The Torture Memos Finally Catch Up With Mr Yoo

The New York Times today March 28, 2009, ran a story on the crusading Spanish judge Balthazar Garzon (accented on the "o"). (Garzon is the investigating judge who sucessfully prosecuted the nortorious Augusto Pinochet, the Chilean dictator. The dust had died down when Pinochet, in the UK for medical treatment, was actually arrested and tried.) In: "Spanish Court Weighs Inquiry on 6 Bush Era Officials"
See:

http://www.nytimes.com/2009/03/29/world/europe/29spain.html?em . "A Spanish court has taken the first steps toward opening a criminal investigation into allegations that six former high-level Bush administration officials violated international law by providing the legal framework to justify the torture of prisoners at Guantánamo Bay, Cuba, an official close to the case said."

Hooray for Judge Garzon! It seems very likely the case will go forward against these men including the notorious Mr. Yoo, Feith, Attorney General Gonzales and others less well known who made it possible for the President and Mr Cheney to abandon the rule of law. Most of these men including Mr Yoo who now sits happily in a professorship at a prestigious university will become international criminals subject to arrest if they leave the country.

The wheels of justice grind slowly....but exceedingly fine. The hope for Mr. Yoo and his kind to be seen escorted from their homes with trench coats over their heads (as they deserve) is probably not going to happen...but the fact that they will not have the freedom of travel and will be classified as international criminals will be sufficient to upset their lives and stand as a warning to other lawyers who would wish to circumvent our laws "Gonzalo Boye, the Madrid lawyer who filed the complaint, said that the six Americans cited had had well-documented roles in approving illegal interrogation techniques, redefining torture and abandoning the definition set by the 1984 Torture Convention........... Our profession does not allow us to misuse our legal knowledge to create a pseudo-legal frame to justify, stimulate and cover up torture.” said Boye.

The article supports the notion that Spain has the authority to prosecute the case and it records events here in the US, our recent successful prosecution for torture of a Liberian who committed the acts in Liberia which establish precedent for the Spanish prosecutions. I await the results and the squirming and denials of the inditees with great anticipation.

CASH FOR TRASH BANK BAILOUT

I have been following the bank and economic imbroglio closely. Unfortunately, I was busy today, March 23, 2009 and missed some of the better commentators. I did learn that the stock market had a fine day. The marketers like the Obama Bank Plan. I guess that must be a good reason for the rest of us, regular tax payers to worry. If they and the bankers like it, it is probable that we won’t.

Here is how I envision what President Obama’s bank plan seems to be to me.

Think of a busy Manhattan intersection. It’s St. Patrick’s Day and everyone is wearing the green! Drivers have been unwisely spending too much at parties, and high priced drinking holes. They have been swilling too much cheap green beer. Some are driving with revoked driver’s licenses. But throwing common sense to the winds, they have nevertheless taken to the streets in their over sized gas guzzler Cadillac SUVs and Mercedes station wagons.

As we approach the intersection we hear horns blaring and wheels screeching, then a great, loud thump and thunderous crash. Then silence. The eerie stillness is broken only by the sound of steam exiting from smashed automobile radiators, and the tinkling sound of a hubcap rolling unevenly across the hard pavement. As the sirens go off, the vehicle’s drivers exit from their totally wrecked vehicles, unhurt but boozy and dazed. They stumble about the streets near their wrecks in drunken oblivion. From inside the wrecks we can hear the wail of hurt passengers calling out in fear and pain.

In a matter of minutes, a police car screeches to a halt at the accident scene. Sargent O’ Bama steps out of his patrol car wielding his ticket book and his nightstick. But he uses neither. Instead of corralling the miscreant scoff-law boozers and taking their keys away, he helps each one back into their battered vehicles. He kicks back into place a loose hub cap, then closes the gaping doors on the passenger compartments, so we can no longer hear the passenger's moans.

Then resting his arms on each of the driver’s open windows in turn he passes out not summonses, but refreshments and a "free gas" coupon to each driver. With a pat on the shoulder, he blithely sends the culprits off on their boozy dangerous way.

Well that’s how I saw it.

But now read what Nobel Prize winning economics Professor and NY Times columnist Paul Krugman has to say!

See “Financial Policy Despair”Paul Krugman, NYT Opinion, March 23, 2009

Partial quote:
"And now Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing.
It’s as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street. And by the time Mr. Obama realizes that he needs to change course, his political capital may be gone.

Let’s talk for a moment about the economics of the situation.
Right now, our economy is being dragged down by our dysfunctional financial system, which has been crippled by huge losses on mortgage-backed securities and other assets.
As economic historians can tell you, this is an old story, not that different from dozens of similar crises over the centuries. And there’s a time-honored procedure for dealing with the aftermath of widespread financial failure. It goes like this: the government secures confidence in the system by guaranteeing many (though not necessarily all) bank debts. At the same time, it takes temporary control of truly insolvent banks, in order to clean up their books."

Real all of Professor Krugman's column by clicking on below:

http://www.nytimes.com/2009/03/23/opinion/23krugman.html?_r=1

DEPRESSION BASICS

The Stock Market Crash of 1929 was not the cause of the Great Depression, but was the result of fundamental weaknesses in the economy of the United States and other major nations of the world.

The major causes of the Depression included over speculation in stocks, land, and other investments; too much credit supplied to consumers; farmers producing more but wages not keeping up with expenses; an increase in business inventory; curtailed production resulting in unemployment; wages were not keeping pace with the cost of living; the unequal distribution of wealth throughout the 1920s.

The effects of the Great Depression was huge across the world. Not only did it lead to the New Deal in America but more significantly, it was a direct cause of the rise of extremism in Germany leading to World War II.

1. Stock Market Crash of 1929

Many believe erroneously that the stock market crash that occurred on Black Tuesday, October 29, 1929 is one and the same with the Great Depression. In fact, it was one of the major causes that led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40 billion dollars. Even though the stock market began to regain some of its losses, by the end of 1930, it just was not enough and America truly entered what is called the Great Depression.Sponsored LinksGreat Depression EconomyLearn All About Economic Depression at Ask.com. Get Answers Today!www.Ask.com2009 Will Be Like 1929.Read Chapter 8 of "America's Great Depression." We guarantee déjà vu.www.Mises.orgDepression FactsLearn all about Depression. Get Free expert advice, news & more!www.everydayhealth.com

2. Bank Failures.

Throughout the 1930s over 9,000 banks failed. Bank deposits were uninsured and thus as banks failed people simply lost their savings. Surviving banks, unsure of the economic situation and concerned for their own survival, stopped being as willing to create new loans. This exacerbated the situation leading to less and less expenditures.

3. Reduction in Purchasing Across the Board.

With the stock market crash and the fears of further economic woes, individuals from all classes stopped purchasing items. This then led to a reduction in the number of items produced and thus a reduction in the workforce. As people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans and their items were repossessed. More and more inventory began to accumulate. The unemployment rate rose above 25% which meant, of course, even less spending to help alleviate the economic situation.

4. American Economic Policy with Europe.

As businesses began failing, the government created the Hawley-Smoot Tariff in 1930 to help protect American companies. This charged a high tax for imports thereby leading to less trade between America and foreign countries along with some economic retaliation. 5. Drought ConditionsWhile not a direct cause of the Great Depression, the drought that occurred in the Mississippi Valley in 1930 was of such proportions that many could not even pay their taxes or other debts and had to sell their farms for no profit to themselves. This was the topic of John Steinbeck's The Grapes of Wrath. The stock market crash of 1929 was not the cause of the Depression but it had a negative effect on people’s perceptions which could have caused a decline in real consumer spending which occurred in late 29 and 1930. People Hoarded money. People hoard because they want their assets in a readily convertible form such as cash. Saving and hoarding are different. Saving it permits it to circulate as a bank gives out loans, mortgages, etc. It is being spent. Hoarding is not an evil in itself since hoarded money is out of circulation making money in circulation more valuable

US KILLS MAYOR'S STAFF IN AFGHANISTAN--US LOOKS STUPID

Today (03-22-09) the NY Times reported: “US Kills 5 Afghans in Raid on House”

While workers here in the US are being laid off left and right, the US has positively altered the situation for employment in a tiny village Afghanistan. The tiny village of Imam Sahib, (population 100) in Afghanistan has five new high-paying employment opportunities due to the intervention of the US. The vacancies occurred in this strange way.

The mayor of this small village, a friend of the US and former anti-Taliban military leader, was roused out of bed by search lights overhead and the rotors of a military chopper. Fearing for his life he sought refuge for his wife and children in the root-cellar. While he remained hunkered down, above ground attacking US soldiers landed from the helicopter, smashed down the front gates on the mayor’s compound, and as his staff went out to investigate, US soldiers opened fire. Two of the mayor's guests, his driver, his cook, and his bodyguard were all shot dead. Two other guests were detained by the US military. No word has been heard of the survivors so far. The US military has not responded to reporter’s inquires regarding the incident. I suspect they are presently hunkered down themselves somewhere, trying to develop some logical explanation for another screw-up. They will need a good story--something that would tend to mitigate the damage to their reputations. However, with the level of intelligence they have displayed so far, the hope for a cogent explanation from them may take some long time coming . So don’t hold your breadth. Expect to feel embarrassed for them and for the nation for some long time! After all we killed five people who were friends of the USA in a very hostile nation! This is not the way to build one's reputation as a friend and helpmate.

Now, in regard to those military "killer" drones, those so-called “smart weapons” which fly silently at high elevations for long periods taking TV pictures of the ground and then at a touch of a button-- on a console far away in Phoenix Arizona--or Washington DC they fire a missile which can blow up a whole house full of people. Using this technology we have been regularly killing in Afghanistan and Pakistan what the US and the media often simply record as “militants”
Well, it seems to me, the high number of "wrong kills" and other embarrassments associated with these drones are easily explained, after this last debacle. If our military men can’t figure out who is friend or foe while they are actually on the ground, how can we possible expect them to kill the "bad guys" from a vacant air-hangar in Phoenix, Arizona! We set up a "pilot" with a joystick, and a TV screen in some isolated location like the above unused CIA location in Phoenix. The "pilot" sits there in front of a console staring at a video screen of grainy images. He can not hear what's going on, and even if he did, this person is definitely not a linguist and is untrained in the language or culture of his targets. The odds of getting it right--hitting the right target- seem pretty slim..and the constant screw-ups are so very, very counter-productive.

This situation would fit well into a Monty Python script if so many unwitting innocent people (often women, children, and the elderly) did not so often fall victim to our mis-guided drone missiles. It's no laughing matter either to see our military and their commanders appear so dumb at a time when a lot of other bad, really "dumb" things are happening such a regular basis right here on Wall Street and in Washington, DC! It’s just not good for appearances. We are beginning to look like a nation of screw-ups and clowns.

Please President Obama, stop the stupidity in Afghanistan and Pakistan. Bring the troops home. Bernie Madoff, AIG, Wall Street, GM head Waggoner and the Humvee, Palin and the GOP, and the Congress crowd are enough! We can’t take any more national embarrassments and maintain some bit of national pride.

LOOTING THE GOVERNMENT

The problem with government bailout policy is that it encourages companies to take unreasonable risks, knowing full well that Congress will not permit them to fail. It is equivalent to having a two-headed flipping-coin, you choose heads, and always "win"! The results are a run on government coffers.

A good deal of this came to the fore today, (March 18, 2009) as the nation agonizes over the news of American International Group (AIG) and its plan to give annual bonuses to its executives and it CEO faces a congressional hearing. Recall that this is the company, now about 80 per cent owned by U.S. taxpayers, which has over the last few months received roughly $170 billion from the government. It is also the one which recently announced the largest quarterly loss in corporate history—a $62 billion dollar shortfall. According to a recent AP accounts, AIG is an international insurance-agency giant which is critical to the well-being and stability of the U.S. and world financial systems. The nearly two hundred billion dollars (of bailout funds) they recently swallowed, was spent to cover their losses to banks (such as Swiss UBS AG, Morgan Stanley, Citigroup), to retirement funds and others who suffered loss related to complex mortgage investments. They also supply capital as collateral needed for common loans and day-to-day business transactions which help to keep money flowing to businesses and homeowners. It is generally accepted that the collapse of AIG could cause widespread damage to banks and consumers around the globe.

One expects that a function of an agency such as AIG, would be to analyze risks of companies they are about to insure, and if these are wanting, to withhold their insurance contracts. Today such "common sense-Franklinesque" ideas sound a "bit quaint" --as if, bankers and insurers should actually be attempting to assess risk. But perhaps that is exactly what they should have been doing. But why have they not?

These AIG executives, who recently awarded themselves some $165 million dollars in bonuses simply signed off on these contracts with little thought of the consequences! Thinking--"oh well--someone else will have to review these decisions--some day, but I'll be long gone." Some of these employees walked away with more than $6 million dollars in their pockets!

It was three months ago that this same AIG, after happily accepting the first bailout money, blithely sent its executives on an all-expenses paid, half-a-million dollar jaunt to the St Regis Resort Hotel at Monarch Beach, in California (in the heart of that state’s Republican territory). That revelation caused a well-earned, but short-lived flurry of press attention. But then other disasters--the stock market crash, unemployment, mortgage defaults, etc. etc. took over the front pages and we forgot about it.

( Note here that the first award,made by Bernanke and Bush, was completed with the authority of under a little known, 1930s law which permitted the Fed to award these funds at their (the Fed’s) own discretion and with no strings attached).

But now in mid-March, after a few months of severe economic woe, when more than 12 million Americans lost their jobs (and their health-insurance coverage), and when national suffering has expanded across the map like a dark, spreading stain. It is at this time, that we are informed as taxpayers, with the latest bill in our collective pockets for nearly 85% of the worth of their failed company, that some of those who actually helped grease the skids under the nation’s economy by looking the other way at the flagrant, high-risk behavio of the companies they insured, will be awarded millions in bonus money.

Further fuel was added to the fire when Andrew Cuomo, New York State’s Attorney General, revealed today that AIG paid out bonuses of $1 million or more, to 73 employees. Eleven of these employees no longer even work there! This revelation only served to underscore the hyperbole and misstatements emanating from the company executives who suggested the bonuses were paid to "retain" these people.

What does this all mean?

The obvious is that the system is a mess! The nation has been on a twenty-year binge of excess which touches all and every aspect of its functions. Excess, greed and incompetence are rampant. The Bush-years reactionary philosophy of "anything goes which makes a profit" has finally been discredited. It's under-lying concept that"the markets will police themselves" and other similar shibboleths have been repudiated. But unfortunately these poisonous concepts are buried at depth, in our collective consciousness. The nation needs a deep colonic irrigation to remove these embedded toxins.

Part of that process of 'clean out' will require a radical change in our system of banking and financial oversight. Soon a comment on that.

But what about these bonuses? If we really need AIG, we may actually require the services of these people, as incompetent and unrepentant as they may appear. Can we start abrogating contracts for revenge purposes? This is certainly not a good precedent to set, though it might feel good to those who are suffering on Main Street as they are forced to foot the bill for a week at the St Regis.

What can we do from where we are now? How do we change the broken system? Somehow. we must avoid the situation that will only compound our troubles…that is, government "bailouts" to companies and executives which permit the conspirators and guilty to continue at their jobs, remain affluent even after they have effectively robbed us. Without change they will only do it again and again. That is not a good precedent to set either.

Perhaps the Obama Administration has been too tentative in regard to its promise of change. Rather than simply giving away money, time and time again, would it not have been wiser to take over AIG, once its apparent losses exceeded it assets. It is, in fact, a government agency at present. Only the need to support the fiction of its independence is supported to assuage the feelings of some elements in the nation who see "nationalization" as a red flag and some terrible evil. That reservation is preventing us from facing up to reality, and doing the right thing.

It’s time for the government to begin planning for a better, less vulnerable economic system, with more controls and less incentives for some to take inordinate risks and expect a "I win, you loose," result.

In that regard, I present here a remarkable recent article entitled: "Looting the American Coffers," NY Times (March 9, 2009) http://www.nytimes.com/2009/03/11/business/economy/11leonhardt.html?em. In it David Leonhardt reviews a prescient paper entitled "Looting", written in 1993 by Professors Akerlof and Romer (Akerlof later received the Nobel Prize in economics).

Written sixteen years ago, "Looting" documents the case of certain real estate investors in Texas in who "took advantage of the government" by borrowing huge amounts of money on risky investments they made huge profits with no regard to the predictable losses which, when their enterprise failed left the government to pay the tab. Does this sound familiar?

"They displayed a ‘total disregard for even the most basic principles of lending, failing to verify standard information about their borrowers or, in some cases, even to ask for that information.’ The investors ‘acted as if future losses were somebody else’s problem," the economists wrote. They were right." (See Leonhardt, 3-09-2009).

To a large extent the economic disaster we are experiencing today is the result of "investor looting". These "investors' have already walked away with their ill-gotten gains. Leaving us to hold the bag.

"But the future also requires the kind of overhaul that Mr. Bernanke has begun to sketch out. Firms will have to be monitored much more seriously than they were during the Greenspan era. They can’t be allowed to shop around for the regulatory agency that least understands what they’re doing. The biggest Wall Street paydays should be held in escrow until it’s clear they weren’t based on fictional profits.

Above all, as Mr. Romer says, the federal government needs the power and the will to take over a firm as soon as its potential losses exceed its assets. Anything short of that is an invitation to loot. " (See Leonhardt, 3-09-2009).

And why not?

JOE STIGLITZ SPEAKS--WE SHOULD ALL LISTEN

Dr. Joseph E. Stiglitz, Nobel Prize winning economist (2001) and Columbia University Professor (University Professor) and author (most recently: "The Three Trillion Dollar War) speakes hear about the Obama plan for the economy. I hope President Obama reads this. Professor Stiglitz again has it right. http://www.thenation.com/doc/20090323/stiglitz