SPIEGEL ONLINE
04/14/2008
By Gabor Steingart in Washington
The dollar is in a tailspin, the trade deficit is growing and a recession is on the horizon. The American way of life is in serious danger. But the head of the Federal Reserve keeps on pumping easy credit into the system -- a crazy policy that will worsen the crisis.
Ben Bernanke at the G7 meeting of central bank governors over the weekend.
Alan Greenspan and Ben Bernanke have more in common with the big cat entertainers Siegfried & Roy than any of us can be comfortable with.
The Las Vegas magicians call themselves "Masters of the Impossible" and have been fascinating audiences for decades by getting snow-white tigers to leap through burning rings.
The legendary Federal Reserve Chairman and his successor were equally adept at fascinating their audiences -- with a policy of miraculous monetary growth that gave America one of the longest periods of economic expansion in modern times. Many saw them as "Masters of the Universe." It seemed as if the central bankers had tamed predatory capitalism with their constant interest rate cuts.
Siegfried & Roy at times seemed at one with their cats, until the day everything went out of control. A tiger bit Roy in the neck during a show and looked as though it were about to devour him alive.
Greenspan and Bernanke too have lost their magic touch, and their image has been shredded by the real estate crisis and the dollar slide. The ravages of the financial markets aren't doing them any personal harm. But devalued stocks, bad mortgage loans and the diving dollar are damaging millions of small investors and savers.
It's as if the tiger has leapt of the stage and is mauling the audience. We can't blame wild cats or financial markets for being ruthless. It's in their nature to be brutal. Their unmistakeable message is: you can take things this far and no further.
In the case of the real estate crisis which reached the banks and is now unsettling the stock markets, the markets are now showing what G7 finance ministers and central bank governors meeting last weekend in Washington for their annual spring get-together declined yet again to admit publicly: Americans must change their lives -- or it will be changed for them by force.
American Way of Life Under Threat
The credit-financed consumer boom of recent years is coming to a painful end. Today's American Way of Life has no chance of surviving the coming years undamaged. The virus will continue to ravage its way through the financial system.
The property crisis is likely to spread to credit card providers soon and will then probably infect car manufacturers, furniture makers and all the other firms that owe their sales increases to the growth in credit finance. "The virus will keep on infecting the system," one management board member from a large bank said, requesting anonymity in return for the candour of his analysis.
His argument is that banks that grant mortgages to home buyers virtually unable to pay their bills are unlikely to be especially scrutinizing when it comes to lending cash to the buyers of fridges, cars and furniture. Indeed, a furniture store in Miami recently tried to lure consumers with the following offer: buy now, pay your first credit installment in three years, and no need for a down-payment.
The credit-financed way of life is typical of the US these days. Many people resort to credit to plug the gap between the lifestyle they have become accustomed to and their declining wages.
Dulling the Pain With Credit
The borrowed cash is like an anaesthetic against the painful impact of globalisation. Private household debt has been growing by $4 billion each business day for years.
All this wouldn't be so bad if the US economy were at least doing well in foreign markets. But it isn't, and hasn't been for a long time. Despite the depreciation of the dollar, which makes imports into the US far more expensive while making US exports cheaper in foreign markets, US manufacturers are finding it hard to sell their products.
Contrary to forecasts by both the Federal Reserve and the Treasury, the trade deficit has continued to grow, by 6 percent in February alone. America imported $62 billion worth of goods more than they exported in February, including a disturbingly large number of cars, computers and pharmaceutical products. Try as they might, most private households in America can't keep up this consumer miracle. The savings behavior of many Americans means that many of them now live from hand to mouth.
But Bernanke is doing nothing to dampen this hunger for credit. The former advisor to President George W. Bush is even trying to whip up credit-financed consumption by lowering interest rates. This is helping to fuel inflation because the monetary growth isn't being matched by growth in real economic output. Inflation in the US currently stands at 4 percent.
It's a paradox. The private commercial banks which have just had to make billions of dollars in write downs have become more cautious. They're scared of further risks. The management resignations at Citigroup and Bear Stearns have had a sobering impact.
Patriotic Madness
Meanwhile the Federal Reserve is urging the banks to go on taking risks. It has been injecting cash into the banking system for the past half-year while urging bank CEOs in confidential chats to offer more credit. The aim is to keep on financing consumer spending and even to stimulate it further -- for reasons of patriotism.
There's a word for this policy -- madness.
But because there is method in this madness, the meeting of mighty central bank governors and finance ministers in Washington over the weekend remained silent about it, at least officially. Outside the meeting rooms, though, there were murmurings about the poisoned legacy of Alan Greenspan and Bernanke's irresponsible behavior.
One participant told me: "There's an unwritten code of honor that says central bank governors should refrain from criticizing each other." Not least out of respect for the independence of central banks.
But the US is unlikely to realize the error of its ways on its own. "The Americans will always do the right thing," British Prime Minister Winston Churchill once said, "after they've exhausted all the alternatives."
Central bankers and tiger tamers have something else in common -- obstinacy. Roy has recovered from his wounds and wants to return to the stage in Las Vegas. "The magic is back," came the defiant announcement.
Alan Greenspan cut a similarly indestructible figure at the weekend. Even though criticism of his cheap money policy was only murmured privately, the 82-year-old legend of central banking said: "I was praised for things I didn't do. I am now being blamed for things I didn't do."
Not that he ever complained about getting false praise.
Wednesday, April 16, 2008
The Madness of Ben Bernanke
A Trillion Dollar Rescue for Wall Street Gamblers
Nothing for Families and Retirees
By MICHAEL HUDSON
If the move to a Unitary Executive of unfettered presidential power frightens you, America's radical right turn to Unitary Finance should compound your fears--and your debts as well. The financial events of the last two weeks of March 2008 demonstrate that the "economic royalists" and "money changers" whom Franklin Delano Roosevelt (FDR) drove from the temple of finance have returned to mismanage our economy into dire straights of unprecedented risk--debt creation, euphemized as "leveraging" and "wealth creation."
The few checks and balances that remain in the way of the financial sector's increasingly centralized planning, especially at the state level, are being swept aside under the guise of "saving the system." Few Wall Street beneficiaries who use this phrase explain just what the system is. For starters, its political managers are industry lobbies appointed to high managerial and planning positions in the public agencies that are supposed to regulate these industries. Their idea of financial planning is to put a trillion dollars in government agency funds and credit guarantees at risk. This agency funding was supposed to be used to help average American families obtain housing and health care, and to protect their savings and provide for their retirement. Instead, it is being mobilized to support the economy's bankers and financial managers. Indeed, the past few weeks have seen seemingly trillions of dollars committed for war making and bank support.
The banking system's free creation of credit, doubling each five years or so for the economy at large, threatens to culminate in debt peonage for many American families and also for industry and for state and local governments. The economic surplus is being quickly absorbed by a combination of debt service and government bailouts for creditors whose Ponzi schemes are collapsing right and left, from residential to commercial real estate and corporate takeover loans to foreign bubble-economy credit.
This is the context in which to view the past few weeks' financial turmoil surrounding Bear Stearns, JPMorgan/Chase and the rapidly changing debt landscape. "The system" that the Treasury, Federal Reserve and the New Deal agencies captured by the Bush Administration is trying to save is an economy-wide Ponzi scheme. By that I mean that the business plan is for creditors to lend debtors enough money for them to pay the interest costs so as to keep current on their loans.
For the past few years this system has depended on asset prices for real estate, stocks and bonds to be inflated by enough to enable debtors to pledge these assets as collateral at a higher market price for more and more new loans. But now that the real estate bubble has burst (and indeed, as stock prices sink), the problem is how to bail out the tip of our economic iceberg that has sunk into negative equity--a condition in which the debts attacked to property exceed its market value. Someone must take a loss--but whom?
Normally, it is the banker or investor who takes the loss. But they are now supposed to be "rescued." This is being presented as a return to stability. But it was a system that never was stable to begin with. In fact, for the rescue to work, most Americans will have to own less and owe more, while being told that all this is the path to wealth creation--as if it were their wealth, not that of their creditors. The Bear Stearns/JPMorgan Chase/monoline insurance giveaway to "save the financial system" provides a vivid illustration of how Unitary Finance has developed a parasitic relationship with American labor in its role as pension contributor, consumer and homeowner. The system being subsidized enables the FIRE sector to direct and live off the productive efforts of others--people who make real things and provide real services.
Saving Wall Street with a trillion-dollar bailout of bad mortgage debt
The bailout started on Sunday, March 16. The government and JPMorgan Chase had reason to be embarrassed about the negotiations, for the details trickled out on the Federal Reserve or Treasury websites and Mr. Paulson's speeches went far beyond just Chase and Bear Stearns. It turned out that on the same Sunday on which he had negotiated the $30 billion Fed bailout, Mr. Paulson started a frenetic ten days orchestrating actions by the Treasury, Federal Reserve, and other government agencies to earmark a trillion dollars to re-inflate financial markets for mortgage holders and their associated creditors and speculators. Behind the scenes, as matters turned out, the Bush Administration was mounting a financial surge: It decided to throw everything its mortgage financing agencies could muster to prevent property markets from collapsing on its watch.
The surge of support for the mortgage and real estate markets was headed by the two largest U.S. mortgage holders and packagers: the government-sponsored National Mortgage Association (FNMA) and Freddie Mac. These two agencies were created to develop tradable markets for mortgages that banks traditionally had kept on their own books by buying home mortgages from the banks and mortgage brokers that originated them. This created a vast new demand for mortgages by making them marketable in large packages for institutional investors such as pension and mutual funds. Being implicitly government-guaranteed, Fannie Mae and Freddie Mac were able to borrow at fairly low interest rates, and sell mortgages at a premium. Demand for these packaged mortgage securities provided an enormous new source of lending. It also turned banks into mortgage originators rather than mortgage holders.
Together, Fannie Mae and Freddie Mac bought more than three-fourths of all U.S. mortgages issued in the fourth quarter of 2007, bringing their holdings to $1.4 trillion. However, the fact that their capital base was under $70 billion--for a 20 to 1 debt-leveraging ratio--led investors to sell their stock steadily over the past year. Rather than insisting that Fannie Mae and Freddie Mac rebuild their capital position, the Office of Federal Housing Enterprise and Oversight (OFHEO) did just the opposite. It reduced their capital requirements from 30 percent to 20 percent, and encouraged them to use this increased leverage to pour an extra $200 billion to the nation's mortgage market. Limits on the size of mortgage loans that these two agencies could make were raised sharply in order to help re-inflate the troubled high-cost California and New York property markets in particular.
Designed to bring temporary relief, this maneuver threatened to further destabilize matters by simply kicking the can down the road. The same applied to the Federal Housing Administration (FHA), set up in 1934 as part of the New Deal. Its insurance fund of about $20 billion backs some 3.8 million mortgage loans totaling $365 billion, for an 18:1 debt-leverage ratio. On Monday, March 24, it promised $400 billion in new mortgage credit insurance. This means that government agencies can use their capital to lend much more money to prospective homebuyers. The FHA, Fannie Mae and Freddie Mac also will be on the line for any losses, "socializing the risk" to a higher degree than ever before.
What was so worrisome about this strategy was that the FHA already was in financial straits as a result of its subprime loans. For the first time in its history it was running a deficit. Over a third of the loans it insured were made by home sellers to new buyers to cover their down payment--enabling homes to be bought without any down payment at all. (Traditionally, 20 percent has been the norm.) This was a brand-new market, barely existing in 2000 on the eve of the Greenspan-Bush real estate bubble. The Secretary of the Housing and Urban Development Agency (HUD), Alphonso R. Jackson, told a Senate committee: "These types of loans have pushed F.H.A. to the brink of insolvency." And now it was to double its activities to prop up the real estate and mortgage market.
The Federal Housing Finance (FHF) board dutifully did its part to increase the system's debt leverage. It doubled the ability of the 12 regional Federal Home Loan Banks (FHLB) to leverage their purchase of mortgage securities, from three times their capital to six times, twice the existing debt/equity ratio. The aim was to help them serve their clients, the nation's eight thousand savings banks, S&Ls, credit unions and insurance companies, finance the purchase of $160 to $200 billion new mortgage-backed securities issued by Fannie Mae and Freddie Mac. The target was for these two agencies to buy up about half a trillion dollars worth of mortgage securities from the private sector this year.
The Federal Home Loan Banking system also announced plans to start offering its own "monoline" mortgage insurance against the looming economic downturn at prices way below what private-sector insurance writers were willing to match. The aim is to shore up the nation's crumbling mortgage-insurance coverage at taxpayer expense. Again, the concept of a "free market" is being subjugated in order to socialize the losses for the FIRE sector's big players. The situation is much like the government insurance of beachfront properties against flood damage, paying for a chronically losing proposition at public expense. Of course, a disproportionate number of the owners of those beachfront properties also come from the campaign-contributing class.
Gillian Tett of the Financial Times noted that this mortgage insurance subsidy is "likely to trigger further debate about how policymakers are turning to state, or quasi-state, entities to stabilise the financial sector" by addressing "an absence of the market." Instead of shaping the market along less risky, less debt-leveraged lines, it was now another case of the government socializing financial risk at below-market rates. John Price, chairman of the Federal Home Loan Bank board, claimed that this "is what Government State Enterprises are for.'" In view of the fact that private insurers would charge higher rates, But the government's present plan being coordinated by Treasury Secretary Paulson seeks to avoid letting markets work in a way that would raise costs to Wall Street and hence leave less revenue for homeowners to pledge for debt service. This policy is presented sanctimoniously as lowering the price at which the financial sector "serves" the economy, not as putting it at risk.
The most amazing moves were still to come. On March 11 the Federal Reserve created a new Term Securities Lending Facility to extend $200 billion in loans to primary bond and securities dealers against their holdings of mortgages and other packaged securities as collateral. The aim was to rapidly re-inflate mortgages that the free market was pricing as junk, as low as 20 percent of face value.
Then came the double bombshell. In a true showing of the green on St. Patrick's Day, March 17, the Fed extended nearly unlimited credit to non-bankers for the first time since the Great Depression. It accepted their toxic mortgages as collateral--dubious assets that "the market" was refusing to touch. So much for "market-based" solutions when it comes to high finance! For the first time since the 1930s, non-banks could borrow from the Fed's loan window against their junk mortgages, apparently at full face value. It was too late for Bear Stearns, but other investment bankers and brokerage houses saw the green lifeline as the Fed opened its discount window to non-bankers, that is, to investment bankers such as Lehman Brothers, in contrast to commercial bankers that are regulated by the Fed.
The volume of credit seemed to be unlimited, collateralized by mortgage-backed securities that "the marketplace" was pricing around the levels Third World loans were selling at after Mexico's 1982 insolvency. Labor economist Tom Palley wrote in his March 26 blog: "These subsidies are a travesty. Goldman Sachs, Lehman Brothers and Morgan Stanley are extraordinarily profitable. They also have been the drivers of the worst trends in the American economy over the past generation, pushing excessive CEO pay that has spread like a cancer throughout corporate America, even reaching into universities and non-profits. Additionally, they have pedaled the shareholder value paradigm that has pushed companies to emphasize short-term gain over long-term investment, and contributed to ripping up America's social contract. Meanwhile, their business model has promoted speculation that is behind repeated asset and commodity price bubbles."
It is to support this business model that the Fed and Treasury officials seem to be making up new rules on a daily basis--rules that receive only a superficial or perfunctory review by Congress. Critics point out that investment bankers are not subject to Federal Reserve oversight or other regulation. Perhaps even this does not really matter in view of the Fed's extreme non-regulatory mode ever since Alan Greenspan's four-term Chairmanship. Even more important, of course, is the fact that the Fed's new clients, investment banks and brokerage houses, do not serve the middle-class depositors in need of special protection for their life savings. The financial investments being saved from adverse market conditions are ultimately speculative in character.
It seems a biting irony that the institutions now being mobilized to bail out Wall Street creditors--the Federal Home Loan Banks to pump credit into the mortgage market, the Federal Housing Administration to insure mortgage loans, Fannie Mae and Freddie Mac to buy and package mortgages for bulk resale to institutional investors--were created to help homebuyers, not their creditors and speculators. But bailing out speculators and high finance has now becoming their primary function. This shift has turned America's housing, mortgage and banking agencies upside down. Wall Street of course has welcomed the capture of these New Deal and post-1945 institutions. But their doctrinaire ideology has accused Glass-Steagall, Social Security, and most recently Sarbanes-Oxley regulations by the Securities and Exchange Commission (SEC) as leading down the road to serfdom.
Politically, such bailouts require an ostensibly humanitarian cover story. They need to be presented as a subsidy not to banks and other wealthy creditors, but to debtors. This means that the "ideal" (that is, most smoothly hypocritical) bailout takes the form of new credit to pay banks and other bondholders and mortgage holders enough to keep the debt bubble afloat. That means enough more credit to keep it growing, at least by the amount of interest that must be paid.
The result is a true road to debt peonage. It is much more destructive--and certainly more real--than the imaginary road to serfdom that Hayek and other anti-government ideologues envision. While these free-enterprise boys wring their hands and denounce government power, their sponsors realize full well that when government steps back, the financial sector moves in to fill the vacuum. The banks and money managers become society's planners and resource allocators--in their own short-term interest. This interest leads them to oppose laws protecting, labor, consumers and debtors. This means that the "freedom" at issue is a one-way favoritism for employers, monopolistic privilege and creditors. What these vested interests mean by the "road to serfdom" is an economy managed by hands other than their own, an economy protecting the workers, consumers and debtors whom they seek to victimize.
No money left for Social Security and health insurance after the real estate bailout?
The American public may justifiably be puzzled by how the government can seem to come up trillions of dollars for foreign wars and banker bailouts, but so little for them. The United States is spending an estimated $3 trillion for an illegal war that has made us less safe, and $1 trillion so far to rescue bankers in a way that is destabilizing the economy. But it can't seem to secure health care or retirement security for all Americans. On Tuesday, March 25, fresh from providing a trillion dollars to underwrite the financial and real estate sector, Mr. Paulson revived the Bush Administration's pretense that there is no money to pay Social Security. Yet "fixing" Social Security--if indeed there is a problem (which is no means certain)--would be relatively easy. Merely restoring the Bush tax cuts for the top 1% of Americans (those earning over $414,000 a year) to the high 30-percent tax rates of the 1990s (nowhere near approaching the 94% top marginal rate of the 1940s, or even the 70-percent rates of the 1970s) would provide 46% more than the Congressional Budget Office's estimate of the Social Security shortfall. The Administration does not acknowledge such inconvenient truths, or do the reporters who simply pass on its handouts to the mass media.
The claim that there is no prospective funding to meet the government's Social Security and Medicare obligations was rendered blatantly incredible in the last week of March, which saw the five-year anniversary of the Bush Administration's war in Iraq. As its death toll to U.S. soldiers reached 4,000, newspaper accounts across the country reported the calculations by Nobel Prize winner Joseph Stiglitz that the war's cost has reached the $3 trillion mentioned above, taking into account its legacy of interest charges and medical treatment for the more than 25,000 troops that had been wounded or had post-traumatic and other psychiatric stress disorders. (Mr. Stiglitz recently updated his analysis to say $3 trillion is a conservative number.)
Five years, four thousand lives, and three trillion dollars for the war--but no money for Social Security and Medicare! Did Mr. Paulson not feel just a little bit discomfort in claiming with seeming urgency that Social Security funding would be exhausted in just over another thirty years, by 2041? Medicare is supposed to be in even worse shape, having accumulated enough wage set-asides to last only until 2019, due largely to rising health costs--which the Bush Administration refused to control by negotiating prices with the drug companies, among others.
The historical road to serfdom is that of debt peonage to a financial oligarchy concentrating wealth in its own hands. Contemporary anti-government "libertarianism" creates a vacuum that the financial sector moves to fill. The problem for society at large is that finance finds its major gains to lie not in raising living standards, but in promoting a free lunch for its customers--while turning corporate profits, monopoly rent-seeking and real estate price gains into a flow of interest to itself, by advancing the credit to finance the purchase of these assets and privileges.
There is only one way to reverse this evolution toward debt peonage. That is to scale back existing mortgages, especially for properties with negative equity, to reflect the plunge in property values today--admittedly under distress conditions, but nonetheless real constraints on the debtor's ability to pay. Once the principal was reduced to realistic levels, adjustable-rate mortgages would be replaced by fixed-rate mortgages.
The problem with this solution is that to the financial institutions, the housing crisis is not their problem. Their blame-the-victim attitude holds it to be the mortgage holders' problem--and now increasingly the taxpayers' problem. This perspective on how to resolve the housing crisis can only succeed by creating a populist rhetoric for public officials to use in promoting financial interests as if all this is in the best interest of homeowners and other debtors.
ONE HUNDRED TWENTY SECONDS FROM NUCLEAR HOLOCAUST
March 12, 2008
AN OPEN LETTER TO THE AMERICAN PEOPLE
My fellow Americans, I sit here at 3:00 am with my heart racing and my hands shaking and I ask that you please take a moment to read my letter. I ask not that you read it for my sake, but rather for your own and for your children and grandchildren.
JUNE 8, 1967, during the Six Day War, we came as close to a nuclear war than anytime in history and it scares me to death as it should you. For the benefit of those who do not know what happened (the result of a deliberate campaign of cover-up and censorship by a Zionist-owned media in America) I will give you a quick history lesson. It all started on a beautiful bright, sunny day 40 years ago. Our ship, the USS LIBERTY, was sailing off the coast of Sinai, doing 5 knots. The LIBERTY was the most sophisticated intelligence gathering platform in the world at that time. We were in international waters gathering intelligence, plucking it from the air, which we had every right to do. We were doing what our government ordered us to do.
Early in the morning we began to see Israeli aircraft coming very close to our ship, some so close we could see the pilots waving at us. As we waved back we could clearly see the Star of David on the aircraft. This went on for many hours. Our flag was flying (as always) GTR-5 was painted on both sides of her bow and “USS LIBERTY” was clearly painted on her stern. There could be no mistake as to who we were. Israel knew we were American and we knew we had been identified as American and friendly as the Israelis themselves have since admitted. They plotted us on their war table and made positive ID of our ship as the LIBERTY. The crew all knew the war was still ongoing and we all took comfort in the fact that our Israeli ‘friends’ had come to visit us. It made all of us feel safer, just in case one of the Arab combatants got spunky and came after us as we all knew Israel would be there to protect their American friends and allies.
We had been on station for approximately 7 to 8 hours. Suddenly, at 2:00 all hell broke loose. We were being attacked by jet aircraft. On their first pass they took out our 4 fifty-caliber machine guns, all of our antennae and our moon dish. Everything we had to communicate with was destroyed. They continued their air assault for about 30 minutes using rockets, canons and napalm which they dropped on the bridge to try and burn us alive. Fifteen minutes into their vicious attack Terry Halbadier got an antenna to work and we began broadcasting “under attack, under attack by unknown jet aircraft.” The jets were unmarked, hiding the identity of our attackers. The USS SARATOGA, commanded by Captain Tully, sent aircraft to our aid only to have them recalled by voice from Secretary of Defense Robert MacNamara. Again, Captain Tully ordered rescue aircraft to come to our aid. Then, President Lyndon Johnson got on the phone and ordered the recall himself, saying “I don’t give a God damn if every man on board that ship dies, I will not embarrass our ally, Israel.”
Now, if we didn’t know who was attacking us until much later into the attack how did the poll cat Johnson know it was the Israelis that were attacking us? The reason is simple–we were set up by our own government as pawns to let Israel have her way with us. Why else would our government recall the life-saving aircraft when we were still under attack?
When the jets got through with us they sent the torpedo boats, three of them. Then and only then did we become aware of who was attacking us. We could see their flags on their boats with the Star of David on them. We were horrified that our so-called ‘ally’ was doing this to us. The word went out we were under attack by Israeli torpedo boats. This was picked up as far away as Vietnam and many other listening posts around the world. Still no help from our government. We were on our own.
The torpedo boats fired five torpedoes at us, one hitting its mark midships, instantly slaughtering 25 American sons. The torpedo boats kept up the attack, I guess, until they ran out of ammunition, shooting at our boilers, firefighters, stretcher bearers, anything that moved. The captain ordered us to prepare to abandon ship.
We put over 3 life rafts, all that remained that would float. We were going to put our most severely wounded men in them. The Israelis would have none of that and shot two of them out of the water and took one aboard their boat as a trophy.
The torpedo boats left and then came Israeli helicopters with armed troops, ready to board our ship and finish us off. They hovered over us like vultures ready for the kill and suddenly they left. We found out later that they left because they knew we had gotten messages out that it was Israel doing the murdering not any Arab state.
When all was said and done in this almost two hour attack, 34 men were murdered, 174 were wounded. There were over 821 canon and rocket holes in our ship. Thousands of 50 caliber armor piercing bullets riddled her skin and there was a 40 x 40 foot torpedo hole in her side. The LIBERTY was the most heavily damaged ship in modern history including WWII.
We did not receive any help from our government for 18 hours after the attack when help was only 15 - 20 minutes away. Why was our government willing to sacrifice 294 American sailors, marines and the finest intelligence ship in the world? That’s what we all were wondering. A few days later, Admiral Isaac Kidd came aboard our ship and ordered every crewman never to speak a word about what happened to us to other crewmen, parents, family, no one under penalty of prison or worse and we all knew what worse meant.
We took the ship to Malta. The dead were removed from the torpedo space and the ship was repaired and painted to look brand new, as if nothing had ever happened.
I stayed silent for many years. I was so afraid to say anything as was the rest of the crew. In about 1983-1984 I read a book called “Assault on the Liberty” by James Ennes Jr., an intelligence officer onboard when we were attacked. I began asking questions of the navy, congress, anyone I could write to find out answers to a simple question - why our government went along with the cover-up as it is still doing today. The standard answer you get from congress is there have already been many investigations which is a bold face lie and I have told them that. All you have to do is check the congressional record and you will see there has never been any investigation except for the sham Board of Inquiry which was a white wash and only took 6 days to complete. Isaac Kidd signed off on it as did Captain Ward Boston, Admiral John McCain Jr. and President Lyndon Johnson all in a matter of 10 days. The conclusion? Mistaken identity!! Captain Boston has recanted what was in the Board of Inquiry as a pack of lies. He was ordered to sign off by none other than Admiral John McCain Jr., Senator McCain’s father.
The fact is we were set up to sink fast, blame it on Egypt and bring the U.S. into the war. This was the deal made by our government and the Israeli Government. This government will not help us get the truth out. They are knee-deep in bed with the Israeli Lobby, AIPAC and every other Israeli interest out there. Our elected officials sold us out then and they are still selling us out now. Israel is committing war crimes on Americans and our government could care less. This country is “We the Government” it is not “We the People” and if we don’t take our government back soon it is nobody’s fault but our own.
What I found out later is our government was 120 seconds away from dropping nuclear bombs on Cairo, Egypt and they would have if the LIBERTY would have sunk. The LIBERTY staying afloat was an act of God. He kept us afloat to tell you the truth. If our government would have nuked Cairo you can bet the Soviet Union would have retaliated in kind on the American people. This was a pact with the devil with only the greater interest of Israel in mind.
My fellow Americans, look what is going on in the Middle East today. It all goes back to the Six Day War 40 years ago. We need you to email your representatives in Congress and demand an investigation into the attack on the LIBERTY. Remember, they work for us, we don’t work for them. As futile as it may seem, we must at least TRY to take our country back from Israel before it is too late, if indeed it is not already.
Miracles have hinged on smaller odds than this. Look at what happened to us 40 years ago–we should have been dead, sunk to the bottom of the sea and yet we stayed afloat, as I said, by the hand of God. It was a miracle. Remember, Israel didn’t just attack the LIBERTY, she attacked America with our government’s help, and remember, as the old saying goes, ‘A leopard does not change its spots’. What this gang of criminals has done once it will do again, and this time, chances are that we will not be as lucky as we were 40 years ago. Despite all the propaganda we hear, Israel is not our friend. No friend treats us as she has. She would just as soon slit our throats as look at us, and this is not a theory, it is a fact proven by history.
Phillip F. Tourney, Survivor June 8, 1967
Tuesday, April 15, 2008
Several Reasons Why it isn't about Oil
By Curt Maynard
The war in Iraq, and America’s so-called Imperialistic ventures in the Mid East have nothing to do with oil.
How do you know that you might be asking?
Without delving into some very credible “conspiracy theories,” which tend to cause the eyes of “enlightened” Americans to glaze over in their own unique self-righteous stupor, let me relate some facts below, that should, assuming the reader has the ability to think properly as my friend in Rome Alfio Faro, likes to say, convince even the skeptic that Bush’s recent forays into the Middle East have nothing to do with the monopolization of oil reserves. I won’t leave the reader hanging, after relating these facts I’ll spell out in one word exactly why Bush is occupying Iraq and Afghanistan and why he intends to attack Iran and Syria as well.[1]
The Third World nation of South Africa produces a barrel of oil from coal for under $35.00 a barrel.[2] The United States of America has some of the largest coal reserves in the world.[3] These coal reserves are of a far higher quality than that used by South Africa, the sulfur content is much less, and thus, American coal can be converted to oil cheaper than can South African coal.
You may have heard about Canada’s Oil Sands, but what you may not have heard is that within these sands Canada harbors nearly as much oil as Saudi Arabia.[4] Granted, it costs much more money to extract this oil from the sand than it does for Saudi Arabia to open its spigots, but at current oil prices, $76.00 a barrel, it is both feasible and profitable to begin mass production.[5]
What the reader, especially the American reader, is almost certainly unaware of is that the United States of America has even more oil than Saudi Arabia or Canada locked away in strata of shale under the Rocky Mountains.[6] Costs to extract this oil are considerably higher than extracting it from sand, but bear in mind, at current prices, it too can be extracted profitably with technology that already exists. Not to mention the fact that its extraction, assuming that illegal aliens aren’t invited en masse to fill openings, will create hundreds of thousands of jobs for Americans, not service related jobs, but real employment with real salaries and benefits.
Methane Hydrate – methane hydrate is essentially frozen methane gas. Methane gas burns cleaner than any other energy source known, if combustion is complete; there is no appreciable pollutant created from its use. In any case, methane hydrate exists in reserves so large that they dwarf all of the oil and coal reserves combined, the world over, from the dawn of time; it lies under the oceans and has already been extracted by the industrious Japanese. Its extraction at present is too costly to be profitable, but like anything else, costs decline over time and/or as the result of new technology.[7]
If the United States government were truly interested in marshaling oil sources around the world, would it not be doing everything within its power to mollify relations with the countries that possess the oil? Instead Bush is doing everything he can to alienate the populations of oil producing nations, and doesn’t seem to be in the least bit concerned about the consequences of such foreign policy folly.
Above I promised that after relating some facts I’d spell out in one word exactly why Bush is occupying Iraq and Afghanistan and why he intends to attack Iran and Syria as well. Dear reader, the reason in one word is “Israel.” Why Bush pursues his insane adventures in the Mid East for the Zionist state is not exactly known, some think he is a Christian fundamentalist, with a “dual covenant” eschatological outlook, this writer seriously doubts this premise, Bush’s words may exemplify Christian value and virtue, but his actual behavior demonstrably prove that his words are empty and are meant only to maintain a relatively powerful base, that of the Christian voting block.[8]
There are others that believe Bush may be compromised in some way and may be under the influence of those blackmailing him; those who would and could reveal to the world some dark secret hiding in the closet of the Commander and Chief. I suppose it’s possible, I personally don’t believe that former President Clinton just happened to meet up with a young Jewess named Monica Lewinsky, who just happened to save a sample of the President’s sperm discharged on her dress after administering fellatio. Call me a conspiracy theorist if you like, but I’ll bet it wasn’t a happy accident.
Toxic Sludge Being Marketed as Fertilizer Utilizing Low-Income Americans as Guinea Pigs
Sludge Fertilizer Program Spurs Concerns
By JOHN HEILPRIN and KEVIN S. VINEYS
Associated Press Via Yahoo, April 13, 2008
Straight to the Source
BALTIMORE - Scientists using federal grants spread fertilizer made from human and industrial wastes on yards in poor, black neighborhoods to test whether it might protect children from lead poisoning in the soil. Families were assured the sludge was safe and were never told about any harmful ingredients. Nine low-income families in Baltimore row houses agreed to let researchers till the sewage sludge into their yards and plant new grass. In exchange, they were given food coupons as well as the free lawns as part of a study published in 2005 and funded by the Housing and Urban Development Department.
The Associated Press reviewed grant documents obtained under the Freedom of Information Act and interviewed researchers. No one involved with the $446,231 grant for the two-year study would identify the participants, citing privacy concerns. There is no evidence there was ever any medical follow-up.
Comparable research was conducted by the Agriculture Department and Environmental Protection Agency in a similarly poor, black neighborhood in East St. Louis, Ill.
The sludge, researchers said, put the children at less risk of brain or nerve damage from lead, a highly toxic element once widely used in gasoline and paint. Other studies have shown brain damage among children, often in poor neighborhoods, who ate lead-based paint that had flaked off their homes.
The idea that sludge - the leftover semisolid wastes filtered from water pollution at 16,500 treatment plants - can be turned into something harmless, even if swallowed, has been a tenet of federal policy for three decades.
In a 1978 memo, the EPA said sludge "contains nutrients and organic matter which have considerable benefit for land and crops" despite the presence of "low levels of toxic substances."
But in the late 1990s the government began underwriting studies such as those in Baltimore and East St. Louis using poor neighborhoods as laboratories to make a case that sludge may also directly benefit human health.
Meanwhile, there has been a paucity of research into the possible harmful effects of heavy metals, pharmaceuticals, other chemicals and disease-causing microorganisms often found in sludge.
A series of reports by the EPA's inspector general and the National Academy of Sciences between 1996 and 2002 faulted the adequacy of the science behind the EPA's 1993 regulations on sludge.
The chairman of the 2002 academy panel, Thomas Burke, a professor at the Johns Hopkins Bloomberg School of Public Health, says epidemiological studies have never been done to show whether spreading sludge on land is safe.
"There are potential pathogens and chemicals that are not in the realm of safe," Burke told the AP. "What's needed are more studies on what's going on with the pathogens in sludge - are we actually removing them? The commitment to connecting the dots hasn't been there."
That's not what the subjects of the Baltimore and East St. Louis research were told.
Rufus Chaney, an Agriculture Department research agronomist who co-wrote the Baltimore study, said the researchers provided the families with brochures about lead hazards, tested the soil in their yards and gave assurances that the Orgro fertilizer was store-bought and perfectly safe.
"They were told that their lawn, as it stood, before it was treated, was a lead danger to their children," said Chaney. "So that even if they ate some of the soil, there would not be as much of a risk as there was before. And that's what the science shows."
Chaney said the Baltimore neighborhoods were chosen because they were within an economically depressed area qualifying for tax incentives. He acknowledged the families were not told there have been some safety disputes and health complaints over sludge.
"They were told that it was composted biosolids that are available for sale commercially in the state of Maryland. I don't think there's any other further disclosure required," Chaney said. "There was danger before. There wasn't danger because of the biosolids compost. Composting, of course, kills pathogens."
The Baltimore study concluded that phosphate and iron in sludge can increase the ability of soil to trap more harmful metals including lead, cadmium and zinc, causing the combination to pass safely through a child's body if eaten.
It called the fertilizer "a simple low-cost" technology for parents and communities "to reduce risk to their children" who are in danger of lead contamination. The results were published in Science of the Total Environment, an international research journal, in 2005.
Another study investigating whether sludge might inhibit the "bioavailability" of lead - the rate it enters the bloodstream and circulates to organs and tissues - was conducted on a vacant lot in East St. Louis next to an elementary school, all of whose 300 students were black and almost entirely from low-income families.
In a newsletter, the EPA-funded Community Environmental Resource Program assured local residents it was all safe.
"Though the lot will be closed off to the public, if people - particularly children - get some of the lead contaminated dirt in their mouths, the lead will just pass through their bodies and not be absorbed," the newsletter said. "Without this iron-phosphorus mix, lead poisoning would occur."
Soil chemist Murray McBride, director of the Cornell Waste Management Institute, said he doesn't doubt that sludge can bind lead in soil.
But when eaten, "it's not at all clear that the sludge binding the lead will be preserved in the acidity of the stomach," he said. "Actually thinking about a child ingesting this, there's a very good chance that it's not safe."
McBride and others also questioned the choice of neighborhoods for the studies and why residents were not told about other, possibly harmful ingredients in sludge.
"If you're not telling them what kinds of chemicals could be in there, how could they even make an informed decision. If you're telling them it's absolutely safe, then it's not ethical," McBride said. "In many relatively wealthy people's neighborhoods, I would think that people would research this a little and see a problem and raise a red flag."
The Baltimore study used a compost of sludge mixed with sawdust and wood chips packaged as "biosolids," the term for sludge preferred by government and the waste industry.
"What we did was make the yards greener," said Pat Tracey, a Johns Hopkins University community relations coordinator who recalled helping with the lawn work. "They were bald, bad yards. It was considered sterile fertilizer."
Baltimore environmental activist Glenn Ross says choosing poor neighborhoods destined for demolition makes it hard to track a study's participants. "If you wanted to do something very questionable, you would do it in a neighborhood that's not going to be there in a few years," he said.
HUD documents show the study's lead author, Mark Farfel, has pursued several other studies of lead contamination including the risks of exposure from urban housing demolitions and the vacant lots left behind.
Farfel has since moved to New York, where he directs the World Trade Center Health Registry surveying tens of thousands of victims of the Sept. 11 attacks. He denied repeated requests for interviews and referred questions to Baltimore's Kennedy Krieger Institute, the children's research facility that was the recipient of HUD grants with Farfel as project manager.
The institute referred questions to Joann Rodgers, a spokeswoman for Johns Hopkins. She said a review board within its medical school approved the study and the consent forms provided to families that participated. "The study did not test children or other family members living in the homes," she said.
Some of Farfel's previous research has been controversial.
In 2001, Maryland's highest court chastised him, Kennedy Krieger and Johns Hopkins over a study bankrolled by EPA in which researchers testing low-cost ways to control lead hazards exposed more than 75 poor children to lead-based paint in partially renovated houses.
Families of two children alleged to have suffered elevated blood-lead levels and brain damage sued the institute and later settled for an undisclosed amount.
The Maryland Court of Appeals likened the study to Nazi medical research on concentration camp prisoners, the U.S. government's 40-year Tuskegee study that denied treatment for syphilis to black men in order to study the illness and Japan's use of "plague bombs" in World War II to infect and study entire villages.
"These programs were somewhat alike in the vulnerability of the subjects: uneducated African-American men, debilitated patients in a charity hospital, prisoners of war, inmates of concentration camps and others falling within the custody and control of the agencies conducting or approving the experiments," the court said.
Popular Impotence Drugs May Cause Sudden Deafness
by David Gutierrez
(NaturalNews) The FDA has announced an immediate change to the labeling of drugs in a family that includes popular impotence drugs, warning that they may lead to sudden, severe and potentially permanent hearing loss.
The erectile dysfunction drugs in the phosphodiesterase type 5 (PDE5) class include Pfizer's Viagra, Eli Lilly's Cialis and GlaxoSmithKline's Levitra. Also receiving a label change will be blood pressure drug Revatio.
The FDA reviewed side effect reports on the drugs after a case study was published in the Journal of Laryngology & Otology in 2007, reporting that a 44-year-old man had suffered sudden hearing loss after only 15 days on Viagra. Upon review, the FDA uncovered 29 post-approval reports of patients undergoing sudden hearing loss from PDE5 drugs. In two-thirds of cases, the hearing loss appeared to be permanent. Hearing loss was sometimes, but not always, accompanied by dizziness or ringing in the ears. The majority of cases involved only one ear.
"Because some level of hearing loss is usually associated with the aging process, patients on these drugs may not think to talk to their doctor about it," said Janet Woodcock, the FDA's chief medical officer.
The FDA advises all patients on PDE5 erectile dysfunction drugs to stop taking the medication immediately upon the first sign of sudden hearing loss, and to seek immediate medical care.
"Because Revatio is used to treat a potentially life-threatening condition, the FDA does not recommend [that] patients abruptly stop taking this medication," the agency said. Such patients "should consult their physician if they experience sudden problems with their hearing."
"The fact that the FDA is just now finding out about the risk of sudden hearing loss from impotence drugs demonstrates the failure of its drug approval process to identify serious health risks before drugs are approved," said consumer health advocate Mike Adams. "The truth is that most newly-approved prescription drugs are unleashed upon the population as large-scale experiments, and neither the drug's manufacturer nor the FDA really has any idea of the true dangers of the drug."
