From Thomas Paine’s Corner
By John Kelley

“A billion here, a billion there, pretty soon you’re talking about real money.” A quote that was for many years wrongly attributed to the late Senator Everett Dirksen seems applicable here. So far the cost of Fannie Mae, Freddie Mac, Lehman Bros. AIG and what Wall Street is asking for equals a trillion dollars. While its not peanuts in anyone’s book the real cost is probably more like 2-3 trillion dollars. That is in addition to the 100s of billions of dollars pumped into the economy by the fed to prevent a credit freeze up before last week.

August 9, 2007 $24 billion, August 10, 2007 $38 billion, November 12, 2007 $42 billion, November 27, 2007 $8 billion, March 12, 2008 $200 billion, August 13, 2008 $70 billion, September 18, 2008 $180 billion, September 24, 2008 $30 billion, pumped into the economy by the fed, all money printed producing more debt for America.

That is in addition to the $700 billion proposal. And that doesn’t count the money that was pumped into the economy through massive tax cuts for the rich and the deficit war spending that took us from a $5 trillion surplus to a $9 trillion dollar national debt.

This all happened for a simple reason. Trickle down economics doesn’t work. That extra money was used for speculation while squeezing equity out of the American worker for even more gambling cash. Bush was willing to do anything to avoid a recession on his watch, even if it meant creating a depression for the next guy. He just ran out of time.

Putting Marble in the Outhouse

For the American economy to work, consumer spending, which makes up 70% of the economic activity, had to continue even though consumer income when adjusted for inflation was falling. Wages and benefits fell almost 30% since 1970 when adjusted for inflation while corporate profits rose to record levels. The only way Americans have kept up is to work longer hours, put more people in the household work and live off credit.

Read more Debt

From AlterNet
By Scott Thill

“Raw capitalism is dead.” — Henry Paulson, U.S. Treasury secretary

“Can’t we just all go out and say things are OK?” — President Bush, to congressional leaders during bailout negotiations

I’m not much of an Army Times reader, but after reading that a brigade was shipping from Iraq in October to serve as “an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks” in the homeland right before the election, my antennae perked up. Same as they did when I read that an electoral college doomsday scenario exists in which Dick Cheney casts the deciding vote that gives McCain-Palin the White House.

That is, if Cheney and Bush don’t take it for themselves. That may sound like fantasy, but don’t kill the messenger. They are all strands of the Gordian knot the Bush administration has tied around the neck of the American people for the last two presidential terms, best represented today by the failed bailout of banks, brokers and other complicit parties that have since jacked the American people out of trillions. And while the Army Times revelation or election doomsday may turn out to be paranoia rather than prescience, the evidence just isn’t there.

Like I said: antennae.

They’ve come in handy as bullshit detectors since Bush stole the election from a flat-footed Al Gore and set about engineering the greatest transfer of public wealth into private hands in American history. If you factor in Monday’s failed takeover, as well as the $5 trillion the American people now owe thanks to the “bailout” of Fannie Mae and Freddie Mac, not to mention the continuing hyper-expensive occupation of Iraq and so on, our citizenry is now so far in the hole that it’s pointless griping about numbers. If you want one, use the figure put forth by Dennis Kucinich: half a quadrillion dollars. We have evolved past the point of economic or geopolitical reality and entered a phase of pure concept.

Read more Police State

From The Asia Times
By Gareth Porter

New evidence from former United States officials reveals that Osama bin Laden and other al-Qaeda leaders were able to skip Afghanistan for Pakistan unimpeded in the first weeks after September 11, 2001, as the George W Bush administration failed to plan to block their retreat.

Top administration officials instead gave priority to planning for war with Iraq, leaving the United States with not nearly enough troops or strategic airlift capacity to close the large number of possible exit routes through the Afghanistan-Pakistan border area where Bin Laden escaped in late 2001.

Because it had not been directed to plan for that contingency, the US military was also forced to turn down an offer from then Pakistani president Pervez Musharraf in late November 2001 to send 60,000 troops to intercept the al-Qaeda leaders.

As Northern Alliance troops marched on Kabul with little resistance in November 2001, the Central Intelligence Agency had intelligence that Bin Laden was headed for a cave complex in the Tora Bora Mountains close to the Pakistani border.

Read more No Plans

From Salon
By Gary Kamiya

With Congress rejecting the $700 billion bailout package, the Dow falling 700 points and the U.S. economy on the edge of a cliff, no one is paying much attention to Iraq. Money talks, and incomprehensible and endless wars walk. From a purely financial perspective, that dismissive attitude makes no sense. The Iraq war has already cost almost $700 billion, and as Joseph Stiglitz and Linda J. Bilmes have argued, its total cost, factoring in huge back-end costs like disability payments, could end up exceeding $3 trillion. As Tom Engelhardt and Chalmers Johnson point out on TomDispatch, the money we’ve poured and are continuing to pour down the bottomless pit of Iraq, to the tune of $10 billion a month, could have bailed us out many times over.

But of course, the Iraq war is about a lot more than money. It’s about the 146,000 U.S. troops still stationed there, and their families. It’s about the stability of the Middle East, and our vital national interest in ensuring that it does not explode. It’s about the overall direction of our foreign policy. It’s about how America is perceived throughout the world. And it’s about the fate of Iraq itself, a nation that our invasion devastated and that we owe our best efforts to rebuild.

Along with fixing our economy, then, what we should do about Iraq is the most important issue facing the country. And the choices offered by the two presidential candidates could not be more different. John McCain will continue the same policies as George W. Bush. He insists that Iraq remains “the central front in the war on terror,” claims that the surge was a decisive turning point and that we are now winning the war, and warns that if America elects Barack Obama, we will lose, with catastrophic consequences. Obama argues that the war was a mistake to begin with, that it led us to “take our eye off the ball” and allow Osama bin Laden to escape and al-Qaida to regroup, and that it has strengthened Iran. He says that if elected he will withdraw American troops in stages over a 16-month period.

Read more Iraq War

From Tom Dispatch
By Ira Chernus

In 1932, in the midst of a disastrous economic meltdown, Franklin D. Roosevelt made “the forgotten man” the centerpiece of his presidential election campaign. Far more than we suspect, this year’s election may turn not on a forgotten man, but on a forgotten war in a forgotten country.

Even before the present financial meltdown hit the news, the Iraq War had slipped out of the headlines and off the political stage. Now, as investment houses totter and bailout plans fill the headlines, it will be even harder for Iraq to get major media attention. Yet the war remains just beneath the surface of the presidential campaign, and so is sure to affect the outcome in ways too complicated to fully grasp.

Think of that war not as one, but two currents, affecting the coming election all the more powerfully because they are out of sight, out of mind, and — interacting in unpredictable ways — out of anyone’s control.

Obama’s War: The Realistic Disaster

The first current is that of realistic perception. Polls continue to show that at least 60% of prospective voters see the war for what it is: a disastrous mistake. Among Democrats, the percentage is far higher than among Republicans, which may be the main reason that Barack Obama is now the Party’s candidate for president.

As the only major candidate in the Democratic primaries who opposed the war from the beginning, his stance proved decisive. It remains a powerful factor in his favor as undecided voters make up their minds, even if they don’t fully realize it. Remember, most people’s electoral decision-making processes — like the war in American consciousness at this point — run largely below the surface.

Read more Iraq War

From TruthDig
By Robert Fisk

It was a weird week to be in the United States. On Tuesday, secretary of the treasury Henry Paulson told us that “this is all about the American taxpayer – that’s all we care about.” But when I flipped the page on my morning paper, I came across the latest gloomy statistic which Americans should care more about. “As of Wednesday evening, 4,162 U.S. service members and 11 Defence Department civilians had been identified as having died in the Iraq war.” By grotesque mischance, $700bn – the cost of George Bush’s Wall Street rescue cash – is about the same figure as the same President has squandered on his preposterous war in Iraq, the war we have now apparently “won” thanks to the “surge” – for which, read “escalation” – in Baghdad. The fact that the fall in casualties coincides with the near-completion of the Shia ethnic cleansing of Sunni Muslims is not part of the story.

Indeed, a strange narrative is now being built into the daily history of America. First we won the war in Afghanistan by overthrowing the evil, terrorist-protecting misogynist Islamist crazies called the Taliban, setting up a democratic government under the exotically dressed Hamid Karzai. Then we rushed off to Iraq and overthrew the evil, terrorist-protecting, nuclear-weaponised, secular Baathist crazies under Saddam, setting up a democratic government under the pro-Iranian Shia Nouri al-Maliki. Mission accomplished. Then, after 250,000 Iraqi deaths – or half a million or a million, who cares? – we rushed back to Kabul and Kandahar to win the war all over again in Afghanistan. The conflict now embraces our old chums in Pakistan, the Saudi-financed, American-financed Interservices Intelligence Agency whose Taliban friends – now attacked by our brave troops inside Pakistani sovereign territory – again control half of Afghanistan.

We are, in fact, now fighting a war in what I call Irakistan. It’s hopeless; it’s a mess; it’s shameful; it’s unethical and it’s unwinnable and no wonder the Wall Street meltdown was greeted with such relief by Messrs Obama and McCain. They couldn’t suspend their campaigns to discuss the greatest military crisis in America’s history since Vietnam – but for Wall Street, no problem. The American taxpayer – “that’s all we care about”. Mercifully for the presidential candidates, they don’t have to debate the hell-disaster of Iraq any more, nor US-Israeli relations, nor Exxon or Chevron or BP-Mobil or Shell. George Bush’s titanic if mythical battle between good and evil has transmogrified into the conflict between good taxpayers and evil bankers. Phew! No entanglement in the lives and deaths of the people of the Middle East. Until the elections – barring another 9/11 – they are yesterday’s men and women.

Read more Bankers

From The Asia Times
By Spengler

The US Congress went into labor this weekend, and gave birth to a gnat. With some cosmetic adjustments, Treasury Secretary Henry Paulson’s US$700 billion bank bailout plan will be adopted this week. Markets barely budged on the news, which was punctuated by government bailouts of two giant banks - America’s Washington Mutual and Belgium’s giant Fortis group. A third rescue, of Britain’s Bradford and Bingley, sees it taken over by the government.

Paulson’s plan likely will provide temporary relief to the stockholders of some American banks, whose balance sheets do not look all that different from Washington Mutual’s. But this has nothing to do with the larger problem, namely the de-leveraging of the American household.

Leverage is the secret of American wealth. The average American family in 2004 had a net worth of US$448,000 on an income of $43,000, according to the Federal Reserve’s survey of consumer wealth. Wealth equaled 10.4 years worth of income. In 1989, the Fed survey shows, it was only 7.3 years of income, and just 3.8 years worth in 1962. Measured in years, why should the ratio of Americans’ net worth amount to annual income have tripled between the administrations of John F Kennedy and George W Bush?

Read more US Wealth

From The Independent UK
By Rupert Cornwell

Yesterday was not only a black Monday for markets. It was the blackest of Mondays too for the US political system, saddled with a discredited president who has completely lost control of his own party and a Congress that responds to a national emergency with little except snarling partisanship.

The stunning defeat of the financial bailout bill has exposed the weakness of the system at its moment of maximum vulnerability, in the quasi-interregnum of the weeks immediately before and after a presidential election. Even so, had a similar crisis erupted at the same stage of the second term of Bill Clinton or Ronald Reagan it is hard to imagine Congress staging a similar rebellion. For George W Bush, alas, it is a different story.

His lack of clout was first exposed last Thursday when the bailout summit he convened at the White House degenerated into a blazing row. But that humiliation paled beside yesterday’s. The President went on TV at 7.30am to plead for the measure that had been thrashed out over the weekend, to no avail. Then he called two dozen recalcitrant House Republicans, begging them to hold their noses and do their patriotic duty – but again to no avail.

When the vote came, his own party voted almost two to one against the bill, more than cancelling out the 140-95 majority of Democrats who did hold their noses to support the wishes of a President most of them despise.

Read more Defeat

From The Progressive
By Matthew Rothschild

David Brooks called people who voted against the bailout “nihilists.” Matt Lauer suggested that anyone who voted against the bailout bill did so to get political cover.

But there were sound reasons to vote against it.

Not on the Republican side, where those who worship the golden calf of the free market want no government intervention at all.

This is a time for government intervention in the economy. The free market has proven to be incapable of policing itself or of functioning rationally.

On the other hand, progressive Democrats were absolutely right to object to the kind of bailout that Paulson was forcing upon us.

No re-regulation of the financial industry was in the bill, so the same shenanigans that caused the crisis could recur at any time.

There was no restoration of Glass-Steagall.

No overturning of the Commodities Futures Modernization Act.

Read more Bailout

From This Can’t Be Happening
By Dave Lindorff

The most entertaining thing about this Wall Street crisis and the refusal of the House of Representatives (not failure but refusal) to pass a bailout bill negotiated by the Bush White House and the House leadership is how shocked and upset those leaders and the pundit class have been by the idea that members of Congress would actually heed the wishes of their constituents!

The Founding Fathers always saw the lower house of Congress as voice of the people—the elected body that, because its members had to face the voters every two years, would be most responsive to public sentiment.

Because of the power of money and the role of the corporate media in filtering the information that voters get about what is actually going on, that close connection between public and public servant in the House has long ago broken down. This time, however, because the crisis hit within five weeks of the national election, and because the crisis involved something that everyone cares about—their money—it worked.

The public is paying attention, and most of us got it. It was obvious that Congress and the White House were out to screw us out of our money in order to protect the millionaire and billionaire traders and conmen who have been running the Wall Street casino for the last decade and a half without any adult supervision.

Now that people are paying attention, it will be interesting to see how these corrupt leaders, Democrat and Republican, will fashion that bailout and get it passed. Once aroused from their TV-induced slumber, the American public may not be willing to get rolled. If the anger grows, and the calls and emails to Congress—which brought down the Capitol website Monday and jammed the switchboard for several days beginning last week—continue to flood in threatening an electoral Armageddon for those who back a bailout, Congress may yet be unable to pass a bill.

Read more Surprise!