “technocrat” devoid of any “natural constituency to protect” because he was unelected and appointed through a de facto coup orchestrated by elite banks and bankers. The New York Times accepted as gospel the claim that elite bankers like Monti are devoid of self-interest and do not protect the interests of the elite banks that provide him wealth and prestige and put him in power. The Onion couldn’t have written it better. Story Continued:

· Scientists May Have Finally Unlocked Puzzle of Why People Are Gay – Lesbians get it from fathers, gay men from mothers?


Scientists may have finally solved the puzzle of what makes a person gay, and how it is passed from parents to their children.

A group of scientists suggested Tuesday that homosexuals get that trait from their opposite-sex parents: A lesbian will almost always get the trait from her father, while a gay man will get the trait from his mother.

The hereditary link of homosexuality has long been established, but scientists knew it was not a strictly genetic link, because there are many pairs of identical twins who have differing sexualities. Scientists from the National Institute for Mathematical and Biological Synthesis say homosexuality seems to have an epigenetic, not a genetic link.

Long thought to have some sort of hereditary link, a group of scientists suggested Tuesday that homosexuality is linked to epi-marks — extra layers of information that control how certain genes are expressed. These epi-marks are usually, but not always, “erased” between generations. In homosexuals, these epi-marks aren’t erased — they’re passed from father-to-daughter or mother-to-son, explains William Rice, an evolutionary biologist at the University of California Santa Barbara and lead author of the study.

“There is compelling evidence that epi-marks contribute to both the similarity and dissimilarity of family members, and can therefore feasibly contribute to the observed familial inheritance of homosexuality and its low concordance between [identical] twins,” Rice notes.

Rice and his team created a mathematical model that explains why homosexuality is passed through epi-marks, not genetics. Evolutionarily speaking, if homosexuality was solely a genetic trait, scientists would expect the trait to eventually disappear because homosexuals wouldn’t be expected to reproduce. But because these epi-marks provide an evolutionary advantage for the parents of homosexuals: They protect fathers of homosexuals from underexposure to testosterone and mothers of homosexuals from overexposure to testosterone while they are in gestation.

“These epi-marks protect fathers and mothers from excess or underexposure to testosterone — when they carry over to opposite-sex offspring, it can cause the masculinization of females or the feminization of males,” Rice says, which can lead to a child becoming gay. Rice notes that these markers are “highly variable” and that only strong epi-marks will result in a homosexual offspring.

Though scientists have long suspected some sort of genetic link, Rice says studies attempting to explain why people are gay have been few and far between.

“Most mainstream biologists have shied away from studying it because of the social stigma,” he says. “It’s been swept under the rug, people are still stuck on this idea that it’s unnatural. Well there are many examples of homosexuality in nature, it’s very common.” Homosexual behavior has been observed in black swans, penguins, sheep, and other animals, he says.

Rice’s model still needs to be tested on real-life parent-offspring pairs, but he says this epigenetic link makes more sense than any other explanation, and that his team has mapped out a way for other scientists to test their work.

“We’ve found a story that looks really good,” he says. “There’s more verification needed, but we point out how we can easily do epigenetic profiles genome-wide. We predict where the epi-marks occur, we just need other studies to look at it empirically. This can be tested and proven within six months. It’s easy to test. If it’s a bad idea, we can throw it away in short order.” Story Continued:

· Appeals court overturns Illinois concealed carry law in gun rights victory


SPRINGFIELD-In a huge win for gun-rights groups, a federal appeals court in Chicago Tuesday tossed the state’s ban on carrying concealed weapons and gave Illinois’ Legislature 180 days to craft a law legalizing concealed carry.

“The debate is over. We won. And there will be a statewide carry law in 2013,” said Todd Vandermyde, a lobbyist for the National Rifle Association.

In a split opinion, the 7th Circuit Court of Appeals reversed a lower court ruling in two cases downstate that upheld the state’s longstanding prohibition against carrying concealed weapons.

Illinois is the only state with an outright prohibition on concealed carry.

“We are disinclined to engage in another round of historical analysis to determine whether eighteenth-century America understood the Second Amendment to include a right to bear guns outside the home,” Judge Richard Posner wrote in the court’s majority opinion.

“The Supreme Court has decided that the amendment confers a right to bear arms for self-defense, which is as important outside the home as inside. The theoretical and empirical evidence (which overall is inconclusive) is consistent with concluding that a right to carry firearms in public may promote self-defense,” he continued.

“Illinois had to provide us with more than merely a rational basis for believing that its uniquely sweeping ban is justified by an increase in public safety. It has failed to meet this burden,” Posner wrote.

“The Supreme Court’s interpretation of the Second Amendment therefore compels us to reverse the decisions in the two cases before us and remand them to their respective district courts for the entry of declarations of unconstitutionality and permanent injunctions,” he continued.

“Nevertheless we order our mandate stayed for 180 days to allow the Illinois legislature to craft a new gun law that will impose reasonable limitations, consistent with the public safety and the Second Amendment as interpreted in this opinion, on the carrying of guns in public,” Posner said.

In a minority opinion, Judge Ann Williams wrote that Illinois is within its rights to ban weapons in “sensitive places” like government buildings, churches and universities in the name of safety.

“The Illinois legislature reasonably concluded that if people are allowed to carry guns in public, the number of guns carried in public will increase, and the risk of firearms-related injury or death in public will increase as well,” Williams said. “And it is also common sense that the danger is a great one; firearms are lethal.”

Attorney General Lisa Madigan, who was defending the state’s prohibition of concealed carry, remained silent on whether her office would appeal Tuesday’s ruling to the U.S. Supreme Court.

“The court gave 180 days before its decision will be returned to the lower court to be implemented. That time period allows our office to review what legal steps can be taken and enables the Legislature to consider whether it wants to take action,” Madigan spokeswoman Maura Possley said.

In 2011, gun-rights advocates lost a bid in the Illinois House to legalize concealed carry by a 65-32 vote. Seventy-one votes were necessary for passage.

The measure, sponsored by state Rep. Brandon Phelps (D-Harrisburg), would have enabled Illinoisans to carry concealed weapons if they had a firearm owner’s identification card and underwent a firearms education course.

Under the failed bill, permit holders could not have been a patient in a mental institution in the previous five years nor have any felony, violent misdemeanor or drug convictions in the previous 10 years.

Concealed weapons also wouldn’t have been allowed under the plan at government buildings, courthouses, schools, sports arenas and stadiums, amusement parks, libraries or college campuses.

At the time of the vote, the Illinois State Police estimated that 325,000 people would taken advantage of a concealed-carry program, which was projected to raise $32 million annually for the state through license fees. Story Continued:


· Michigan Legislature gives final approval to right-to-work limiting unions, sends to governor


The Michigan Legislature gave final approval Tuesday to a bitterly contested right-to-work plan limiting the power of unions, a devastating and once unthinkable defeat for organized labor in a state considered a cradle of the movement.

Unswayed by Democrats’ pleas and thousands of protesters inside and outside the state Capitol, the House approved two final bills, sending them on to Republican Gov. Rick Snyder. One dealt with private sector workers, the other with government employees. Both measures cleared the Senate last week.

At a Diesel plant in Detroit Monday, President Obama said “American manufacturing is growing at the fastest pace since the 1990s,” and credited the recovering economy in part to this boost.

Many are moving their assets to avoid the new taxes that await if Washington doesn’t strike a deal.

Snyder is expected to sign the measures into law as early as Wednesday that would make Michigan the 24th state with right-to-work laws, which ban requirements that nonunion employees pay unions for negotiating contracts and other services.

Supporters say they give workers more choice and boost economic growth, but critics say the real intent is to weaken organized labor by bleeding unions of money needed to bargain effectively with management.

“This is about freedom, fairness and equality,” House Speaker Jase Bolger said. “These are basic American rights — rights that should unite us.”

Democrats offered a series of amendments, one of which would have allowed a statewide referendum. All were swiftly rejected.

“This is the nuclear option,” Rep. Doug Geiss, a Democrat from Taylor. “This is the most divisive issue that we have had to deal with. And this will have repercussions. And it will have personal hard feelings after this is all said and done.”

Protesters in the gallery chanted “Shame on you!” as the measures were approved. Union backers clogged the hallways and grounds shouting, “No justice, no peace.”

Sen. John Proos, a Republican from St. Joseph who voted for the right-to-work bills last week, said opponents had a right to voice their anger but predicted it would fade as the shift in policy brings more jobs to Michigan.

“As they say in sports, the atmosphere in the locker room gets a lot better when the team’s winning,” he said.

In other states such as Wisconsin and Indiana, similar battles were drawn-out affairs lasting weeks or months. Wisconsin went a step further than Michigan, enacting legislation that stripped most public-sector workers of their right to collective bargaining.

Snyder, a business executive-turned-governor, and the Legislature’s GOP majority used their political muscle to rapidly introduce and ramrod legislation through the Michigan House and Senate in a single day last week.

Snyder insisted the matter wasn’t handled with undue haste and that right-to-work state was a long-discussed issue in Michigan.

“There has been lots of time for citizens to contact legislators and share their feelings,” he said in an interview with WWJ-AM.

In Michigan, the right-to-work movement gains its strongest foothold yet in the Rust Belt, where the 2010 election and tea party movement produced assertive Republican majorities that have dealt unions repeated setbacks.

Opponents said they would press Snyder to use his line-item veto authority and remove a $1 million appropriation from the bills, making them eligible for a statewide referendum.

Lawmakers who backed the bills “will be held accountable at the ballot box in 2014,” said Rep. Tim Greimel, the incoming House Democratic leader. Story Continued:


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