When Is Money Not Money? When It Is a Ponzi Scheme

So you think you understand finance? Do you think anybody understands finance? Does the Secretary of the Treasury understand finance? Well...according to this website:

Our money system is not what we have been led to believe. The creation of money has been "privatized," or taken over by a private money cartel. Except for coins, all of our money is now created as loans advanced by private banking institutions — including the private Federal Reserve. Banks create the principal but not the interest to service their loans. To find the interest, new loans must continually be taken out, expanding the money supply, inflating prices — and robbing you of the value of your money.

Could this be what's behind the whole economic collapse we're now trying to dig ourselves out of by selling bad debts to China? And would that then rob the Chinese of the value of their money?

Not only is virtually the entire money supply created privately by banks, but a mere handful of very big banks is responsible for a massive investment scheme known as "derivatives," which now tallies in at hundreds of trillions of dollars. The banking system has been contrived so that these big banks always get bailed out by the taxpayers from their risky ventures, but the scheme has reached its mathematical limits. There isn't enough money in the entire global economy to bail out the banks from a massive derivatives default today. When the investors realize that the "insurance" against catastrophe that they have purchased in the form of derivatives is worthless, they are liable to jump ship and bring the whole shaky edifice crashing down.

But Fareed Zakaria says China CAN bail out this system. If not, what exactly does "the whole shaky edifice crashing down" look like?

This article suggests that what has happened is nothing less than "The Collapse of a 300 Year Ponzi Scheme".

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 (M3) 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.

And what happens when this long-standing house of cards falls? And what will finally call their bluff? Apparently, their bluff will be called by none other than the earth itself.

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."

So what is the solution - if any?

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.

And how can we "grow our own" banking system without becoming essentially government-run, which sounds like - thunderstorm sound effects with Halloween music, please - "socialist"?

Ask Ron Paul, maybe? Or is the Government By the People not such a horrible thing after all? At least, not as horrible as a Ponzi-Scheming Banking Cartel Not By the People.

Am I Not Human? When Security Trumps Compassion

In considering human rights abuse for the "Am I Not Human?" campaign, instead of focusing on one group, I will explore a number of examples of a pattern that appears in such abuse, and one America, as well as other powerful nations, must come to grips with: the conflict between security and compassion, between looking at others outside one's "group" as fellow human beings, or as threats.

One of the most obvious cases where this conflict is played out is in the War on Terror. It's easy to simplify the War on Terror as a conflict between Good - us, people who believe and claim they love democracy and freedom - vs. Evil - them, people we claim hate democracy and freedom, aka, the "terrorists".

But if one examines this issue more closely, it's obvious that there's more to it than that. In my last post for this blog campaign, I examined the inhumane treatment of Palestinians by the Israeli government, and also by those countries who ignore the plight of the Palestinians, especially in Gaza. But many argue that the Palestinians support and foster terrorism, attacks on civilians by suicide bombers in peacetime situations, such as markets or theaters or, famously, the Olympics. The Israelis' treatment of Palestinians, they argue, is directly a consequence of those terrorist acts, which Israel must defend itself and its people against. It's a security issue. The apartheid wall, the collective punishment of entire families in Gaza for the acts of a few, the constant checkpoints, the deprivation of jobs, income, or basic food and other supplies, are all explained as necessary security measures.

The War on Terror was begun after 9/11 as a security measure. Suddenly we were attacked, unexpectedly, by Islamic terrorists, in the most horrific way. To defend ourselves and our country, Bush initiated a war against terror - with a huge backing of popular and congressional support. The creation of the Department of Homeland Security, the surveillance of all communications coming in & out of the country (as much as that is possible, and with certain perimeters), allowing the torture of terror suspects, the establishment of military tribunals and a detention center at Guantanamo Bay, detaining terror suspects indeterminately without legal recourse, extraordinary rendition, prison ships, the invasion of Afghanistan and ultimately the invasion of Iraq, Somalia and other lesser-known places - all these measures, now widely criticized as violating people's basic human rights, were enacted in the name of security.

Air strikes on targets that may include civilians - not just mistakes, but knowingly - are also allowed in the various battlefields in the war on terror. This is a deliberate calculation to gain the greater "good" - victory in war and then they hope enactment of "higher goals" such as democracy or access to oil - at the expense of the value of human life.

These air strikes have many strategic reasons - such as minimizing the risk to U.S. soldiers. That is all well and good. But it doesn't necessarily remove the "sin" of taking innocent lives. We're talking about children, women, families. These people did not ask the U.S. to invade. They do not understand exactly what's going on. And their support for the U.S. "mission" is shaken every time civilians are killed. Of course, the Taliban and al-Qaeda are killing civilians, too. Their concern for humanity, is touted as the reason for their war. They say the U.S. and Israel kill Muslim women and children, and so these extremist groups justify their attacks as a "defense" of "their people" against the American "aggressors". It's a matter, to them, of "security".

Saudi Arabia is extremely security-conscious. They are run by a sort of "benevolent" Mafia, the Saudi royal family, including thousands of princes, who get the lion's share of the country's substantion income from oil revenues. They use religion to maintain the loyalty of their citizen-subjects, and try to "modernize" their country in order to keep people happy and obedient. But women in Saudi Arabia, as showcased by the case of the girl from Qatif who was sentenced to whipping for being gang-raped, supposedly because she was with a man who was not her husband or brother. Only public outcry caused the King to ultimately pardon her, but without such publicity she would have had to endure punishment for being the victim of a heinous crime.

This is because in Saudi Arabia, women are still largely considered the "property" of their husbands or male relatives, and have few rights, not even the right to drive a car (unlike some other Muslim gulf states, for example). They are not allowed to appear in public except when covered completely from head to foot in black robes. Although many justify this as "Islamic", many more Muslims would disagree. There's nothing in and of itself wrong with head-covering - as long as it's voluntary. But morality-police enforce these laws, and women are severely restricted in their movements, ability to work or do much of anything outside the home, since they must always have a male relative escort. Many women in Saudi Arabia are huge Oprah Winfrey fans, as she discusses issues that women face in a compassionate way, helping some of these women deal with their lives and feel they have a purpose. Sometimes, under these conditions, women wonder if men believe they are in fact human.

Men in Saudi Arabia justify this attitude with what amounts to another security issue. They want to protect their privileged position in society and their ego-pumping "superiority" without the bother of "uppity" women, who pose a huge security risk for such men. Apparently the men do not think compassion for women involves consideration for their personal needs and pride, or just the ability to support themselves in the event their male relatives should die.

From Hitler's unspeakable atrocities which were justified by a need for security and "superiority", to slavery in the U.S., also justified by the need for "security" and prosperity in the agricultural South, to racist behavior around the world, often justified by the need to "protect" the supposedly "superior" group from some imagined destruction, invasion or "adulteration" by the "other", "inferior" groups, to the latest fear of "terrorists" which title is frequently applied to anyone Muslim... all these represent choices in favor of security and self-protection over compassion and consideration of the rights of others.

Even on a lesser scale, whenever security trumps consideration for the human element, oppression begins, and oppression is the greatest obstacle to true democracy and free society.

First, a free society cannot be created, maintained, inspired or made by force. That means war is out as a means of achieving it. Therefore, the War on Terror is doomed to failure, if its goal is making the world safe for democracy. War cannot make the world safe for anything except war.

Second, excessive infringement on human liberty cannot promote security, if it only acts on rigid, written laws and doesn't have the flexibility to act on the ground in a human way between human beings.

Here's an example of this in Dahr Jamail's lates article as he describes the situation he saw at an airport:

TSA is one of several security gifts from the Bush administration, or rather, from the twisted conjunction of corporate business and state power that oversees and safeguards our "freedom" and "democracy" through an elaborate system of control mechanisms.

Immediately in front of me, an elderly gentleman in a wheelchair was trying to reason with the security guard who was asking him to take off his sandals. "What do you want me to do? I didn't wear socks so you could see my feet since I'm unable to bend over and take off my sandals."

"Sir, you must comply with policy," the guard said in a raised voice, as three other TSA agents moved in behind him, arms folded ominously across their chests, and surrounded the elderly man in the wheelchair who requested their assistance, doing what he could to "comply." None of the guards stepped forward to take off his sandals for him in order to check his feet.

In exasperation he shouted, "I'm asking for help, and you won't do it, so what do you want me to do? What the Hell am I supposed to do? What are you afraid of? I'm an old man in a wheelchair! Are you afraid of my sandals?"

The guards would not allow him through the x-ray until he eventually lowered his voice. We must never upset the status quo, because that is an important pillar of a system that holds change in dread. Do not rock the boat, and don't you dare speak up, lest it indicate that something is wrong.

It requires no crystal ball to see that we are embedded in a system that has no qualms about harassing old men in wheelchairs or making pregnant women walk through x-ray machines. It is the same system that is killing scores of Iraqi and Afghan civilians daily, and killing the planet systemically. It is a system that requires us to be sleepwalkers, rather than alert and sensitive humans.

Sometimes the security-frenzy can taint people on the ground who act as vigilantes, as in this attack by Israeli settlers against Palestinians:

Last night 40 Jewish settlers went on a rampage in the long-suffering Palestinian city of Hebron, throwing rocks, smashing windows and slashing tires. One Palestinian resident reports:

“The stone-throwing tonight was not rioting, it was with intent to kill … Settlers threw stones at us from the fifth floor. I picked one up and it weighed at least a kilo…

“We’re eight families, 60 people in all, and we are constantly threatened … Yesterday huge stones just barely missed two of my cousins. If they had been hit they would have been killed.”

Why not turn to the IDF for protection?

“He claims his family had asked Border Guard officers to form a separation between them and the settlers, but that the latter had continued throwing stones indiscriminately at both parties.

Al-Jabri went on to say that after a settler had threatened to slaughter his entire family he complained to IDF soldiers, but they didn’t respond. “He took out his gun, put it to his mouth, and said, ‘Deir Yasin, Deir Yasin’, referring to the massacre in the village of Deir Yasin in 1948,” he said.

“I was shocked to hear a soldier tell me, ‘There’s nothing I can do, and there’s no use complaining, the settlers and we are one,” al-Jabri added.”

And, indeed, none of the pogromists have been arrested so far, despite many of them undoubtedly being repeated offenders.

In this latter case, the police (enforcers, protectors) and vigilantes unite against the "other" group, who have been branded as a threat, and hence, in security terms, fair game.

It's telling that Israel refuses to attend the U.N conference on racism, where they reasonably expect they would be castigated for their human rights violations against the Palestinians. But others make a valid point that this is not the only case of racism or denying human rights and should not somehow be showcased to the detriment of help for other oppressed people, such as those in, for example, Myanmar, or even North Korea, both of which nations seek a high degree of security and power concentrated in the hands of a very few.

It seems that militarism often clashes with compassion, and it is that very conflict which played out in the 2008 election, where Barack Obama's election signified to many a mandate for compassion instead of hyper-securityism or militarism that the GOP ended up signifying after the Bush administrations many misadventures. Let's hope this really does become Obama's legacy: the triumph of compassion over fear, which is the only true road to lasting security.

Coordinated Terror Attack on Mumbai

Terrorists used machine guns and grenades in well-coordinated attacks in Mumbai, India, against 2 luxury hotels, the city's largest train station, a theater, and a hospital, killing over 80 (death toll not yet final...) and wounding about 240 ... so far...in what Christine Amanpour described as

the worst attack in India in the last 20 years, where Islamic militants have been stepping up their assaults on Mumbai, which is not just the center of its filmmaking but the economic and financial hub of India.

According to the New York Times,

Even by the standards of terrorism in India, which has suffered a rising number of terrorist attacks this year, the assaults were particularly brazen and drastically different in scale and execution. The attackers used boats to reach the urban peninsula where they hit, and their targets were sites popular with tourists.

It appears that the attacks were run like a military operation rather than the usual suicide attack, using a group of "soldiers" and the element of surprise to take out unarmed civilians - to what purpose, God only knows.

Some guests, including two members of the European Parliament who were visiting on a trade delegation, remained in hiding in the hotels, making desperate cellphone calls, some of them to television stations, describing their ordeal.

Alex Chamberlain, a British citizen who was dining at the Oberoi, told Sky News television that a gunman had ushered 30 or 40 people from the restaurant into a stairway and, speaking in Hindi or Urdu, ordered them to put up their hands.

“They were talking about British and Americans specifically,” he recounted. “There was an Italian guy, who, you know, they said, ‘Where are you from?’ and he said he’s from Italy, and they said, ‘Fine,’ and they left him alone.”

Sajjad Karim, 38, a British member of the European Parliament, told Sky News: “A gunman just stood there spraying bullets around, right next to me.”

Others who escaped from the ordeal confirmed that gunment asked for people with US or British passports. As for Mr. Karim,

Before his phone went dead, Mr. Karim added: “I managed to turn away and I ran into the hotel kitchen and then we were shunted into a restaurant in the basement. We are now in the dark in this room, and we have barricaded all the doors. It’s really bad.”

No word yet on the fate of Mr. Karim, whose name would suggest he is Muslim, but whose passport may have sealed an undeserved fate at the hands of complete idiots imagining themselves carrying out some sort of Islamic "jihad". Their "jihad", which according to the Qur'an, is supposed to involve the use of the mind, apparently went AWOL into the netherworld of "underground" gangs where "action" replaces "thought" and "faith" is defined as "totally willing to kill targets, including self-targeting" - as long as the word "Islam" is used to justify the "action".

Consequences... await the living... as the body count goes up, as civil society falls apart, as both sides seek some sort of balancing between revenge and peaceful coexistence, mostly the former, and as "Muslim" extremists increasingly perform group lobotomistic rituals that is turning the world against them and against their religion. A religion which is classified in many minds as "terrorist", while nothing could be farther from the truth.

Another great excuse for the war on terror. Another gushing wound on the hope for human cooperation. Unless thinking people can see beyond it, to the inevitable failure of "terrorism".

Obama Opens With Bang: First, Rebuild US

President-elect Barack Obama is not just "hitting the ground running" - he's been getting ready for his presidency since last September, according to Time mag. And now he's unveiled how he'll tackle job one: the economy.

The President-Elect has also signaled the country what he wants to do: enact an "Economic Recovery Plan" that will mean 2.5 million more jobs by January of 2011. In his words (from Saturday's radio address) a plan "big enough to meet the challenges we face ... a two-year, nationwide effort to jumpstart job creation in America and lay the foundation for a strong and growing economy." Again, I have no inside knowledge, but I'd expect it to be about $600 to $700 billion.

Its focus will be on infrastructure of a sort that will not only put people to work but also improve the productivity of the economy. His words: "We'll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children, and building wind farms and solar panels; fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead."

People have been complaining about lack of investment in infrastructure for years, and it's a great sign that Obama is planning to shore up the economy the old-fashioned way.

By putting his economic team in place barely three weeks after he was elected, and telling the nation what he plans to do immediately after he takes office, the President-Elect is asserting leadership at a time when the the Bush administration has all but abdicated.

Even the markets are looking to Obama now rather than the fast-fading Bush. Obama's leadership shows signs of both strength and direction/purpose. That's cause for optimism, something I didn't have during Bush's reign. Many others, I'm sure, agree.

Reid: Immigration Reform Will Be EZ under Obama

According to Harry Reid in an interview with Gannett, President-elect Obama and former rival Sen. John McCain already agree on immigration reform, and Congress is likely not to put up a fight on this one, saving their sabers for health care reform. Sounds good, but we'll see what comes down later.

Corporate Prisons, Slave Labor = Fascist Shift?

Len Hart has this to say about the privatization of the prison system in America under the GOP:

Like many crooked GOP schemes, the fascist corporatization of state prisons makes a slick end run around the Bill of Rights, sets up crony corporations with a guaranteed gravy train at tax payer expense, and ---to sweeten the deal --it provides them with slave labor.

It is no accident that under Gov George W. Bush, Texas beat out Mississippi for 'dead last' in education. As education declines, crime increases. Increasing crime fuels the corporate prison gravy train. Justice has nothing to do with it. It's about warehousing and enslaving people for profit.

What's the danger exactly?

Unless the nation wakes up to what happened in Texas, the nation will enter not just an economic depression but a new dark age, perhaps an end to civilization as we know it. In many ways we already share with the middle ages, a careless disregard for every life. In Texas, the crime rate increased as the prison systems --under Bush Jr --went corporate! As a result, one in 100 Texas residents are in prison, many of them 'corporate' lock ups in which prisoners have no rights. As Texas took the GOP/fascist prison route, education tanked --a recipe for future unemployment, poverty and increased crime.

Note that the GOP gained big in 2000 & '04 with uneducated voters: the "redneck" vote, the Evangelical white vote (which generally favors ideology over reason), and poor white blue-collar workers. It is the GOP's policy to gut social programs that could benefit the poor and middle class, cut taxes for the rich, and thus redistribute wealth upward. This scheme can only have popular appeal among people who can't figure out what it really is - a monstrous ripoff - but who are likely to believe propaganda if it appeals to their emotional "buttons", involving fear, security, tradition, family, country in a sentimental/nostalgic sense, and a desire for independence and freedom without risk and change. Education forms a threat to the size and stability of this GOP-malleable voting bloc, and so it is in the GOP's interest to gut education and make higher-education less and less achievable (read affordable).

And what better way to prevent education than to create a criminal class that work as slaves in incarceration camps that become increasingly impossible to get out of? And by gradually turning prisons over to private industry, whose motive is solely to make a profit, the concept of re-entering society or "correction" becomes not the goal, but the impediment to achievement of wealth. The more prisoners, the more money. And the prisoners also have to pay in two ways: by endless fines and charges, and by free labor. That free labor is actually slave labor, but nobody looks at it that way. It's considered "time served" and "punishment", a zone where rights no longer exist. The uneducated bloc overwhelmingly populate this Incarceration World, and yet they are the most vociferous about punishing the guilty. Naturally, the guilty are charged and convicted on dramatically racist lines.

Texas is particularly egregious on this, and represents a microcosm for everything that's wrong with the GOP's stance on crime and punishment.

Texas is called the gulag state for good reasons. Certainly, justice in Texas is applied inequitably. Minorities --primarily black and Hispanic --are disproportionately represented in the Texas gulag system but under represented in the State legislature, the various city councils, and the state judicial system.

Black people represent only 12% of the Texas population but comprise 44% of the total incarcerated population. Whites make up about 58% of Texas' total population, but only 30% of the prison and jail population.

These statistics are terrifying:

...by year's end 1999, there were 706,600 Texans in prison, jail, parole or probation on any given day. In a state with 14 million adults, this meant that 5% of adult Texans, or 1 out of every 20, are under some form of criminal justice supervision. The scale of what is happening in Texas is so huge, it is difficult to contrast the size of its criminal justice systems to the other states' systems it dwarfs:

• There are more Texans under criminal justice control than the entire populations of some states, including Vermont, Wyoming and Alaska.
• If Texas was a nation separate from the United States, it would have the world's highest incarceration rate--significantly higher than the United States (682), and Russia (685) which has 1 million prisoners, the world's third biggest prison system. Texas' incarceration rate is also higher than China (115), which has the world's second largest prison population (1.4 million prisoners).
• While one out of every 20 Texas adults is under some form of criminal justice control, one out of 3 young black men (29% of the black male population between 21 and 29) are in prison, jail, parole or probation on any given day.
• One out of every four adult black men in Texas is under some form of criminal justice supervision.
• Blacks in Texas are incarcerated at a rate seven times greater than whites. While there are 555 whites behind bars for every 100,000 in the Texas population, there are an astonishing 3862 African Americans behind bars for every 100,000 in the state. This is nearly 63% higher than the national incarceration rate for blacks of 2366 per 100,000.
• If Texas' black incarceration rate was applied to the United States, the number of blacks behind bars on a national level would increase by half a million. There are currently an estimated 824,900 African Americans in prison and jail in the US The new figure, 1,346,370, would increase the number of African Americans incarcerated in the US by 63%.

And of course, when these African Americans are serving the prison corporations from the inside as free slave labor, what happened to the Emancipation Proclamation?

Let's hope Obama does something to guide us out of this GOP rut.

World Leaders Avoid Bush Like Plague

Check out this video showing world leaders refusing to shake GWB's hand. Does anyone grasp the gravity of this?

Does US Congress Have Less Clout Than Iraqi Parliament?

Believe it or not, this seems to be the case. Incredibly, while the Iraqi parliament comes to blows over the agreement that would allow the US to stay in their country for another 3 years, the lil' ol' US Congress can't even read that Agreement, let alone discuss it.

The administration has asserted that the agreement between the U.S. and Iraq is merely a Status of Forces Agreement (SOFA) and therefore does not require congressional approval. Yet the agreement goes far beyond the traditional limits of a SOFA, which typically set the terms for bringing materials and equipment into a nation and outline the legal procedures that will apply to members of the military who are accused of crimes.

Believe it or not, the current agreement contains terms that will actually give Iraq a measure of control over U.S. forces. No foreign nation or international entity has ever been given the authority to direct U.S. forces without prior congressional approval - either through a majority vote of both chambers or a two-thirds vote in the Senate in the case of treaties.

If this agreement goes into effect without congressional approval, it will establish a precedent under which future presidents can exercise broad unilateral control over the U.S. military - and even give foreign nations control over our troops.

If this sticks in your craw, you can send a message to that effect to Congress, and hope someone listens...
And they're getting ready to adjourn, the best you could hope for is Nancy Pelosi pops this question - highly unlikely - and the end (of the time to approve the agreement) is near...

Cheney, Gonzales INDICTED in South Texas! Please Say It's True....

Yes, it's true! Dick Cheney and Alberto Gonzales, among others (such as Brownsville Sen. Eddie Lucio Jr), are now under indictment in south Texas for "engaging in organized criminal activity" in the matter of prisoner abuse at an immigration prison in south Texas, by a District Attorney who, according to this article, has "a reputation for wackiness and little time left in office."

The DA: Willacy County District Attorney Juan Angel Guerra,

a 53-year-old Rio Grande Valley prosecutor who drew national attention for suing counterparts in the county justice system and staging a protest with barnyard animals, long has alleged high-ranking corruption in the deals that brought the impoverished county a $60 million immigration detention center.

Ah, those wonderful immigration detention centers! I'm sure Cheney was so proud! And now to think it could actually end up with .... dare we hope???

The prosecutor didn't really aim that high.

“I didn't intend to go after the vice president. That was not my intention,” said Guerra, who dubbed the investigation Operation Goliath. “We just followed the money, followed the corruption. It just happened that it just took us all the way to Washington.”

Not surprising. Scott Horton, could this be the answer to your prayers?

Cheney is accused of contributing to the neglect of federal immigration detainees by contracting for-profit prisons.

“By working through corporations as prisons for profit, Defendant Richard Cheney has committed at least misdemeanor assaults of our inmates and/or detainees,” the indictment reads, adding that a “money trail” can be traced to Cheney's substantial investments in the Vanguard Group, which invests in privately run prisons.

Megan Mitchell, spokeswoman for Cheney, said: “We have not received an indictment. We haven't received a call from the district attorney's office. ... We haven't heard anything from the district attorney.”

Guerra said he kept Operation Goliath secret for four months over concern that pressure would be brought to bear to stop it.

Wise move there, too. But that "misdemeanor" part seems too paltry for the Angler. Let's hope the DA's reputation for drama doesn't undercut the seriousness of this case. There's been a political struggle here, and it may extend beyond Texas.

In 2007, after being indicted on public theft charges, he camped in front of the county jail with goats, roosters and a horse to symbolize what he called a “circus” against him. Those charges were dismissed, as more recently were other indictments accusing him of corruption including tampering with government records and abusing his office.

Guerra later sued the county judge, county sheriff, county clerks, and others.

Guerra has contended the indictments against him were meant to keep him from being re-elected. He lost in the March primary election.

Regarding Lucio's comment that the indictments are a circus act, he said, “This was a grand jury that had been looking into this for the past four months. That's belittling the grand jury.”

Now the case is set for arraignment, but the Judge, Judge Manuel Banales, has said he will issue summonses, thus avoiding arrests and the need to post bond. He also allowed attorneys to appear for the accused for the arraignment.

And things look somewhat up in the air, too.

In the latest bizarre development in the case, the lame-duck prosecutor who won the indictments was a no-show in court Wednesday. The judge ordered Texas Rangers to go to Willacy County District Attorney Juan Guerra's house, check on his well-being and order him to court on Friday.

Let's hope he shows up, fires up, and gets something moving before this whole momentum fizzles out...like those impeachment proceedings.

The Consequences of Bush's "Outlaw Administration"

If you're sick that Bush and Co. are getting away with human rights abuse, lying their way into a War Without End Amen, torture, ruining the environment, and everything else, NOW READ THIS - it's entitled "Justice After Bush: Prosecuting an outlaw administration"and basically summarizes a superb article by Scott Horton at Harper's (needs subscription, though, so thanks for the summary!)where Horton says:

This administration did more than commit crimes. It waged war against the law itself. It transformed the Justice Department into a vehicle for voter suppression, and it also summarily dismissed the U.S. attorneys who attempted to investigate its wrongdoing. It issued wartime contracts to substandard vendors with inside connections, and it also defunded efforts to police their performance. It spied on church groups and political protesters, and it also introduced a sweeping surveillance program that was so clearly illegal that virtually the entire senior echelon of the Justice Department threatened to (but did not in fact) tender their resignations over it. It waged an illegal and disastrous war, and it did so by falsely representing to Congress and to the American public nearly every piece of intelligence it had on Iraq. And through it all, as if to underscore its contempt for any authority but its own, the administration issued more than a hundred carefully crafted "signing statements" that raised pervasive doubt about whether the president would even accede to bills that he himself had signed into law.

So Compound F (blogger at Docudharma who provided this summary) says we then face the harder issue of how to prosecute this disaster? How can we hold these criminals accountable to such a pervasive and insidious swath of crime?

What are we going to do? Prosecute our entire political class on all of the myriad crimes they have collectively committed? Obama is going to have his hands full just with the issue of Bush signing statements, not to mention achieving bi-partisan consensus on the ongoing crises of the economy, environment, and failed wars.

Horton gets pragmatic: Bust the Big Fish on Torture.

There can be no doubt that torture is illegal. There is no wartime exception for torture, nor is there an exception for prisoners or "enemy combatants," nor is there an exception for "enhanced" methods. The authors of the Constitution forbade "cruel and unusual punishment," the details of that prohibition were made explicit in the Geneva Conventions ("No physical or mental torture, nor any other form of coercion, may be inflicted on of any kind whatever"), and that definition has in turn become subject to U.S. enforcement through the Uniform Code of Military Justice, the U.S. Criminal Code, and several acts of Congress. Nor can there be any doubt that this administration conspired to commit torture: Waterboarding. Hypothermia. Psychotropic drugs. Sexual humiliation. Secretly transporting prisoners to other countries that use even more brutal techniques. The administration has carefully documented these actions and, in many cases, proudly
proclaimed them. The written guidelines for interrogations at Guantánamo Bay, for instance, describe several techniques for degrading and physically debilitating prisoners, including the "forceful removal of detainees' clothing" and the use of "stress positions." And in a 2006 radio interview, Dick Cheney said simply that the use of waterboarding to obtain intelligence was a "no-brainer."2

And since banning torture is something President-elect Obama promised to do on 60 minutes as well as other occasions, our next step is prosecuting the jerks.

Horton also recounts how the administration was aware of the potential criminality early on in the process as they wrote various memos attempting to redefine torture (enhanced interrogation) and prisoner of war status (enemy combatants), and the very meaning of war (war on terror is non-conventional, making the Geneva Conventions "quaint"). Thus, there is evidence of "guilty minds," and guilty intentions. Cheney, Powell, Rice, Rumsfeld, Tenet, and Ashcroft met early on (2002) to discuss specific methods, when Ashcroft famously asked:

"Why are we talking about this in the White House? History will not judge this kindly."
He also recounts a conversation with Jane Mayer (author of Journey to the Dark Side) in which she quotes a CIA officer on the topic, who said:

"Laws? Like who the fuck cares?"

Which are the very things the President & Co. are sworn to uphold.

Law and order are wonderful, fragile things. Even should Obama simply end torture and shut GITMO, the knowledge and acceptance that our leaders can and have gotten away with torturing humans will not cease being a crisis of law and order.

Which makes Horton's conclusion less than satisfying. Among many possible venues for prosecution of these crimes, he believes the best is Commission of Inquiry ("Truth & Reconciliation"), something on the order of the Warren Commission, where we would try to get to the truth in exchange for immunity.

I think his prescription for Nuremberg-like trials is more appropriate in this case. We desperately need both accountability, and a deterrent for future governments.

Toxic & Nonexistent Mortgages Crawl Out from Dead Fantasy Wall Street Bull

According to this report,

So we've been hearing it's the fault of greedy home buyers who ran out and purchased homes they couldn't afford. Or, conversely, maybe it was the fault of predatory lenders who made bad loans. Round and round the blame seemed to go. So I was completely baffled by Henry Paulson's announcement yesterday that it wouldn't help to buy up the toxic mortgages as promised in the bailout.
At least, it baffled me until I read this article. And that's when it occurred to me--he can't buy up the toxic mortgages to stave off the meltdown because a vast majority of these loans don't exist.

So let's get this straight...first there are toxic mortgages that were used as a kind of legal scam to get folks to buy houses they couldn't afford, and when the "grace" period ran out, SURPRISE! ...the borrowers defaulted on the loan and then the homes' values plummeted, leaving creditors with worthless paper.

Then there's the NONEXISTENT mortgages where this scam-generated paper wealth wasn't enough to satisfy the greed of lenders, so they just basically MADE UP some loans, something like "matching funds" except instead of funds, they were just more papers, with in this case, not only the collateral, but the buyer removed.

But this has been a long time comin'. It's the greed mixed with total lack of accountability in the financial sector that should have shocked us along the way, but instead was greeted with open arms.

I had been waiting for the end of Wall Street. The outrageous bonuses, the slender returns to shareholders, the never-ending scandals, the bursting of the internet bubble, the crisis following the collapse of Long-Term Capital Management: Over and over again, the big Wall Street investment banks would be, in some narrow way, discredited. Yet they just kept on growing, along with the sums of money that they doled out to 26-year-olds to perform tasks of no obvious social utility. The rebellion by American youth against the money culture never happened. Why bother to overturn your parents’ world when you can buy it, slice it up into tranches, and sell off the pieces?

And the results?

If you want to know what these Wall Street firms are really worth, take a hard look at the crappy assets they bought with huge sums of ­borrowed money, and imagine what they’d fetch in a fire sale. The vast assemblages of highly paid people inside the firms were essentially worth nothing.

People like Meredith Whitney, an analyst of financial firms for Oppenheimer Securities who, on October 31, 2007, was one of the first to sound the alarms of Wall Street's collapse, and Steve Eisman, a colleague who also worked as an analyst at Oppenheimer, warned the wheelers-n-dealers of Wall Street that this was a house of cards. But no one wanted to listen.

That’s when Eisman finally got it. Here he’d been making these side bets with Goldman Sachs and Deutsche Bank on the fate of the BBB tranche without fully understanding why those firms were so eager to make the bets. Now he saw. There weren’t enough Americans with shitty credit taking out loans to satisfy investors’ appetite for the end product. The firms used Eisman’s bet to synthesize more of them. Here, then, was the difference between fantasy finance and fantasy football: When a fantasy player drafts Peyton Manning, he doesn’t create a second Peyton Manning to inflate the league’s stats. But when Eisman bought a credit-default swap, he enabled Deutsche Bank to create another bond identical in every respect but one to the original. The only difference was that there was no actual homebuyer or borrower. The only assets backing the bonds were the side bets Eisman and others made with firms like Goldman Sachs. Eisman, in effect, was paying to Goldman the interest on a subprime mortgage. In fact, there was no mortgage at all. "They weren’t satisfied getting lots of unqualified borrowers to borrow money to buy a house they couldn’t afford," Eisman says. "They were creating them out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans. But that’s when I realized they needed us to keep the machine running. I was like, This is allowed?"

In other words, these were "cloned", but not in the "real" sense of making another CDS out of "reality", but rather in the "fantasy" sense - code named "synthetic" - to make another risky, weirdo CDS out of ... nothing! Not even "thin air"! It's money-for-fantasy, the Ultimate Money Swap!

In short, the economy was bloated chock-full of fake "loan packages" by a world of unscrupulous, convoluted, almost unfathomable trade.

In 2000, there had been $130 billion in subprime mortgage lending, with $55 billion of that repackaged as mortgage bonds. But in 2005, there was $625 billion in subprime mortgage loans, $507 billion of which found its way into mortgage bonds. Eisman couldn’t understand who was making all these loans or why.

When he found out, it was a revelation of the huge scam with many names - like "shorts" for example - not familiar to "main street" but which would ultimately come down crashing over their heads.

The juiciest shorts—the bonds ultimately backed by the mortgages most likely to default—had several characteristics. They’d be in what Wall Street people were now calling the sand states: Arizona, California, Florida, Nevada. The loans would have been made by one of the more dubious mortgage lenders; Long Beach Financial, wholly owned by Washington Mutual, was a great example. Long Beach Financial was moving money out the door as fast as it could, few questions asked, in loans built to self-destruct. It specialized in asking home­owners with bad credit and no proof of income to put no money down and defer interest payments for as long as possible. In Bakersfield, California, a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $720,000.

But it gets worse, as the number of such cases skyrockets.

Eisman knew subprime lenders could be scumbags. What he underestimated was the total unabashed complicity of the upper class of American capitalism. For instance, he knew that the big Wall Street investment banks took huge piles of loans that in and of themselves might be rated BBB, threw them into a trust, carved the trust into tranches, and wound up with 60 percent of the new total being rated AAA.

Which led to a huge house of cards.

“You have to understand this,” he says. “This was the engine of doom.” Then he draws a picture of several towers of debt. The first tower is made of the original subprime loans that had been piled together. At the top of this tower is the AAA tranche, just below it the AA tranche, and so on down to the riskiest, the BBB tranche—the bonds Eisman had shorted. But Wall Street had used these BBB tranches—the worst of the worst—to build yet another tower of bonds: a “particularly egregious” C.D.O. The reason they did this was that the rating agencies, presented with the pile of bonds backed by dubious loans, would pronounce most of them AAA. These bonds could then be sold to investors—pension funds, insurance companies—who were allowed to invest only in highly rated securities. “I cannot fucking believe this is allowed—I must have said that a thousand times in the past two years,” Eisman says.

And for those who wonder what's a "BBB tranche"...

as Eisman puts it, “the equivalent of three levels of dog shit lower than the original bonds.”

So if they're that bad, why do people invest in them? And what could be worse? Worse? What's worse are the toxic mortgages that don't even exist! That never existed in the first place. That, when asked "When did you live?" respond "NEVER!" The demon packages, demon loans. That's what brought the house of cards down...

There weren’t enough Americans with shitty credit taking out loans to satisfy investors’ appetite for the end product. The firms used Eisman’s bet to synthesize more of them. Here, then, was the difference between fantasy finance and fantasy football: When a fantasy player drafts Peyton Manning, he doesn’t create a second Peyton Manning to inflate the league’s stats. But when Eisman bought a credit-default swap, he enabled Deutsche Bank to create another bond identical in every respect but one to the original. The only difference was that there was no actual homebuyer or borrower. The only assets backing the bonds were the side bets Eisman and others made with firms like Goldman Sachs. Eisman, in effect, was paying to Goldman the interest on a subprime mortgage. In fact, there was no mortgage at all. “They weren’t satisfied getting lots of unqualified borrowers to borrow money to buy a house they couldn’t afford,” Eisman says. “They were creating them out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans. But that’s when I realized they needed us to keep the machine running. I was like, This is allowed?”

Who are "us"? Investors buying the toxic mortgages. The market was so delusional and drunk with greed that they actually made up fantasy/false mortgages to satiate it.

And here we are now, our economy on life-support. And we, the people, and the taxpayers, are footing the bill. How do you like that?

Where's Ben Bernanke's Missing 2 Trillion?

So the sky is falling, the economy collapsing, and what does the Bush Administration have to say? Or what do they actually know?? Is their answer like the immortal words of Cheney, when told that many Americans believed the Iraq War wasn't worth it:

So?

Kay in Maine reports that

Ben Bernanke has given out 2 trillion dollars in emergency loans, but doesn't know who got the money...

Or, according to this article at firedoglake,

Apparently Bernanke, that wonderful bipartisan soul who is so competent and wonderful that everyone in the village thinks Obama should leave him in charge is refusing to identify who got almost 2 trillion dollars of Fed cash. Bloomberg News is suing to find out. Personally I really, really, really want to know. What exactly is Bernanke hiding?

Is it that he doesn't know? Or doesn't want us to know? Or doesn't know if it would be a good or bad idea for us to know?

After all, the whole idea of these loans is pretty shaky, but necessary.

This is money that was loaned in exchange for "collateral", by which we mean "trash no one else but the Fed would buy for anything but cents on the dollar".

"Collateral" otherwise known as those infamous Credit Default Swaps, perhaps? Those toxic assets that have poisoned every business they touch?

More to the point, that 2 trillion is taxpayer money, and taxpayers have a right to know what sweetheart deals Bernanke's been giving out, and who's been getting what. This whole "this information is too scary for citizens to know" schtick is so Bush regime. I thought we were moving into a new era of openness? Perhaps Barney should get with the program?

Now that President-elect Obama is hitting the ground running - including plans to close Gitmo and more bailouts for the economy, not to mention undoing some of those Bush signing statements - we should let him know it's time to replace Bernanke with someone more capable, more up-front, and less Bushco-oriented. Of course, with Alan
Greenspan as a precedent, Bernanke could be hoping for a longer-term stay at the Fed.

Does this mean the bailout is planned as a sort of "black budget" like certain sectors of the military budget? Or is it more like the "budget" of Iraq? Let's hope Bloomberg News gets some traction on their FOIA lawsuit so bring Bernanke & Treasury Secretary Henry Paulson to make good on their "transparency" promise back in September, so we don't have to look at our taxpayer-dollar expenditures on blacked-out pages.

Obama's Presidency: Let the Transformation Begin...

Leonard Pitts wrote this memorable column on the transformational effect of Obama's presidency:

''For the first time in my adult lifetime I am really proud of my country. And not just because Barack has done well, but because I think people are hungry for change.'' -- Michelle Obama, Feb. 18, 2008

I always thought I understood what Michelle Obama was trying to say.

You are familiar, of course, with what she actually did say, which is quoted above. It provided weeks of red meat for her husband's opponents, who took to making ostentatious proclamations of their own unwavering pride in country.

But again, I think I know what the lady meant to say. Namely, that with her husband, this brown-skinned guy with the funny name, making a credible run for the highest office in the land, she could believe, for the first time, that ''we the people'' included her.

It is, for African Americans, an intoxicating thought almost too wonderful for thinking. Yet, there it is. And here we are, waking up this morning to find Barack Obama president-elect of these United States.

In a sense, it is unfair -- to him, to us -- to make Tuesday's election about race. Whatever appeal Obama may have had to African Americans and white liberals eager to vote for a black candidate, is, I believe, dwarfed by his appeal to Americans of all stripes who have simply had enough of the politics of addition by division as practiced by Karl Rove and his disciples, enough of the free floating anger, the holiday from accountability, the nastiness masquerading as righteousness, the sheer intellectual dishonesty, that have characterized the era of American politics that ends here.

But in the end, after all that, there still is race.

And it would be a sin against our history, a sin against John Lewis and Viola Liuzzo, against James Reeb and Lyndon Johnson, against Fannie Lou Hamer and Martin Luther King, against all those everyday heroes who marched, bled and died 40 years ago to secure black people's right to vote, not to pause on this pinnacle and savor what it means. It would be a sin against our generations, against slaves and freedmen, against housemen and washerwomen, against porters and domestics, against charred bodies hanging in southern trees, not to be still and acknowledge that something has happened here and it is sacred and profound.

For most of the years of the American experiment, ''we the people'' did not include African Americans. We were not included in ''we.'' We were not even included in ``people.''

What made it galling was all the flowery words to the contrary, all the perfumed lies about equality and opportunity. This was, people kept saying, a nation where any boy might grow up and become president. Which was only true, we knew, as long as it was indeed a boy and as long as the boy was white.

But as of today, we don't know that anymore. What this election tells us is that the nation has changed in ways that would have been unthinkable, unimaginable, flat out preposterous, just 40 years ago. And that we, black, white and otherwise, better recalibrate our sense of the possible.

There was something bittersweet in watching Michelle Obama lectured on American pride this year, in seeing African Americans asked to prove their Americanness when our ancestors were in this country before this country was. There was something in it that was hard to take, knowing that we have loved America when America did not love us, defended America when it would not defend us, believed in American ideals that were larger than skies, yet never large enough to include us.

We did this. For years unto centuries, we did this. Because our love for this country is deep and profound. And complicated and contradictory. And cynical and hard.

Now it has delivered us to this singular moment. Barack Obama is president-elect of the United States.

And we the people should be proud.

The World Embraces President Obama, Mississippi Censors Him

This from Electronic Village:

Did you see where school officials down in Mississippi threatened children with expulsion from busses and classrooms if they uttered the word, "Obama"?

and mentions

I imagine that there are still some folks who will have difficult time dealing with a Black president. I imagine it will hurt some of the officials and judges that run federal buildings and federal courtrooms when they have to place a portrait photo of the incoming president on the walls.

From the original:

On Thursday, the Pearl Schools superintendent said that a school bus driver and a coach were disciplined for allegedly telling students not to say President-elect Barack Obama’s name.

Guess some people, like the little newspaper in TX that didn't even print the news of Obama's election (apparently they didn't know Texas was part of the United States?), think we are still in the late 1800's, there isn't a recession, and they weren't descended from Adam or Eve in Africa. And why does any African heritage automatically cause a person to be "black" but any European heritage doesn't cause them to be in any sense "white" or even "multi-racial"??? Obviously, being "black" is much stronger than being "white". And preferable. Otherwise, why would you want the numbers of "black" to increase? Because it's a matter of survival of the fittest, and being "black" must mean more "fit" - except those in Mississippi are in denial of the confusion in their own actions. Maybe like Sarah Palin, they think Africa is a nation, somewhere between Fiji and India. Isn't that where the Indians come from?

What better role model for all students could there be than Barack Obama - and his family?

Good news about the racists, though. They are shrinking, vastly outnumbered by everybody else. There has never been such an outpouring of admiration and excitement as leaders and people all over the world embrace the name, and the man, Barack Obama.

TOTAL JOY! President-Elect Barack Obama Turns the Page

"Tonight is Your Answer." Nothing like this has ever happened before. The sheer numbers of people - a quarter million in Chicago's Grant Park & environs - all mesmerized, inspired, united, moved to the core, and ecstatic about Barack Obama's election as President of the United States - doesn't count the untold millions watching on their televisions and computer screens: an amazing celebration of democracy - a peaceful, dramatic, and real people's victory - of the people, by the people, for the people. Was it the numbers, the enthusiasm, the sense of release from a dark period, of freedom from some unnamed threat, or was it the sheer power of human cooperation on a scale grander than anyone really comprehended until it actually went down?

Or was it the power of one man to lead in a time that cried out for rational, sensible, genuine leadership - by gathering and uniting an entire nation to turn the page??

The end of the campaign crept up on me like a slow, protracted labor ... knowing childbirth is coming inevitably, but afraid of what could happen, what could go wrong, there's always so many variables, but in any case, when the time comes, it will come, and then, suddenly - no matter how much preparation, it will go down suddenly - a child will be born. Where no life existed, in the final stretch of the campaign, I had this strange feeling of being unable to focus on anything else, unable to stand the wait, yet forced to wait, unable to just calm down and get a life.

But then suddenly it did go down, just as predicted, and yet the release was palpable, the baby was born! But this child was like no other...

OK, I've seen elections since the days of Eisenhower. I saw the elation and excitement over JFK's election, yes! But it was not like this.

And I saw the anticipation and enthusiasm over Reagan's election, where he got swept into office in a huge mandate. But it was nothing like this.

Jimmy Carter's campaign was marked by crowds and hope and energy, I remember. But nothing at all like this. Others such as LBJ, Bill Clinton, or even Nixon in his glory days before the Fall, also had their share of fans and supporters and hopeful followers. But all that pales in comparison to this.

So it is not surprising that journalists mentioned the Moon landing as a moment when the nation and the world were transfixed as they were with the election of Barack Obama. But even that transcendent moment, in many ways more historically significant than the election of a leader, yet even that moment does not compare in its power over a nation to this. The moon landing did not cause dancing in the streets, did not shake the social structure that was once built on slavery to its core, did not electrify democracy, did not cause millions of apathetic citizens to suddenly, passionately, and from their heart to love their country. It was a giant step for humankind, to be sure. But it was not the defining moment of turning the page...

"Our stories are distinctive, but our destiny is shared..." A man destined to shape and change that destiny, whose moment of triumph and joy is also characterized by his trademark cool seriousness - that intuitively-understood sign that he recognizes, unlike his predecessor, the gravity of the situation through which he must now lead us. He knows how mind-boggling is the great book whose page he - and all of us, in a sense - must turn...

Now we must turn the page from divisiveness, from all the "isms" starting with racism and sexism and including all the ethnic and ideological differences that so often end in hate, destruction, and war. We must turn the page from mean-spiritedness and demeaning those with whom we disagree. We must turn the page from rigid ideologies that cause us to see others, even countrymen, even neighbors, as enemies. It is time to turn the page...

Now we must turn the page from war as a solution to all ills, and turn the page from confrontation without compassion, without even rational consideration. The war on terror, the war on cancer, the war on drugs, the war on crime... all these wars have not succeeded. Could it be the solution is not necessarily to declare, and then wage war? It is time to turn the page...

Now we must turn the page from self-centered, Me-first values. The values that led to greed, to believing we can get something from nothing without working for it, the values that led millions to believe that the Market, the Almighty Market, would save us all. The values that threatened to destroy our economy, our status, our nation, and our lives. It's time to turn the page...

We must turn the page from exclusiveness, from looking down on others and saying, "We are Americans" and "They are not", or from saying those who agree with us are "Real America" and those who disagree are false. Or from believing that our religion is the only acceptable religion and all others and all other beliefs are a threat to our security or our society. We must turn the page from desiring to force others to our beliefs, as if that is even possible. It is time to turn the page...

We must turn the page from Big Brother surveillance and fear-mongering, from the use of torture, extraordinary renditions, and secret prison ships as a means to supposedly bring a victory to democracy - by undermining its ideals, its principles, and even its laws and Constitution. It's time to turn the page...

We must turn the page from emotionalism which so quickly turns to hate and fear, and open our God-given minds to actually use them... yes it is time to use our minds to turn the page...

And from the gracious and eloquent concession speech of John McCain, the very power of Barack Obama's page-turning has inspired his opponent to also turn this page, for without turning the page, our nation and even our planet are in peril, and we are our own worst enemy, as the last period of history has warned us, but it could change, and it will change, if we do turn the page...

The moment is great beyond words, but we all know and sense that. Even the world senses that, most certainly. And we all know ... there is no turning back.