Undernews for 27 January 2009

UNDERNEWS
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27 January 2009

WORD
The word 'security' is a broad, vague generality whose contours should not be invoked to abrogate the fundamental law... The guarding of military and diplomatic secrets at the expense of informed representative government provides no real security for our republic. --- Justice Hugo Black
OBAMA'S VIETNAM IN THE 'GRAVEYARD OF EMPIRES'
Alex Thurston, The Seminal - The planned escalation in Afghanistan rests on the premise that we can use extra soldiers to bring about political stability. That requires that Afghanistan has a stable and legitimate government. And presumably that government needs an executive.

So what to do about President Hamid Karzai? If we keep him in the interest of political stability, it seems he will criticize the escalation and other military activities out of his own political interest. But if we remove Karzai or allow him to fail, we run the risk of destabilizing Afghan politics further - or merely finding ourselves confronting these same problems again with someone else.

Either way, one cost of escalation seems to be disrupting whatever political stability exists now - and if political stability is the goal of escalation, then we're being asked to make a big leap of faith that everything will magically gel at the right moment.

Here's Karzai denouncing the latest air strikes in his country:

"Mr Karzai said most of those killed were civilians, adding that such deadly incidents strengthened Taleban rebels and weakened Afghanistan's government. Women and children were among those killed, Mr Karzai said. . .

"'Our goal is to improve our army and have the ability to defend our country ourselves as soon as possible, and not have civilian casualties anymore as we again had yesterday,' he said.

That sounds a lot like "stop killing our people and get out." And that's not a popular message no matter who's in Washington.

The British press is speculating that Obama may "cut Karzai adrift."

"International support for Mr Karzai, who was once the darling of the West, has waned spectacularly, amid worsening violence, endemic corruption and weak leadership. But until very recently, diplomats insisted there were no viable alternatives even as fighting has intensified and the Taliban insurgency in the south has grown. But four key figures believed to be challenging Mr Karzai have arrived in Washington for meetings with Obama administration officials this week. There is now talk of a 'dream ticket' that would see the main challengers run together to unite the country's various ethnic groups and wrest control away from Mr Karzai.

"'The Americans aren't going to determine the outcome of the election, but they could suggest to people they put their differences aside and form a dream ticket.' said a senior US analyst in Kabul.

A dream ticket? Sounds like one of those 'Best and Brightest' ideas someone hatched at a think tank in DC. What's to say the new team wouldn't run into the same problems? Does Karzai work with warlords and drug dealers because he is personally depraved, or would any Afghan politician who didn't want to work with the Taliban be forced into similar alliances? Can any Afghan elites build a national base of support, especially ones who frequently leave the country and have little contact with ordinary Afghans?

Sure, cut Karzai loose. But don't be surprised when we hit the same snags in a year or two, or sooner. It's built into the nature of the occupation, because we can't manufacture political support for our presence when very little such support exists.

Reader Chris Collins writes, "'Karzai' is Pashtu for 'Diem.' As you noted, this looks increasingly like a bad rerun of Vietnam - but on two fronts." Although there are lots of differences between Diem and Karzai, the former's end is a reminder of what could be afoot in Afghanistan:

Wikipedia - On November 1, 1963, with only the palace guard remaining to defend President Diem and his younger brother, Ngo Dinh Nhu, the generals called the palace offering Diem safe exile out of the country if he surrendered. However, that evening, Diem and his entourage escaped via an underground passage to Cholon, where they were captured the following morning, November 2. The brothers were executed in the back of an armored personnel carrier by Captain Nguyen Van Nhung while en route to the Vietnamese Joint General Staff headquarters. Diem was buried in an unmarked grave in a cemetery next to the house of the US ambassador.

Upon learning of Diem's ouster and death, Ho Chi Minh is reported to have said, "I can scarcely believe the Americans would be so stupid." The North Vietnamese Politburo was more explicit, predicting: "The consequences of the 1 November coup d'état will be contrary to the calculations of the U.S. imperialists . . . Diem was one of the strongest individuals resisting the people and Communism. Everything that could be done in an attempt to crush the revolution was carried out by Diem. Diem was one of the most competent lackeys of the U.S. imperialists . . . Among the anti-Communists in South Vietnam or exiled in other countries, no one has sufficient political assets and abilities to cause others to obey. Therefore, the lackey administration cannot be stabilized."

After Diem's assassination, South Vietnam was unable to establish a stable government and numerous coups took place during the first several years after his death. While the U.S. continued to influence South Vietnam's government, the assassination bolstered North Vietnamese attempts to characterize the South Vietnamese as supporters of colonialism.

Justin Raimondo, Anti-War - The appointment of George Mitchell, whose success at helping settle the Irish imbroglio suggests some skill at managing impossible situations, has evoked hope in those who pine for a more open-mined - and evenhanded - approach to the problem of Palestine. It is a hope I share.

Yet I'm not optimistic, for two very good reasons: Dennis Ross, whose appointment as plenipotentiary for Middle Eastern affairs seems to undercut what is likely to be the Mitchell approach, and Richard Holbrooke, whose dual domain of Afghanistan and Pakistan will be the focus of U.S. military action in the coming years. Specifically, more than 14 years - at least, that's what Holbrooke told us in a pre-election piece in Foreign Affairs magazine:

"The situation in Afghanistan is far from hopeless. But as the war enters its eighth year, Americans should be told the truth: it will last a long time - longer than the United States' longest war to date, the 14-year conflict (1961-75) in Vietnam."

Which raises the question: why weren't we told the truth in the first place? Correct me if I'm wrong, but I don't recall Obama ever "promising" to keep fighting in Afghanistan for over 14 years - do you?

It's true he emphasized the "neglect" of the Afghan front, which has supposedly suffered on account of the Bushian obsession with Iraq - but a war longer than the Vietnam conflict? No one ever voted for Obama in gleeful anticipation of such a prospect, yet, if Holbrooke is right, that is going to be the signature issue that defines his presidency.

Obama plans on doubling U.S. forces in Afghanistan, bringing the total up to some 70,000 - and with more, you can be sure, on the way. We are told that Obama's magical diplomatic skills will compel the Europeans to do their part, with NATO taking the lead. Yet Afghanistan is not the former Yugoslavia, and if Holbrooke thinks he can impose a new Dayton on the rebel Afghans and the increasingly resentful Pakistanis, he is apt to run up against the same brick wall that has stymied would-be conquerors for 2,000 years, including the Soviets, the British, and Genghis Khan's Golden Horde. The Europeans know this, and they won't be too eager to jump into the fray.

A Vietnam-style counterinsurgency conflict spreading across the Afghan-Pakistan border and reaching into the wilds of Central Asia would dwarf the present quagmire in Iraq by several degrees of magnitude. Yet Obama was and still is touted as a peacemaker and an agent of "change."

Joshua Frank, Anti-War - In the wee morning hours on Friday, Jan. 23, a U.S. spy plane killed at least 15 in Pakistan near the Afghanistan border. It was Barack Obama's first blood and the U.S.' first violation of Pakistan's sovereignty under the new administration. The attack was an early sign that the newly minted president may not be overhauling the War on Terror this week, or even next.

As the U.S. government fired upon alleged terrorists in the rugged outback of Pakistan, Obama was back in Washington appointing Richard Holbrooke as a special U.S. representative to Pakistan and Afghanistan. Unfortunately, like the remote-control bombing that claimed human life, Obama's vision for the region, in the embodiment of Holbrooke, may not be a drastic departure from the failed Bush doctrine. . .

Despite Obama's insistence that Holbrooke is qualified to lead new efforts in the War on Terror, history seems to disagree.

In 1975, during Gerald Ford's administration, Indonesia invaded East Timor and slaughtered 200,000 indigenous Timorese. The Indonesian invasion of East Timor set the stage for a long and bloody occupation that recently ended after an international peacekeeping force was introduced in 1999. . .

During his testimony before Congress in February 1978, Professor Benedict Anderson cited a report that proved there was never a U.S. arms ban, and that during the period of the alleged ban the U.S. initiated new offers of military weaponry to the Indonesians:

"If we are curious as to why the Indonesians never felt the force of the U.S. government's 'anguish,' the answer is quite simple. In flat contradiction to express statements by Gen. Fish, Mr. Oakley, and Assistant Secretary of State for East Asian and Pacific Affairs Richard Holbrooke, at least four separate offers of military equipment were made to the Indonesian government during the January-June 1976 'administrative suspension.' This equipment consisted mainly of supplies and parts for OV-10 Broncos, Vietnam War-era planes designed for counterinsurgency operations against adversaries without effective anti-aircraft weapons, and wholly useless for defending Indonesia from a foreign enemy. The policy of supplying the Indonesian regime with Broncos, as well as other counterinsurgency-related equipment, has continued without substantial change from the Ford through the present Carter administrations."

The disturbing symbiosis between Holbrooke and figures like uberhawk Paul Wolfowitz is startling.

"In an unguarded moment just before the 2000 election, Richard Holbrooke opened a foreign policy speech with a fawning tribute to his host, Paul Wolfowitz, who was then the dean of the Johns Hopkins School of Advanced International Studies in Washington," reported Tim Shorrock following the terrorist attacks in 2001.

Shorrock continued: "Holbrooke, a senior adviser to Al Gore, was acutely aware that either he or Wolfowitz would be playing important roles in the next administration. Looking perhaps to assure the world of the continuity of U.S. foreign policy, he told his audience that Wolfowitz's 'recent activities illustrate something that's very important about American foreign policy in an election year, and that is the degree to which there are still common themes between the parties.' The example he chose to illustrate his point was East Timor, which was invaded and occupied in 1975 by Indonesia with U.S. weapons – a security policy backed and partly shaped by Holbrooke and Wolfowitz. 'Paul and I,' he said, 'have been in frequent touch to make sure that we keep [East Timor] out of the presidential campaign, where it would do no good to American or Indonesian interests.'"

In sum, Holbrooke has worked vigorously to keep his bloody campaign silent, and it appears to have paid off. In chilling words, Holbrooke described the motivations behind his support of Indonesia's genocidal actions:

"The situation in East Timor is one of the number of very important concerns of the United States in Indonesia. Indonesia, with a population of 150 million people, is the fifth largest nation in the world, is a moderate member of the Non-Aligned Movement, is an important oil producer – which plays a moderate role within OPEC – and occupies a strategic position astride the sea lanes between the Pacific and Indian Oceans. . . We highly value our cooperative relationship with Indonesia."

If his bloody history in East Timor is anything, it's a sign that Richard Holbrooke is not qualified to lead the U.S. in a new direction in today's Middle East. . .

Helene Cooper, NY Times - Can President Obama succeed in that long-lamented "graveyard of empires" - a place that has crushed foreign occupiers for more than 2,000 years?. . .

Even as Mr. Obama's military planners prepare for the first wave of the new Afghanistan "surge," there is growing debate, including among those who agree with the plan to send more troops, about whether - or how - the troops can accomplish their mission, and just what the mission is.

Afghanistan has, after all, stymied would-be conquerors since Alexander the Great. It's always the same story; the invaders - British, Soviets - control the cities, but not the countryside. And eventually, the invaders don't even control the cities, and are sent packing.

Think Iraq was hard? Afghanistan, former Secretary of State Colin Powell argues, will be "much, much harder."

"Iraq had a middle class," Mr. Powell pointed out on MSNBC's "Morning Joe" a couple of hours before Mr. Obama was sworn in last Tuesday. "It was a fairly advanced country before Saddam Hussein drove it in the ground." Afghanistan, on the other hand, "is still basically a tribal society, a lot of corruption; drugs are going to destroy that country if something isn't done about it.". .

One question for Mr. Obama is whether 30,000 more troops are enough. "I think that this is more of a psychological surge than a practical surge," said Karin von Hippel, an Afghanistan expert at the Center for Strategic and International Studies. She said she favored the troop increase, but only as a precursor to getting the Europeans to contribute more, and to changing America's policy so it focuses more on the countryside, as opposed to the capital.

"In Afghanistan, the number of troops, if you combine NATO, American and Afghan troops, is 200,000 forces versus 600,000 in Iraq," Ms. von Hippel said. "Those numbers are so low that an extra 30,000 isn't going to get you to where you need to be. It's more of a stop-gap measure.". .
OBAMA EXEMPTS MAJOR DEFENSE LOBBYIST FROM HIS OWN ETHICS RULES
Project on Government Oversight - We applaud President Obama's commitment to improving transparency and ethics throughout the federal government, and we are quite pleased that he wasted no time in issuing Executive Orders on the revolving door, the Freedom Of Information Act, and other issues near and dear to us.

So it comes as an unpleasant surprise to learn that the President already wants to make an exception for William J. Lynn III, his nominee for Deputy Secretary of Defense. One of the President's Executive Orders requires his appointees to recuse themselves from working on issues on which they have lobbied in the past two years. But as recently as 2008, Lynn was listed as part of a lobbying team for Raytheon, working on issues such as the DOD appropriations bill, acquisition policy, missile defense, and more.

The Obama administration has asked for a waiver, since Lynn cannot possibly recuse himself from these issues and still be effective at his job. But allowing a top defense industry lobbyist like Lynn to work on these issues as Deputy Secretary of Defense presents a clear conflict of interest, and it undermines the spirit of reform embodied in the Executive Orders.

Boston Globe - A former Raytheon Co. lobbyist nominated to be deputy defense secretary has agreed to sell his stock in the military contractor and similar holdings, but won't be forced to step back from decisions related to his former employer, the Pentagon said.

Instead, William J. Lynn III's dealings at the Defense Department would be subject to ethics reviews for one year, Pentagon spokesman Geoff Morrell said. Lynn was a registered lobbyist until last July and is now the Waltham-based defense contractor's vice president for government operations and strategy.

Senator Carl Levin of Michigan, the Democratic chairman of the Armed Services Committee, said Thursday that he would delay considering Lynn's nomination until the White House provides more information on why he was given a waiver from Obama's new ethics rules.

The action seemed to satisfy Levin, who said he would support the nomination. . .
HOW ARNE DUNCAN THINKS ABOUT CHILDREN
I am not a manager of 600 schools. I'm a portfolio manager of 600 schools and I'm trying to improve the portfolio. - Arne Duncan, the new education secretary speaking of the Chicago schools he ran.
CAN HUMPTY DUMPTY BE FIXED?
Ellen Brown, Global Research - All the king's men cannot put the private banking system together again, for the simple reason that it is a Ponzi scheme that has reached its mathematical limits. A Ponzi scheme is a form of pyramid scheme in which new investors must continually be sucked in at the bottom to support the investors at the top. In this case, new borrowers must continually be sucked in to support the creditors at the top. The Wall Street Ponzi scheme is built on "fractional reserve" lending, which allows banks to create "credit" (or "debt") with accounting entries. Banks are now allowed to lend from 10 to 30 times their "reserves," essentially counterfeiting the money they lend. Over 97 percent of the U.S. money supply has been created by banks in this way. The problem is that banks create only the principal and not the interest necessary to pay back their loans. Since bank lending is essentially the only source of new money in the system, someone somewhere must continually be taking out new loans just to create enough "money" (or "credit") to service the old loans composing the money supply. This spiraling interest problem and the need to find new debtors has gone on for over 300 years -- ever since the founding of the Bank of England in 1694 - until the whole world has now become mired in debt to the bankers' private money monopoly. As British financial analyst Chris Cook observes:

"Exponential economic growth required by the mathematics of compound interest on a money supply based on money as debt must always run up eventually against the finite nature of Earth's resources."

The parasite has finally run out of its food source. But the crisis is not in the economy itself, which is fundamentally sound - or would be with a proper credit system to oil the wheels of production. The crisis is in the banking system, which can no longer cover up the shell game it has played for three centuries with other people's money. Fortunately, we don't need the credit of private banks. A sovereign government can create its own.

Today's credit crisis is very similar to that facing Franklin Roosevelt in the 1930s. In 1932, President Hoover set up the Reconstruction Finance Corporation as a federally-owned bank that would bail out commercial banks by extending loans to them, much as the privately-owned Federal Reserve is doing today. But like today, Hoover's plan failed. The banks did not need more loans; they were already drowning in debt. They needed customers with money to spend and to invest. President Roosevelt used Hoover's new government-owned lending facility to extend loans where they were needed most - for housing, agriculture and industry. Many new federal agencies were set up and funded by the RFC, including the HOLC (Home Owners Loan Corporation) and Fannie Mae (the Federal National Mortgage Association, which was then a government-owned agency). In the 1940s, the RFC went into overdrive funding the infrastructure necessary for the U.S. to participate in World War II, setting the country up with the infrastructure it needed to become the world's industrial leader after the war.

The RFC was a government-owned bank that sidestepped the privately-owned Federal Reserve; but unlike the private banks with which it was competing, the RFC had to have the money in hand before lending it. The RFC was funded by issuing government bonds (IOU.s or debt) and relending the proceeds. The result was to put the taxpayers further into debt. This problem could be avoided, however, by updating the RFC model. A system of public banks might be set up that had the power to create credit themselves, just as private banks do now. A public bank operating on the private bank model could fan $700 billion in capital reserves into $7 trillion in public credit that was derivative-free, liability-free, and readily available to fund all those things we think we don't have the money for now, including the loans necessary to meet payrolls, fund mortgages, and underwrite public infrastructure. . .

This was the sort of banking scheme used in Benjamin Franklin's colony of Pennsylvania, where it worked brilliantly well. The spiraling-interest problem was avoided by printing some extra money and spending it into the economy for public purposes. During the decades the provincial bank operated, the Pennsylvania colonists paid no taxes, there was no government debt, and inflation did not result.

Like the Pennsylvania bank, a modern-day federal banking system would not actually need "reserves" at all. It is the sovereign right of a government to issue the currency of the realm. What backs our money today is simply "the full faith and credit of the United States," something the United States should be able to issue directly without having to draw on "reserves" of its own credit. But if Congress is not prepared to go that far, a more efficient use of the earmarked $700 billion than bailing out failing banks would be to designate the funds as the "reserves" for a newly-reconstituted RFC.
ISRAEL & PALESTINE
CBS - Mr. Obama wants to shore up the ceasefire in Gaza, but a lasting peace really depends on the West Bank where Palestinians had hoped to create their state. The problem is, even before Israel invaded Gaza, a growing number of Israelis and Palestinians had concluded that peace between them was no longer possible, that history had passed it by. For peace to have a chance, Israel would have to withdraw from the West Bank, which would then become the Palestinian state. . .

Though settlers and Palestinians don't agree on anything, most do agree now that a peace deal has been overtaken by events.

"While my heart still wants to believe that the two-state solution is possible, my brain keeps telling me the opposite because of what I see in terms of the building of settlements. So, these settlers are destroying the potential peace for both people that would have been created if we had a two-state solution," Dr. Mustafa Barghouti, once a former candidate for Palestinian president, told 60 Minutes' Bob Simon

And he told 60 Minutes Israel's invasion of Gaza - all the death and destruction - convinces him that Israel does not want a two-state solution. "My heart is deeply broken, and I am very worried that what Israel has done has furthered us much further from the possibility of [a] two-state solution.". . .

Demographers predict that within ten years Arabs will outnumber Jews in Israel, the West Bank and Gaza. Without a separate Palestinian state the Israelis would have three options, none of them good. They could try ethnic cleansing, drive the Palestinians out of the West Bank, or they could give the Palestinians the vote. That would be the democratic option but it would mean the end of the Jewish state. Or they could try apartheid - have the minority Israelis rule the majority Palestinians, but apartheid regimes don't have a very long life.

"Unfortunately, and I have to say to you that apartheid is already in place," Dr. Barghouti argued. . .

Moderate Israelis who deplore the occupation used to believe passionately in a two-state solution. That is no longer the case.

Meron Benvenisti used to be deputy mayor of Jerusalem. He told Simon the prospects of the two-state solution becoming a reality are "nil."

"The geopolitical condition that's been created in '67 is irreversible. Cannot be changed. You cannot unscramble that egg," he explained.

Asked if this means the settlers have won, Benvenisti told Simon, "Yes."

"And the settlers will remain forever and ever?" Simon asked.

"I don't know forever and ever, but they will remain and will flourish," Benvenisti said. . .

But one very important Israeli says she intends to move them out. She's Foreign Minister Tzipi Livni, a candidate to become prime minister in elections next month. She's also Israel's chief negotiator with the Palestinians, and she told 60 Minutes peace is unthinkable with the settlers where they are.

"Can you really imagine evacuating the tens of thousands of settlers who say they will not leave?" Simon asked.

"It's not going to be easy. But this is the only solution," she replied.

"But you know that there are settlers who say, 'We will fight. We will not leave. We will fight,'" Simon asked.

"So this is the responsibility of the government and police to stop them. As simple as that. Israel is a state of law and order," Livni said.
OBAMA PRAISES AMERICA'S FIRST FISCAL CON MAN
Although he's losing ground to Governor Blogo in the race for the most self-serving historical references, Obama has already compared himself to Lincoln, Reagan and Roosevelt, a good trick for those other than schizoids. Now, however he may have gone to far. In a recent speech, he praised America's first great fiscal con man:

"With all history that's passed through the narrow canyons of Lower Manhattan, it's worth taking a moment to reflect on the role that the market has played in the development of the American story. The great task before our founders was putting into practice the ideal that government could simultaneously serve liberty and advance the common good. For Alexander Hamilton, the young secretary of the treasury, that task was bound to the vigor of the American economy. Hamilton had a strong belief in the power of the market, but he balanced that belief with a conviction that human enterprise, and I quote, "may be beneficially stimulated by prudent aids and encouragements on the part of the government." Government, he believed, had an important role to play in advancing our common prosperity. So he nationalized the state Revolutionary War debts, weaving together the economies of the states and creating an American system of credit and capital markets. And he encouraged manufacturing and infrastructure, so products could be moved to market."

In fact, Alexander Hamilton deserves no small credit for the mess we find ourselves in today, as the Review has suggested from time to time.

Stephen Zarlenga, American Monetary Institute - The Constitution left the money power up for grabs. Alexander Hamilton wasted no time in grabbing.

The Constitution went into effect in late 1789. Hamilton's first move as Secretary of the Treasury, was to assume $15 million of the state debts. . an extremely unpopular act. Why?

The worthless debt was held by the revolutionary soldiers, farmers, manufacturers and merchants who furnished its supplies. As Congress secretly passed the bill behind closed doors, the country was overrun by speculators, buying up the certificates for pennies on the dollar.

Next Hamilton and associates, having kept the monetary power out of government, moved to assume it themselves. . .

Hamilton's Federalists quickly put through legislation chartering the First Bank of The United States, as a privately owned central bank on the Bank of England model. The Bank would be issuing paper notes not really backed by metal, but pretending to be redeemable in coinage, on the one condition that not a lot of people asked for redemption. They never had enough coinage.

Thus the real question was whether it would be private banks or the government that would issue paper money. Will the immense power and profit of issuing currency go to the benefit of the whole nation, or to the private bankers? That's always been the real monetary question in America.

Gold and silver served as a smoke-screen. What the bankers counted on were the legal considerations of the money. They knew that all that was needed to give their paper notes value, was for the government to accept them in payment for taxes. That, and not issuing too excessive a quantity. Under those conditions, the paper notes they printed out of thin air, would be a claim on any wealth existing in the society.

Just where did the money for first bank of the U.S. came from? . . . The $10 million subscription for the banks' shares, was oversubscribed within two hours. Only one tenth of it was ever paid in gold. The rest was accepted in the form of bonds - the government bonds that Hamilton had turned from pennies on the dollar to full value. The money for the private bank actually came from the American people.

Thanks to Jefferson's efforts, the bank was liquidated in 1811. Three quarters of it was found to be owned by English and Dutch.

Bob Blain, Progressive Review - The federal government has been adding interest to its debt for 204 years. James Jackson, Congressman from Georgia, predicted that this would happen in a speech he made to the First Congress on February 9, 1790. Jackson warned that passing Alexander Hamilton's plan to base the country's money supply on the existing federal debt of $75 million would "settle upon our posterity a burden which they can neither bear nor relieve themselves from." He predicted: "In the course of a single century it would be multiplied to an extent we dare not think of," He clearly saw that Hamilton's plan would put in place an exponential process of debt growth. To support his warning he cited the experience of Florence, Genoa, Venice, Spain, France, and England.

Hamilton's plan was for Congress to commit the country to pay interest on the debt until the debt was paid. In the meantime the debt certificates would circulate as money. He argued that this would turn a $75 million debt into a $75 million money supply. The problem was that interest payments would have come out of the money supply. This would reduce the quantity of money that remained in circulation -- and cause recession -- until new loans returned the interest money back into circulation. The history of federal government finance shows such periodic swings between debt reduction and recession to debt increase and recovery.

The power to deal with this problem that Congress has neglected all these years is the power "to coin money and regulate the value thereof." It has overused its power "to borrow money on the credit of the United States." According to the Federal Reserve, 98 percent of the U.S. money supply is borrowed. Only 2 percent is coined.

The First Congress set the wrong precedent. It should have created $75 million in money and paid off the debt. With a population of 4 million people and an economy starved for a medium of exchange, that would have increased the money supply by $18.75 per person.

Why did the First Congress borrow instead of coin money? Newspapers at the time accused members of Congress of acting to serve their own interests. They sent agents into the countryside to buy up debt certificates that the general public thought were worthless. They then passed the Funding Act knowing that it would give themselves and their heirs a source of income that would grow exponentially with the debt. For every debtor there is a creditor. What is a $4 trillion debt for debtors is $4 trillion in claims for creditors.

Abraham Lincoln - The privilege of creating and issuing money is not only the supreme prerogative of government, but is the government's greatest creative opportunity. By the adoption of these principles, the taxpayers will be saved immense sums of interest.
OBAMA STRIKES BLOW FOR FUEL EFFICIENCY
This is not only good for the environment; it's a rare example of a contemporary president observing the 10th Amendment's grant of powers to states.

LA Times - President Obama moved on two fronts Monday to force automakers to produce more fuel-efficient vehicles, including a major step in permitting California and other states to regulate greenhouse gas emissions. Lawmakers and environmentalists said the president's actions paved the way to development of a national carbon standard for automobiles.

Such a standard already is in force in Europe and Japan. Crafting a national rule would please environmentalists, but surprisingly could also satisfy the automobile industry, which has argued that trying to comply with a California greenhouse gas rule in addition to a federal mileage standard would be cumbersome and costly.

Allowing California and 13 other states to enforce the tailpipe rules could amount to a live test run for a federal greenhouse gas regulation. .

Obama also instructed the Department of Transportation to implement new federal fuel economy standards and touted some $90 billion in clean-energy spending in the massive stimulus bill pending in Congress, including an apparent tenfold increase in federal assistance for the development of super-efficient automobiles.
ISRAEL'S DETACHMENT FROM REALITY
Patrick Cockburn, Independent, UK - I was watching the superb animated documentary Waltz with Bashir about the Israeli invasion of Lebanon in 1982. It culminates in the massacre of some 1,700 Palestinians in the Sabra and Chatila refugee camps in south Beirut by Christian militiamen introduced there by the Israeli army which observed the butchery from close range.

In the last few minutes the film switches from animation to graphic news footage showing Palestinian women screaming with grief and horror as they discover the bullet-riddled bodies of their families. Then, just behind the women, I saw myself walking with a small group of journalists who had arrived in the camp soon after the killings had stopped.

The film is about how the director, Ari Folman, who knew he was at Sabra and Chatila as an Israeli soldier, tried to discover both why he had repressed all memory of what happened to him and the degree of Israeli complicity in the massacre.

Walking out of the cinema, I realized that I had largely repressed my own memories of that ghastly day. I could not even find a clipping in old scrapbooks of the article I had written about what I had seen for the Financial Times for whom I then worked. . .

Soon after seeing Waltz with Bashir I saw TV pictures of the broken bodies of the Palestinians killed by Israeli bombs and shells in Gaza during the 22-day bombardment. At first I thought that little had changed since Sabra and Chatila. . .

But on returning to Jerusalem 10 years after I was stationed here as The Independent's correspondent between 1995 and 1999 I find that Israel has changed significantly for the worse. There is far less dissent than there used to be and such dissent is more often treated as disloyalty.

Israeli society was always introverted but these days it reminds me more than ever of the Unionists in Northern Ireland in the late 1960s or the Lebanese Christians in the 1970s. Like Israel, both were communities with a highly developed siege mentality which led them always to see themselves as victims even when they were killing other people. . .

Intolerance of dissent has grown and may soon get a great deal worse. Benjamin Netanyahu, who helped bury the Oslo accords with the Palestinians when he was last prime minister from 1996 to 1999, is likely to win the Israeli election on 10 February. The only issue still in doubt is the extent of the gains of the extreme right.

The views of these were on display this week as Avigdor Lieberman, the chairman of the Ysrael Beitenu party, which, according to the polls will do particularly well in the election, was supporting the disqualification of two Israeli Arab parties from standing in the election. "For the first time we are examining the boundary between loyalty and disloyalty," he threatened their representatives. "We'll deal with you like we dealt with Hamas."
PUBLIC DIVIDED ON AFGHANISTAN
Open Left - A new poll on Afghanistan is out, the first one to ever ask a direct, three-way question on American troop levels in the country:

"Thinking now about Afghanistan, do you think the number of U.S. military forces in Afghanistan should be increased, decreased, or kept about the same?" Increased: 34% Decreased: 29% About the same: 32% Unsure: 5%. It seems to show that public opinion on the matter is pretty soft and generally undecided. Really, the country is almost evenly divided three ways.

This is pretty remarkable, given that both President Obama and Senator John McCain supported Afghanistan escalation during the 2008 Presidential campaign. For that matter, there is no prominent public campaign in favor of Afghanistan withdrawal. As was the case for withdrawal from Iraq in 2003, 2004 and most of 2005, neither the Democratic and Republican leadership supported the idea. And yet, despite no one making the case for withdrawal, the American public already favored it by huge margins in the summer of 2005.

In this environment, it doesn't take Nostradamus to realize that it is only a matter of time before public opinion turns against a large American military presence in Afghanistan. If 34% support for troop escalation in Afghanistan is all that can be mustered despite everyone pushing for it, what starts happening once people actually make the case for withdrawal? For that matter, what starts happening to public opinion on Afghanistan once we begin withdrawing from Iraq? . . .

Public opinion will turn against a large American military presence in Afghanistan. This is not a question of "if," but of "when." It is essential that President Obama stays ahead of this trend.
ICELAND MAY BECOME LEFT GREEN LAND
Guardian, UK - The global economic crisis claimed its first leader, as Iceland's prime minister announced the immediate resignation of his government following the collapse of the country's currency and banking system. Geir Haarde said as recently as Friday that his coalition would remain in office until early elections, called for 9 May, after violent protests at its handling of Iceland's tottering economy. Yesterday he threw in the towel, saying that his Independence party and its Social Democratic Alliance partners were quitting immediately as he could not accept a demand by the Alliance to take over the premiership. . . "A new government should be formed by the end of the week," Baldur Thorhallsson, a political science professor from the University of Iceland, said. "It seems most likely that we will have a minority government of the Alliance party and the left-greens." Steingrimur Sigfusson, leader of the left-greens, offered a national government in October, when the collapse became apparent, which the government rejected. Sigfusson said that he is now considering all possibilities.
EGYPT HELPING ISRAEL & HAMAS NEGOTIATE
Richard Silverstein, Tikun Olam - Haaretz brings news that Israel and Hamas are in the midst of serious negotiations under Egyptian auspices over a long-term truce. According to the report, Israel has proposed up to a 10 year truce while Hamas has countered with a one-year offer. As part of its offer, Israel would be willing to lift its 18-month blockade of Gaza:

"Egypt is also demanding a truce of a number of years' duration. But Taha, Hamas' spokesman in the Gaza Strip, said the group would agree to a cease-fire of no more than between one year and 18 months. Another Hamas spokesman, Ismail Radwan, said a long-term cease-fire 'kills' the right to resistance by the Palestinians."

Part of the negotiation involves how to monitor the borders in a way that is acceptable to both Israel and Hamas. The presence of Israeli or Fatah monitors at the crossings is a sensitive one for Hamas as Israel in the past has used its presence to force the closing of the border for reasons that were less than transparent. . .

If true (and its important to note that hopeful reports like this often turn out to be empty ones), this is a most welcome development as it provides hope of a more stable relationship between Hamas and Israel. This also indicates that Israel is negotiating with Hamas (albeit indirectly), something which Israel and the U.S. have taken great pains to claim they would never do.

Nowhere in this report is there any mention of Hamas recognizing Israel, which was another one of the supposedly "non-negotiable" principles that Israel and the U.S. demanded before it would negotiate with or recognize Hamas. One might even see the Israeli proposal for an unlimited or even 10 year truce as creeping toward Hamas' own position, which publicly offered a long term hudna to Israel, a proposal that has been on the table for some time and rejected previously by Israel.

If the story is correct, it also proves that Israel's vaunted claim that it invaded in order to silence Hamas rockets was for naught. Just as the Jewish peace camp has claimed all along, the only thing that will silence the rockets is negotiations-each side compromising and giving up on something it considers important in order to get from the other side something it considers even more important. . .

All this will give George Mitchell something substantive to talk about with Olmert, Barak and Livni when he arrives on Wednesday.
UPDATE
Anti War - The Egyptian government is reportedly pressing Hamas to hurry up and agree to a ceasefire with Israel's outgoing Kadima-led government before next month's elections. Several terms are yet to be agreed upon by both sides, but they have maintained a ceasefire for over a week and negotiations continue.

But if Hamas pushes the negotiations past the election, officials caution, the likely victory of a coalition led by the right-wing Likud Party, which condemned the notion of ending the war in the first place, could derail negotiations. Hamas appears to have won some key concessions from the current Israeli government, including a promise to open the long-closed border crossings, critically important as the war torn nation struggles in vain to repair the damage from the invasion. The two sides continue to differ on the length of the ceasefire and other terms.
HELP THE EDITOR
One thing I can't get straight in my mind is how do you rebuild an economy that was so heavily based on speculation, hypotheses, options, futures, non-existent assets, hedge funds and Ponzi schemes?

What exactly are you rebuilding? For the economy to flourish do we have to recreate all the aforementioned with a new generation of hustlers, high rollers and suckers?

In other words, if much of the money was never there, how do you ever find it again? - Sam
GALLERY

GALLERY: SWALLOWED BY THE JUNGLE
FOXES IN THE CHICKEN COOP: CASS SUNSTEIN
Center for Progressive Reform - Barack Obama [has] selected Harvard Law Professor Cass Sunstein to direct the White House Office of Management and Budget's Office of Information and Regulatory Affairs. The job is perhaps better known by its informal title: "regulatory czar," so named because the holder is charged with signing off on all major proposed regulations. In the recent past, the OIRA has been a place where regulations to protect health, safety and the environment go to die, or at the very least be weakened.

In a report, a group of CPR member scholars expressed serious concern about Professor Sunstein's support for the very methods used to weaken and defeat badly needed regulations. Among the concerns:

- Sunstein is a stout supporter of cost-benefit analysis as a primary tool for assessing regulations, despite its imprecision and the ease with which it is manipulated to achieve preferred policy outcomes;

- He supports such cost-benefit approaches as the widely condemned "senior discount" method for undervaluing the lives of seniors in cost-benefit analyses, an approach even the Bush Administration was forced to disown;

- He rejects the "precautionary principle" as a basis for regulating, thus ensuring that dangerous pollutants and products will be given the "benefit of the doubt," rather than well-grounded concerns about health and safety;

- He supports the centralization of authority over regulatory decisions in the White House - OIRA in particular, even though Congress delegated the exercise of expert judgment to the regulatory agencies, not to OIRA's staff economists in the White House.

- He has written that the Occupational Safety and Health Administration might be unconstitutional.

CPR President Rena Steinzor, one of seven co-authors of the report, warned that "Unless he turns over a new leaf, or unless President Obama keeps a careful eye on OIRA, we fear that Cass Sunstein's reliance on cost-benefit analysis will create a regulatory fiefdom in the White House that will deal with needed regulations in very much the same way that the Bush Administration did."

Progressive Review - Obama constitutional advisor Sunstein is also opposed prosecuting Bush officials for crimes and told the NY Times, "I would be stunned to find an anti-business [Supreme Court] appointee from either [Clinton or Obama]. There's not a strong interest on the part of Obama or Clinton in demonizing business, and you wouldn't expect to see that in their Supreme Court nominees."
UN CRIME WATCHDOG SAYS DRUG MONEY HELPED IN FISCAL CRISIS
On a number of occasions we have noted the probable importance of drug and other illegal monies in the fiscal crisis. This is the first corporate media story we have seen that even mentions the topic

International Herald Tribune - The United Nations' crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis. Vienna-based UNODC Executive Director Antonio Maria Costa said in an interview released by Austrian weekly Profil that drug money often became the only available capital when the crisis spiraled out of control last year.

"In many instances, drug money is currently the only liquid investment capital," Costa was quoted as saying by Profil. "In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor."

The United Nations Office on Drugs and Crime had found evidence that "interbank loans were funded by money that originated from drug trade and other illegal activities," Costa was quoted as saying. There were "signs that some banks were rescued in that way."

Profil said Costa declined to identify countries or banks which may have received drug money and gave no indication how much cash might be involved.
CITIZEN GROUPS TROUBLED BY OBAMA'S MEDICAL RECORD PLAN
Robert Pear, NY Times - President-elect Barack Obama's plan to link up doctors and hospitals with new information technology, as part of an ambitious job-creation program, is imperiled by a bitter, seemingly intractable dispute over how to protect the privacy of electronic medical records. . .

Lawmakers, caught in a crossfire of lobbying by the health care industry and consumer groups, have been unable to agree on privacy safeguards that would allow patients to control the use of their medical records.

Congressional leaders plan to provide $20 billion for such technology in an economic stimulus bill whose cost could top $825 billion. . .

So far, the only jobs created have been for a small army of lobbyists trying to secure money for health information technology. They say doctors, hospitals, drugstores and insurance companies would be much more efficient if they could exchange data instantaneously through electronic health information networks. Consumer groups and some members of Congress insist that the new spending must be accompanied by stronger privacy protections in an era when digital data can be sent around the world or posted on the Web with the click of a mouse.

Lawmakers leading the campaign for such safeguards include Representatives Edward J. Markey of Massachusetts and Pete Stark of California, both Democrats; Senator Patrick J. Leahy, Democrat of Vermont; and Senator Olympia J. Snowe, Republican of Maine.

Without strong safeguards, Mr. Markey said, the dream of electronic health information networks could turn into "a nightmare for consumers."

In the last few years, personal health information on hundreds of thousands of people has been compromised because of security lapses at hospitals, insurance companies and government agencies. These breaches occurred despite federal privacy rules issued under a 1996 law. Congress is trying to strengthen those privacy protections and make sure they apply to computer records. Lobbyists for insurers, drug benefit managers and others in the health industry are mobilizing a campaign to persuade Congress that overly stringent privacy protections would frustrate the potential benefits of digital records.

One of the proposed safeguards would outlaw the sale of any personal health information in an electronic medical record, except with the patient's permission.

Another would allow patients to impose additional controls on certain particularly sensitive information, like records of psychotherapy, abortions and tests for the virus that causes AIDS. Patients could demand that such information be segregated from the rest of their medical records.

Under other proposals being seriously considered in Congress, health care providers and insurers would have to use encryption technology to protect personal health information stored in or sent by computers. Patients would have a right to an accounting of any disclosures of their electronic data. Health care providers and insurers would have to notify patients whenever such information was lost, stolen or used for an unauthorized purpose. And patients - or state officials acting on their behalf - could recover damages from an entity that improperly used or disclosed personal health information. . .
THE SENATOR WHO WANTS TO KILL GOOD HEALTHCARE POLICY
Single Payer News - Montana Senator Max Baucus, Chairman of the Senate Finance Committee, has said that in writing his new healthcare legislation "everything is on the table" except single payer

After Baucus ruled single payer "off the table" in his search for an "American" solution to the healthcare crisis, Montana's newspapers have carried several articles calling for Senator Baucus to put single payer back on the table.

Writing in "The Great Falls Tribune" under the headline "Tell Sen. Baucus Single-payer Should Be On the Table," Gene Fenderson, who served for twenty-five years as a union trustee of a Taft-Hartley joint healthcare fund, wrote: "I maintain that a single-payer system must be on the table because it can help save our present and future economic well being as a state and nation." Fenderson criticized the Baucus plan directly saying: "Unfortunately, the Baucus plan simply adds even more layers of confusion to this hodgepodge, which is already driving costs up and up for all Americans. We can do better. We must do better. That is why a single-payer system must be on the table."

A second article, in the Helena Independent Record, reported on results of meetings held throughout Montana at the urging of President Obama's healthcare transition team. The meetings were to report to the transition team what ordinary citizens think about healthcare reform.

"The consensus of (our group) was that we did not see a lot of change coming unless we went to a single-payer, universal health system,'' said Deborah Hanson of Miles City, who organized a meeting of local citizens at the behest of Obama's transition team. "That was sort of a general consensus - knowing, of course, that may not happen.''

"The Miles City meeting, held Dec. 21 at Hanson's home, was one of several in Montana and thousands held across the nation during the last two weeks of December."

Meanwhile, back in Washington, Senator Baucus was attending a lavish pre-inaugural ball at a posh nightclub where he told Brian Ross of ABC News that "lobbyists just want what's best for America." Baucus also had praise for the drug, insurance and other lobbyists who paid for the party, saying: "They really care about our country."
ELITE ETHNOGRAPHY
Russell Baker's new book, Family of Secrets, is chock full of previously untold tales of one of America's great corrupt families, the Bushes, which led Tim Rutten of the Los Angeles Times to describe it as "preposterous." That's the sort of statement establishment types feel entitled to make without any supporting evidence despite the fact that their complaint is about some one else's evidence. Rutten goes further, offering this delicious ex cathedra statement: "I regard the belief that Lee Harvey Oswald acted alone as an important indicium of mental health."

In fact, the JFK death remains one of the great unsolved mysteries and those who have expressed some doubt some part of the official findings have included Lyndon Baines Johnson, Richard Milhous Nixon, Don Hewitt of CBS, U.S. House of Representatives Select Committee on the Assassination, Stephen Rosenfeld, Washington Post, Senator Ted Kennedy, Attorney General Bobby Kennedy, Senator Richard B. Russell (member of Warren Commission), Rep. Hale Boggs (member of Warren Commission), Texas Governor John B. Connally and his wife, Nellie, Presidential assistant Kenneth O'Donnell (at Dealey Plaza during the shooting), Presidential assistant David Powers (at Dealey Plaza during the shooting), Speaker of the House Tip O'Neill, Senator Richard Schweiker, Senator Gary Hart, Senator Russell B. Long, Senate Majority Leader Howard Baker and President of France Charles de Gaulle.

One of these insane types, Stephen Rosenfeld of the Washington Post, even wrote, "That the assassination probably encompassed more than a lone gunman now seems beyond cavil."

In fact, the story of the past half century or so of American politics has been filled with unsolved mysteries, unexplained anomalies and stories about which we only know some of the facts. Books like Baker's are immensely helpful not because they necessarily provide ultimate answers but because they provide new information, especially information that the establishment would just as soon didn't get around.

Besides, you don't have to accept an author's theories or inferences to find the evidence of interest, but if you do want to shoot down a particular theory about people and events, at least put some bullets in your gun.
HILL DEMS WARM TO INVESTIGATION OF BUSH CRIMES
Jason Leopold, Alternet - On Wednesday - the first working day of the Obama administration - Senate Majority Leader Harry Reid said he would support funding and staff for additional fact-finding by the Senate Armed Services Committee, which last month released a report tracing abuse of detainees at Guantanamo Bay and Abu Ghraib to Bush's Feb. 7, 2002, decision to exclude terror suspects from Geneva Convention protections.

Senate Armed Services Committee Chairman Carl Levin, who issued that report, echoed Reid's comments, saying "there needs to be an accounting of torture in this country." Levin, D-Michigan, also said he intends to encourage the Justice Department and incoming Attorney General Eric Holder to investigate torture practices that took place while Bush was in office.

Two other key Democrats joined in this growing chorus of lawmakers saying that serious investigations should be conducted.

Sen. Sheldon Whitehouse, D-Rhode Island, a former federal prosecutor and a member of the Senate Judiciary Committee, said in a floor speech, "As the President looks forward and charts a new course, must someone not also look back, to take an accounting of where we are, what was done, and what must now be repaired."

Democratic Majority Leader Steny Hoyer of Maryland told reporters: "Looking at what has been done is necessary."

On Jan. 18, two days before Obama's inauguration, House Speaker Nancy Pelosi expressed support for House Judiciary Committee Chairman John Conyers's plan to create a blue-ribbon panel of outside experts to probe the "broad range" of policies pursued by the Bush administration "under claims of unreviewable war powers."

In an interview with Fox News' Chris Wallace, Pelosi specifically endorsed a probe into the politicization of the Justice Department, but didn't spell out a position on Conyers's plan to examine the Bush administration's torture and rendition policies, which could prove embarrassing to Pelosi and other Democratic leaders who were briefed by the CIA about these tactics.

Still, when Wallace cited Obama's apparent unwillingness to investigate the Bush administration, Pelosi responded: "I think that we have to learn from the past, and we cannot let the politicizing of the - for example, the Justice Department, to go unreviewed. Past is prologue. We learn from it. And my views on the subject - I don't think that Mr. Obama and Mr. Conyers are that far apart."

The emerging consensus among top congressional Democrats for some form of investigation into Bush's controversial policies has surprised some progressives who had written off the leadership long ago for blocking impeachment hearings and other proposals for holding Bush and his subordinates accountable.
BRITS PROVE BAILOUTS DANGEROUS TO THOSE IN POWER
Andrew Grice, Independent, UK - From bounce to backlash. The Conservative Party lead over Labour at the opinion polls has rocketed from five to 15 points in one month, with voters turning against Gordon Brown as the recession bites.

The ComRes survey for The Independent puts the Tories on 43 per cent (up four points on last month), Labour on 28 per cent (down six), the Liberal Democrats on 16 per cent (unchanged) and other parties on 13 per cent (up two). The research shows Labour at its lowest standing since September's survey; the party has slumped back to where it stood before Mr Brown won international plaudits for the Government's rescue of the banks last autumn. . .

And people are sceptical about whether the Government's measures to combat the recession will work. Only a third (33 per cent) believe it has put in place the right solutions, 58 per cent do not. . . Forty-nine per cent of people doubt whether the Government's attempts to solve the banking crisis will work. The reservations are shared across the political spectrum: by a margin of 48 to 43 per cent, Labour voters do not believe in the measures on the banks. The Tories have regained the lead in every age group and enjoy a 40 per cent-plus rating in every social group.
GALLERY

GALLERY: KURT VONNEGUT MOTIVATIONAL POSTERS
BIDEN WARNS OF MORE AMERICAN DEATHS IN AFGHANISTAN
Christina Bellantoni, Washington Times - Vice President Joseph R. Biden Jr. said Sunday that there will be an "uptick" in American casualties in Afghanistan as the U.S. military increases its presence in that country, which he characterized as "a real mess."

The vice president's prediction prompted outrage from liberal antiwar groups who characterized it as "cavalier," although a leading scholar at a Washington neoconservative think tank called the Biden remarks an overdue recognition of reality. . .

Mr. Biden, in an interview on CBS' "Face the Nation" conducted from his home in Wilmington, Del., said the situation in Afghanistan has deteriorated, blaming a "failure to provide sufficient resources - economic, political and military - as well as failure to get a coherent policy among our allies - economically and politically and in terms of the military resources." . . .

"The bottom line here is, we've inherited a real mess. We're about to go in and try to essentially reclaim territory that's been effectively lost," Mr. Biden said. "There are going to be some additional military forces. There are going to be additional efforts to train their police and to train their Afghan army. And all of that means we're going to be engaging the enemy more now." . . .

CBS host Bob Schieffer asked Mr. Biden whether his comments mean more American casualties should be expected. "I hate to say it, but yes, I think there will be. There will be an uptick. Because as the commander in Afghanistan said, he said, 'Joe, we will get this done, but we're going to be engaging the enemy much more,'" the vice president said.
BREVITAS
CRASH TALK

Irv Katz, The Chronicle of Philanthropy - As charitable organizations face unprecedented challenges because of the global economic crisis, it is time for all nonprofit leaders to join forces and become key players in achieving a recovery.

Instead of doing what nonprofit groups traditionally do--seek money for their own causes and programs-we need to focus on solving the problems at hand. What Americans need now are jobs and what charities need are extra hands, so let's urge Congress and the White House to make charitable employment a key component of the economic-stimulus plan.

Spending government money on jobs at nonprofit causes would accomplish several goals. The government would be financing jobs that paid workers a decent living, money they could use to invest in goods and services in their hometowns. It also would help nonprofit groups deal with the short-term increase in demand for services and a shortfall of private and government money available to hire new workers to meet those demands. And perhaps most important, it would give nonprofit groups an opportunity to train a cadre of workers who can sustain charitable institutions over the long haul as demographic changes make it harder to attract workers.

Workers placed in organizations that focus on arts, conservation, health care, social services, and so many other causes could acquire skills and experience that will be much in demand for decades to come.

The need for workers is especially acute at social- service organizations, which are facing steep rises in demand. Training more people to do this vital work will make it possible for charitable organizations to come closer to caring for all those who seek aid. . .

Les Christie, CNN Money There is probably even more excess housing inventory gumming up the market than current statistics indicate, thanks to a wave of foreclosures that has yet to hit the market.

The problem: Many foreclosed homes and other distressed properties that are now owned by banks have yet to be listed for sale. The volume of this so-called 'ghost inventory' could be substantial enough to depress already steeply falling prices when it does go on the market. . .

RealtyTrac, the online marketer of foreclosed properties, recently discovered that it has far more foreclosed properties listed in its database, which the company compiles using courthouse records, than there are listed in the multiple listing services maintained by real estate agents.

RealtyTrac looked at listings in four states, California, Maryland, Florida and Wisconsin, and found that they contained only a third of the foreclosures it has in its database. The scope of the problem isn't clear, but it could be huge considering that RealtyTrac has a total of 1.5 million bank-owned properties on its site.

Dean Baker makes an interesting point about now much discussed employment figures from the New Deal: "The standard measures of the unemployment rate counted people employed under government programs like the Works Progress Administration as being unemployed. If these people are instead counted as being employed (in keeping with current methodology) then the unemployment rate fell below 10 percent in 1937, before Roosevelt became concerned about budget deficits and cut spending and raised taxes. This is still far from full employment, but it is less than half the 23 percent rate that Roosevelt faced when he took office.

AFGHANISTAN

Asia Times - [An] intelligence assessment shared by Moscow reveals that almost half of the US supplies passing through Pakistan is pilfered by motley groups of Taliban militants, petty traders and plain thieves. The US Army is getting burgled in broad daylight and can't do much about it. Almost 80% of all supplies for Afghanistan pass through Pakistan. The Peshawar bazaar is doing a roaring business hawking stolen US military ware, as in the 1980s during the Afghan jihad against the Soviet Union. This volume of business will register a quantum jump following the doubling of the US troop level in Afghanistan to 60,000.

OUTLYING PRECINCTS

Political Wire - "An 'apoplectic' Kennedy family is seething over the rough treatment that heiress apparent Caroline got from Gov. Paterson's office and is spoiling for revenge," the New York Post reports. Said one "well-placed" Democrat: "The governor's going to pay for this. Ted is furious. The family is furious. The Kennedys are now against the governor."

GAZA

Voice of America - Israel's prime minister says his country will grant legal protection to soldiers who fought in the three-week war in the Gaza Strip, against possible allegations of war crimes. Mr. Ehud Olmert said he had appointed Israel's justice minister, Daniel Friedman, to chair a committee to offer a coordinated defense against what he called "self-righteous people" who might want to sue Israeli soldiers. This past week, a United Nations human rights expert, Richard Falk, accused Israel of violating humanitarian law by conducting an offensive against, in his words, "an essentially defenseless population."

Gershom Gorenberg, South Jerusalem - Responding to the appointment of George Mitchell as Barack Obama's Mideast envoy, Abe Foxman has achieved something remarkable: He has outdone Marty Peretz in the tasteless-comment competition among the self-appointed cheerleaders of Israel. . . Peretz, still listed as editor-in-chief of The New Republic, greeted the beginning of the Israeli air campaign in Gaza in December by describing its message as: "Do not f- with the Jews.". . . Now comes Foxman. "Sen. Mitchell is fair. He's been meticulously even-handed," said Abraham Foxman . . . "But the fact is, American policy in the Middle East hasn't been 'even handed' - it has been supportive of Israel when it felt Israel needed critical U.S. support. So I'm concerned, I'm not sure the situation requires that kind of approach in the Middle East.". . . Thanks, Abe. Heaven forfend that American policy should be afflicted with fairness.

DRUG BUSTS

BBC - Cannabis has been reclassified by the [British] government from a Class C to a Class B drug, carrying a higher maximum jail sentence for possession. Home Secretary Jacqui Smith said there was "uncertainty at the least" on the future impact on young people's mental health as a result of using cannabis. Therefore she was going to "err on the side of caution and protect the public" by upping the classification level, she went on.

CRIME BLOTTER

A 14-year-old who wanted to be cop conned officers at a Chicago police station by appearing in uniform and asking for his assignment. It took the police five hours to discover the error as the boy rode in a squad car.

NEIGHBORHOOD CRIME WATCH

Politico - House Judiciary Committee Chairman John Conyers (D-Mich.) has subpoenaed Karl Rove, the former top political advisor to President George W. Bush, to question what Rove knows about "politicization" of the Justice Department. The Senate Judiciary Committee had subpoenaed Rove during the last Congress, but relying on an executive privilege claim by Bush, Rove refused to appear. Conyers had previously subpoenaed former White House Counsel Harriet Miers and Josh Bolten, Bush former White House chief of staff, seeking any information they had. Conyers is also seeking White House documents related to the firing of nine U.S. attorneys. After the White House refused to comply with the subpoenas, and Miers refused to even appear before the committee to answer the subpoena, the House Judiciary Committee sued. A federal judge backed the committee in a major win for Conyers and House Democrats, but resolution of the case has been delayed by the changeover in administrations.

FREEDOM & JUSTICE

Boston Globe - The Supreme Court ruled Monday that police officers have leeway to frisk a passenger in a car stopped for a traffic violation even if nothing indicates the passenger has committed a crime or is about to do so. . . The justices accepted Arizona's argument that traffic stops are inherently dangerous for police and that pat-downs are permissible when an officer has a reasonable suspicion that the passenger may be armed and dangerous. The pat-down is allowed if the police "harbor reasonable suspicion that a person subjected to the frisk is armed, and therefore dangerous to the safety of the police and public," Justice Ruth Bader Ginsburg said.

Cory Doctorow, Boing Boing - An Australian family who traveled to the US to visit a dying relative were accused of attempting to illegally immigrate by US Customs and Border Patrol officials, who caged them, detained them, starved them overnight, and then sent them back on the next flight to Australia. The US consulate's only comment? "We reserve the right to refuse entry to visitors to the United States." . . . "They treated us like terrorists," Mr Rabbi said. "We are Australian citizens. Why did they have to keep us in a detention centre? Why did they have to lock up my kids?". . .
Despite producing the family's $6400 return tickets, dated February 5, he says the officers accused him of attempting to illegally stay in the US.

An Iowa woman has been arrested for failing to return a library book she checked out last April. The book is valued at $13.95.

ECO CLIPS

Tree Hugger - Who'd have thought that poetry in the potty could make you use less toilet paper? A study by the research center Japan Toilet Labo showed that it can make a big difference - cutting down paper use by 20%.
Written poetically, the posters send messages like: "That paper will meet you only for a moment," "Fold the paper over and over and over again," and "Love the toilet." Researchers said that toilet paper usage has been increasing in Japan as of late, and they hypothesize it's because it's free - people scrimp when they're at home. So they're pushing to have 1,000 posters put in public stalls to encourage people to cut down on how much toilet paper the use as one more small step to save the planet.

CORPORADOS

Comcast - A 93-year-old man froze to death inside his home just days after the municipal power company restricted his use of electricity because of unpaid bills, officials said. Marvin E. Schur died "a slow, painful death," said Kanu Virani, Oakland County's deputy chief medical examiner, who performed the autopsy. Neighbors discovered Schur's body on Jan. 17. They said the indoor temperature was below 32 degrees at the time, The Bay City Times reported Monday. "Hypothermia shuts the whole system down, slowly," Virani said. "It's not easy to die from hypothermia without first realizing your fingers and toes feel like they're burning." A city utility worker had installed a "limiter" device to restrict the use of electricity at Schur's home on Jan. 13, Belleman said. The device limits power reaching a home and blows out like a fuse if consumption rises past a set level. Power is not restored until the device is reset.

HEALTH & SCIENCE

NY Times - Today, fewer than half of all high school students have had sex: 47.8 percent as of 2007, according to the National Youth Risk Behavior Survey, down from 54.1 percent in 1991. . . A 2002 report from the Department of Health and Human Services found that 30 percent of 15- to 17-year-old girls had experienced sex, down from 38 percent in 1995. During the same period, the percentage of sexually experienced boys in that age group dropped to 31 percent from 43 percent. The rates also went down among younger teenagers. In 1995, about 20 percent said they had had sex before age 15, but by 2002 those numbers had dropped to 13 percent of girls and 15 percent of boys.

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