Obama’s Stimulus… Shovel Ready?

Sunday, July 12, 2009

Obama’s Op-Ed, Annotated [ht/ Stephen Spruiell]

President Obama has an op-ed in the Washington Post today defending the stimulus package. Let’s take a look under the hood:

Nearly six months ago, my administration took office amid the most severe economic downturn since the Great Depression. At the time, we were losing, on average, 700,000 jobs a month. And many feared that our financial system was on the verge of collapse.

Wait a minute. At a press conference a few weeks ago, when confronted with the disparity between his administration’s projected unemployment figures under the stimulus (8 percent) and the real unemployment figures (9.7 percent), Obama said, “Keep in mind the stimulus package was the first thing we did… If you recall, it was only significantly later that we suddenly get a report that the economy had tanked.”

So Obama took office amid the most severe downturn since the Great Depression, at a time when the country was hemorrhaging jobs and the financial system was on the brink of collapse. He said as much a week before signing the stimulus into law. But don’t blame him for overselling the impact the stimulus would have — his administration was totally blindsided by a sudden report that the economy had tanked!

The swift and aggressive action we took in those first few months has helped pull our financial system and our economy back from the brink. We took steps to restart lending to families and businesses, stabilize our major financial institutions, and help homeowners stay in their homes and pay their mortgages.

Let’s examine that phrase, “swift and aggressive action.” For Treasury Secretary, Obama rammed a tax cheat through the confirmation process by claiming he was the only man who could do the job. Secretary Geithner then proceeded to unveil a plan to save the banking system that inspired so little confidence, the Dow fell 300 points upon its announcement. Geithner’s Public-Private Investment Partnership to buy troubled assets from banks has failed to launch, primarily because the Financial Accounting Standards Board loosened mark-to-market accounting rules, thus enabling banks to avoid write-downs on their toxic mortgage-backed securities. Now that banks can hold those assets without booking losses, they have little incentive to sell them at a discount to the P-PIP. With P-PIP looking increasingly like a dud, the adminitration’s only real plan to deal with crippled banks is to cross its fingers and hope the economy grows fast enough to enable them to recover on their own.

Nor has Obama’s Making Home Affordable plan been any great success, as Joe Nocera explained in Friday’s NYT (best summed up by the phrase “drop in the bucket”). As NRO’s editors pointed out when the plan was announced, “The relatively small group of in-deep but creditworthy homeowners who could be helped by Obama’s plan already are positioned to refinance at better rates, or to move from variable-rate loans to low-drama fixed-rate mortgages, without a $475 billion government intervention.” That’s $75 billion for the program and $400 billion to shore up Fannie and Freddie, the real beneficiaries of the deal.

On the other hand, Obama did move swiftly and aggressively to sign the Lilly Ledbetter act, exposing companies to spurious equal-pay lawsuits; to roll back Clinton-era welfare reforms; to use TARP funds to shield the UAW from the full fallout of the GM and Chrysler bankruptcies, and so on. Maybe that’s what he meant.

We also passed the most sweeping economic recovery plan in our nation’s history.

True, if by “sweeping” you mean “costly.”

The American Recovery and Reinvestment Act was not expected to restore the economy to full health on its own but to provide the boost necessary to stop the free fall.

This is just a terrible metaphor. Can we decide whether the economy a sick patient or a free-falling object? And how does one give a free-falling object a “boost”?

So far, it has done that. It was, from the start, a two-year program, and it will steadily save and create jobs as it ramps up over this summer and fall. We must let it work the way it’s supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity.

As Keith Hennessey and Ed Morrissey point out, it’s important to note the language change here, both the sudden shift from present to future tense (it “has” worked vs. it “will” save and create jobs), and in the abandonment of the “3.5 million jobs” figure that the administration was throwing around when it was selling the stimulus.

Now is the time to build a firmer, stronger foundation for growth that not only will withstand future economic storms but that helps us thrive and compete in a global economy. To build that foundation, we must lower the health-care costs that are driving us into debt, create the jobs of the future within our borders, give our workers the skills and training they need to compete for those jobs, and make the tough choices necessary to bring down our deficit in the long run.

Already, we’re making progress on health-care reform that controls costs while ensuring choice and quality, as well as energy legislation that will make clean energy the profitable kind of energy, leading to whole new industries and jobs that cannot be outsourced.

Suffice it to say, the road back to prosperity does not pass through nationalized health care and energy sectors.

And this week, I’ll be talking about how we give our workers the skills they need to compete for these jobs of the future. In an economy where jobs requiring at least an associate’s degree are projected to grow twice as fast as jobs requiring no college experience, it’s never been more essential to continue education and training after high school. That’s why we’ve set a goal of leading the world in college degrees by 2020. Part of this goal will be met by helping Americans better afford a college education. But part of it will also be strengthening our network of community colleges.

A new initiative to strengthen community colleges… that sounds familiar — where have I heard it before? The community-college initiative is the classic punt on education reform, based on the incorrect assumption that increasing college enrollment will automatically yield a better-educated work force, i.e. that there is no distinction “between attending school and becoming capable or skilful.” Furthermore, there is no good evidence that more spending on education yields better educational outcomes.

I suppose we should be glad that, by urging patience with the stimulus and trying to change the subject to education, the president appears to be taking the idea of a second stimulus off the table, at least for now. But that would concede too much ground. We should not allow Obama to take credit pre-emptively for any future recovery when there is such a strong case to be made that his policies created a level of uncertainty that prevented the recovery from starting sooner. More importantly, we should dispute the notion that the absence of a recovery means the stimulus wasn’t big enough. Even if we accept the notion that Keynesian stimulus can spur economic growth (it can’t), any stimulus we’re going to get out of Congress is going to be too overloaded with welfare spending and pork-barrel waste to have anything but a negative effect. That’s the hard fact of the matter, which the president’s op-ed is a lame attempt to obfuscate.
National Review

HOUSE  Cancels Obama’s POWER GRAB!!

House overwhelmingly rejects signing statement

By Walter Alarkon
07/09/09]

The House rebuked President Obama for trying to ignore restrictions to international aid payments, voting overwhelmingly for an amendment forcing the administration to abide by its constraints.

House members approved an amendment by a 429-2 vote to have the Obama administration pressure the World Bank to strengthen labor and environmental standards and require a Treasury Department report on World Bank and International Monetary Fund (IMF) activities. The amendment to a 2010 funding bill for the State Department and foreign operations was proposed by Rep. Kay Granger (R-Texas), but it received broad bipartisan support.

The conditions on World Bank and IMF funding were part of the $106 billion war supplemental bill that was passed last month. Obama, in a statement made as he signed the bill, said that he would ignore the conditions.

They would “interfere with my constitutional authority to conduct foreign relations by directing the Executive to take certain positions in negotiations or discussions with international organizations and foreign governments, or by requiring consultation with the Congress prior to such negotiations or discussions,” Obama said in the signing statement.

Senior Democrats and Republicans railed against the notion that the president could ignore a law they had passed and he had signed.

“We do this not just on behalf of this institution, but on behalf of this democracy,” said Rep. Barney Frank (D-Mass.). “There’s kind of a unilateralism, an undemocratic, unreachable way about these signing statements.”

President George W. Bush had used signing statements to ignore a number of provisions in bills that he signed into law, frustrating Democrats in Congress. One Bush signing statement allowed the administration to ignore a provision banning the torture of terror detainees in situations threatening the nation’s security.

Frank and Rep. Mark Kirk (R-Ill.) said that one way they could get presidents to stop issuing signing statements casting aside laws would be to refuse to fund their priorities. The amendment passed Thursday seeks to nullify Obama’s signing statement by withholding funds from any agreement involving the Treasury Department that doesn’t follow the conditions set out in the supplemental bill.

“The signal we send to the Treasury is very clear: Ignore statute at your peril,”

Kirk said.

The U.S. funding for the IMF, which will come in the form of a $108 billion credit line, was a sticking point in negotiations over the war supplemental bill. House Republicans opposed the legislation despite their support for military operations in Iraq and Afghanistan because they viewed the IMF funding as an unnecessary “global bailout.” House and Senate leaders included constraints on the IMF and World Bank funding as a way to ensure support from lawmakers skeptical over sending more money abroad, said House Appropriations Chairman David Obey (D-Wis.).

“Sometimes, the only way the votes can be found to provide the funds the admin wants is to provide certain limitations on the money,” Obey said Thursday in a floor speech criticizing Obama’s signing statement.

The State Department and foreign operations appropriations bill that contained the amendment was expected to win passage late Thursday. Both Democratic and Republican appropriators spoke in support of it during the floor debate Thursday afternoon.
THE HILL

Obama delivers Billions of aid to States who supported him…

Does Obama know the meaning of the word: Discrimination?

Billions in aid go to areas that backed Obama in ‘08

By Brad Heath, USA TODAY

WASHINGTON — Billions of dollars in federal aid delivered directly to the local level to help revive the economy have gone overwhelmingly to places that supported President Obama in last year’s presidential election.
That aid — about $17 billion — is the first piece of the administration’s massive stimulus package that can be tracked locally. Much of it has followed a well-worn path to places that regularly collect a bigger share of federal grants and contracts, guided by formulas that have been in place for decades and leave little room for manipulation.

“There’s no politics at work when it comes to spending for the recovery,” White House spokesman Robert Gibbs says.

Counties that supported Obama last year have reaped twice as much money per person from the administration’s $787 billion economic stimulus package as those that voted for his Republican rival, Sen. John McCain, a USA TODAY analysis of government disclosure and accounting records shows. That money includes aid to repair military bases, improve public housing and help students pay for college.

The reports show the 872 counties that supported Obama received about $69 per person, on average. The 2,234 that supported McCain received about $34.

Investigators who track the stimulus are skeptical that political considerations could be at work. The imbalance is so pronounced — and the aid so far from complete — that it would be almost inconceivable for it to be the result of political tinkering, says Adam Hughes, the director of federal fiscal policy for the non-profit OMB Watch. “Even if they wanted to, I don’t think the administration has enough people in place yet to actually do that,” he says.
“Most of what they’re doing at this point is just stamping the checks and sending them out,” Hughes says.

The stimulus package Obama signed in February includes about $499 billion in new spending, and to date, the Obama administration has allocated about $158 billion to specific projects and programs. Most of that money has gone directly to state governments, which then disperse the money to prevent school layoffs, repair roads and fund social services. That contrasts with the $17 billion that Washington distributes directly to local communities.

Including the larger chunk of money given to state governments, the aid favors states that voted for Obama, which have received about 20% more per person

Not all of the money favors places that supported Obama. About a third of the $17 billion, or $5.5 billion, in contracts that the federal government has signed for projects ranging from repaving runways to cleaning up nuclear waste has gone overwhelmingly to counties that supported McCain.

Jake Wiens, an investigator with the non-profit Project on Government Oversight, says it’s too soon to draw meaningful conclusions about whether the type of aid in the stimulus favors Obama’s constituents. But, he says, “it will be important to pay close attention as the data come in to ensure that political favoritism plays no role.”

The imbalance didn’t start with the stimulus. From 2005 through 2007, the counties that later voted for Obama collected about 50% more government aid than those that supported McCain, according to spending reports from the U.S. Census Bureau. USA TODAY’s review did not include Alaska, which does not report its election results by county.

USA Today article

Meanwhile, Obama and Michelle $pend, $pend, $pend, on their luxury vacations while California’s Incompetence’ Leaves Banks Wrestling Over IOUs

If you don’t think CA’s problems aren’t the country’s problems wait for the ripple effect this will have in the other 49 states. Arnold is playing the role Henry Paulson did when he announced Lehman Bros went Bankrupt.

July 10 (Bloomberg) — California’s government-issued IOUs have put community banks in a no-win situation. Either they add the state’s debt to their balance sheets, or they face the prospect of losing depositors.

“It’s an unfair position to put banks in where we’re allowing the state Legislature to go on and we’re financing it,” said Kevin McPhaill, executive vice president of Porterville-based Sierra Bancorp, which has 23 branches in California. “If you don’t take the warrants then you have the risk of losing customers.”

Sierra is among more than two dozen California banks that agreed to accept IOUs at least through today as Governor Arnold Schwarzenegger wrestles with a $26 billion annual budget deficit. While the biggest U.S. banks, including Wells Fargo & Co. and Bank of America Corp., announced plans to stop exchanging the registered warrants for cash after today, smaller banks with offices only in California can’t afford to cut off depositors and risk losing business.

Refusing IOUs would also slash funding for Californians already mired in a housing crisis and facing a surge in job losses. The state was home to the nation’s second-highest foreclosure rate in May, according to RealtyTrac Inc., and its unemployment rate of 11.5 percent ranked fifth in the country.

The IOUs, which the state government started paying to businesses and individuals on July 2, carry an annual interest rate of 3.75 percent. The Controller’s office estimates the state will send $3 billion in IOUs this month to pay for social services, state vendors, tax refunds and other obligations.

Monitoring Warrants

Sierra is accepting the registered warrants from existing customers for an indefinite period and is monitoring the overall amount, McPhaill said in a phone interview yesterday. Sierra had $1.2 billion in deposits at the end of the first quarter, compared with almost $$953.5 billion at Charlotte, North Carolina-based Bank of America.

Golden Valley Bank, which has two locations in Northern California, is evaluating the process every Friday to determine if it will continue taking the warrants, said Chief Executive Officer Mark Francis. The Chico-based lender had $64.6 million in deposits.

“I don’t like the fact that this is getting jammed down our throats and we’re financing the incompetence” of the government, Francis said in an interview. “It would be very difficult since we’re a small bank not to take one from a customer.”

California Standoff

California, the world’s eighth-largest economy, had its credit rating cut on July 6 for the second time in two weeks by Fitch Ratings as Schwarzenegger and lawmakers remained deadlocked over how to fill the hole in the $100 billion annual budget. Fitch lowered state bonds to BBB, or two levels above so-called high-yield, high-risk junk ratings.

“The state’s known for months that the budget is out of balance, so there’s some frustration among our industry that we’re put in this position,” said Beth Mills, spokeswoman for the California Bankers Association, which represents more than 200 of the state’s 300 banks.

Wes Schaefer, vice chairman of American Business Bank in Los Angeles, said his company is following the lead of Bank of America and San Francisco-based Wells Fargo and will stop accepting IOUs if and when they do. The lender, which provides services mostly to businesses in Southern California, is more concerned about the state’s deteriorating economy than the risk of holding the warrants, said Schaffer.

“If all the banks just accept, there’s no reason for any pressure to be on the legislators to get the problem fixed,” he said.

Bloomberg

Fed warns (Paulson) on Congressional scrutiny

Published: July 9 2009 23:42

Paulson makes a good point.  It’s our money they are spending like drunken sailors on shore leave.  I feel as others do, the day of reckoning is at hand. The signs speak to us like a hammer on a nail. Obama is doing NOTHING…  That means we are in for the mother of all tsunamis,  even the well to do will be hurting.. Look forward to breadlines and chaos.

The Federal Reserve warned on Thursday that a growing congressional threat to curtail its independence would destabilise markets and raise the cost of servicing US debt for “current and future generations”.

Ron Paul, the Texas Republican, has gathered the support of a majority of the House of Representatives for a bill that would audit the Fed’s monetary policy decisions. He told a Congressional hearing he wanted the power to prevent the Fed being “secret and clandestine and serving special interests”.
Donald Kohn, vice-chairman of the Fed, argued at the House financial services subcommittee hearing that any sense of political interference would negatively affect markets. “Any substantial erosion of the Federal Reserve’s monetary independence likely would lead to higher long-term interest rates as investors begin to fear future inflation,” he said.

Not only did Mr Kohn argue that the Fed should be given the power to regulate large systemically significant companies, but he argued against giving up responsibility for consumer protection, asking Congress to overturn the Obama administration’s proposal to create a new Consumer Financial Protection Agency.

”I would hope that the Congress might think about whether there are ways of strengthening the Federal Reserve’s commitment to consumer regulation as an alternative to creating a new regulator,” he said.

As US authorities have considered how to reform the country’s regulatory regime in the wake of the current economic crisis, the Fed has been drawn into an argument with other regulators over who oversees the US’s largest financial institutions.

The conflict appeared to end with the Obama administration giving power over systemically significant insitutions to the Fed, with additional oversight from a council of regulators including the Federal Deposit Insurance Corporation.

But critics in Congress have not given up an attempt to push all or more of the power to the council, taking it away from the Fed. The hearing on Thursday heard support for that view. Mr Paul’s audit bill now has more than 250 co-sponsors.

FT.com

Strange Martial Law via Food Control: HR 2749

Not what the American people ordered – HR 2749, martial law and the enslavement of their farmers

By The Writers’ Collective

Source: Food Freedom

HR 2749

is a strange bill in many ways. While the other “food safety” bills have been around since winter, allowing for much public discussion on the internet, HR 2749 has only suddenly appeared.

It is a mutant conglomeration of the worst of the other bills, with the addition of one very original part – martial law.

When it was a draft, it was Waxman’s bill. But once given a number, it became Dingel’s who already had a “food safety” bill, HR 759. So Waxman got none and Dingel got two. (Was this because Waxman, being Jewish, was a hideous choice to introduce a bill with Codex in it – designed by the Nazi pharmaceutical companies that funded Hitler, provided the gas for the gas chambers, experimented on prisoners with vaccines – and is expected to kill millions?)

* HR 2749 would give FDA the power to order a quarantine of a geographic area, including “prohibiting or restricting the movement of food or of any vehicle being used or that has been used to transport or hold such food within the geographic area.”

[This - "that has been used to transport or hold such food" - would mean all cars that have ever brought groceries home or any pickup someone has eaten take-out in, so this means ALL TRANSPORTATION can be shut down under this. This is using food as a cover for martial law.]

Under this provision, farmers markets and local food sources could be shut down, even if they are not the source of the contamination. The agency can halt all movement of all food in a geographic area.

[This is also a means of total control over the population under the cover of food, and at any time.] See this DailyKos entry.

The bill is unusual, too, because slow as it was to appear. The little bugger of bill has made up for it since. It got a number on June 10, went to committee on June 17, passed instantly, and is headed for a vote on the floor of the House.

The first Patriot Act was passed using fear of terrorism. This Patriot Act is more coy, hiding under a cloak of “food safety” and but also using fear – fear of food contamination. Evidently, Americans are supposed to be so frightened by the slightest possibility of a terrorist or of E-coli, they would trade away all their precious, hard fought freedoms for the promise of safety. Or at least, that is what the trade-off has become. “Terrorism” and “contamination” are great bugaboos used to open doors to an end to the US Constitution. That is exactly what we are left with after those who wrote HR 2749 are done.

Who did write these bills? It seems Monsanto had not only a hand, but a “defining” influence. http://farmwars.info/?p=594

This redefining of reality is what seems to be underlying all the loss of freedom. Normal and free are disappearing into the maw of corporate definitions of reality. See this Yup Farming piece.

So, we begin with contaminated food from filthy corporate processors and concentrated animal feeding operations (CAFOs). And what do we end up with after that reality is ground up by corporate legal hands? Changes in the definition of risk so that natural things are treated as dangerous and toxic things are untouched, such that:

• Healthy, normal farms are taken over by government as though they were run by criminals and contaminated corporate slaughterhouses are untouched;
• The necessary freedom of individuals to live and grow food and be left alone are somehow suddenly destroyed, though they were never the source of any food contamination issue; and such that
• The profit and control and power of corporations which were absolutely the source of the increasingly terrible food, is somehow suddenly vastly increased.

Thanks to corporate control over reality, our wanting to clean up corporate processors and feedlots and CAFOS and end up with farmers’ markets and local farms and organic food has become the industrialization and potential destruction of every healthy part of the food system and the triumph of the most contaminated and toxic part. And in the non-bargain, we lost all freedoms and they took all control. And “all” is not a hyperbole here, for one need only look at another provision of HR 2749 to feel how insane, how distant from all we ever wanted.

* HR 2749 would empower FDA to regulate how crops are raised and harvested. It puts the federal government right on the farm, dictating to our farmers.

[What is missing in pointing out this astounding control, is that it opens the door to CODEX and WTO "good farming practices" will include the elimination of organic farming by eliminating manure, mandating GMO animal feed, imposing animal drugs, and ordering applications of petrochemical fertilizers and pesticides. Farmers, thus, will be locked not only into the industrialization of once normal and organic farms but into the forced purchase of industry's products. They will be slaves on the land, doing the work they are ordered to do - against their own best wisdom - and paying out to industry against their will. There will be no way to be frugal, to grow one's own grain to feed the animals, to raise healthy animals without GMO grains or drugs, to work with nature at all. Grassfed cattle and poultry and hogs will be finished. So, it needs to be made clear where control will take us. And weren't these the "rumors on the internet" that were dismissed but are clearly the case?] See this DailyKos entry.

When we wanted not to get E-coli in processed meat, did we intend to put our farmers into corporate servitude? Did we plan to have our own lives straight-jacketed by a million new controls over our own gardens, our own desire to grow food, our own plans to start small businesses, our own dreams to have a small piece of land and farm ourselves? Who has the audacity to take our needs and grotesquely bastardize them in these ways, while giving the destruction and totalitarian control the sham name of “food safety”?

We wanted good food. We never wanted to trap our farmers into an industrial prison on their own land, afraid moment to moment of not fulfilling some monstrous set of instructions that never end – rules the farmers loathe, rules that have not only nothing to do with real farming but which are antithetical to it. Why have we ended up with HR 2749, an intense corporate nightmare around the most central and necessary aspects of a free country and of free human beings – farming and food?

If you think this is a hoax or a joke, look it up yourself on google..meanwhile click this link to read more..

Obama’s Health-Care Caper… Sick of him yet?

Obama’s Top Five Health Care Lies

Shikha Dalmia,
07.01.09

President Barack Obama walked into the Oval Office with a veritable halo over his head. In the eyes of his backers, he could say or do no wrong because he had evidently descended directly from heaven to return celestial order to our fallen world. Oprah declared his tongue to be “dipped in the unvarnished truth.” Newsweek editor Evan Thomas averred that Obama “stands above the country and above the world as a sort of a God.”

But when it comes to health care reform, with every passing day, Obama seems less God and more demagogue, uttering not transcendental truths, but bald-faced lies. Here are the top five lies that His Awesomeness has told–the first two for no reason other than to get elected and the next three to sell socialized medicine to a wary nation.

*****Lie One: No one will be compelled to buy coverage.

During the campaign, Obama insisted that he would not resort to an individual mandate to achieve universal coverage. In fact, he repeatedly ripped Hillary Clinton’s plan for proposing one. “To force people to buy coverage,” he insisted, “you’ve got to have a very harsh penalty.” What will this penalty be, he demanded? “Are you going to garnish their wages?” he asked Hillary in one debate.

Yet now, Obama is behaving as if he said never a hostile word about the mandate. Earlier this month, in a letter to Sens. Max Baucus, D-Mont., and Ted Kennedy, D-Mass., he blithely declared that he was all for “making every American responsible for having health insurance coverage, and making employers share in the cost.”

But just like Hillary, he is refusing to say precisely what he will do to those who want to forgo insurance. There is a name for such a health care approach: It is called TonySopranoCare. (The author IS mistaken. First of all, Hillary said she would give Tax Credits to individuals, Families and Businesses plus the addition of a small percentage of wage earners income. She also said people who couldn’t afford it, would get HELP from the government.)

****Lie Two: No new taxes on employer benefits.

Obama took his Republican rival, Sen. John McCain, to the mat for suggesting that it might be better to remove the existing health care tax break that individuals get on their employer-sponsored coverage, but return the vast bulk–if not all–of the resulting revenues in the form of health care tax credits. This would theoretically have made coverage both more affordable and portable for everyone. Obama, however, would have none of it, portraying this idea simply as the removal of a tax break. “For the first time in history, he wants to tax your health benefits,” he thundered. “Apparently, Sen. McCain doesn’t think it’s enough that your health premiums have doubled. He thinks you should have to pay taxes on them too.”

Yet now Obama is signaling his willingness to go along with a far worse scheme to tax employer-sponsored benefits to fund the $1.6 trillion or so it will cost to provide universal coverage. Contrary to Obama’s allegations, McCain’s plan did not ultimately entail a net tax increase because he intended to return to individuals whatever money was raised by scrapping the tax deduction. Not so with Obama. He apparently told Sen. Baucus that he would consider the senator’s plan for rolling back the tax exclusion that expensive, Cadillac-style employer-sponsored plans enjoy, in order to pay for universal coverage. But, unlike McCain, he has said nothing about putting offsetting deductions or credits in the hands of individuals.

In other words, Obama might well end up doing what McCain never set out to do: Impose a net tax increase on health benefits for the first time in history.

****Lie Three: Government can control rising health care costs better than the private sector.

Ignoring the reality that Medicare–the government-funded program for the elderly–has put the country on the path to fiscal ruin, Obama wants to model a government insurance plan–the so-called “public option”–after Medicare in order to control the country’s rising health care costs. Why? Because, he repeatedly claims, Medicare has far lower administrative costs and overhead than private plans–to wit, 3% for Medicare compared to 10% to 20% for private plans. Hence, he says, subjecting private plans to competition against an entity delivering such superior efficiency will release health care dollars for universal coverage.

But lower administrative costs do not necessarily mean greater efficiency. Indeed, the Congressional Budget Office analysis last year chastised Medicare’s lax attitude on this front. “The traditional fee-for-service Medicare program does relatively little to manage benefits, which tends to reduce its administrative costs but may raise its overall spending relative to a more tightly managed approach,” it noted on page 93.

In short, extending the Medicare model will further ruin–not improve–even the functioning aspects of private plans.

****Lie Four: A public plan won’t be a Trojan horse for a single-payer monopoly.

Obama has repeatedly claimed that forcing private plans to compete with a public plan will simply “keep them honest” and give patients more options–not lead to a full-blown, Canadian-style, single-payer monopoly. As I argued in my previous column, this is wishful thinking given that government programs such as Medicare have a history of controlling costs by underpaying providers, who make up the losses by charging private plans more. Any public plan modeled after Medicare will greatly increase this forced subsidy, eventually driving private plans out of business, even if that weren’t Obama’s intention.

But, as it turns out, it very much is his intention. Before he decided to run for office–and even during the initial days of his campaign–Obama repeatedly said that he was in favor of a single-payer system. What’s more, University of California, Berkeley Professor Jacob Hacker, who is a key influence on the Obama administration, is on tape explicitly boasting that a public plan is a means for creating a single-payer system. “It’s not a Trojan horse,” he quips, “it’s just right there.”

But even if Obama wanted to, it is simply impossible to design a public plan that could compete with private insurers on a level playing field and without “feeding off the public trough” as Obama claims. At the very least, such a plan would always carry an implicit government guarantee that, should it go bust, no one in the plan would lose coverage. This guarantee would artificially lower the plan’s capital reserve requirements, giving it an unfair edge over private plans. What’s more, it is simply not plausible to expect that the plan wouldn’t receive any start-up subsidies or use the government’s muscle to negotiate lower rates with providers. If it eschewed all these things, there would be no reason for it to exist–because it would be just like any other private plan.

****Lie Five: Patients don’t have to fear rationing.

Obama has been insisting, including during his ABC Town Hall event last week, that the rationing patients would face under a government-run system wouldn’t be any more draconian than what they currently confront under private plans. This is complete nonsense.

The left has been trying to address fears of rationing by trotting out an old and tired trope, namely, that rationing is an inescapable fact of life because every system rations whether by price or fiat. But there is a big difference between the two. If I can’t afford caviar and champagne every night, any rationing involved is metaphoric, not real. Genuine rationing occurs when someone else controls access–how much of a particular good I can consume.

By that token, Obama’s stimulus bill has set in motion rationing on a scale unimaginable in the land of the free. Indeed, the bill commits over $1 billion to conduct comparative effectiveness research that will evaluate the relative merits of various treatments. That in itself wouldn’t be so objectionable–if it weren’t for the fact that a board will then “direct financing” toward approved, standardized treatments. In short, doctors will find it much harder to prescribe newer or non-standard treatments not yet deemed effective by health care bureaucrats. This is exactly along the lines of the British system, where breast cancer patients were denied Herceptin, a new miracle drug, until enraged women fought back. Even the much-vilified managed care plans would appear to be a paragon of generosity in comparison with this.

Obama has repeatedly asked for honesty in the health care debate. It is high time he started showing some.

Shikha Dalmia is a senior analyst at Reason Foundation and writes a biweekly column for Forbes.
Forbes

Senate bill fines people refusing health coverage.

WASHINGTON (AP) — Americans who refuse to buy affordable medical coverage could be hit with fines of more than $1,000 under a health care overhaul bill unveiled Thursday by key Senate Democrats looking to fulfill President Barack Obama’s top domestic priority.

The Congressional Budget Office estimated the fines will raise around $36 billion over 10 years. Senate aides said the penalties would be modeled on the approach taken by Massachusetts, which now imposes a fine of about $1,000 a year on individuals who refuse to get coverage. Under the federal legislation, families would pay higher penalties than individuals.

In a revamped health care system envisioned by lawmakers, people would be required to carry health insurance just like motorists must get auto coverage now. The government would provide subsidies for the poor and many middle-class families, but those who still refuse to sign up would face penalties.

Called “shared responsibility payments,” the fines would be set at least half the cost of basic medical coverage, according to the legislation.

In 2008, employer-provided coverage averaged $12,680 a year for a family plan, and $4,704 for individual coverage, according to the Kaiser Family Foundation’s annual survey. Senate aides, who spoke on condition of anonymity because they were not authorized to speak publicly, said the cost of the federal plan would be lower but declined to provide specifics.

The legislation would exempt certain hardship cases from fines.

The new proposals were released as Congress neared the end of a weeklong July 4 break, with lawmakers expected to quickly take up health care legislation when they return to Washington. With deepening divisions along partisan and ideological lines, the complex legislation faces an uncertain future.

Obama wants a bill this year that would provide coverage to the nearly 50 million Americans who lack it and reduce medical costs.

In a statement, Obama welcomed the legislation, saying it “reflects many of the principles I’ve laid out, such as reforms that will prohibit insurance companies from refusing coverage for people with pre-existing conditions and the concept of insurance exchanges where individuals can find affordable coverage if they lose their jobs, move or get sick.”

The Senate Health Education, Labor and Pensions bill also calls for a government-run insurance option to compete with private plans as well as a $750-per-worker annual fee on larger companies that do not offer coverage to employees.

Sens. Edward M. Kennedy, D-Mass., and Christopher Dodd, D-Conn., said in a letter to colleagues that their revised plan would cost dramatically less than an earlier, incomplete proposal, and help show the way toward coverage for 97 percent of all Americans.

In a conference call with reporters, Dodd said the revised bill had brought “historic reform of health care” closer. He said the bill’s public option will bring coverage and benefit decisions driven “not by what generates the biggest profits, but by what works best for American families.”

The two senators said the Congressional Budget Office put the cost of the proposal at $611.4 billion over 10 years, down from $1 trillion two weeks ago.

However, the total cost of legislation will rise considerably once provisions are added to subsidize health insurance for the poor through Medicaid. Those additions, needed to ensure coverage for nearly all U.S. residents, are being handled by a separate panel, the Senate Finance Committee. Bipartisan talks on the Finance panel aim to hold the overall price tag to $1 trillion.

The Health Committee could complete its portion of the bill as soon as next week, and the presence of a government health insurance option virtually assures a party-line vote.

In the Senate, the Finance Committee version of the bill is unlikely to include a government-run insurance option. Bipartisan negotiations are centered on a proposal for a nonprofit insurance cooperative as a competitor to private companies.

Three committees are collaborating in the House on legislation expected to come to a vote by the end of July. That measure is certain to include a government-run insurance option.

At their heart, all the bills would require insurance companies to sell coverage to any applicant, without charging higher premiums for pre-existing medical conditions. The poor and some middle-class families would qualify for government subsidies to help with the cost of coverage. The government’s costs would be covered by a combination of higher taxes and cuts in projected Medicare and Medicaid spending.
API Story

Where’s the Transparency? Asks Helen Thomas and Chip Reid

Thanks Helen and Chip Reid for asking:

“Where’s the Transparency in an Open Forum?”

Robert “declasse” Gibbs performance in front of a Town Hall Meeting is reminiscent of a Circus Side Show… Where the operative running the shell game hides a pea under the hull of a walnut, his hands moving magically swerving back and forth around and around at the speed of light barking, put your bets down find the pea..!

aka- see if you can catch me giving a straight answer.

Just more lies following up promoting Obama’s Campaign rhetoric heaped with braggadocio of Transparency and Open Government.

Obama said anything you wanted to hear to get elected!

Why aren’t his supporters holding him accountable and taking him to task over his broken promises of fixing what’s wrong with the government in Washington? They’ve all disappeared into the woodwork because they were WRONG and now they are too ashamed to admit it; that’s why!

Didn’t Obama say he wouldn’t raise taxes on people making UNDER $250,000 yr ?

Yeah, I thought so too. You bet on a straight answer… …well here it is!

Obama volunteers Americans to pay global taxes…

Obama signs agreement for UN “Solidarity Levies” a Global IRS Tax..

More Hopeless Change!

(ht/Cliff Kincaid)

The United Nations is proceeding, with President Obama’s acquiescence, to implement a global plan to create a new international socialist order financed by global taxes on the American people.

The Conference on the World Financial and Economic Crisis and its Impact on Development that begins today will consider adoption of a document calling for “new voluntary and innovative sources of financing initiatives to provide additional stable sources of development finance…” This is U.N.-speak for global taxes. They are anything but “voluntary” for the people forced to pay them.

The most “popular” proposals, which could generate tens of billions of dollars in revenue for global purposes, involve taxes on greenhouse gas emissions and financial transactions such as stock trades.

The document was agreed to at an informal meeting of expert “facilitators” and was made available on June 22 at 3 p.m. It is doubtful that any changes will be made to it.

The conference was postponed from June 1-3 to June 24-26 at the U.N. in New York. While the “outcome document” has been watered down somewhat from the previous version, it still reaffirms attainment of the U.N.’s Millennium Development Goals, which would require the payment of $845 billion from U.S. taxpayers. A commitment to the MDGs was a stated objective of the Global Poverty Act, which Barack Obama had introduced as a U.S. senator. It requires the U.S. to devote 0.7 percent of Gross National Income to foreign aid.

Now, as President, Obama can bypass the Congress

and simply direct his Ambassador to the U.N. Susan Rice to approve the U.N. conference document. Then the pressure will be increased on Congress to come up with the money and satisfy our “international commitments.”

This is the pattern that he followed in regard to more money for the International Monetary Fund (IMF). After agreeing at the G-20 summit to provide more money for the IMF, the Obama White House slipped the cash and credit into the recently passed emergency war funding bill. The Obama White House had added billions in cash, as well as a $100 billion line of credit, for the IMF.

Rep. Mike Pence commented, “This legislation, which includes $108 billion in loan authorizations for a global bailout, for the International Monetary Fund — at a time when this government has run up a $2 trillion annual deficit — I believe does a disservice to taxpayers and to those that defend us. Passing a $108 billion global bailout on the backs of our soldiers is just not right.”

The U.N. conference document explains where all of this is leading — the destruction of the American dollar as the world’s reserve currency and the build-up of global institutions such as the IMF and the U.N.

It declares that “We acknowledge the calls by many states for further study of the feasibility and advisability of a more efficient reserve system, including the possible function of SDRs in any such system and the complementary roles that could be played by various regional arrangements.” SDRs are Special Drawing Rights, a form of international currency that enables global institutions like the International Monetary Fund to provide more foreign aid to the rest of the world. The U.S. pays for SDRs through its financial contributions to the IMF.

If implemented, the document would officially mark the end of the United States as the world’s leading economic power.

Urging socialism as the solution to the crisis, the document states that “Insufficient emphasis on equitable human development has contributed to significant inequalities among countries and peoples. Other weaknesses of a systemic nature also contributed to the unfolding crisis, which has demonstrated the need for more effective government involvement to ensure an appropriate balance between the market and public interest.”

The nerve center of this emerging new international socialist system will be the United Nations, a body that has developed a reputation for corruption and incompetence and whose “peacekeepers” have been implicated in sexual abuse and other human rights violations.

“The United Nations, on the basis of its universal membership and legitimacy, is well positioned to participate in various reform processes aimed at improving and strengthening the effective functioning of the international financial system and architecture,” the document says.

“This United Nations Conference is part of our collective effort towards recovery,” it adds.

The Obama Administration’s unofficial point man in U.N. deliberations has been economist Joseph Stiglitz, who has been coordinating a “Commission of Experts” that has reported to U.N. General Assembly President Miguel D’Escoto, the notorious Communist Catholic Priest who received the Lenin Peace Prize from the old Soviet Union.

Stiglitz produced his own document which called for “the issuance of additional SDRs,” “additional sources of funding” for global institutions, a new global reserve currency, and a new global credit facility. Key recommendations have been incorporated into the official U.N. conference document but Stiglitz and his “experts” provide far more details about them.

In terms of new funding sources, the document calls for “innovative sources of financing such as emission rights trading and financial transactions taxes…” The concept of “emissions trading” enables corporations to avoid limits on greenhouse gas emissions if they pay taxes to government. It is part of the “cap and trade” legislation now being pushed on Capitol Hill.

Chapter Five of this document, “International Financial Innovations,” goes into detail, declaring that “For some time, the difficulty in meeting the UN official assistance target of 0.7 percent of Gross National Income of developed industrial countries as official development assistance, as well as the need for adequate funding for the provision of global and regional public goods (peace building, fighting global health pandemics, combating climate change and sustaining the global environment more generally) has generated proposals on how to guarantee a more reliable and stable source of financing for these objectives.”

The document notes that an international airline ticket tax is now in effect, as a result of the actions of the “Leading Group on Solidarity Levies” that now involves close to 60 countries and major international organizations. This money is going to fight global diseases.

The term “Solidarity Levies” is U.N.-speak for global taxes.

The Stiglitz document explains, “Some of the initiatives that have been proposed encompass ‘solidarity levies’ or, more generally, taxation for global objectives. Some countries have already decreed solidarity levies on airline tickets but there is a larger set of proposals. There have also been suggestions to auction global natural resources — such as ocean fishing rights and pollution emission permits — for global environmental programs.”

It goes on to say, “The suggestion of taxes that could be earmarked for global objectives has a long history. To avert their being perceived as encroachments on participating countries’ fiscal sovereignty, it has been agreed that these taxes should be nationally imposed, but internationally coordinated.”

So the nations of the world, including the U.S., will collect the taxes but then turn them over to institutions such as the U.N. The world body will function, in effect, like a global IRS.

Is it too much to ask that our media take some time off from talking about the girl with star tattoos on her face, “Jon & Kate Plus 8,” and Perez Hilton, to examine what is going on at the United Nations?

World Tribune News

Churchill said: “You can’t make Peace with Dictators.”

Ahmadinejad’s Very Clever Propaganda…

by Tellurian:
President Ahmadinejad, using Axelrod tactics whitewashes the Truth with propaganda like truthiness in an effort to elicit an apology from the United State for so-called interference in his fraudulent election. Watching Obama and his cohorts in their day to day drama inflicting Hitchcockian chaos on the consciousnesses of the general public is better than watching a mind bending mystery on Pay TV.

The maze of truths entwined in the fakery produced and directed by experts hired by the Chicago WH, are some of the most skilled intelligencia in high stakes snake oil sales bought and paid for with “your” money. Any Hollywood production of the latest ‘Thriller’ or ‘Action’ movie pales in comparison to the media creation we have inaugurated into this WH.

Just a few days after the election, the WH reveals Obama made contact with Ahmadinejad in May stating he wanted the two to meet for discussing nuclear disarmament.. Some would feel a bit unnerved a US President would choose taking sides (so close) weeks before an election especially if he wasn’t sure who the eventual winner would be. I have serious doubts of Obama’s clairvoyance as he hardly demonstrated the courage while a US Senator for a ‘yay’ or ‘nay’ vote when voting “present” outnumbered his declared votes.

Where Obama is playing a game of masquerade with US.. We had better demonstrate higher awareness of the difference between a media created presidency created to conceal actual plans or intentions not in our best interests. The bedrock principles and heritage given us by the Founding Fathers have been preserved and followed by most of our past presidents. (ie before Bush) Whether you like it or not; Clinton gave us 8 years of Peace and Prosperity. Clinton proved it could be done with the right leadership. He proved after the huge deficits incurred by the Bush I presidency, the country could be brought back to a state of solvency. And in 8yrs, he put us back in the plus column of a surplus. No need to wonder why his presidency was plagued by unrelenting persecution by Republicans. Clinton forestalled for 8 yrs what is happening to us now.

Why do you think in these daily press conferences Obama wears a smiling smirk? Because he’s made fools of 48% of the public who bought his pipe dream of Hope and Change and voted for him but none of his supporters ever thought to ask him HOW while on the campaign trail ? How are you going to do it? No one ever asked: “Whats your plan”?

Here is the headline that brought on the above rant:

“Iran’s Ahmadinejad compares Obama to Bush”

TEHRAN (Reuters) – President Mahmoud Ahmadinejad accused President Barack Obama of behaving like his predecessor on Iran and called on him to apologize for what he called U.S. interference following the Iranian elections.

Obama has ramped up his previously muted criticism, saying he was “appalled and outraged” by a crackdown on protests which followed Ahmadinejad’s disputed re-election. (Oh, boy! Better late than Never!)

“Mr Obama made a mistake to say those things … our question is why he fell into this trap and said things that previously (former U.S. President George W.) Bush used to say,” the semi-official Fars News Agency quoted Ahmadinejad as saying. (Obama is Bush3 but not in a good way!)

About 20 people have been killed in the demonstrations, but police and militia have flooded Tehran’s streets since Saturday, quelling the majority of protests after the most widespread anti-government unrest since the 1979 Islamic revolution. (First tell us why you need to kill people to suppress dissent?)

The turmoil has dimmed prospects for Obama’s outreach to Iran over its nuclear programme, with Tehran blaming Britain and the United States for fomenting violence. (Oh, horse-shit! Tell it to the hand!)

“I hope you avoid interfering in Iran’s affairs and express your regret in a way that the Iranian nation is informed of it,” Ahmadinejad said. (Hold your breath, Ahmadinejad, until Hell Freezes Over!)

Iran’s reformist opposition leaders have vowed to press on with legal challenges to an election they say was rigged. (Well done)

The wife of opposition leader Mirhossein Mousavi, who says he won the poll, said it was a “duty to continue legal protests to preserve Iranian rights.” (Make sure you stay away from car bombs)

Mousavi supporters said they would release thousands of balloons on Friday imprinted with the message “Neda you will always remain in our hearts” — a reference to the young woman killed last week who has become an icon of the protests.

Riot police swiftly dispersed a group of about 200 demonstrators with teargas on Wednesday, but the protest was a far cry from marches last week that attracted tens of thousands. (well, when people are dying for protesting a fraud… it does have a chilling effect)

Protest cries of Allahu Akbar were heard from Tehran rooftops again overnight, although they were much more short-lived than on previous evenings in the capital.

COUNTRY “DEEPLY SPLIT”

The unrest has exposed unprecedented rifts within Iran’s clerical establishment, with Supreme Leader Ayatollah Ali Khamenei, who normally stays above the political fray, siding strongly with Ahmadinejad.

“My personal judgment is that this is a country deeply split and emotionalized,” a Western diplomat in the region said. The protests had shown how dissatisfied some parts of society were with the way Iran was run — to the chagrin of its leadership.

“I think they are deeply shocked,” the diplomat said. The authorities had managed to impose outward stability, but had paid a heavy moral price, he added.

Khamenei has upheld the result of the June 12 presidential poll and has warned opposition leaders they would be responsible for any bloodshed. (I doubt they will kill themselves in protest. The blood is on your hands!)

Iran’s top legislative body, the Guardian Council, has also ruled out a call from Mousavi to annul the election.

A spokesman for the council, which must approve the poll, said it had looked into all complaints but found no major fraud or irregularities, state Press TV reported on Thursday. (Oh, just like herduring the Primary between Obama and Hillary. The DNC/RBC gave Hillary’s votes away to Obama..to help him win. I hope Obama, as he promised, is paying their mortgage and their car payments.)

The spokesman said the vote was “among the healthiest elections ever held in the country” since the revolution. (How is death healthy?)

The crackdown on the protests has stalled U.S. efforts to reach out to Tehran both over its nuclear programme and to seek its help in stabilizing Afghanistan. (Aw- too bad. Maybe Obama will find the time to help distressed homeowners and fix the economy)

The United States withdrew invitations to Iranian diplomats to attend U.S. Independence Day celebrations on July 4. (You gotta be kidding me. Obama invited killers to a 4th of July Party here?)

It was the first time since Washington cut diplomatic ties with Tehran in 1980 that Iranian diplomats had been invited to the embassy parties, but the move to withdraw the invites was largely symbolic as no Iranians had even responded. (yeah, right. The larger question is…why invite them in the first place?)

U.S. ENGAGEMENT “DELAYED”

“The president’s policy of engagement is obviously delayed, but we are going to have to deal with the government of Iran,” Senator John Kerry, chairman of the Senate Foreign Relations Committee, told Reuters.

“In the short term relations will definitely get worse, but in the long term the U.S. really has to re-think its policy and to recognize that regime change is not possible in Iran.”
Yahoo

Obama contacted Ayatollah before the Election!

an interview with:

Webster G. Tarpley, scholar, author of Surviving the Cataclysm

The two-faced Obama does another 180…

White House press secretary Robert Gibbs had a hard time Tuesday explaining an apparent about-face by President Obama on whether Bush administration lawyers should be prosecuted for writing legal memos authorizing “enhanced interrogation techniques” that some consider to have been torture.

“With respect to those who formulated those legal decisions, I would say that that is going to be more of a decision for the Attorney General within the parameters of various laws, and I don’t want to prejudge that,” Mr. Obama said today, adding that “there are a host of very complicated issues involved there.”

This seemed to fly in the face of what the president chief of staff, Rahm Emanuel, said on Sunday.

“Those who devised policy, [the president] believes that they were — should not be prosecuted either,” Emanuel said.

Gibbs was asked about this discrepancy repeatedly at the daily press briefing. At one point, he suggested that the press simply not pay attention to what Emanuel had said.

“Instead of referring to what anybody might have said, I think it’s important — or anything that I might have said — it’s important to refer to what the president said,” Gibbs said.

EXCLUSIVE: U.S. contacted Iran’s Ayatollah before election:

(Didn’t Obama state clearly and unequivocally he didn’t want to interfere with the politics of Tehran when Iranian citizens were being killed during the protests?

If you voted for this FRAUD… thanks alot for electing the most UNAmerican president in the history of the US who could not care less about people. Read on!)

Prior to this month’s disputed presidential election in Iran, the Obama administration sent a letter to the country’s supreme leader, Ayatollah Ali Khamenei, calling for an improvement in relations, according to interviews and the leader himself.

Ayatollah Khamenei confirmed the letter toward the end of a lengthy sermon last week, in which he accused the United States of fomenting protests in his country in the aftermath of the disputed June 12 presidential election.

U.S. officials declined to discuss the letter on Tuesday, a day in which President Obama gave his strongest condemnation yet of the Iranian crackdown against protesters.

An Iranian with knowledge of the overture, however, told The Washington Times that the letter was sent between May 4 and May 10 and laid out the prospect of “cooperation in regional and bilateral relations” and a resolution of the dispute over Iran’s nuclear program.

The Iranian, who asked not to be named because of the sensitivity of the topic, said the letter was given to the Iranian Foreign Ministry by a representative of the Swiss Embassy, which represents U.S. interests in Iran in the absence of U.S.-Iran diplomatic relations. The letter was then delivered to the office of Ayatollah Khamenei, he said.

The letter was sent before the election, whose outcome – delivering a supposed landslide to incumbent President Mahmoud Ahmadinejad – has touched off the biggest anti-government protests in Iran since the 1979 Islamic Revolution.

The Obama administration, while criticizing a violent crackdown on demonstrators by Iranian security forces, has said that it will continue efforts to engage the Iranian government about its nuclear program and other issues touching on U.S. national security.

In his news conference on Tuesday, however, President Obama gave his most forceful statement yet about Iran’s actions, which have led to the deaths of at least 17 protesters, including a young woman whose shooting death has become known around the world through the Internet.

“I strongly condemn these unjust actions, and I join with the American people in mourning each and every innocent life that is lost,” Mr. Obama said. “I’ve made it clear that the United States respects the sovereignty of the Islamic Republic of Iran and is not interfering with Iran’s affairs. But we must also bear witness to the courage and the dignity of the Iranian people, and to a remarkable opening within Iranian society. And we deplore the violence against innocent civilians anywhere that it takes place. … Those who stand up for justice are always on the right side of history.”

“The Iranian, who asked not to be named because of the sensitivity of the topic, said the letter was given to the Iranian Foreign Ministry by a representative of the Swiss Embassy, which represents U.S. interests in Iran in the absence of U.S.-Iran diplomatic relations. The letter was then delivered to the office of Ayatollah Khamenei, he said.”

page 2

We don’t Jail Banking Criminals; We HIRE Them!

On Monday, two men with considerable responsibility for enabling the banking meltdown confronted the error of their ways. Not directly, of course, for accountability is hardly the mark of either Lawrence Summers, the top White House economic adviser, or Treasury Secretary Timothy Geithner.

Their careers have long been fueled by error. Summers was one of the leading prophets of radical financial deregulation in the Clinton administration. And Geithner, as head of the New York Fed, looked the other way during Wall Street’s collapse and then responded by opening wide the spigot of taxpayer dollars to resuscitate Citigroup and AIG.

What they wrote this week in a joint Op-Ed article in The Washington Post is a condemnation of the Wall Street shenanigans they once abetted and celebrated. I hope their apparent sudden conversion to common sense indicates the seriousness of the banking regulation plan that President Obama will present to Congress today.

“Over the past two years, we have faced the most severe financial crisis since the Great Depression,” they wrote, placing the blame squarely where it belongs, on the unregulated derivatives markets they once gushed over. “The current financial crisis had many causes … in the widespread use of poorly understood financial instruments, in shortsightedness and excessive leverage at financial institutions. But it was also the product of basic failures in financial supervision and regulation.”

What irony that Summers, who as Bill Clinton’s treasury secretary pushed through legislation guaranteeing “legal certainty for Swap Agreements” and banning the regulation of securitized mortgage debt, should now admit that “securitization led to an erosion of lending standards, resulting in market failure that fed the housing boom and deepened the housing bust.”

According to Summers and Geithner, the Obama plan to be revealed today promises that all derivatives dealers will be “subject to supervision, and regulators will be empowered to enforce rules against manipulation and abuse.”

If such language is ever passed into law, I hope that Brooksley Born is in the gallery and gets the standing ovation she deserves. That’s the woman who, when she headed the Commodity Futures Trading Commission, warned that the derivatives market needed to be regulated. Summers and his predecessor as treasury secretary, Robert Rubin, destroyed Born’s career because she dared to accurately predict today’s crisis.

But better late than never, although it’s a shame that Obama’s economic whiz kids are only now getting serious about cracking down on Wall Street hustlers after first guaranteeing their toxic paper with trillions of taxpayer dollars. Nor should we assume that the Obama plan will not be subverted by the financial industry lobbyists, whose enormous campaign treasure chest, now financed by taxpayers, allows them to slice and dice congressional voting blocs the way they did subprime mortgages.

Already there’s a joker in the deck of the Obama proposal in that it relies heavily on the Federal Reserve, which on the regional level is fully controlled by the very financial industry firms that it is expected to monitor. Summers and Geithner write that “all large, interconnected firms whose failure could threaten the stability of the system will be subject to consolidated supervision by the Federal Reserve.” Like we never heard that one before.

Because of bad deregulation laws, those large, interconnected firms were allowed to grow to the point where their failure indeed threatened “the stability of the system.” What we need to do is return to the basic principle of the New Deal-era Glass-Steagall Act (which Clinton reversed) that broke up “too big to fail” financial conglomerates because, by definition, when such companies threaten to fail, we taxpayers are left picking up the tab.

It was depressing that the president told The Wall Street Journal on Tuesday that he favors “a relatively light touch when it comes to the government … in terms of financial regulation.” And that “[w]e had a regulatory system that was outdated that did not encompass the non-bank sector.”

Nonsense. We had a regulatory system inherited from Franklin Roosevelt’s New Deal that for 60 years sustained a wall between the traditional heavily regulated banks and the non-bank hustlers on Wall Street who should have never been allowed to play their funny money games with people’s savings and home mortgages. That wall was torn down by President Clinton at the behest of Wall Street lobbyists and now must be restored if there is to be true reform. The reforms presented by Obama are an important start, but I worry they do not face up to the reality that financial conglomerates too big to fail are too big to be allowed to exist.

article by Robert Scheer/Truthdig

The American Empire is bankrupt.. Eyes Wide Shut!

By Chris Hedges

This week marks the end of the dollar’s reign as the world’s reserve currency. It marks the start of a terrible period of economic and political decline in the United States. And it signals the last gasp of the American imperium. That’s over. It is not coming back. And what is to come will be very, very painful.

Barack Obama, and the criminal class on Wall Street, aided by a corporate media that continues to peddle fatuous gossip and trash talk as news while we endure the greatest economic crisis in our history, may have fooled us, but the rest of the world knows we are bankrupt. And these nations are damned if they are going to continue to prop up an inflated dollar and sustain the massive federal budget deficits, swollen to over $2 trillion, which fund America’s imperial expansion in Eurasia and our system of casino capitalism. They have us by the throat. They are about to squeeze.

There are meetings being held Monday and Tuesday (of this week) in Yekaterinburg, Russia, (formerly Sverdlovsk) among Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization. The United States, which asked to attend, was denied admittance. Watch what happens there carefully. The gathering is, in the words of economist Michael Hudson, “the most important meeting of the 21st century so far.”

It is the first formal step by our major trading partners to replace the dollar as the world’s reserve currency. If they succeed, the dollar will dramatically plummet in value, the cost of imports, including oil, will skyrocket, interest rates will climb and jobs will hemorrhage at a rate that will make the last few months look like boom times. State and federal services will be reduced or shut down for lack of funds. The United States will begin to resemble the Weimar Republic or Zimbabwe. Obama, endowed by many with the qualities of a savior, will suddenly look pitiful, inept and weak. And the rage that has kindled a handful of shootings and hate crimes in the past few weeks will engulf vast segments of a disenfranchised and bewildered working and middle class.

The people of this class will demand vengeance, radical change, order and moral renewal, which an array of proto-fascists, from the Christian right to the goons who disseminate hate talk on Fox News, will assure the country they will impose.

I called Hudson, who has an article in Monday’s Financial Times called “The Yekaterinburg Turning Point: De-Dollarization and the Ending of America’s Financial-Military Hegemony.” “Yekaterinburg,” Hudson writes, “may become known not only as the death place of the czars but of the American empire as well.” His article is worth reading, along with John Lanchester’s disturbing exposé of the world’s banking system, titled “It’s Finished,” which appeared in the May 28 issue of the London Review of Books.

“This means the end of the dollar,” Hudson told me. “It means China, Russia, India, Pakistan, Iran are forming an official financial and military area to get America out of Eurasia. The balance-of-payments deficit is mainly military in nature. Half of America’s discretionary spending is military. The deficit ends up in the hands of foreign banks, central banks. They don’t have any choice but to recycle the money to buy U.S. government debt. The Asian countries have been financing their own military encirclement. They have been forced to accept dollars that have no chance of being repaid. They are paying for America’s military aggression against them. They want to get rid of this.”

China, as Hudson points out, has already struck bilateral trade deals with Brazil and Malaysia to denominate their trade in China’s yuan rather than the dollar, pound or euro. Russia promises to begin trading in the ruble and local currencies. The governor of China’s central bank has openly called for the abandonment of the dollar as reserve currency, suggesting in its place the use of the International Monetary Fund’s Special Drawing Rights.

What the new system will be remains unclear, but the flight from the dollar has clearly begun. The goal, in the words of the Russian president, is to build a “multipolar world order” which will break the economic and, by extension, military domination by the United States.

China is frantically spending its dollar reserves to buy factories and property around the globe so it can unload its U.S. currency. This is why Aluminum Corp. of China made so many major concessions in the failed attempt to salvage its $19.5 billion alliance with the Rio Tinto mining concern in Australia. It desperately needs to shed its dollars.
“China is trying to get rid of all the dollars they can in a trash-for-resource deal,” Hudson said. “They will give the dollars to countries willing to sell off their resources since America refuses to sell any of its high-tech industries, even Unocal, to the yellow peril. It realizes these dollars are going to be worthless pretty quickly.”

The architects of this new global exchange realize that if they break the dollar they also break America’s military domination. Our military spending cannot be sustained without this cycle of heavy borrowing. The official U.S. defense budget for fiscal year 2008 is $623 billion, before we add on things like nuclear research. The next closest national military budget is China’s, at $65 billion, according to the Central Intelligence Agency.

There are three categories of the balance-of-payment deficits. America imports more than it exports. This is trade. Wall Street and American corporations buy up foreign companies. This is capital movement. The third and most important balance-of-payment deficit for the past 50 years has been Pentagon spending abroad. It is primarily military spending that has been responsible for the balance-of-payments deficit for the last five decades. Look at table five in the Balance of Payments Report, published in the Survey of Current Business quarterly, and check under military spending. There you can see the deficit.

To fund our permanent war economy, we have been flooding the world with dollars. The foreign recipients turn the dollars over to their central banks for local currency. The central banks then have a problem. If a central bank does not spend the money in the United States then the exchange rate against the dollar will go up. This will penalize exporters.

This has allowed America to print money without restraint to buy imports and foreign companies, fund our military expansion and ensure that foreign nations like China continue to buy our treasury bonds. This cycle appears now to be over. Once the dollar cannot flood central banks and no one buys our treasury bonds, our empire collapses. The profligate spending on the military, some $1 trillion when everything is counted, will be unsustainable.

“We will have to finance our own military spending,” Hudson warned, “and the only way to do this will be to sharply cut back wage rates. The class war is back in business. Wall Street understands that. This is why it had Bush and Obama give it $10 trillion in a huge rip-off so it can have enough money to survive.”

The desperate effort to borrow our way out of financial collapse has promoted a level of state intervention unseen since World War II. It has also led us into uncharted territory.

“We have in effect had to declare war to get us out of the hole created by our economic system,” Lanchester wrote in the London Review of Books. “There is no model or precedent for this, and no way to argue that it’s all right really, because under such-and-such a model of capitalism … there is no such model. It isn’t supposed to work like this, and there is no road-map for what’s happened.”

The cost of daily living, from buying food to getting medical care, will become difficult for all but a few as the dollar plunges. States and cities will see their pension funds drained and finally shut down. The government will be forced to sell off infrastructure, including roads and transport, to private corporations. We will be increasingly charged by privatized utilities—think Enron—for what was once regulated and subsidized. Commercial and private real estate will be worth less than half its current value.

The negative equity that already plagues 25 percent of American homes will expand to include nearly all property owners. It will be difficult to borrow and impossible to sell real estate unless we accept massive losses. There will be block after block of empty stores and boarded-up houses. Foreclosures will be epidemic. There will be long lines at soup kitchens and many, many homeless.

Our corporate-controlled media, already banal and trivial, will work overtime to anesthetize us with useless gossip, spectacles, sex, gratuitous violence, fear and tawdry junk politics. America will be composed of a large dispossessed underclass and a tiny empowered oligarchy that will run a ruthless and brutal system of neo-feudalism from secure compounds. Those who resist will be silenced, many by force. We will pay a terrible price, and we will pay this price soon, for the gross malfeasance of our power elite.

TRUTHDIG … Obama fiddles while Rome Burns

Obama Creating New Rules undercutting Federal Reserve for Regulating Lenders and Authority Over Home Mortgages.

WASHINGTON – From simple home loans to Wall Street’s most exotic schemes, the government would impose sweeping new “rules of the road” for the nation’s battered financial system under an overhaul proposed Wednesday by President Barack Obama.

Aimed at preventing a repeat of the worst economic crisis in seven decades, the changes would begin to reverse a determined campaign pressed in the 1980s by President Ronald Reagan to cut back on federal regulations.

Obama’s plan would do little to streamline the alphabet soup of agencies that oversee the financial sector. But it calls for fundamental shifts in authority that would eliminate one regulatory agency, create another and both enhance and undercut the authority of the powerful Federal Reserve.

The new agency, a consumer protection office, would specifically take over oversight of mortgages, requiring that lenders give customers the option of “plain vanilla” plans with straightforward terms. Lenders who repackage loans and sell them to investors as securities would be required to retain 5 percent of the credit risk — a figure some analysts believe is too low.

In all, the Obama’s broad proposal cheered consumer advocates and dismayed the banking industry with its proposed creation of a regulator to protect consumers in all their banking transactions, from mortgages to credit cards. Large insurers protested the administration’s decision not to impose a standard, federal regulation on the insurance industry, leaving it to the separate states as at present. Mutual funds succeeded in staying under the jurisdiction of the Securities and Exchange Commission instead of the new consumer protection agency.

Obama cast his proposals as an attempt to find a middle ground between the benefits and excesses of capitalism.

“We are called upon to put in place those reforms that allow our best qualities to flourish — while keeping those worst traits in check,” Obama said.

The president’s plan lands in the lap of a Congress already preoccupied by historic health care legislation, consideration of a new Supreme Court justice and other major issues. Still, Obama has set an ambitious schedule, pushing lawmakers to adopt a new regulatory regime by year’s end.

“We’ll have it done this year,” pledged Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee.

(If Dodd is involved, you know it’s a Bad Deal)

“Absolutely,” agreed Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee.

(The crook who allowed the decimation of FNMAE & FMAC)

But fissures quickly developed.

Dodd, who had been at Obama’s side in the East Room of the White House for the announcement, raised questions about one of the plan’s key features — giving the Federal Reserve authority to oversee the largest and most interconnected players in the financial world.

“There’s not a lot of confidence in the Fed at this point,” Dodd said. (why not say theres no confidence in Geithner?)

MSNBC

Rockefeller patterns a healthcare ‘reform’ bill on the Federal Reserve

RED FLAG ALERT! The depraved Jay Rockerfeller, another “tool” of the Obama Administration that continues maintaining a Senate seat in WVA (Why or How? Don’t ask me!) plans on creating a Health Care/Medi-Care Agency governed by the Executive Branch. Be afraid- be really afraid!

Jun 1, 2009

(ht/Jerry Mazza)

Things are getting stranger and stranger in D.C. and the promise of change now definitely looks like the same old game with Medicare: invite the HMOs in to brainstorm cuts in services to people who need them most.

Behind this is a new bill submitted on May 20 by Senator John D. “Jay” Rockefeller IV (D, W.VA.), chairman of the Senate Finance Subcommittee on Health Care. It authorizes the Medicare Payment Advisory Commission (MedPAC, created in 1997) to go even further and set lists of approved treatment standards and actually have enforcement powers over methods of healthcare delivery and reimbursement. You just think about that for a minute.

This time “The MedPAC Reform Act” is calling for MedPAC to be made up of “independent experts” as an “executive agency modeled after the Federal Reserve.” Is that because the Fed has done such an incredibly super job of throwing our money after banks and other dinosauric corporations like AIG?

Do we need still another shark tank of “experts” with vested interests and little transparency over their actions, spending your money as they will, and as fast as they print it. Yes, just as the Federal Reserve serves private financial interests, so too the new health care reimbursement agency will serve the HMOs, demanding their (your) blood money. This is the opposite of what Obama promised in his “Change” campaign.

But then, politicians as we all know will and do say anything to get elected. Reality is another thing. And Rockefeller claims that an enhanced, empowered MedPAC would not be, and get this, subject to the “whims of Congress.” Excuse me? Jay said this and more about his bill in a recent interview with Washington Post healthcare writer, Ceci Connolly. He added, “To truly achieve transformative health care reform, we need to separate the special interests from the decision makers.” Think about that for a while.

He added “We must take Congress out of its current role [representing the people?] . . . It is inefficient and ineffective; we are not health-care experts, and being a deliberative body means that we cannot keep pace with the rapidly transforming health-care marketplace.” Congress is not made up of all arms experts yet they appropriate billions every year to the Department of Defense. When we leave it to the generals to do on their own buying pell-mell, we end up with them in bed with big defense corporations, creating multi-billion dollar white elephants that don’t fly, i.e, incredible waste.

In fact, in the true tradition of the Rockefeller family and their treasonous involvement and leadership in the Bilderberg Group, Jay Rockefeller is trying to circumvent the duly elected legislative body of the people to make side deals with private corporations, utilizing MedPAC’s “experts,” and hence have more money to pour down the corporations’ ever dollar-hungry gullets, not to mention the bankrupt banks’ maws.

The very idea of setting up an “independent” national commission to declare what doctors and hospitals can and cannot do is odious — a step totally in the wrong direction for both the right and left sides of the Obama/Baucus health-care “reform” discussion. It is made to order to keep the money flowing right down the drain of the financial cadre behind the HMOs.

Until now, the very idea of this flagrantly “special interest” bill has not been permitted in the United States. Unfortunately, the model for it comes express-direct from Britain and is called the “National Institute for Clinical Excellence,” or NICE, more appropriately “Nazi-Inspired Citizen Eradication”. NICE was set up 11 years ago and passes on what medications, treatments, and services cannot be allowed to be given in the health-care system. It can easily become the “euthanasia express,” with its “Kevorkians,” excuse me, “experts” deciding who lives and who dies and when.

There is a distinctly inhuman, illegal feeling about this bill. But then Rockefeller’s latest bill is one of dozens that have been filed recently in Congress, each with various slants, but all consistent with the un-American, Nazi-medicine edge.

They will all be detailed soon in Obama/Baucus/Grassley’s “comprehensive health care reform” act in June. For instance, a version that was filed last week in the Senate called the “Advance Planning and Compassionate Care Act,” was to help citizens decide when to reduce expensive treatments in their “end-of-life” experiences. Can you believe it? It is again sponsored by Jay Rockefeller, Senators Susan Collins (R-Maine), Ron Wyden (D-Oregon), and others. This is not science fiction, folks. These geeks (vultures/saboteurs- my emphassis) are for real. They just sound like they’re from another planet.

In fact, Rockefeller personally desires backing the principle of providing health care for all, especially kids, so they can practice these little tricks on everyone. He would also like to have Medicare open to enrolling people 55 years old and up, to get the “experts” hands on them earlier. But the caveat, my dears, is that he wants his NICE agency patterned on Britain’s model to “service them.”

NICE will decide when and how to cut care for the enrollees so that the HMO systems get their pound of flesh, yours or mine, and more. My advice, beloved fellow citizens, old, middle-aged and young, is to be careful of this Rockefeller, this elitist playing Democratic senator and his bunch. And be careful of all who offer your healthcare up as a honey-pot for the healthcare and Big Pharma bears — just like the Federal Reserve does with taxpayer money for the banks.

As to Obama, he couldn’t care less. He just wants to cut a couple of trillion from his first term expenditures, the monies he’s already given away to the banks, so that he has more to spend next time around. Stay tuned. More to come!

Online Journal

Obama’s help for Homeowners; nothing but another propaganda myth…

Foreclosures down slightly, but no signs of stabilization yet for homeowners.

Anyone hoping for a housing bottom will likely be discouraged by the RealtyTrac’s foreclosure report this morning. U.S. foreclosure filings topped 300,000 for the third straight month in May and are expected to hit a record 1.8 million by the end of the first half of the year. The number of filings fell 6 percent from last month,

“but as foreclosures continue to mount there are clear signs that the banks aren’t buying into President Obama’s mortgage rescue plan.” (Let’s rephrase that comment to read: Obama isn’t insisting the Banks we Bailed out give homeowners ALL the help they need to keep their homes.)

When President Obama announced the program earlier this year with great fanfare, he promised to save the homes of 9 million people, but based on the steady flow of new foreclosure filings, the banks are not cooperating. Once the cramdown provision — which would have given bankruptcy courts the ability to reduce the principal of mortgages underwater —

“was killed by the Senate, there were no teeth in the Obama plan.”

Living at ground zero of the toxic assets (my area, Orlando/Kissimmee, was eighth on the metropolitan area foreclosure list this month), the evidence is in front of me that foreclosures continue to mount. Real estate sales people tell how foreclosed homes that sold for $200,000 or more just a couple of years ago are now being sold for less than $80,000 by the banks.

If banks are willing to take that much of a loss after the expense of foreclosure, wouldn’t some adjustment in the value of the home to avoid foreclosure be more cost effective? But so far banks have resisted any type of loan program that requires them to adjust the principal amount of the mortgage.

Job losses and falling property values continue to delay the housing recovery as more homeowners are unable to pay their mortgages or sell their homes. Unemployment is now up to 9.4 percent and many expect it could still climb higher.

The mortgage crisis, which at first impacted primarily subprime loans, is now hitting prime borrowers. About 29 percent of loans that entered the foreclosure process were prime, fixed-rate mortgages, according to the Mortgage Bankers Association. Homes in some stage of foreclosure totaled 3.85 percent of all loans in the first quarter, up from 2.47 percent a year earlier.

“The numbers are getting bigger and that’s what is bothering me,” Patrick Newport, an economist at IHS Global Insight told Bloomberg. “You have banks holding these toxic loans, which means bank balance sheets are in even worse shape with the increase in delinquencies.”

Nevada, California and Florida continued to outpace the rest of the country in foreclosure filings. Nevada had the highest foreclosure rate, one in every 64 households, which is more than six times the national average. California was second at one in 144 households followed by Florida at one in 148 households. Arizona was fourth with one in 158 households and Utah was fifth with one filing per 316 households. The areas with the biggest jump in number of foreclosure filings were Michigan, Washington and New York.

The city with the highest foreclosure rate was Las Vegas, with one in every 54 households getting a notice, which is up 78 percent from a year ago. California has six cities among the top 10, and Florida has three.

Lita Epstein has written more than 25 books including The 250 Questions You Should Ask to Avoid Foreclosure.
Link

A typical homeowner’s plight reflecting the recidivism of Obama’s lofty rhetoric failing to translate into reality.“I just laughed,” Ms. Ulery said. “It was a really good deal for them.”

“These (Banks) are the same people you couldn’t trust before.”

MESA, Ariz. — She had seen the advertisements for the new government program offering relief. She had heard President Obama promise that help was on the way for homeowners like her, people who had lost jobs and could no longer make their mortgage payments.

But when Eileen Ulery called her mortgage company — Countrywide, now part of Bank of America — the bank did not offer to alter her mortgage. Rather, the bank tried to sell her a new loan with a slightly lower monthly payment while asking her to pay $13,000 toward the principal and a fresh $5,000 in fees.

Her problem was that she did not yet present a big enough problem to merit aid.

Yes, she was teetering toward delinquency. She was among millions of homeowners rapidly sliding toward danger for whom the Obama administration had devised an aid program — some already in foreclosure proceedings, others headed that way as they ran out of means to make their payments. But unlike those in imminent peril of losing their homes, Ms. Ulery had never missed a payment.

“I don’t know who this bailout is helping,” she said. “We’ve given these banks all this money and they’re not doing what they say they’re doing. Something’s not working right. They keep saying they’re doing all this, but we don’t see it down here at this level.”

More than three months after the Obama administration outlined a new program aimed at rescuing millions of distressed homeowners by compensating banks that modify mortgages, Ms. Ulery’s experience illustrates the mixture of confusion, frustration and limited assistance that now reigns.

Through many months of wrangling over the fate of the financial system, with hundreds of billions of taxpayer dollars dispensed on bailouts, distressed homeowners have waited for their own rescue amid talk that it was finally on the way. Modifications of so-called subprime and Alt-A mortgages — those made to people with tarnished credit — actually fell by 11 percent in May from April, according to research by Alan M. White at Valparaiso University School of Law.

A Treasury spokeswoman, Jenni Engebretsen, confirmed that homeowners like Ms. Ulery — current on their mortgages yet grappling with a hardship like unemployment — were eligible for loan modifications under the program. She said mortgage servicers had offered to modify more than 100,000 loans since the department announced the program.

But how many loans have been modified? Ms. Engebretsen declined to say, noting that the Treasury was working with mortgage companies to “fine-tune reporting systems.”  (If you believe that- the Brooklyn Bridge is still up For Sale..)

A spokesman for Bank of America Home Loans, Rick Simon, confirmed that the bank offered Ms. Ulery refinancing and not loan modification. The bank is now focusing on modifications only for those borrowers “who are already in severe threat of foreclosure,” he said.

“We’re still putting the systems in place to handle people who are current on their loans,” Mr. Simon said, declining to say how many loans Bank of America had modified. “It’s still very, very early in the program.”

Ms. Ulery, 63, is the face of the latest wave of troubled American homeowners, a surge of people in financial danger not because of reckless gambling on real estate, but because of lost income.

Far from being one of those who used easy-money loans to speculate on homes proliferating across the desert soil of greater Phoenix, she has lived in the same modest, stucco-sided condo in suburban Mesa for a dozen years. She bought the two-bedroom home in 1997 for $77,500.

For two decades, she worked as an executive assistant at nearby Arizona State University, bringing home more than $1,000 every other week — enough to pay the bills.

Round-faced, wry and given to staccato bursts of laughter, Ms. Ulery regularly visits yard sales, seeking out plates and patchwork quilts for her collections. She takes pleasure in her two grandchildren and her beagle. She enjoys an occasional glass of wine, favoring a $6 merlot that comes in a screw-top bottle.

“I’m not an extravagant-type person,” she said. “I see these big houses all around, and they’re beautiful, but I’m comfortable in my little condo.”

Like tens of millions of other American homeowners, she added to her mortgage balance as the value of her condo swelled, at one point exceeding $200,000. She refinanced to pay off some credit cards and settle into a 30-year, fixed-rate loan. Later, she took out a home equity line of credit to buy a new Hyundai. She refinanced again in 2007, borrowing $20,000, mostly for a new roof.

page 2 of her story

Obama proposes US cities may have to be bulldozed in order to survive

Dozens of US cities may have entire neighborhoods bulldozed as part of drastic “shrink to survive” proposals being considered by the Obama administration to tackle economic decline.

The government looking at expanding a pioneering scheme in Flint, one of the poorest US cities, which involves razing entire districts and returning the land to nature.

Local politicians believe the city must contract by as much as 40 per cent, concentrating the dwindling population and local services into a more viable area.

The radical experiment is the brainchild of Dan Kildee, treasurer of Genesee County, which includes Flint.

Having outlined his strategy to Barack Obama during the election campaign, Mr Kildee has now been approached by the US government and a group of charities who want him to apply what he has learnt to the rest of the country.

Mr Kildee said he will concentrate on 50 cities, identified in a recent study by the Brookings Institution, an influential Washington think-tank, as potentially needing to shrink substantially to cope with their declining fortunes.

Most are former industrial cities in the “rust belt” of America’s Mid-West and North East. They include Detroit, Philadelphia, Pittsburgh, Baltimore and Memphis.

In Detroit, shattered by the woes of the US car industry, there are already plans to split it into a collection of small urban centres separated from each other by countryside.

“The real question is not whether these cities shrink – we’re all shrinking – but whether we let it happen in a destructive or sustainable way,” said Mr Kildee. “Decline is a fact of life in Flint. Resisting it is like resisting gravity.”

Karina Pallagst, director of the Shrinking Cities in a Global Perspective programme at the University of California, Berkeley, said there was “both a cultural and political taboo” about admitting decline in America.

“Places like Flint have hit rock bottom. They’re at the point where it’s better to start knocking a lot of buildings down,” she said.

Flint, sixty miles north of Detroit, was the original home of General Motors. The car giant once employed 79,000 local people but that figure has shrunk to around 8,000.

Unemployment is now approaching 20 per cent and the total population has almost halved to 110,000.

The exodus – particularly of young people – coupled with the consequent collapse in property prices, has left street after street in sections of the city almost entirely abandoned.

In the city centre, the once grand Durant Hotel – named after William Durant, GM’s founder – is a symbol of the city’s decline, said Mr Kildee. The large building has been empty since 1973, roughly when Flint’s decline began.

Regarded as a model city in the motor industry’s boom years, Flint may once again be emulated, though for very different reasons.

But Mr Kildee, who has lived there nearly all his life, said he had first to overcome a deeply ingrained American cultural mindset that “big is good” and that cities should sprawl – Flint covers 34 square miles.

He said: “The obsession with growth is sadly a very American thing. Across the US, there’s an assumption that all development is good, that if communities are growing they are successful. Ifthey’re shrinking, they’re failing.”

They could then knock them down or sell them on to owners who will occupy them. The city wants to specialise in health and education services, both areas which cannot easily be relocated abroad.

The local authority has restored the city’s attractive but formerly deserted centre but has pulled down 1,100 abandoned homes in outlying areas.

Mr Kildee estimated another 3,000 needed to be demolished, although the city boundaries will remain the same.

Already, some streets peter out into woods or meadows, no trace remaining of the homes that once stood there.

Choosing which areas to knock down will be delicate but many of them were already obvious, he said.

The city is buying up houses in more affluent areas to offer people in neighbourhoods it wants to demolish. Nobody will be forced to move, said Mr Kildee.

“Much of the land will be given back to nature. People will enjoy living near a forest or meadow,” he said.

Mr Kildee acknowledged that some fellow Americans considered his solution “defeatist” but he insisted it was “no more defeatist than pruning an overgrown tree so it can bear fruit again”.

Obama Fires Watchdog appointed as Inspector General for Ameri-Corp.

WASHINGTON – An inspector general fired by President Barack Obama said Friday he acted “with the highest integrity” in investigating AmeriCorps and other government-funded national service programs. Gerald Walpin said in an interview with The Associated Press that he reported facts and conclusions “in an honest and full way” while serving as inspector general at the Corporation for National and Community Service.

In a letter to Congress on Thursday, Obama said he had lost confidence in Walpin and was removing him from the position. (Uh-huh, but not until Walpin’s investigation caught a supporter breaking the law.)

Walpin defended his work on Friday. “I know that I and my office acted with the highest integrity as an independent inspector general should act,” he said.

Obama’s move follows an investigation by Walpin finding misuse of federal grants by a nonprofit education group led by Sacramento Mayor Kevin Johnson, who is an Obama supporter and former NBA basketball star. Johnson and a nonprofit education academy he founded ultimately agree to repay half of $847,000 in grants it had received from AmeriCorps.

Walpin was criticized by the acting U.S. attorney in Sacramento for the way he handled the investigation of Johnson and St. HOPE Academy.

“It is vital that I have the fullest confidence in the appointees serving as inspectors general,” Obama said in the letter to House Speaker Nancy Pelosi, D-Calif., and Vice President Joe Biden, who also serves as president of the Senate. “That is no longer the case with regard to this inspector general.”

The president didn’t offer any more explanation, but White House Counsel Gregory Craig, in a letter late Thursday to Sen. Charles Grassley, R-Iowa, cited the U.S. attorney’s criticism of Walpin to an integrity committee for inspectors general.

“We are aware of the circumstances leading to that referral and of Mr. Walpin’s conduct throughout his tenure and can assure you that the president’s decision was carefully considered,” Craig wrote.

Walpin said he gave the integrity committee “a full and complete response” that was also signed by several people who worked on the case. “I have no question but that we acted totally properly,” he said in the interview.

Grassley had written Obama a letter pointing to a law requiring that Congress be given the reasons an inspector general is fired. He cited a Senate report saying the requirement is designed to ensure that inspectors general are not removed for political reasons.

Grassley said Walpin had identified millions of dollars in AmeriCorps funds that were wasted or misspent and “it appears he has been doing a good job.”

The inspector general found that Johnson, a former all-star point guard for the Phoenix Suns, had used AmeriCorps grants to pay volunteers to engage in school-board political activities, run personal errands for Johnson and even wash his car.

In August 2008, Walpin referred the matter to the local U.S. attorney’s office, which said the watchdog’s conclusions seemed overstated and did not accurately reflect all the information gathered in the investigation.

“We also highlighted numerous questions and further investigation they needed to conduct, including the fact that they had not done an audit to establish how much AmeriCorps money was actually misspent,” Acting U.S. Attorney Lawrence Brown said in an April 29 letter to the federal counsel of inspectors general.

Walpin’s office made repeated public comments just before the Sacramento mayoral election, prompting the U.S. attorney’s office to inform the media that it did not intend to file any criminal charges.

In settling the case, the government agreed to lift its suspension of any future grants to the academy and Johnson agreed to immediately repay $73,000 in past grants. The academy was given 10 years to repay the remaining $350,000.

Brown said at the time of the settlement that prosecutors determined there was no fraud, but rather a culture of “sloppiness” in St. HOPE’s record-keeping.

Kevin Hiestand, chairman of the board of St. HOPE Academy, said in a statement it was “about time” Walpin was removed. “Mr. Walpin’s allegations were meritless and clearly motivated by matters beyond an honest assessment of our program,” he said.

Ken Bach, who works in the inspector general’s office at the national service corporation, will be acting inspector general until Obama appoints someone to the position.

Walpin, a New York attorney, was appointed by then-President George W. Bush and sworn into office in January 2007 after being confirmed by the Senate, according to a news release on AmeriCorps’ Web site. Walpin graduated from College of the City of New York in 1952 and received a law degree in 1955 from Yale Law School. He was a partner with the New York City law firm Katten Muchin and Rosenman LLP for more than 40 years.

Alan Solomont, a Democrat and the board chairman of the government-run corporation, and Stephen Goldsmith, a Republican and the board’s vice chair, said they strongly endorsed Obama’s decision. (out of fear, they may suffer the same fate as Walpin, no doubt!)

Obama rests his feet on the Resolute Desk while talking to Netanyahu..

Obama speaking with Israeli Prime Minister Benjamin Netanyahu.

Is there any limit to Obama’s ability to disrespect even the Resolute Desk used by former presidents JFK and Clinton during their terms in the office…

A bit of Resolute’s history

“The ship was purchased, fitted out and sent to England as a gift to HER MAJESTY QUEEN VICTORIA by the PRESIDENT AND PEOPLE of the UNITED STATES as a token of goodwill & friendship. This desk was made from her timbers when she was broken up, and presented by the QUEEN OF GREAT BRITAIN & IRELAND to the PRESIDENT OF THE UNITED STATES in 1880, Rutherford B. Hayes, as a memorial of the courtesy and loving kindness which dictated the offer of the gift of the HMS RESOLUTE.”

Remember when we had president’s attuned to the importance and great respect for America’s historical treasures?

Remembering our dignified past memories surrounding the Resolute desk..

Please give this interloper an Adirondack Chair and a gift certificate to Akia and be done with it..

Not only does Obama disrespect our National Treasures but cannot seem to preclude himself from insulting the Israelis in the process with his casual approach to volatile life and death situations in the ME..

read here:

“Israeli TV newscasters Tuesday night interpreted a photo taken Monday in the Oval Office of President Obama talking on the phone with Israeli Prime Minister Benjamin Netanyahu as an “insult” to Israel.

They saw the incident as somewhat akin to an incident last year, when the Iraqi reporter threw a shoe at President Bush in Baghdad.

It is considered an insult in the Arab world to show the sole of your shoe to someone. It is not a Jewish custom necessarily, but Israel feels enough a part of the Middle East after 60 years to be insulted too.

Was there a subliminal message intended from the White House to Netanyahu in Jerusalem, who is publicly resisting attempts by Mr. Obama and Secretary of State Hillary Clinton to force Israel to stop any kind of settlement activity in occupied territories once and forever?

Whether or not it is true, it shows the mood in Israel. They feel cornered. The reactions out of Israel reflect that feeling.

Netanyahu is making a speech Sunday, in part as a response to Mr. Obama’s address to the Arab world last week in Cairo. (this should be a joy to watch!)

Israel’s Channel One TV reported that Netanyahu was told Tuesday by an “American official” in Jerusalem that, “We are going to change the world. Please, don’t interfere.” The report said Netanyahu’s aides interpreted this as a “threat.”

Netanyahu met with George Mitchell today for four hours in Jerusalem. The State Department announced this afternoon that Mitchell will be stopping in Beirut and Damascus when he finishes his visits to Israel and the Palestinian Authority.”

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