Are you sure this is from 1974?

You Know Things Are Bad When Even Newsweek Is Slamming the Obama Administration for Caving in to the Financial Status Quo

Washington's Blog
Saturday, April 11, 2009

You know things are bad when even one of the most mainstream publications - Newsweek - is slamming the Obama administration for caving to the financial status quo, and sounding the same themes that I and other "alternative" writers have been shouting into the wind about for many months.

After recounting a meeting in which Senators Sanders, Cantwell, Dorgan, Feinstein, Levin and Webb met with Obama, Geithner and Summers and expressed their dismay that the administration was just going to keep doing the same old thing which got us into this mess, Newsweek writer Michael Hersh writes:

Major Wall Street players are digging in against fundamental changes. And while it clearly wants to install serious supervision, the Obama administration—along with other key authorities like the New York Fed—appears willing to stand back while Wall Street resurrects much of the ultracomplex global trading system that helped lead to the worst financial collapse since the Depression. 

At issue is whether trading in credit default swaps and other derivatives—and the giant, too-big-to-fail firms that traded them—will be allowed to dominate the financial landscape again once the crisis passes. As things look now, that is likely to happen. And the firms may soon be recapitalized and have a lot more sway in Washington—all of it courtesy of their supporters in the Obama administration. With its Public-Private Investment Program set to bid up and buy toxic assets, the administration is handing these companies another giant federal subsidy. But this time the money will come through the back door, bypassing Congress, mainly via FDIC loans. No one is quite sure how the program will work yet, but it's very likely going to make a lot of the same Wall Street houses much richer at taxpayer expense. Meanwhile, the big banks that still need help will almost certainly get another large infusion once the stress tests are completed by the end of the month.

The financial industry isn't leaving anything to chance, however. One sign of a newly assertive Wall Street emerged recently when a bevy of bailed-out firms, including Citigroup, JPMorgan and Goldman Sachs, formed a new lobby calling itself the Coalition for Business Finance Reform. Its goal: to stand against heavy regulation of "over-the-counter" derivatives, in other words customized contracts that are traded off an exchange...

Geithner's new rules would allow the over-the-counter market to boom again, orchestrated by global giants that will continue to be "too big to fail" (they may have to be rescued again someday, in other words). And most of it will still occur largely out of sight of regulated exchanges...

the old culture is reasserting itself with a vengeance. All of which runs up against the advice now being dispensed by many of the experts who were most prescient about the crash and its causes—the outsiders, in other words, as opposed to the insiders who are still running the show. Among the outsiders is Nassim Nicholas Taleb, the trader and professor who wrote "The Black Swan: The Impact of the Highly Improbable." Taleb wrote in the Financial Times this week that a fundamental new approach is needed. Not only should firms be prevented from growing too big to fail, "complex derivatives need to be banned because nobody understands them and few are rational enough to know it," he said. Yet even as we are still picking up the debris, we seem to be ready to embrace that world once again.

The Constitution Dies - To Thunderous Applause

Posted by sakerfa on April 6, 2009

Gee, you folks who thought Obama was the be-all and end-all to “solve” violations of The Constitution under President Bush:

A pair of bills introduced in the U.S. Senate would grant the White House sweeping new powers to access private online data, regulate the cybersecurity industry and even shut down Internet traffic during a declared “cyber emergency.”

Senate bills No. 773 and 778, introduced by Sen. Jay Rockefeller, D-W.V., are both part of what’s being called the Cybersecurity Act of 2009, which would create a new Office of the National Cybersecurity Advisor, reportable directly to the president and charged with defending the country from cyber attack.

This sounds reasonable, at first blush.

But I’ve read the actual draft bill that allegedly was proffered, and while most of the time what is published on WND is about as diametrically opposed politically to my views, this isn’t one of those times.

On page 21 and 22 it is established not only certification of “security professionals” in the computer field but mandatory licensing for anyone performing compute security services not only to the government but also to any “critical infrastructure system or network.”

This would immediately make part of what I do - selling spam-interdiction software to state and local public safety organizations such as police departments - unlawful unless I went through whatever “process” the government sets forth.

Got that?  As a guy who has been writing spam filtering software for more than a decade, as the guy who first offered it to his ISP customers back in the 1990s as part of our service to every user, what I did in the 1990s would be made illegal (since we had literally thousands of accounts billed to a government agency of one form or another) and my provision and support of that software (”Spamblock-Sys”) would be unlawful going forward unless I submitted to whatever licensing criteria the government set forth in the future.

Might I be willing to submit to that?  Maybe.  Will it dramatically increase the cost of that software?  Absolutely.  Who’s going to pay for it?  You are, in higher taxes.

Second, page 40 has some truly frightening implications, among them granting The Department of Commerce plenary authority to invade networks and access the data therein irrespective of Constitutional or legal restrictions against that action.

Finally, there is a provision within this draft allowing The President to order disconnection of any “critically important” infrastructure - but it does not define what that is, once again, granting effective plenary authority to The President to silence communications irrespective of Constitutional protections regarding Free Speech.

First Amendment?

What First Amendment?

The First Amendment is first for a reason - without Freedom of The Press, which happens to fundamentally include the right to freely communicate between ourselves, there is no means by which corruption and evil can be effectively exposed.

The Second Amendment is second for a reason - if The First Amendment falls, you’re going to need The Second Amendment, and fast.

I wonder if we’ll defend the Second Amendment as citizens of The United States if we won’t defend The First!

Economist: US collapse driven by 'fraud'; Geithner covering up bank insolvency

04/04/2009 @ 3:49 pm

Filed by Stephen C. Webster 


In an explosive interview on PBS' Bill Moyers Journal, William K. Black, a professor of economics and law with the University of Missouri, alleged that American banks and credit agencies conspired to create a system in which so-called "liars loans" could receive AAA ratings and zero oversight, amounting to a massive "fraud" at the epicenter of US finance.

But worse still, said Black, Timothy Geithner, President Barack Obama's Secretary of the Treasury, is currently engaged in a cover-up to keep the truth of America's financial insolvency from its citizens.

The interview, which aired Friday night, is carried on the Bill Moyers JournalWeb site.

Black's most recent published work, "The Best Way to Rob a Bank is to Own One," released in 2005, was hailed by Nobel-winning economist George A. Akerlof as "extraordinary."

"There is no one else in the whole world who understands so well exactly how these lootings occurred in all their details and how the changes in government regulations and in statutes in the early 1980s caused this spate of looting," he wrote. "This book will be a classic."

But that book only covers the fallout from the 1980s Savings & Loan crisis; Black's later first-hand involvement in that scandal being the ensuing liquidation of bad banks.

"A single bank, IndyMac, lost more money than the entire Savings and Loan Crisis," reported PBS. "The difference between now and then, explains Black, is a drastic reduction in regulation and oversight, 'We now know what happens when you destroy regulation. You get the biggest financial calamity of anybody under the age of 80.'"

That financial calamity, he explained, was brought about not by mishap or accident, but only after a concerted effort to undermine and remove all regulations, allowing a creditor free-for-all that hinged on fraudulent risk ratings for bad loans. 

"[T]he way that you do it is to make really bad loans, because they pay better," he told Moyers. "Then you grow extremely rapidly, in other words, you're a Ponzi-like scheme. And the third thing you do is we call it leverage. That just means borrowing a lot of money, and the combination creates a situation where you have guaranteed record profits in the early years. That makes you rich, through the bonuses that modern executive compensation has produced. It also makes it inevitable that there's going to be a disaster down the road.

"...This stuff, the exotic stuff that you're talking about was created out of things like liars' loans, that were known to be extraordinarily bad," he continued. "And now it was getting triple-A ratings. Now a triple-A rating is supposed to mean there is zero credit risk. So you take something that not only has significant, it has crushing risk. That's why it's toxic. And you create this fiction that it has zero risk. That itself, of course, is a fraudulent exercise. And again, there was nobody looking, during the Bush years. So finally, only a year ago, we started to have a Congressional investigation of some of these rating agencies, and it's scandalous what came out. What we know now is that the rating agencies never looked at a single loan file. When they finally did look, after the markets had completely collapsed, they found, and I'm quoting Fitch, the smallest of the rating agencies, "the results were disconcerting, in that there was the appearance of fraud in nearly every file we examined."

He equated the entire US financial system to a giant "ponzi scheme" and charged Treasury Secretary Timothy Geithner, like Secretary Henry Paulson before him, of "covering up" the truth.

"Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?" asked Moyers. 

"Absolutely, because they are scared to death," he said. "All right? They're scared to death of a collapse. They're afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we'll run screaming to the exits. And we won't rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it's foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, 'We just can't let the big banks fail.' That's wrong."

Ultimately, said Black, the financial downfall of the United States in the wake of the Bush years is due to "the most elite institutions in America engaging in or facilitating fraud."

"When will Americans wake up and hold the real criminals - Banksters - accountable for their actions, and pressure the government to enact systemic changes to prevent future abuses?"

Families learning of $163,000 tax 'bomb'

Economics prof says deficits heading toward 'banana republic levels'

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Posted: April 04, 2009
12:10 am Eastern

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WorldNetDaily

An economics professor from Stanford is warning Americans soon will discover a $163,000-per-family tax "bomb" inside President Obama's budget plans, which have pushed U.S. deficits toward "banana republic levels."

The alert comes from Michael J. Boskin, who praised some of Obama's economic plans in a Wall Street Journal column but saw red flags waving for other provisions.

Boskin, a fellow at the Hoover Institution who chaired the Council of Economic Advisers under President George H.W. Bush, crunched the numbers and found that while Obama inherited a growing and significant budget deficit, his plans will add $6.5 trillion of debt.

"What does $6.5 trillion of additional debt imply for the typical family? If spread evenly over all those paying income taxes (which under Mr. Obama's plan would shrink to a little over 50 percent of the population), every income-tax paying family would get a tax bill for $163,000," he wrote.

"(In 10 years, interest would bring the total to well over a quarter million dollars, if paid all at once. If paid annually over the succeeding 10 years, the tax hike every year would average almost $34,000.) That's in addition to his explicit tax hikes," wrote Boskin.

"While the future tax time-bomb is pushed beyond Mr. Obama's budget horizon, and future presidents and Congresses will decide how it will be paid, it is likely to be paid by future income tax hikes as these are general fund deficits," he said.

"We can get a rough idea of who is likely to pay them by distributing this $6.5 trillion of future taxes according to the most recent distribution of income-tax burdens. We know the top 1 percent or 5 percent of income-taxpayers pay vastly disproportionate shares of taxes, and much larger shares than their shares of income. But it also turns out that Mr. Obama's massive additional debt implies a tax hike, if paid today, of well over $100,000 for people with incomes of $150,000, far below Mr. Obama's tax-hike cut-off of $250,000. … In other words, a middle-aged two-career couple in New York or California could get a future tax bill as big as their mortgage," he warned.

Boskin notes that Obama's administration did inherit a large deficit.

"All presidents present the best possible case for their budgets, but a mind-numbing array of numbers offers innumerable opportunities to conjure up misleading comparisons," he said. "Mr. Obama's characterizations of his budget unfortunately fall into this pattern. He claims to reduce the deficit by half, to shave $2 trillion off the debt (the cumulative deficit over his 10-year budget horizon), and not to raise taxes on anyone making less than $250,000 a year.

"While in a Clintonian sense correct (depends on what the definition of 'is' is), it is far more accurate to describe Mr. Obama's budget as almost tripling the deficit. It adds $6.5 trillion to the national debt, and leaves future U.S. taxpayers (many of whom will make far less than $250,000) with the tab. And all this before dealing with the looming Medicare and Social Security cost explosion," he said.

He said the Congressional Budget Office "baseline cumulative deficit" for 2010-2019 is $9.3 trillion. Obama's proposals, he writes, add to that $6.5 trillion.

"Finally, what of the claim not to raise taxes on anyone earning less than $250,000 a year? … Every dollar of debt he runs up means that future taxes must be $1 higher in present-value terms. Mr. Obama is going to leave a discounted present-value legacy of $6.5 trillion of additional future taxes, unless he dramatically cuts spending. … Call it a stealth tax increase or ticking tax time-bomb," he said.

Boskin praised Obama's plans to permanently index the alternative minimum tax and other provisions, but he said the growing trillion-dollar deficits in the latter years of Obama's plans "are so large for a prosperous nation in peacetime – three times safe levels – that they would cause the debt burden to soar toward banana republic levels."

WND previously reported when Lawrence J. Haas, former communications director for Vice President Al Gore, said Obama "wants to make permanent all the tax cuts from those years [2001 and 2003] for people making up to $250,000 a year and frankly to redistribute income a bit in a fair way so he would raise taxes on those above $250,000."

His comments came in an interview with Greg Corombos of Radio America/WND, 

Haas explained the income redistribution plan:

"The tax cuts from 2001 and 2003 provided a disproportionate amount of the benefits for those in the top one, two percent of earners, so in essence what the president is attempting to do is make things a little bit fairer by way of asking those who have done so well in recent years to pay a little bit more … [while continuing] tax relief for people at the bottom, in the middle, in all candor who have struggled in recent years."

In a 2001 radio station interview, Obama said he thought wealth "redistribution" was appropriate:

If you look at the victories and failures of the civil rights movement and its litigation strategy in the court, I think where it succeeded was to invest formal rights in previously dispossessed people, so that now I would have the right to vote. I would now be able to sit at the lunch counter and order and as long as I could pay for it I’d be OK

But, the Supreme Court never ventured into the issues of redistribution of wealth, and of more basic issues such as political and economic justice in society. To that extent, as radical as I think people try to characterize the Warren Court, it wasn't that radical. It didn't break free from the essential constraints that were placed by the Founding Fathers in the Constitution, at least as it's been interpreted, and the Warren Court interpreted in the same way, that generally the Constitution is a charter of negative liberties. Says what the states can't do to you. Says what the federal government can't do to you, but doesn't say what the federal government or state government must do on your behalf.

And that hasn't shifted and one of the, I think, tragedies of the civil rights movement was because the civil rights movement became so court-focused I think there was a tendency to lose track of the political and community organizing and activities on the ground that are able to put together the actual coalition of powers through which you bring about redistributive change. In some ways we still suffer from that.

Frustrated Americans cheer Obama's tough auto moves

Mon Mar 30, 2009 4:17pm EDT
By Daniel Trotta

NEW YORK (Reuters) - Some frustrated U.S. taxpayers cheered President Barack Obama's tough steps to shore up the reeling auto industry on Monday but critics called his decision to fire General Motors' chief a heavy-handed power grab.

Obama forced out General Motors chief executive Rick Wagoner, pushed Chrysler LLC toward a merger with Italy's Fiat SpA, and threatened bankruptcy for both, marking an escalation in Washington's involvement in rescuing the faltering economy.

Skeptics asked whether it was an early sign of a more activist administration or an isolated example. GM shares tumbled 30 percent on the news and the Dow Jones Industrial average sank nearly 4 percent.

Experts called it potentially the most significant presidential intervention in the private sector since Harry Truman tried to seize the steel industry during the Korean War in 1952, only to be rebuffed by the Supreme Court.

"I don't think the president should be running the economy. They should have let the company go bankrupt. The guy would have lost his job anyway," said Edward Prescott, a 2004 Nobel laureate in economic sciences.

As a candidate last year, Obama supported rescuing the financial sector, and since then he has shifted to attacking the bonuses and corporate jets for companies taking taxpayer money to pushing out a CEO and replacing members of the board of directors.

"Politics is certainly entering the process. GM should have gone into bankruptcy in the fall. We would be much further along with the workout by now," added Randall Filer, a professor of economics at Hunter College in New York.

Stephen Schork, editor of an industry report on the energy and shipping markets, feared Obama was trying to engineer a hasty conversion to green energy. "They are expressing abject hostility toward the hydrocarbon industry," Schork said.

WILL POPULAR SUPPORT HOLD?

At the same time, Obama's approval ratings have held firm above 60 percent in most public opinion polls. In a Cincinnati coffee shop, retiree Sharon Schmidt, 74, said she supported the decision to push Wagoner out.

"If GM is going to take a big bailout from the federal government, the people who brought it to this state should probably go," Schmidt said. "These bankers and so on are making million dollar bonuses? They should be gone, too."

In a Dallas suburb, accountant John Shaffer, 47, also approved. "I feel he was fired to force the unions and bond holders to seriously negotiate with the company. So I think it was good," he said.

Stephen Hess, a presidential scholar at the Brookings Institution, said Obama's action lacked any historical parallel because the circumstances of the financial crisis were unique and he could succeed because he seemed to have a good "internal gyroscope" on reading the mood of the public.

"So far people are with him," Hess said. "There will be a lot of people who say: At last somebody is doing something."

Opposition from Republicans in Congress was fast and fierce.

"With sweeping new power the White House will be deciding which plants will survive and which won't, so in essence, this administration has decided they know better than our courts and our free market process how to deal with these companies," said Republican Senator Bob Corker of Tennessee.

But in a sign Obama may find some support from the Republican minority, Representative Darrell Issa of California said Obama has "struck the right chord in seeking balance between supporting the American auto industry and calling for a much-needed restructuring."

Obama Denounces Global Currency While Creating The Very Means For Its Introduction

Posted By admin On March 25, 2009 @ 9:26 am In Featured Stories

Paul Joseph Watson
Prison Planet.com
Wednesday, March 25, 2009
Obama, Geithner and Bernanke yesterday publicly defended the dollar and denounced proposals by China and Russia to supplant the greenback with a new global currency, and yet the very policies of the Obama administration, the Treasury and the Federal Reserve are creating the perfect storm for the dollar’s death and its replacement with a new international reserve currency.

As we reported on Monday, China has expressed support for Russia’s proposal to hand the IMF the power to create a new supra-national global currency in response to the call for an alternative to the U.S. dollar as the world reserve currency.

Last week the Kremlin called for the “creation of a supranational reserve currency to be issued by international institutions as part of a reform of the global financial system.”

Yesterday, Barack Obama, Timothy Geithner and Ben Bernanke all separately expressed support for the dollar and denounced the Chinese-Russian proposal for a new global currency.

“… The dollar is extraordinarily strong right now,” said Obama during his prime-time press conference. “The reason the dollar is strong right now is because investors consider the United States the strongest economy in the world, with the most stable political system in the world. So, you don’t have to take my word for it.”

When asked if he supported the introduction of a new global currency, Obama flatly stated, “No, I don’t support a global currency.”

During Tuesday’s congressional hearing, both Geithner and Bernanke echoed Obama’s statement.

“Would you categorically renounce the United States moving away from the dollar and going to a global currency as suggested by China?” a lawmaker asked Treasury Secretary Geithner.

Geithner immediately responded, “I would.”

“And the chair?” the lawmaker asked, after turning to Fed chairman Bernanke.

“I would also,” Bernanke said.

The creation of a new supra-national global reserve currency to supplant the U.S. dollar would likely lead to a complete collapse of the greenback, of which trillions are held in in foreign exchange reserves by foreign countries such as China and Japan.

In the case of Obama, Geithner and Bernanke, actions certainly speak louder than words, because while publicly denouncing the demise of the dollar and the call for a new global currency, their every policy is creating the very means and justification for its introduction.

Bernanke himself has vehemently supported efforts to create a global regulatory framework that would act as the vehicle for the introduction of a new global currency to replace the dollar.

He has echoed the sentiments of Blair, Brown, Merkel, Sarkozy and others in calling for a new world economic order and “A strategy that regulates the financial system as a whole, in a holistic way, not just its individual components,” Bernanke told a CFR audience at a speech earlier this month.

“I also will not say much about the international dimensions of the issue but will take as self-evident that, in light of the global nature of financial institutions and markets, the reform of financial regulation and supervision should be coordinated internationally to the greatest extent possible,” said Bernanke, adding that the crisis is “very much an international problem, and it requires international solutions.”

The endgame of a form of supervision “coordinated internationally to the greatest extent possible” can mean little else but the creation of a global currency that can be tightly regulated and controlled by international bodies such as the IMF and World Bank, therefore Bernanke’s public denouncement of a “global currency” is nothing more than a two faced stunt.

In addition, as Ron Paul has warned, Bernanke’s policies are leading to the destruction of the dollar and the creation of a vacuum that would create the perfect pretext for the introduction of a global currency.

Trillions upon trillions of freshly printed federal reserve notes that are being used to throw good money after bad, pay corrupt banker’s bonuses and bailout failed, inept and incompetent banks and corporations at the expense of the taxpayer are going to create a hyperinflationary holocaust that will plunge the dollar into a crisis never before experienced and will undoubtedly put massive pressure on China and Japan to liquidate their holdings of U.S. debt and replace it with a new form of international reserve currency.

The fact that banks are still holding on to the trillions printed since September last year has delayed any significant inflationary impact, but when the lending starts again, confidence in the greenback’s ability to act as an international reserve currency will sink and calls for its replacement will reach a crescendo.

Treasury Secretary Geithner has played a leading role in the wholesale looting of the greenback, announcing this week that the printing presses will be cranked to the tune of at least another $1 trillion to buy more “toxic assets” from the sagging balance sheets of failing institutions - again, all at the expense of the taxpayer who will pay for it with rampant tax hikes and runaway inflation on fuel and food later down the road.

This will mirror the situation in Iceland, where massive devaluation of the krona has destroyed savings and led to calls for the country to abandon their currency altogether and join the Euro. A similar fate awaits the U.S. with “helicopter Ben” and his loyal sidekick Geithner doing everything in their power to destroy the dollar’s value with ceaseless so-called “stimulus” plans.

Some analysts have gone even further, suggesting that the hyperinflationary backlash will not be on a par with Iceland, but with Zimbabwe, where the Zimbabwean dollar has suffered annual inflation of over 200 million per cent over the last few years.

Of course, the pound sterling and the Euro, on the back of identical hyperinflation caused by central banks overprinting money, will also collapse, leaving no alternative but for the introduction of a new global reserve currency to “restore confidence”.

And so we turn to Obama - the man who has used his political capital, slick speeches and confident smile to oversee the greatest destruction of American wealth since the great depression. Obama has acted as the slimy salesman for the introduction of Bernanke and Geithner’s multi-trillion dollar programs that can have no other effect but to weaken the position of the dollar as the global reserve currency, so for him to glibly express his opposition to a new global reserve currency that will replace the dollar is an act of gut-wrenching hypocrisy.

Obama has continually demonized private enterprise in favor of government intervention and has acted as the engine for the gargantuan transfer of wealth from American taxpayers to the Wall Street oligarchs that pull his strings.

While publicly denouncing a move towards a global currency yesterday, Obama has conversely announced that he will pursue a new world economic order, a “new global deal” in alliance with British Prime Minister Gordon Brown.

When we hear the terms “new world economic order,” and a “new global deal,” they are interchangeable with the agenda to create a new global currency. It’s all about taking more power and centralizing it into fewer hands and creating a de facto banking dictatorship that will have complete control over global currencies and exchange rate mechanisms.

Obama, Geithner and Bernanke are the three biggest culprits behind the destruction of the dollar and are culpable for creating the perfect storm for its replacement with a new global reserve currency - so for all three to claim yesterday that they support a strong dollar and oppose a global currency is like Bernie Madoff lecturing you that Ponzi schemes are immoral.

Kroft to Obama: Are you punch-drunk?

By: Craig Gordon and Jonathan Martin
March 22, 2009 06:55 PM EST

President Barack Obama said he believes the global financial system remains at risk of implosion with the failure of Citigroup or AIG, which could touch off “an even more destructive recession and potentially depression.”

His remarks came in a“60 Minutes” interview in which he was pressed by Steve Kroft for laughing and chuckling several times while discussing the perilous state of the world’s economy.

“You're sitting here. And you're— you are laughing. You are laughing about some of these problems. Are people going to look at this and say, ‘I mean, he's sitting there just making jokes about money—’ How do you deal with— I mean: explain. . .” Kroft asked at one point.

“Are you punch-drunk?” Kroft said.

“No, no. There's gotta be a little gallows humor to get you through the day,” Obama said, with a laugh.

Obama tried to inject some optimistic notes into the interview, saying he sees “flickers of hope” that the economy is beginning to turn the corner.

And he seemed intent on cooling the populist anger rising in the country, particularly over AIG’s $165 million in bonuses. He signaled that he would like to see changes in a House resolution that would tax the bonuses at 90 percent, saying “we can’t govern out of anger.”

“Main Street has to understand, unless we get these banks moving again, then we can’t get this economy to recover. And we don’t want to cut off our nose to spite our face,” he said.

The interview captured the balancing act that Obama must strike on the economy. He gave a nod to public anger at Wall Street while saying it could not dictate his response.

He got in a few whacks of his own at Wall Street executives who contributed to the meltdown—referring to them ironically at one point as “the best and the brightest”—while being ever-mindful that he still needs their help to dig out of the crisis.

His talk of depression could be viewed as alarmist—but it also seemed aimed at bracing Congress and the public for the unpopular prospect of spending even more taxpayer dollars to prop up Wall Street. Treasury Secretary Timothy Geithner is set to roll out a plan Monday aimed at restoring the flow of credit that would back up private investments with government funds.

Even his awkward laughter highlighted an issue Obama has faced dating back to the campaign, a sense that he sometimes is too “cool” and detached to fully grasp the public anxiety over mounting job losses and economic worries.

Still, Obama made clear that he’s afraid the nation hasn’t seen the worst of the economic crisis. He said the recession deepened faster than he expected, particularly in terms of job losses.

“If we did nothing, you could still have some big problems. There are certain institutions that are so big that if they fail, they bring a lot of other financial institutions down with them. And if all those financial institutions fail all at the same time, then you could see an even more destructive recession and potentially depression,” Obama said.


“I'm optimistic about that not happening,” he quickly added, “because I think we did learn lessons from the Great Depression.”

Obama also cited Wall Street’s high-risk, high-reward culture as a main cause of the economic meltdown. He took aim at traders and executives in personal terms—saying they need to leave New York for North Dakota or Iowa to appreciate how out-of-whack their pay looks to the average American.

“I mean there were a whole bunch of folks who, on paper, if you looked at quarterly reports, were wildly successful, selling derivatives that turned out to be. . .completely worthless,” Obama said, with a chuckle.



“Gosh, I don't think it's me being anti-Wall Street just to point out that the best and the brightest didn't do too well on that front, and that you know, maybe the incentive structures that have been set up have not produced the kinds of long term growth that, that I think everybody's looking for.”

He also said he doesn’t think Wall Street has gotten his message yet, and that he must do a better job conveying it to them:

“One of the things that I have to do is to communicate to Wall Street that, given the current crisis that we're in, they can't expect help from taxpayers but they enjoy all the benefits that they enjoyed before the crisis happened,” Obama said. “You get a sense that, in some institutions that has not sunk in.”

Even one of his top supporters, billionaire investor Warren Buffett, came in for some criticism from Obama when Kroft noted that Buffett has criticized his plan.

“Warren's also a big player in the financial markets who's a major owner of Wells Fargo. And so he's got a perspective from the perspective of somebody who is part owner of a bank,” Obama said.

Still, Obama would not endorse legislation moving through Congress to tax nearly all the bonuses of executives at AIG. Asked if the measure is constitutional, the former law professor said: “Well, I think that as a general proposition, you don't want to be passing laws that are just targeting a handful of individuals…And as a general proposition, I think you certainly don't want to use the tax code—is to punish people.”

“So let's see if there are ways of doing this that are both legal, that are constitutional that uphold our basic principles of fairness, but don't hamper us from getting the banking system back on track,” Obama said.

And he defended his embattled Treasury Secretary Timothy Geithner, telling Kroft that he wouldn’t accept his resignation if he tried to quit. Obama said jokingly that he’d respond: “Sorry Buddy, you've still got the job.”

The economy dominated the interview, which also ranges on topics such as his upcoming Afghanistan policy review and even his daughter’s new swing set at the White House.

On Afghanistan, Obama said he is looking for a “comprehensive strategy” that stresses diplomacy that includes engagement with neighboring Pakistan. While Obama is studying requests from the military for more troops, he warned that, “there's gotta be an exit strategy. There’s gotta be a sense that this is not perpetual drift.”

He said Afghanistan is a more complex problem than Iraq. “Iraq was actually easier than Afghanistan. It's easier terrain,” Obama told Kroft. “You've got a-- much better educated population, infrastructure to build off of. You don't have some of the same destabilizing border-- issues that you have between Afghanistan and Pakistan. And so this is going to be a tough nut to crack. But it is not acceptable for us to simply sit back and let safe havens of terrorists plan and plot.”

For all the challenges, Obama said, “the complexities of Afghanistan-- are matched, maybe even dwarfed, by the complexities of the economic situation.”

Obama also used the interview to criticize former Vice President Dick Cheney’s criticism of Obama’s decision to close Guantanamo Bay prison, where terror suspects are held. Since leaving office, Cheney has been an outspoken critic of Obama over the war on terror, saying Obama was taking steps to “raise the risk to the American people of another attack.”

“How many terrorists have actually been brought to justice under the philosophy that is being promoted by Vice President Cheney?” Obama asked. “It hasn't made us safer. What it has been is a great advertisement for anti-American sentiment.”

Terence Corcoran: Is this the end of America?

Posted: March 19, 2009, 7:38 PM by NP Editor
Terence Corcoran, Ben Bernanke, inflationU.S. law-making is riddled with slapdash, incompetence and gamesmanship
By Terence Corcoran

Helicopter Ben Bernanke’s Federal Reserve is dropping trillions of fresh paper dollars on the world economy, the President of the United States is cracking jokes on late night comedy shows, his energy minister is threatening a trade war over carbon emissions, his treasury secretary is dithering over a banking reform program amid rising concerns over his competence and a monumentally dysfunctional U.S. Congress is launching another public jihad against corporations and bankers.

As an aghast world — from China to Chicago and Chihuahua — watches, the circus-like U.S. political system seems to be declining into near chaos. Through it all, stock and financial markets are paralyzed. The more the policy regime does, the worse the outlook gets. The multi-ringed spectacle raises a disturbing question in many minds: Is this the end of America?

Probably not, if only because there are good reasons for optimism. The U.S. economy has pulled out of self-destructive political spirals in the past, spurred on by its business class and corporate leaders, the profit-making and market-creating people who rose above the political turmoil to once again lift the world out of financial crisis. It’s happened many times before, except for once, when it took 20 years to rise out of the Great Depression.

Past success, however, is no guarantee of future recovery, especially now when there are daily disasters and new indicators of political breakdown. All developments are not disasters in themselves. The AIG bonus firestorm is a diversion from real issues , but it puts the ghastly political classes who make U.S. law on display for what they are: ageing self-serving demagogues who have spent decades warping the U.S. political system for their own ends. We see the system up close, law-making that is riddled with slapdash, incompetence and gamesmanship.

One test of whether we are witnessing the end of America is how many more times Americans put up with congressional show trials of individual business people and their employees, slandering and vilifying them for their actions and motives. And for how long will they tolerate a President who berates business and corporations as dens of crime and malfeasance? If the majority of Americans come to accept the caricatures of business as true, then America is closer to the end of its life as a global leader, as a champion of markets and individualism.

But America is at risk in other ways, especially in the technical business of setting and executing policy. The presidency of Barack Obama has set out on a course that has no precedent in U.S. history. Franklin D. Roosevelt, whose New Deal transformed the U.S. economy during the Great Depression, pushed America off on a sharply different political and ideological course. The Obama administration is different in many ways, not least in its supreme self-confidence in its methods and objectives.

Reform of health care, environmental policy, education, energy, banking, regulation — every nook and cranny of the U.S. economy has been put on alert for major change. Expansion of government spending, plunging the U.S. into unprecedented deficits, is without parallel. In economic policy, through regulation and control of energy output, financial services and monetary expansion, the U.S. government has embarked on a fundamental reshaping of America. It is designed, in short, to bring on the end of America.

The spillover effect of all this on the rest of the world promises to be dramatically disruptive. The greatest global risk is in monetary and currency policy. Below is a chart that graphically demonstrates the sharp deviation in monetary policy from past norms. Under the chairmanship of Ben Bernanke, the Federal Reserve is in the midst of a giant economic experiment, flooding the world with U.S. dollars, hoping that flood will stimulate economic activity.

The total monetary base, already at astronomical levels, is now expected to take another big hit with the new Fed policy of buying up U.S. longer-term treasury bills in a bid to drive down long-term interest rates.

Mr. Bernanke is sometimes known as “Helicopter Ben” because he once in an academic paper referred to the use of “helicopters” full of money to rescue an economy from deflation. In comments Wednesday to explain the Fed’s new policy of buying $300-billion in U.S. treasury bills, Mr. Bernanke noted that the Fed is now more worried about inflation being too low than about it getting too high in the future.

For the rest of the world, however, the worry is that America is at risk of becoming the fountainhead of a new inflationary outburst. The U.S. dollar is now in decline, gold is moving sharply higher, and new global currency turmoil is on the horizon.

It may not happen. A paper just published by the Federal Reserve Bank of St. Louis, source of the chart above, says that the Fed will have to be prepared to absorb all the excess money it has poured into the U.S. economy. It will be a technical and political challenge unlike any central bank has ever undertaken. The future of America is at stake.

U.N. panel says world should ditch dollar

Wed Mar 18, 2009 11:16am EDT
By Jeremy Gaunt, European Investment Correspondent

LUXEMBOURG (Reuters) - A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies, a member of the panel said on Wednesday, adding to pressure on the dollar.

Currency specialist Avinash Persaud, a member of the panel of experts, told a Reuters Funds Summit in Luxembourg that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket.

Persaud, chairman of consultants Intelligence Capital and a former currency chief at JPMorgan, said the recommendation would be one of a number delivered to the United Nations on March 25 by the U.N. Commission of Experts on International Financial Reform.

"It is a good moment to move to a shared reserve currency," he said.

Central banks hold their reserves in a variety of currencies and gold, but the dollar has dominated as the most convincing store of value -- though its rate has wavered in recent years as the United States ran up huge twin budget and external deficits.

Some analysts said news of the U.N. panel's recommendation extended dollar losses because it fed into concerns about the future of the greenback as the main global reserve currency, raising the chances of central bank sales of dollar holdings.

"Speculation that major central banks would begin rebalancing their FX reserves has risen since the intensification of the dollar's slide between 2002 and mid-2008," CMC Markets said in a note.

Russia is also planning to propose the creation of a new reserve currency, to be issued by international financial institutions, at the April G20 meeting, according to the text of its proposals published on Monday.

It has significantly reduced the dollar's share in its own reserves in recent years.

GOOD TIME

Persaud said that the United States was concerned that holding the reserve currency made it impossible to run policy, while the rest of world was also unhappy with the generally declining dollar.

"There is a moment that can be grasped for change," he said.

"Today the Americans complain that when the world wants to save, it means a deficit. A shared (reserve) would reduce the possibility of global imbalances."

Persaud said the panel had been looking at using something like an expanded Special Drawing Right, originally created by the International Monetary Fund in 1969 but now used mainly as an accounting unit within similar organizations.

The SDR and the old Ecu are essentially combinations of currencies, weighted to a constituent's economic clout, which can be valued against other currencies and indeed against those inside the basket.

Persaud said there were two main reasons why policymakers might consider such a move, one being the current desire for a change from the dollar.

The other reason, he said, was the success of the euro, which incorporated a number of currencies but roughly speaking held on to the stability of the old German deutschemark compared with, say, the Greek drachma.

Persaud has long argued that the dollar would give way to the Chinese yuan as a global reserve currency within decades.

A shared reserve currency might negate this move, he said, but he believed that China would still like to take on the role.

Dodd facing fresh political firestorm

Scorecard
Wed Mar 18, 6:13 pm ET
Sen. Chris Dodd (D-Conn.) looks like he may be facing a fresh political firestorm.
Dodd just admitted on CNN that he inserted a loophole in the stimulus legislation that allowed million-dollar bonuses to insurance giant AIG to go forward – after previously denying any involvement in writing the controversial provision. .
“We wrote the language in the bill, the deal with bonuses, golden parachutes, excessive executive compensation that was adopted unanimously by the United States Senate in the stimulus bill,” Dodd told CNN’s Wolf Blitzer this afternoon.
“But for that language, there would have been no language to deal with this at all.”
Dodd had previously said that he played no role in writing the controversial language, and was not a part of the conference committee that inserted the language in the bill. As late as today, Dodd’s spokeswoman denied the senator’s involvement.
The AIG bonuses have caused a political firestorm, with Republicans and Democrats alike looking to lay blame for who’s responsible, and leading lawmakers looking to revoke the bonuses.
Dodd’s role in the legislation will likely come up as he faces the likelihood of a tough re-election. Former GOP congressman Rob Simmons announced he was running this week, and has already taken issue with Dodd’s stewardship as chairman of the Senate Banking Committee.

Bilderbergers excite conspiracists

By: Kenneth P. Vogel
March 15, 2009 06:53 AM EST

The highest levels of the Obama administration are infested with members of a shadowy, elitist cabal intent on installing a one-world government that subverts the will of the American people.

It sounds crazy, but that’s what a group of very persistent conspiracy theorists insists, and they point to President Obama’s nominee for Health and Human Services Secretary, Kansas Gov. Kathleen Sebelius, as the latest piece of evidence supporting their claims.

It turns out that Sebelius – like top administration economists Timothy Geithner, Larry Summers and Paul Volcker, as well as leading Obama diplomats Richard Holbrooke and Dennis Ross – is a Bilderberger. That is, she is someone who has participated in the annual invitation-only conference held by an elite international organization known as the Bilderberg group.

The group, which takes its name from the Dutch hotel where it held its first meeting in 1954, exists solely to bring together between 100 and 150 titans of politics, finance, military, industry, academia and media from North America and Western Europe once a year to discuss world affairs. It doesn’t issue policy statements or resolutions, nor does it hold any events other than an annual meeting.

Past participants have included Margaret Thatcher, who attended the 1975 meeting at Turkey’s Golden Dolphin Hotel, former media mogul Conrad Black, who has been to more than a dozen conferences, and Bill Clinton, Tony Blair, Condoleezza Rice, Donald Rumsfeld, Queen Beatrix of the Netherlands, King Juan Carlos of Spain and top officials of BP, IBM, Barclays and the Bank of England.

It is precisely that exclusive roster of globally influential figures that has captured the interest of an international network of conspiracists, who for decades have viewed the Bilderberg conference as a devious corporate-globalist scheme.

The fulminating is aggravated by Obama's preference for surrounding himself with well-credentialed, well-connected, and well-traveled elites. His personnel choices have touched a populist, even paranoid nerve among those who are convinced powerful elites and secret societies are moving the planet toward a new world order.

Their worldview, characterized by a deep and angry suspicion of the ruling class rather than any prevailing partisan or ideological affiliation, is widely articulated on overnight AM radio shows and a collection of Internet websites.

The video sharing website YouTube alone is home to thousands of Bilderberg-related videos.

“I don’t laugh at the people who claim that they understand the connections, but I’ve never really spent much time tracing that through,” said Rep. Ron Paul (R-Texas), a former presidential candidate whose libertarian sensibilities have made him a darling of the Bilderberg conspiracists.

“The one thing that concerns me is that the people who surround Obama or Bush generally come from the same philosophic viewpoint and they have their organizations – they have the Trilateral Commission, the CFR [Council on Foreign Relations] and the Bilderbergers, and they’ve been around a long time. And my biggest concern is what they preach: Keynesian economics and interventionism and world planning,” he said.

While it's easy to dismiss the Bilder-busters as cranks, these voices have a way of making themselves heard on the margins of the debate in ways that can prove to be a real, if minor, distraction to Obama’s political team. Bill Clinton had trouble shaking rumors that he was behind a shady criminal syndicate operating out of the Mena airport. George W. Bush was sometimes portrayed as the puppet of clandestine Middle Eastern oil interests.

Obama’s selection of numerous Bilderbergers for key posts “certainly would verify their suspicions,” said Paul, referring to fears of the group’s influence.

“And I don’t think it’s just Obama. Whether it’s the Republicans or the Democrats – Goldman Sachs generally has somebody in treasury. And the big banks generally have somebody in the Federal Reserve. And they’re international people, too. And they’re probably working very hard this weekend, with the G20. And they get involved in the IMF. But that is their stated goal. They do believe in a powerful centralized government and we believe in the opposite.”

One popular website, “Prison Planet,” greeted Sebelius’ nomination with the headline “Obama Picks Bilderberger for Health Secretary.”

It’s obvious why Bilderberg is a frequent target of conspiracy theorists, who’ve credited it with anointing aspiring presidents, selecting their running mates, creating the European Union and instigating the war in Iraq and the bombing of Serbia, among other coups.

Bilderberg meetings are closed to the press, participants are asked not to publicly discuss the proceedings and the attendee list is only occasionally released. As a result, the group has come to be viewed as a more publicity-shy cousin to the Trilateral Commission and the Council on Foreign Relations – other influential international think tanks that are staples of fringe group conversation.

Unlike Bilderberg, though, those organizations have opened their proceedings to public scrutiny, maintain websites and have long listed their members.

The Bilderberg group, in a rare press release last year, laid out a benign if vague mission: creating “a better understanding of the complex forces and major trends affecting Western nations.”

“Bilderberg is a small, flexible, informal and off-the-record international forum in which different viewpoints can be expressed and mutual understanding enhanced,” read the press release, which noted that a list of participants would be available by phone request between 9:00 AM and 5:00 PM on the second and third days of the conference.

The Bilderberg conspiracists first pounced on the Obama connection during the 2008 campaign, when news leaked in May that the candidate, who at the time was closing in on the Democratic presidential nomination, had initially tapped former Fannie Mae chairman Jim Johnson, a top Bilderberger, to help him select a running mate.

IRS filings show that Johnson as recently as 2006 was the treasurer of a non-profit group called American Friends of Bilderberg. The group has raised hundreds of thousands of dollars over the years to pay for meetings--including $125,000 in total contributions from Bilderberg stalwarts Henry Kissinger and David Rockefeller in 2005 and 2006 plus $25,000 in 2005 from the Washington Post, whose chairman Don Graham has attended in the past.

Johnson did not return a message inquiring about his role at Bilderberg.

“The news further puts to rest any delusions that Bilderberg is a mere talking shop where no decisions are made,” reported Prison Planet. “It also ridicules once again any notion that an Obama presidency would bring ‘change’ to the status quo of America being ruled by an unelected corporate and military-industrial complex elite.”

One month later, in June, Johnson was joined at the 2008 Bilderberg meeting by Geithner, Holbrooke, Summers and Ross, as well as Obama’s first choice for HHS secretary, Tom Daschle, and Sebelius, who at the time was included on some short lists of prospective Obama running mates and who also attended the 2007 meeting in Istanbul, Turkey.

According to the Bilderberg press release, the meeting was designed to “deal mainly with a nuclear free world, cyber terrorism, Africa, Russia, finance, protectionism, US-EU relations, Afghanistan and Pakistan, Islam and Iran.” Approximately two-thirds of the 140 expected attendees came from Europe, according to the release, and the rest from North America.

Had the meeting been held outside the United States, that might have been the end of the Obama angle. But the conference, which took place from June 5 through 8, was held at a heavily guarded hotel in Chantilly, Va. in suburban Washington—coincidentally overlapping with an Obama campaign event in the area.

While Obama’s schedule indicated he was to fly home to Chicago for the weekend—and journalists were herded on a campaign plane under the impression they were headed there along with Obama—the future president slipped away for a private meetings and never actually boarded the flight.

As it turned out, Obama secretly met that evening with Hillary Rodham Clinton in Washington, D.C., but not before raising alarms among the Bilder-busters, who were convinced something was rotten in Chantilly.

Prison Planet connected the dots and concluded Obama and Clinton met at the Bilderberg meeting, declaring that “the complete failure of the mainstream media to report on the fact, once again betrays the super-secretive nature and influential reputation that the 54-year-old organization still maintains.”

“It is now seems increasingly likely that the secret meetings with Bilderberg this weekend will herald the decision to name Hillary Clinton as Obama's VP candidate,” predicted a sister site, Infowars.net.

Even the snarky D.C.-based Wonkette blog weighed in, half-seriously positing that “really, it sounds like” Obama and Clinton rendezvoused “at that creepy Bilderberg Group meeting, which is happening now, and which is so secret that nobody will admit they’re going, even though everybody who is anybody goes to Bilderberg.”

Curiously, though, the episode wasn’t the first time a Bilderberg meeting intersected with vice presidential selection machinations.

In 2004, both Time magazine and the New York Times noted that then-Sen. John Edwards (D-N.C) had impressed Bilderbergers at that year’s conference in Stresa, Italy—roughly one month prior to his selection as Sen. John Kerry’s (D-Mass.) running mate-- when Edwards debated Republican Ralph Reed. Then, as in 2008, Jim Johnson led the vice presidential vetting.

Time reported that then-Sen. Jon Corzine (D-N.J.) and Holbrooke attended and called Kerry “with rave reviews” about Edwards' debate skills.

In its tick-tock of the vice-presidential selection process, the New York Times also noted the Bilderberg effect.

''His performance at Bilderberg was important,'' a friend of Kerry told the Times. ''He reported back directly to Kerry. There were other reports on his performance. Whether they reported directly or indirectly, I have no doubt the word got back to Mr. Kerry about how well he did.''

An attendee of the 2004 meeting dismissed the notion that Edwards’ Bilderberg performance helped land him on the Democratic ticket.

“It wasn’t because of his performance at the meeting – he was at the meeting because he was going to get picked” said the attendee, who did not want to be identified breaching Bilderberg’s off-the-record rule. “He was there as a surrogate for Kerry” and to boost his foreign policy bona fides, said the attendee.

Either way, the attendee contended, the Bilderberg conspiracy theories don’t make sense on their face, if only because the wide array of ideologies represented would make it difficult to reach consensus.

“There were so many different people there with so many different viewpoints that it belied the opportunity to really conspire, because obviously a Kissinger and a [prominent neoconservative Richard] Perle are going to come down in a very different place than say a Holbrooke or a Johnson,” the attendee said.

Besides, the attendee observed, it’s almost impossible to name a Bilderberger-free Cabinet.

“You’d be hard pressed to find an administration that hasn’t reached into those ranks into the last 20, 30, 40 years. “

FEDS GRANT EMINENT DOMAIN AS COLLATERAL TO CHINA FOR U.S. DEBTS!

Beijing, China -- Sources at the United States Embassy in Beijing China have just CONFIRMED to me that the United States of America has tendered to China a written agreement which grants to the People's Republic of China, an option to exercise Eminent Domain within the USA, as collateral for China's continued purchase of US Treasury Notes and existing US Currency reserves!

The written agreement was brought to Beijing by Secretary of State Hillary Clinton and was formalized and agreed-to during her recent trip to China.

This means that in the event the US Government defaults on its financial obligations to China, the Communist Government of China would be permitted to physically take -- inside the USA -- land, buildings, factories, perhaps even entire cities - to satisfy the financial obligations of the US government.

Put simply, the feds have now actually mortgaged the physical land and property of all citizens and businesses in the United States. They have given to a foreign power, their Constitutional power to "take" all of our property, as actual collateral for continued Chinese funding of US deficit spending and the continued carrying of US national debt.

This is an unimaginable betrayal of every man, woman and child in the USA. An outrage worthy of violent overthrow.

www.Liveleak.com

Senate Moves Toward Ratification of U.N.'s 'Law of the Sea Treaty'

The Senate is gearing up to ratify a decades-old U.N. treaty that critics warn could create a massive U.N. bureaucracy that could even claim powers over American waterways.

By Joseph Abrams
FOXNews.com
Thursday, March 12, 2009

Sen. John Kerry, D-Mass., is advocating ratification of a treaty that critics warn could give the U.N. powers over American waterways (Reuters).

LOST -- the U.N. Convention on the Law of the Sea, also called the Law of the Sea Treaty -- regulates all things oceanic, from fishing rights, navigation lanes and environmental concerns to what lies beneath: the seabed's oil and mineral wealth that companies hope to explore and exploit in coming years.

But critics say the treaty, which declares the sea and its bounty the "universal heritage of mankind," would redistribute American profits and have a reach extending into rivers and streams all the way up the mighty Mississippi.

The U.N. began working on LOST in 1973, and 157 nations have signed on to the treaty since it was concluded in 1982. Yet it has been stuck in dry dock for nearly 30 years in the U.S. and never even been brought to a full vote before the Senate.

But swelling approval in the Senate and the combined support of the White House, State Department and U.S. Navy mean LOST may be ready to unfurl its sails again.

Sen. John Kerry, chairman of the Senate Foreign Relations Committee, said during a January confirmation hearing that he intends to push for ratification. "We are now laying the groundwork for and expect to try to take up the Law of the Sea Treaty. So that will be one of the priorities of the committee, and the key here is just timing -- how we proceed."

Secretary of State Hillary Clinton, saying the treaty is vital for American businesses and the Navy, told Kerry that his committee "will have a very receptive audience in our State Department and in our administration."

LOST apportions "Exclusive Economic Zones" that stretch 200 miles from a country's coast and establishes the International Seabed Authority to administer the communal territory farther out. The treaty's proponents say it clears up a murky legal area that has prevented companies from taking advantage of the deep seas' wealth.

"American firms and businesses want legal certainty so they can compete with foreign companies for marine resources," said Spencer Boyer, director of international law and diplomacy at the Center for American Progress. Without the clearly defined authority established by the treaty, "there's confusion -- a lot of businesses don't want to take that risk."

The American military is looking for another kind of certainty from LOST -- a guarantee of safe passage through all seaways, a right China sought to deny an unarmed Navy vessel Monday in its own Exclusive Economic Zone in the South China Sea.

"The Convention codifies navigation and overflight rights and high seas freedoms that are essential for the global mobility of our armed forces," the Joint Chiefs of Staff wrote in a June 2007 letter to Senate leadership.

LOST has even managed to unify environmental groups and deep-sea miners, who both see something to gain in the treaty.

"We gain sovereignty, we gain territory, we gain access to places that we have not had access to as easily," said Don Kraus, president of Citizens for Global Solutions, a group that advocates strengthening international institutions. "We don't stand to lose anything."

But critics say clauses built into the treaty could directly harm American interests. They say it could force the U.S. to comply with unspecified environmental codes, and that the treaty gives environmental activists the legal standing to sue over river pollution and shut down industry, simply because rivers feed into the sea.

The treaty allows environmental groups to bring lawsuits to the Law of the Sea Tribunal in Germany, a panel of 21 U.N. judges who would have say over pollution levels in American rivers. Their rulings would have the force law in the U.S., according to a reading in a 2008 Supreme Court decision by Justice John Paul Stevens.

"You've got an unaccountable tribunal that will surely be stacked with jurists hostile to our interests," said Chris Horner, author of "Red Hot Lies," a book critical of environmentalists. "This would never pass muster if the Senate held an open, public debate about this."

Legal experts also warn that the treaty demands aid for landlocked countries that lack the access and technology to mine the deep seas -- and that it might not even benefit the U.S. at all.

"You have to pay royalties on the value of anything you extract (from the deep seabed), those royalties to be distributed as the new bureaucracy sees fit, primarily to landlocked countries and underdeveloped countries," said Steven Groves, a fellow at the conservative Heritage Foundation. American money would also go to fund the International Seabed Authority, which Groves warned "would have the potential to become the most massive U.N. bureaucracy on the planet."

"The whole theory of the treaty is that the world's oceans and everything below them are the common heritage of mankind," said Groves. "Very socialist."

Any nation that is party to the treaty can have a seat on the tribunal and seabed authority -- even ones that don't have access to the sea. The current vice president of the tribunal represents Austria, a landlocked nation that hasn't had a sea berth since the Austro-Hungarian Empire was dissolved in the First World War.

Some legal experts worry that without ratification, the U.S. will lose a seat at the table as maritime law continues to be codified and resources get divvied up. But opponents note that many of the benefits offered the U.S., such as navigation rights, are already international custom, and that the U.S. has effected the treaty without being party to it. President Reagan's initial opposition on the basis of seabed laws forced the rewriting of the original treaty in 1994, which led the U.S. to sign it, but not to ratify it.

Its complexity, however, still beguiles even experts, who say it is unlikely to be understood when brought to a vote in the Senate.

"The thing is about 150 pages long -- meaning there are exactly zero people in the Senate who have read it," said Groves.

Obama's Poll Numbers Are Falling to Earth

By DOUGLAS E. SCHOEN and SCOTT RASMUSSEN

It is simply wrong for commentators to continue to focus on President Barack Obama's high levels of popularity, and to conclude that these are indicative of high levels of public confidence in the work of his administration. Indeed, a detailed look at recent survey data shows that the opposite is most likely true. The American people are coming to express increasingly significant doubts about his initiatives, and most likely support a different agenda and different policies from those that the Obama administration has advanced.

Polling data show that Mr. Obama's approval rating is dropping and is below where George W. Bush was in an analogous period in 2001. Rasmussen Reports data shows that Mr. Obama's net presidential approval rating -- which is calculated by subtracting the number who strongly disapprove from the number who strongly approve -- is just six, his lowest rating to date.

Overall, Rasmussen Reports shows a 56%-43% approval, with a third strongly disapproving of the president's performance. This is a substantial degree of polarization so early in the administration. Mr. Obama has lost virtually all of his Republican support and a good part of his Independent support, and the trend is decidedly negative.

A detailed examination of presidential popularity after 50 days on the job similarly demonstrates a substantial drop in presidential approval relative to other elected presidents in the 20th and 21st centuries. The reason for this decline most likely has to do with doubts about the administration's policies and their impact on peoples' lives.

There is also a clear sense in the polling that taxes will increase for all Americans because of the stimulus, notwithstanding what the president has said about taxes going down for 95% of Americans. Close to three-quarters expect that government spending will grow under this administration.

Recent Gallup data echo these concerns. That polling shows that there are deep-seeded, underlying economic concerns. Eighty-three percent say they are worried that the steps Mr. Obama is taking to fix the economy may not work and the economy will get worse. Eighty-two percent say they are worried about the amount of money being added to the deficit. Seventy-eight percent are worried about inflation growing, and 69% say they are worried about the increasing role of the government in the U.S. economy.

When Gallup asked whether we should be spending more or less in the economic stimulus, by close to 3-to-1 margin voters said it is better to have spent less than to have spent more. When asked whether we are adding too much to the deficit or spending too little to improve the economy, by close to a 3-to-2 margin voters said that we are adding too much to the deficit.

Support for the stimulus package is dropping from narrow majority support to below that. There is no sense that the stimulus package itself will work quickly, and according to a recent Wall Street Journal/NBC poll, close to 60% said it would make only a marginal difference in the next two to four years. Rasmussen data shows that people now actually oppose Mr. Obama's budget, 46% to 41%. Three-quarters take this position because it will lead to too much spending. And by 2-to-1, voters reject House Speaker Nancy Pelosi's call for a second stimulus package.

While over two-thirds support the plan to help homeowners refinance their mortgage, a 48%-36% plurality said that it will unfairly benefit those who have been irresponsible, echoing Rick Santelli's call to arms on CNBC.

And although a narrow majority remains confident in Mr. Obama's goals and overall direction, 45% say they do not have confidence, a number that has been growing since the inauguration less than two months ago. With three-quarters saying that they expect the economy to get worse, it is hard to see these numbers improving substantially.

There is no real appetite for increasing taxes to pay for an expanded health-insurance program. Less than half would support such an idea, which is 17% less than the percentage that supported government health insurance when Bill Clinton first considered it in March of 1993.

While voters blame Republicans for the lack of bipartisanship in Washington, the fact is that they do not believe Mr. Obama has made any progress in improving the impulse towards cooperation between the two parties. Further, nearly half of voters say that politics in Washington will be more partisan over the next year.

Fifty-six percent of Americans oppose giving bankers any additional government money or any guarantees backed by the government. Two-thirds say Wall Street will benefit more than the average taxpayer from the new bank bailout plan. This represents a jump in opposition to the first plan passed last October. At that time, 45% opposed the bailout and 30% supported it. Now a solid majority opposes the bank bailout, and 20% think it was a good idea. A majority believes that Mr. Obama will not be able to cut the deficit in half by the end of his term.

Only less than a quarter of Americans believe that the federal government truly reflects the will of the people. Almost half disagree with the idea that no one can earn a living or live "an American life" without protection and empowerment by the government, while only one-third agree.

Despite the economic stimulus that Congress just passed and the budget and financial and mortgage bailouts that Congress is now debating, just 19% of voters believe that Congress has passed any significant legislation to improve their lives. While Congress's approval has increased, it still stands at only 18%. Over two-thirds of voters believe members of Congress are more interested in helping their own careers than in helping the American people. When it comes to the nation's economic issues, two-thirds of voters have more confidence in their own judgment than they do in the average member of Congress.

Finally, what probably accounts for a good measure of the confidence and support the Obama administration has enjoyed is the fact that they are not Republicans. Virtually all Americans, more than eight in 10, blame Republicans for the current economic woes, and the only two leaders with lower approval ratings than Harry Reid and Nancy Pelosi are Republican leaders Mitch McConnell and John Boehner.

All of this is not just a subject for pollsters and analysts to debate. It shows fundamentally that public confidence in government remains low and is slipping. We face the possibility of substantial gridlock along with an absolute absence of public confidence that could come to mirror the lack of confidence in the American economy that the Dow and the S&P are currently showing.

Deception at Core of Obama Plans

By Charles Krauthammer
WASHINGTON -- Forget the pork. Forget the waste. Forget the 8,570 earmarks in a bill supported by a president who poses as the scourge of earmarks. Forget the "$2 trillion dollars in savings" that "we have already identified," $1.6 trillion of which President Obama's budget director later admits is the "savings" of not continuing the surge in Iraq until 2019 -- 11 years after George Bush ended it, and eight years after even Bush would have had us out of Iraq completely.

Forget all of this. This is run-of-the-mill budget trickery. True, Obama's tricks come festooned with strings of zeros tacked onto the end. But that's a matter of scale, not principle.

All presidents do that. But few undertake the kind of brazen deception at the heart of Obama's radically transformative economic plan, a rhetorical sleight of hand so smoothly offered that few noticed.

The logic of Obama's address to Congress went like this:

"Our economy did not fall into decline overnight," he averred. Indeed, it all began before the housing crisis. What did we do wrong? We are paying for past sins in three principal areas: energy, health care, and education -- importing too much oil and not finding new sources of energy (as in the Arctic National Wildlife Refuge and the Outer Continental Shelf?), not reforming health care, and tolerating too many bad schools.

The "day of reckoning" has now arrived. And because "it is only by understanding how we arrived at this moment that we'll be able to lift ourselves out of this predicament," Obama has come to redeem us with his far-seeing program of universal, heavily nationalized health care; a cap-and-trade tax on energy; and a major federalization of education with universal access to college as the goal.

Amazing. As an explanation of our current economic difficulties, this is total fantasy. As a cure for rapidly growing joblessness, a massive destruction of wealth, a deepening worldwide recession, this is perhaps the greatest non sequitur ever foisted upon the American people.

At the very center of our economic near-depression is a credit bubble, a housing collapse and a systemic failure of the entire banking system. One can come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies, insufficient regulation of new and exotic debt instruments, the easy money policy of Alan Greenspan's Fed, irresponsible bankers pushing (and then unloading in packaged loan instruments) highly dubious mortgages, greedy house-flippers, deceitful homebuyers.

The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe in the first place.

And yet with our financial house on fire, Obama makes clear both in his speech and his budget that the essence of his presidency will be the transformation of health care, education and energy. Four months after winning the election, six weeks after his swearing in, Obama has yet to unveil a plan to deal with the banking crisis.

What's going on? "You never want a serious crisis to go to waste," said Chief of Staff Rahm Emanuel. "This crisis provides the opportunity for us to do things that you could not do before."

Things. Now we know what they are. The markets' recent precipitous decline is a reaction not just to the absence of any plausible bank rescue plan, but also to the suspicion that Obama sees the continuing financial crisis as usefully creating the psychological conditions -- the sense of crisis bordering on fear-itself panic -- for enacting his "Big Bang" agenda to federalize and/or socialize health care, education and energy, the commanding heights of post-industrial society.

Clever politics, but intellectually dishonest to the core. Health, education and energy -- worthy and weighty as they may be -- are not the cause of our financial collapse. And they are not the cure. The fraudulent claim that they are both cause and cure is the rhetorical device by which an ambitious president intends to enact the most radical agenda of social transformation seen in our lifetime.

Baxter admits flu product contained live bird flu virus

The Canadian Press

Updated: Fri. Feb. 27 2009 2:56 PM ET
TORONTO — The company that released contaminated flu virus material from a plant in Austria confirmed Friday that the experimental product contained live H5N1 avian flu viruses.
And an official of the World Health Organization's European operation said the body is closely monitoring the investigation into the events that took place at Baxter International's research facility in Orth-Donau, Austria.
"At this juncture we are confident in saying that public health and occupational risk is minimal at present," medical officer Roberta Andraghetti said from Copenhagen, Denmark.
"But what remains unanswered are the circumstances surrounding the incident in the Baxter facility in Orth-Donau."
The contaminated product, a mix of H3N2 seasonal flu viruses and unlabelled H5N1 viruses, was supplied to an Austrian research company. The Austrian firm, Avir Green Hills Biotechnology, then sent portions of it to sub-contractors in the Czech Republic, Slovenia and Germany.

The contamination incident, which is being investigated by the four European countries, came to light when the subcontractor in the Czech Republic inoculated ferrets with the product and they died. Ferrets shouldn't die from exposure to human H3N2 flu viruses.

Public health authorities concerned about what has been described as a "serious error" on Baxter's part have assumed the death of the ferrets meant the H5N1 virus in the product was live. But the company, Baxter International Inc., has been parsimonious about the amount of information it has released about the event.
On Friday, the company's director of global bioscience communications confirmed what scientists have suspected.

"It was live," Christopher Bona said in an email.

The contaminated product, which Baxter calls "experimental virus material," was made at the Orth-Donau research facility. Baxter makes its flu vaccine -- including a human H5N1 vaccine for which a licence is expected shortly -- at a facility in the Czech Republic.

People familiar with biosecurity rules are dismayed by evidence that human H3N2 and avian H5N1 viruses somehow co-mingled in the Orth-Donau facility. That is a dangerous practice that should not be allowed to happen, a number of experts insisted.
Accidental release of a mixture of live H5N1 and H3N2 viruses could have resulted in dire consequences.

While H5N1 doesn't easily infect people, H3N2 viruses do. If someone exposed to a mixture of the two had been simultaneously infected with both strains, he or she could have served as an incubator for a hybrid virus able to transmit easily to and among people.

That mixing process, called reassortment, is one of two ways pandemic viruses are created.

There is no suggestion that happened because of this accident, however.
"We have no evidence of any reassortment, that any reassortment may have occurred," said Andraghetti.

"And we have no evidence of any increased transmissibility of the viruses that were involved in the experiment with the ferrets in the Czech Republic."
Baxter hasn't shed much light -- at least not publicly -- on how the accident happened. Earlier this week Bona called the mistake the result of a combination of "just the process itself, (and) technical and human error in this procedure."
He said he couldn't reveal more information because it would give away proprietary information about Baxter's production process.

Andraghetti said Friday the four investigating governments are co-operating closely with the WHO and the European Centre for Disease Control in Stockholm, Sweden.
"We are in very close contact with Austrian authorities to understand what the circumstances of the incident in their laboratory were," she said.
"And the reason for us wishing to know what has happened is to prevent similar events in the future and to share lessons that can be learned from this event with others to prevent similar events. ... This is very important."

Russian scholar says US will collapse _ next year

Mar 4 04:13 AM US/Eastern
By MIKE ECKEL
Associated Press Writer

MOSCOW (AP) - If you're inclined to believe Igor Panarin, and the Kremlin wouldn't mind if you did, then President Barack Obama will order martial law this year, the U.S. will split into six rump-states before 2011, and Russia and China will become the backbones of a new world order.
Panarin might be easy to ignore but for the fact that he is a dean at the Foreign Ministry's school for future diplomats and a regular on Russia's state-guided TV channels. And his predictions fit into the anti-American story line of the Kremlin leadership.

"There is a high probability that the collapse of the United States will occur by 2010," Panarin told dozens of students, professors and diplomats Tuesday at the Diplomatic Academy—a lecture the ministry pointedly invited The Associated Press and other foreign media to attend.

The prediction from Panarin, a former spokesman for Russia's Federal Space Agency and reportedly an ex-KGB analyst, meshes with the negative view of the U.S. that has been flowing from the Kremlin in recent years, in particular from Vladimir Putin.

Putin, the former president who is now prime minister, has likened the United States to Nazi Germany's Third Reich and blames Washington for the global financial crisis that has pounded the Russian economy.

Panarin didn't give many specifics on what underlies his analysis, mostly citing newspapers, magazines and other open sources.

He also noted he had been predicting the demise of the world's wealthiest country for more than a decade now.

But he said the recent economic turmoil in the U.S. and other "social and cultural phenomena" led him to nail down a specific timeframe for "The End"—when the United States will break up into six autonomous regions and Alaska will revert to Russian control.

Panarin argued that Americans are in moral decline, saying their great psychological stress is evident from school shootings, the size of the prison population and the number of gay men.

Turning to economic woes, he cited the slide in major stock indexes, the decline in U.S. gross domestic product and Washington's bailout of banking giant Citigroup as evidence that American dominance of global markets has collapsed.

"I was there recently and things are far from good," he said. "What's happened is the collapse of the American dream."

Panarin insisted he didn't wish for a U.S. collapse, but he predicted Russia and China would emerge from the economic turmoil stronger and said the two nations should work together, even to create a new currency to replace the U.S. dollar.

Asked for comment on how the Foreign Ministry views Panarin's theories, a spokesman said all questions had to be submitted in writing and no answers were likely before Wednesday.

It wasn't clear how persuasive the 20-minute lecture was. One instructor asked Panarin whether his predictions more accurately describe Russia, which is undergoing its worst economic crisis in a decade as well as a demographic collapse that has led some scholars to predict the country's demise.

Panarin dismissed that idea: "The collapse of Russia will not occur."

But Alexei Malashenko, a scholar-in-residence at the Carnegie Moscow Center who did not attend the lecture, sided with the skeptical instructor, saying Russia is the country that is on the verge of disintegration.

"I can't imagine at all how the United States could ever fall apart," Malashenko told the AP.

Some cases where Obama's policies are like Bush's

By The Associated Press – 1 day ago
Some cases in which actions by the Obama administration have tracked policies of former President George W. Bush:

WHITE HOUSE RECORDS
The Obama administration sided with Bush in trying to kill a lawsuit that seeks to recover what could be millions of missing White House e-mails from the Bush years, reasoning that plenty had already been spent and done to recover the messages.
Citizens for Responsibility and Ethics in Government, the private group that sued, called it "an incredibly cynical and narrow view" of the government's legal obligations. White House spokesman Robert Gibbs countered that the administration still was pursuing "a greater amount of transparency than Washington has seen."

ENEMY COMBATANTS
The administration filed a legal brief that echoed Bush in maintaining that detainees in Afghanistan have no constitutional rights and arguing that enemy combatants held at Bagram Airfield cannot use U.S. courts to challenge their detention.
The brief said that if the Bagram detainees got access to U.S. courts, it would allow all foreigners captured by the United States in conflicts worldwide to do the same. Human rights lawyer Tina Monshipour Foster said she had "expected better" from the Obama administration. A Justice Department spokesman said the ruling spoke for itself.

STATE SECRETS
Even as Obama officials promised a thorough review of its use of state secrets protections, government lawyers continued to invoke the state secrets law in a federal appeals court in San Francisco. That case involves a suit over the CIA's extraordinary rendition program, in which U.S. operatives seized foreign suspects and handed them over to other countries for questioning.
Some former prisoners subjected to the process contend they were tortured. Proving that in court has been difficult, as evidence they have sought to corroborate their claims has been protected by the president's state secrets privilege.

MORE STATE SECRETS
The Obama Justice Department also asserted the state secrets privilege in a lawsuit brought by the Oregon chapter of the Al-Haramain Islamic Foundation.
The only U.S. chapter of a defunct Islamic charity based in Saudi Arabia, Al-Haramain sued after the government accidentally turned over documents that the group says showed evidence of the wiretapping.
Government lawyers asked an appeals court to prevent a lower court judge from releasing any information in the case which they said would harm national security. The administration wants the information to remain secret while it continues to fight the matter before the appeals court. But the appeals court in San Francisco ruled Friday against the government's request for an emergency stay.

STATE SECRETS III
The Obama administration is supporting Bush's use of the state secrets privilege in a third case, this one involving suits against telecommunications companies by people and organizations alleging that the companies violated wiretapping and privacy laws.
The Bush administration had invoked the state secrets privilege to keep a judge from reviewing government documents laying out the program under which the companies allowed the government to eavesdrop on their customers without a court's permission after the Sept. 11 attacks.

IMMIGRATION
As a candidate, Barack Obama promised an immigration policy that would shift emphasis away from workplace raids and place greater focus on employers who hire illegal immigrants and overall immigration reform. Some immigration advocates were hopeful Obama would sign an executive order that would freeze immigration raids, but that hasn't happened.
On Tuesday, federal agents raided an engine plant in Bellingham, Wash., and rounded up 28 illegal immigrants, leading one immigrants' advocacy group to declare: "On immigration, we need change we can believe in."
It turns out that the raid took even Homeland Security Secretary Janet Napolitano by surprise. She ordered a review of the action, and said work-site enforcement needs to be focused on the employers, not the workers.