Today's Stories

September 22, 2008

Michael Hudson
The Paulson-Bernanke Bank Bailout Plan: Will the Cure be Worse Than the Crisis?

Mike Whitney
Mushroom Clouds Over Wall Street

Steven Breyman
Does the U.S. Really Need Cluster Bombs?

September 20 / 21, 2008

Alexander Cockburn
Is This the Stake Through Neoliberalism's Heart?

Michael Hudson
America's Own Kleptocracy

Pam Martens
The Wall Street Model: Unintelligent Design

Lila Rajiva
Putting Lipstick on an AIG

Mike Whitney
Full-Spectrum Breakdown

Richard Rhames
A Bailout to Nowhere

Bill Moyers /
Michael Winship
The NY Yankees and the U.S. Economy

Bill and Kathleen Christison
The Making of Recent U.S. Middle East Policies: a New Study of Neocon Influence

Susan Block
Palin as Venus in Furs: the Dominatrix Politics of Drilling and Killing

Robert Fantina
Republicans and Subpoenas: Never the Twain Shall Meet

Heidi Walters
Hung Up on Route 36: an 18-Wheeler and a Nuclear Cask

David Yearsley
Germany's Lost Organs: When Bigger Was Better

Raymond J. Lawrence
The Politics of Tribulation: Sarah Palin and the Rapture

David Rosen
One Billion Pills Later: Viagra at 10

David Michael Green
Living in Sarah Palin's America

Anthony Papa
Imprisoned Voters and the Elections

Niranjan Ramakrishnan
Freddie, Fannie, Daddy, Nanny

Howard Lisnoff
When We Notice the Homeless

John Goekler
Leaving Every Child Behind

Missy Beattie
Impalement

Dave Zirin
Leave Josh Howard Alone

Charles R. Larson
Holden Caulfield, Rest in Peace

Tim Matson
Too Big for His Birches: Woodlot Economics

Susie Day
Attack of the Angry Fetus

Poets' Basement
Corseri, Gibbons, Jenkins and Ford

Website of the Weekend
Dylan & Baez: Deportees

September 19, 2008

Steven T. Banko
McCain's Passion Play

Mike Whitney
The Point of No Return

Michael Hudson
The Dow Jones' Wonderfully Cheesy Addition

William Kaufman
Shattering the Glass-Steagall Act: the Bi-Partisan Origins of the Financial Crisis

Brenda Norrell
The Fall of Lehman Bros.: Blowback for Black Mesa?

Keeanga-Yamatta Taylor
The New Rhetoric of Racism: Why Won't Obama Call It Out?

Clifton Ross
Bolivia: Cleaning Up the Bull Ring

Dave Lindorff
Hang On to Your Wallets: the Government's About to Rescue Us!

Cynthia McKinney
Seize the Time!

Susan Hurlich
Storm Survivors: a Dispatch from Cuba

Michael Donnelly
Let's Hand It All Over to the Democrats (They Helped Create This Mess)

Website of the Day
The Crisis Explained

September 18, 2008

Benjamin Dangl
The Machine Gun and the Meeting Table

Harvey Wasserman
The Senate's Drill, Drill, Drill Scam

Susan Abulhawa
The Lobby Has Spoken: Biden and Israel

Robert Weissman
After the Fall: the Financial Re-Regulatory Agenda

Anne-Marie McManus
McCain's Cinderella: the Fetishization of Sarah Palin

Corey D. B. Walker
The Poverty of 21st Century Progressivism

William S. Lind
Senator O'Bush: Why Obama is Wrong on Iran and Afghanistan

Ron Jacobs
Washington's False Logic of Torture

Dave Lindorff
American and China: Joined at the Hip

Binoy Kampmark
How Damien Hirst Got Away With It

Website of the Day
An Invisible Army

September 17, 2008

Stephen Conn
Palin and the Politics of Big Oil

Forrest Hylton
Reactionary Rampage in Bolivia

Patrick Cockburn
Petraeus Leaves Iraq

Gregory Elich
Inside North Korea

Ralph Nader
How the U.S. Auto Industry Wrecked Itself

Franklin Lamb
The Palestinians of Shabra-Shatila

Pam Martens
The Gang's All Here: Bush, McCain and the Old Iran/Contra Team

Dave Lindorff
The End of the Blue Chip Economy

Peter Morici
The Damage Deepens

Stanley Heller
The Killing of Count Folke Bernadotte

Douglas Valentine
Rambling David Foster Wallace

Website of the Day
Free Cindy McCain!

September 16, 2008

Paul Craig Roberts
US Economy: Rudderless and Reeling from Direct Hits

Tiphaine Dickson
Citizen Palin: Why Sarah Palin Quoted Westbrook Pegler

Stan Goff
America is Now Rome: an Open Letter to Christian Troops in Iraq and Afghanistan

Uri Avnery
Tzipi's Choice

Michael Winship
Lipstick on Polar Bears

Jeff Halper
Warehousing Palestinians

Patrick Irelan
Bolivia Versus the Empire

Oscar Gonzalez
Who's Dumber? Ike's Refugees or Wall Street's?

Binoy Kampmark
Cheney and His Records

Fatemeh Keshavarz
Muslims are at Peace with You

Sen. Russ Feingold
Restoring the Rule of Law

Website of the Day
The Next Great Rock Band?

September 15, 2008

Mike Whitney
The Tumbrils Roll at Dawn

Peter Morici
Toxic Lehman

Patrick Cockburn
Take Another Look at the Surge

Charles R. Larson
The Maverick Has No Clothes

Jonathan Cook
The Expulsion of Palestinians from Jaffa

Nikolas Kozloff
Racist Rhetoric in Bolivia

Roger Burbach
Morales Confronts the Insurrection: Bolivia and the Echoes of Allende

Helen Redmond
Where's the Health Care Bailout?

David Michael Green
The Democrats Do Poland

David Macaray
The Boeing Strike

Ralph Nader
Remembering Peter Camejo

Website of the Day
The Ballad of Sarah Palin

September 13 / 14, 2008

Alexander Cockburn
Panic!

Jeffrey St. Clair
Inside Dirk Kempthorne's Closet

Wajahat Ali
Playing with the Constitution

Robert Fantina
Cheney Scales New Heights of Hypocrisy

Marcus Rediker
Notes on a Visit to the Favelas of Medellín, Colombia

Richard Neville
The Baby Killers

Ed Gaffney
Breaking the Siege of Gaza

Carla Blank
Neglecting a Grand Old Lady

P. Sainath
The Almighty and the U.S. Elections

Lee Sustar
Working Harder; Falling Further Behind

Joshua Frank
Liberalism and Its Bounds

M. Junaid Levesque-Alam
The Guantanamoized Age

Dennis Loo
Shock and Awe Comes Home to Roost

Zach Zill
Squeezed Out in New York City

Omar Barghouti
So You Think You Can Dance? Israeli Profiling of African-American Dancers

Bill Quigley
Social Justice Quiz, 2008

Andy Worthington
Bush's Bitter Legacy

Stephen Dunifer
Free Radio: Liberating the Commons

Seth Sandronsky
Bailing Out Big Auto

David Yearsley
Portabella's Bach: Grim, Trite and Incredibly Boring

Patrick B. Barr
Obama's Punchless Campaign

Rannie Amiri
Tasting Ramadan

Niranjan Ramakrishnan
The Flight Not Taken

Richard Rhames
What, Me Reason?

Manuel Garcia, Jr.
The Large Hadron Collider Powers Up

Poets' Basement
Deer Cloud and Buknatski

Website of the Weekend
Wasilla Valley PTA?

September 12, 2008

Nikolas Kozloff
The Next Cuban Missile Crisis?

Michael Hudson
More Dangerous Than the A-Bomb? The Chicago School's Record of Infamy

Lloyd Miller
Palin and Alaskan Native and Tribal Rights: a Dismal Record

Steve Breyman
Georgia in NATO?

Maria Rivera
Cuba After Gustav and Ike: an Eyewitness Account

Jonathan Cook
Israel and the Dark Arts

Ayesha Ijaz Khan
U.S. Designs on Pakistan

M. Shahid Alam
The Mendacity of Missed Opportunities

Robert Weissman
Executive Pay and the "Market Economy"

Tanya Golash-Boza / David Brunsma
Immigration Raids Must Be Stopped

Website of the Day
Know Your Rights

September 11, 2008

Noam Chomsky
Towards a Second Cold War?

Sharon Smith
Afghanistan: You Call This a Good War?

Ron Jacobs
Palinomics: She Ain't No Working Class Hero

Marjorie Cohn
God, Guns and Oil: A Palin Theocracy?

Mike Whitney
Cheney in the Caucasus

Jeffery R. Webber
Bolivia: a Coup in the Making?

Paul Cantor
The Other 9/11

Peter Morici
The Surging Trade Deficit

Ray McGovern
Iran's Road Less Traveled to Nukes

Linn Washington, Jr.
Screening Mumia: The Suppression of Dissent in America

Website of the Day
Palin (Michael) for President!

September 10, 2008

Paul Craig Roberts
A Temporary Respite from Permanent Decline

Conn Hallinan
The Return of U.S. Death Squads

Ralph Nader
Who Needs Regulations When You've Got a Golden Parachute?

Peter Morici
Can the Bailout Work?

Joanne Mariner
The Horrendous Case of Aafia Siddiqui

Laura Tate Kagel /
Jen Marlowe
The Pending Execution of Troy Davis: a Case for Clemency

Chuck Spinney
Incestuous Amplification and the Madness of King George

Dave Lindorff
Lazy Thinking and Prejudice

Scott Campbell
Where Now for Oaxaca's Social Movement?

Paul Farmer
Haiti and the Hurricanes

Anne Kilkenny
Letters from Wasilla: the Sarah Palin I Know

Website of the Day
Democrats and Zombies

September 9, 2008

Michael Colby
The Obama Poll Drop

Chellis Glendinning
Retorno a 1968: From Berkeley to Mexico City

Vijay Prashad
Losing Game

Jeffery R. Webber/
George Ciccariello-Maher
Venezuela From Below

David Michael Green
Country Last

Brian J. Foley
The New Face of Republican Power

John Ross
Mexican Flag Wrap

Pierre M. Sprey /
Winslow T. Wheeler
Joint Strike Fighter: Another Defense Acquisition Disaster

Nicole Colson
Sami Al-Arian's Long Road to Freedom

Marc Gardner
California's Anti-Homosexual Laws are Alive and Unwell

William S. Lind
The Baltic States and Russia: Toy Armies or Accomodation?

Website of the Day
All Hope Rests with Piper Palin

September 8, 2008

Mike Whitney
An Interview with Michael Hudson on the Worsening Debt Crisis

Tariq Ali
The Godfather as President

Pam Martens
The Man Who Vetted Palin

Bill Quigley
The Weary Road Home: Displaced Poor Continue to Return to New Orleans

Malini Johar Schueller /
Ed White
Not About Me: Obamamania, Racial Porn-fest and Palinama

Robert Jensen
Pop Music and 9/11

Uri Avnery
Lonely Rider

Win McCormack
Palin Family Values

Howard Lisnoff
How Far From a Police State?

Maria C. Khoury
Taybeh Oktoberfest in Palestine

Website of the Day
Scaring Students from Voting in Virginia

September 6 / 7, 2008

Alexander Cockburn
Sarah Palin and the Good Book

Jeffrey St. Clair
That Dam Senator: A River Ran Through Him

Linn Washington, Jr.
The GOP Excluded Black-Owned Businesses from Contracts at St. Paul Convention

Patrick Cockburn
Did Bush Spies Monitor Iraqi Allies?

Gary Leupp
The September 3 Attack on Pakistan: a Precursor to More War Crimes?

Nancy Kurshan
CHI-town Lowdown: Memories of 1968

William Blum
Has Obama Already Lost?

Michael Winship
The St. Paul Police vs. the Independent Media

Fred Gardner
Joe Biden, Drug Warrior

Nikolas Kozloff
Sarah Palin and the Wal-Mart Moms: the Cultural Packaging of VP Candidates

Wajahat Ali
The Cryptkeeper and His Pitbull: the Past and Future of the GOP

Robert Fantina
Change Agents?

Karyn Strickler
Palin by Comparison: Sarah and the Hillary Voters

David Yearsley
What Their Fanfares Told Us About the Candidates

Richard Rhames
Bad Campaign Moon Rising

James L. Secor
Bandwagon Politics

Missy Beattie
Missy for Vice POTUS

Eric Patton
Baseless in Obamaland

Ben Terrall
Haiti and the Washington Consensus

Thom Rutledge
Mr. Magoo and the Kind Stranger: a Serious Political Problem

Dan Bacher
Arnold and the Manufactured Drought

David Macaray
Is Union Democracy at Risk?

Jane Stillwater
The Admiral's Child: a Psychological Reason for McCain's Flip Flops

Grady Harper
Should Hunting Really be High on Our Priority List?

Poets' Basement
Wolff, Payne and Holt

Website of the Weekend
We'll See Your Sarah Palin and Raise You With Maria McKee

September 5, 2008

Elizabeth Walters
Old Fears, New Worries in Louisiana

Bill Quigley
Gustav's Path of Destruction

Alan Farago
Nothing Means Anything: The Fantasy of John and Sarah

Dave Lindorff
The Things They Left Behind (Including McCain's First Wife)

Ira Glunts
A Lesson Before Lying: How Republicans Solved Sarah Palin's Jewish Problem

Peter Morici
The Big Slump

Deepak Tripathi
Politics, Morality and the GOP: John McCain as John Major?

Manuel Garcia, Jr.
The Energy of a Hurricane

Michael Donnelly
Change. God. POW.: a Summary of McCain's Big Speech

Martha Rosenberg
Free to Good Home, SUVs

Website of the Day
Sarah Palin's Air War: On Wolves and Bears

September 4, 2008

Jeffrey St. Clair
The Real McCain

Paul Craig Roberts
Who is Wrecking America?

Ron Jacobs
The Perishing Republicans, the RNC 9 and the Twin Cities Cops

M. Junaid Levesque-Alam
The Soft Surge

Andy Worthington
Rendered to Egypt for Torture

Osama Dawoud
How I Lost My Fulbright Scholarship

Stephen Lendman
Katrina Redux: the Militarization of New Orleans

Fidel Castro
Hurricane as Nuclear Strike

Website of the Day
Is McCain Palin's Bitch?

September 3, 2008

Patrick Cockburn
The Fake U.S. Victory in Iraq

Sen. Mike Gravel
Good Luck, Sarah!

Vijay Prashad
The Indian Left and the Indo-US Nuclear Deal

Nikolas Kozloff
Palin, Hunting and the American Psyche

Ralph Nader
Repeal Taft-Hartley

Howard Lisnoff
Forty Years in the Streets (And They're Still Beating Up Journalists)

Steve Early / Cal Winslow
Can SEIU Members Exorcize the Purple Shades of Jackie Presser?

Shepherd Bliss
A Field Report From Slow Food Nation

Bill Quigley
Living in the Car After Gustav

Website of the Day
Growing Up Okie: an Interview with Roxanne Dunbar-Ortiz

September 2, 2008

Marjorie Cohn
Raiding Democracy in St. Paul

Jonathan Cook
Palestinian Village Faces Army Reign of Terror

Robert Weitzel
Biden and Israel

Corey D. B. Walker
Where Do We Go From Here?

John Ross
The Kidnapping Boom in Mexico

Eric Walberg
Wag the Dog in Georgia

Judith Scherr
No Day in Court for Ronald Dauphin

Richard Morse
Haiti, 2008

B. R. Gowani
What If the Israel Lobby was the African-American Lobby?

Michael Greenberg
Loofah Day in Cleveland

Website of the Day
Thanks for the Memories!

September 1, 2008

Nikolas Kozloff
Making a Killing in Iraq: McCain and the Telecoms

C. G. Estabrook
The War Will Go On

Manuel Garcia, Jr.
Will a Russo-American Nuclear War Happen (Soon)?

David Macaray
An Elegy for Labor Day

B. R. Gowani
The Lobby as Juggernaut

Saul Landau
Real Gold Winners

Charles Orloski
Going Down to Hell's Cul-de-Sac

Gloria La Riva
Profit and Disaster in New Orleans

Website of the Day
Springsteen: Factory

August 30 / 31, 2008

Alexander Cockburn
Obama's Speech; McCain's Palinomy

Bill Quigley
Gustav is Coming

Jeffrey St. Clair
Valley Boy: The Rise and Fall of Richard Pombo

Andy Worthington
Shining a Light on the Dark Prison

Deepak Tripathi
The Race for the White House: Notes From a European Observer

Stanley Howard
A Prisoner's Tale of Abuse

Dave Lindorff
Troopergate in Alaska

Wajahat Ali
Palin on the Prowl: a Cougar for the PUMAs?

Robert Fantina
McCain and Palin

Josh Schlossberg
A Bias for Life: the Role of the Environmentalist

Benjamin Dangl
Beyond Voting

Missy Beattie
Stars, Stripes, War and Shame

Howard Lisnoff
Better Cuba Than Florida?

Suzan Mazur
Rethinking Evolution with Stuart Newman

Rev. Jim Rigby
What Would Jesus Ride to the Conventions?

David Yearsely
Katy Perry Meets Mozart

Serge Quadruppani
Italy's Years of Lead

B.R. Gowani
What If the Israeli Lobby Was the Islamic Lobby?

Richard Rhames
Empty Political Calories

Poets' Basement
Holt, Davies, Corsale and Landau

Website of the Day
Return of the Druids

August 29, 2008

Mike Whitney
How the Chicago Boys Wrecked the Economy

Brian Cloughley
Resurgent Russia

David Ker Thomson
Jacko and Me: Dispatches From Fifty

Joanne Mariner
A UK Window on CIA Abuses

Neve Gordon
The Ordeal of Sahar Vardi, Refusenik

Chris Genovali
Of Whales and Off-Shore Drilling

Ron Jacobs
What's a Godfearing Country to Do?

Michael Donnelly
Honest Abe in Denver?

August 28, 2008

Judy Gumbo Albert
The Battle of Chicago

Paul Cantor
Who Killed Victor Jara?

Saul Landau /
Farrah Hassen
Axis of Evil Defeats Neocons

Andy Worthington
Clearing Out Guantánamo

Ben Terrall
Return to Port-au-Prince

Leonard Peltier
Message to Obama: Symbolism Alone Will Not Bring Change

Niranjan Ramakrishnan
The Miasma of Bi-Partisanship

Donna J. Volatile
The Obama Construct

Website of the Day
Ishmael Reed, Alice Walker and Maya Angelou on the Meaning of Obama

August 27, 2008

Anthony DiMaggio
The Myths of Joe Biden

Jordan Flaherty
Three Years After Katrina

Ralph Nader
The Politics of Avoidance

Melissa Checker
Carbon Offsets, More Harm Than Good?

Bob Sommer
Blaming the Sixties

Cynthia McKinney
How the Democrats Helped Bush Hijack the Country

Ali Khan
Pakistan's Flawed Presidency

M. Junaid Levesque-Alam
The Only Good Muslim is the Anti-Muslim

Dave Lindorff
Strip-Search Nation

David Macaray
Labor's Hard Lessons

Website of the Day
Stagnant Income in an Eroding Economy

August 26, 2008

Patrick Cockburn
The Big Questions About Iraq

Michael D. Yates
Obama and the Working Class

Paul Craig Roberts
Is War With Russia on the Agenda?

Andy Worthington
The Guantánamo Suicide Report

Rev. Jesse L. Jackson
Obama's Promised Land?

Huwaida Arraf
Sailing into Gaza

Joseph Grosso
Back to the Future: New York's Housing Crisis

Sheldon Richman
What About the Ossetians?

Binoy Kampmark
Impasse at Singur

Website of the Day
Taser Bait in Denver

August 25, 2008

Patrick Cockburn
US Out of Iraq by "2011"

Bill Quigley
Katrina, the Pain Index

Jonathan Cook
Israeli Outposts Seal Death of Palestinian State

James McEnteer
Death by Paranoia

Uri Avnery
The Devil's Hoof

Will Potter
The State Deparment's Green Scare Wing

Robert Jensen
Technological Fundamentalism

Stephen Lendman
Reinventing the Evil Empire

Wajahat Ali
Biden His Time

Carl Finamore
The Future of Trade Unions in China

Website of the Day
Don't Blow Up the Mountain, Boys

August 23 / 4, 2008

Alexander Cockburn
"Change," "Hope"...Why They Must be Talking About Joe Biden!

Jeffrey St. Clair
Killing Salmon with Paul O'Neill: Power, Profits and the Future of the Columbia River

Patty O'Grady
John McCain in a New Context: Why the Senator is No War Hero

Nicole Colson
Obama and Big Corn

Steve Conn
Obama and the Mining Cartel

Deepak Trapathi
Pakistan in Uncertain Times

Robert Fantina
Once Upon a Time in America: a McCain Administration

Jonathan M. Feldman
Obamanomics: Does the Left Have Anything to Say?

Joshua Frank
Targeting Pelosi (and the War Machine): an Interview with Cindy Sheehan

Osama Qashoo
Sailing to Gaza

Howard Lisnoff
The Long Silence: American Jews and the Palestinians

David Michael Green
Sen. McShame and the Wreckage: John McCain Discovers America

Dave Lindorff
Why Not Let the Republicans Deal With This Mess?

Christopher Brauchli
A Banner Month for Passports

Alan Farago
Who Crippled the Government?

Michael Winship
Cash Register Conventions

Richard Rhames
Vlad the Derailer: Can Putin Save America From Itself?

David Rosen
The Culture Wars Are Over: But Culture Warriors Are Still Terrorizing America

Patrick B. Barr
Don't Try to Tame the Lightning Bolt

Jamie Newlin
Western Turf Wars: the Politics of Public Lands Ranching

Poets' Basement
Glendinning, McEnteer and Bonner

Website of the Weekend
Cafe Reconcile, New Orleans

August 22, 2008

Boris Kagarlitsky
Fallout from the Georgian War

Laura Carlsen
Obama and Latin America: Change or Continuity?

Bob Barr
No War for Georgia

Marwan Bishara
From Russia with Love: Putin Hits Georgia, Bloodies Bush

Peter Morici
Is the Fed Still a Central Bank?

Manuel Garcia, Jr.
The Big Heat

Charles Mostoller
The Battle for the Amazon

Sumbul Ali-Karamali
Obama is Not a Muslim: But Would It Be So Terrible If He Were?

Keith Rosenthal
Standing Up to Union-Bashing

John F. Miglio
The Devolution of the Baby Boom Generation

Website of the Day
Fire Sale in the Markets!

August 21, 2008

Allan J. Lichtman
Is Georgia 2008 a Repeat of Hungary 1956?

Dave Lindorff Loserville: How Obama Blew It

Ralph Nader
The Problem with Problem Banks

Joanne Mariner
The Military Commissions, So Far

Wajahat Ali
Descent Into Chaos: an Interview with Ahmed Rashid on Pakistan, Afghanistan and the Taliban

Ron Jacobs
Georgia and Historical Farce

Rostam Purzal
The Left and Iran

Anthony Papa
Unlocking the Power of Art to Counter Injustice

Website of the Day
Rocky Mountain Way

August 20, 2008

Michael Neumann
Russia and Georgia: Proportion and Distortion

Ray McGovern
Musharraf Out Like Nixon

Eric Walberg
Georgia's Ossetian Debacle

Fidaa Abed
Blocking a Gazan's Path to San Diego

Daniel Haack
The Pentagon's Most Prolific Pundit

Mike Whitney
Greenback Surges, Euro Shrivels

Website of the Day
Hands Off South Africa's Centre for Civil Society

August 19, 2008

Paul Craig Roberts
Are You Ready for Nuclear War?

Deepak Tripathi
A New Age of Torture

Marwan Bishara
The Politics of Evil in the US Elections

Saul Landau
Baseball Diplomacy or Just Baseball?

William S. Lind
Leave Georgia Alone, George

Martha Rosenberg
Whole Foods and Other Food Offenders

James Brittain
The Road to Tyranny in Colombia

Pratyush Chandra
Krugman's Great Illusion

David Macaray
AFSCME's Strike Against the University of California

Website of the Day
McCain Plagiarizing Solzhenitsyn

September 22, 2008

Will the Cure be Worse Than the Crisis?

The Paulson-Bernanke Bank Bailout Plan

By MICHAEL HUDSON

Saturday’s $700 billion junk mortgage bailout is the largest and worst giveaway since a corrupt Congress gave land grants to the railroad barons a century and a half ago. If it goes through, it will shape the coming century by giving finance unprecedented power over debtors – homebuyers, industry, state and local government, and the federal government as well.

But what threatens to be even worse is the government’s move to let the financial sector make even higher, unprecedented gains by working its way out of negative equity to “make taxpayers whole” by repaying the government’s bailout by bleeding the economy at large. nticipating congressional capitulation in this license to engage in predatory credit, the latest Sunday evening surprise is that Treasury Secretary Henry Paulson’s own firm, Goldman Sachs, is to become bank holding company picking up the financial wreckage now that the government is covering the bad loans and investment gambles Wall Street has made.

What Mr. Paulson did not say in his weekend TV interviews, organized as what he hoped would be a series of victory laps. Neither he nor Fed Chairman Ben Bernanke nor any other Wall Street spokesman has acknowledged that the government has helped promote today’s $46 trillion debt bomb. This enormous overhead consists of the product that banks are selling – interest-bearing debt that is being added to real estate, corporate industry and personal income to price the U.S. economy out of world markets.

We have heard nothing about how Wall Street lobbyists have succeeded in killing the financial cops on Wall Street – and done the same with the consumer cops on Main Street. There is no public recognition of the fact that more money in tax cuts went to the top 1% than the bottom 80% combined. 

So how much credence should we give the newest proposals for the United  States to commit economic suicide by turning over the powers of government in effect to Wall Street? When they talk about “making taxpayers whole,”  what really is their game?

At first glance it may sound appealing to taxpayers for banks to be told to use their future earnings to pay back the $700 billion dollars in junk mortgages, bad hedge-fund bets and other gambles that the Treasury promised on September 20 to pick up at face value, no loss incurred. To provide a sense of proportion, this money could have funded the next forty or fifty years of Social Security. It could have funded health care for all Americans. It could have made a big step toward rebuilding the nation’s crumbling infrastructure. But that is another story. For now the major question is just how the banks, insurance companies and financial conglomerates are to raise the money to pay off this bailout.

The last time the government let banks earn their way out of negative equity was in 1980. Interest rates to bank customers topped 20 percent, driving down prices for real estate, stocks and bonds so low that the leading U.S. banks saw their net worth wiped out. Their debts to depositors and bondholders exceeded the collateral they held in their reserves to back these deposit obligations. But as soon as Ronald Reagan led the Republicans back into office, the Federal Reserve began to flood the economy with free credit, driving down the interest rates that banks had to pay. They were allowed to act as a monopoly and keep credit-card interest rates high, at 20 percent, and above 30 percent with penalties, thanks to the fact that America’s high post-Vietnam interest rates led state after state to repeal anti-usury laws to keep credit flowing.

So the banks did “earn their way out of debt.” But if you were a taxpayer who needed to use a credit card, you paid through the nose. The banks earned their way out of debt at your expense. And by the way, if you really did pay an income tax, you probably did not own commercial real estate or significant financial assets. The Internal Revenue Service made commercial real estate and a large swath of finance (at least for the wealthiest investors) income-tax free by generating tax credits that could be applied against income across the board. The capital-gains tax was lowered to a fraction of the income tax, leading investors to pay out whatever income their investments generated as interest on loans to buy property they expected to sell at a markup. And with Alan Greenspan appointed the head the Federal Reserve Board in 1987, the age of asset-price inflation had arrived.

Cities and states vied with each other to slash property taxes, replacing them with income and sales taxes that fall mainly on labor and consumers. The upshot is that wealth has polarized to an unprecedented degree. According to statistics collected by the Congressional Budget Office, the wealthiest 1% now own 57% of the nation’s returns to wealth (interest, dividends and capital gains) and the richest 10% own no less than 77%.

With this background in mind, it looks like the Paulson-Bernanke plan for the Wall Street investment banks and other predatory lenders – and insurers such as A.I.G. – to “earn their way out of debt” will be at the economy’s expense. The bailout is to be achieved by letting Wall Street’s post-Glass-Steagall financial conglomerates charge their customers exorbitant financial charges. As Britain’s Conservative Party leader Margaret Thatcher put it in her favorite phrase, TINA: There is no alternative. And as Lady Macbeth said, if the deed is to be done, let it be done fast. After all, it is a once-in-a-lifetime chance for every financial institution in America to cash out with a fortune!

For Mr. Paulson this means not giving Congress a chance to represent the public interest in designing the terms of this giant bailout. Sec. 8 of the Treasury plan bans any Congressional review, giving him unprecedented power by: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” Under cover of emergency force majeur conditions, the plan is to take the money and run, preferably without permitting any Congressional debate.

It is bad enough for the government to buy $700 billion of bad bank investments at prices that no private-sector investor has been willing to approach. This itself is an undeserved giveaway to the financial institutions that caused the problem by living recklessly in the short run. But making them – and indeed, helping them – pay back this gift with the aid of favorable tax and deregulatory policies will simply shift the cost off their shoulders onto those of bank depositors, credit-card users, mortgage borrowers and hapless pension-fund contributors to the money managers who have taken most of the current income in the form of commissions, salaries and bonuses to themselves. This will sharply add to the price of doing business in the United States, and specifically to the economy’s debt overhead by the banks making even more predatory loans.

It gets worse. In order for the existing junk mortgages to be “made good,” real estate prices must be raised further above the ability to pay for this year’s five million homeowners in arrears and facing default. Is this a good thing? Is it good to raise access prices for housing even more, forcing new homebuyers to go further into debt than ever before to gain access to housing? Mr. Paulson has directed the Federal Reserve, Fannie Mae, Freddie Mac and the FHA (Federal Housing Authority) to re-inflate the real estate market. They are to pump nearly a trillion dollars into the mortgage market.

Fiscal policy is also to be brought to bear to turn the real estate market around by pressuring cities and states to “help homeowners pay their mortgage debts” by cutting property taxes. The idea is to leave more revenue available for property owners to pay mortgage bankers. Unfortunately, this will oblige cities to make up these cuts by taxing labor and sales, running deeper into debt than they already are, or cutting back their spending on basic infrastructure, education and public services and continue shortchanging their pension funds. This is the price to be exacted to “protect the taxpayer’s interest” by bailing out irresponsible banks. The solution is to let them make even more money by acting in a yet more predatory way.

This is not industrial capitalism; it is asset stripping. The closest analogy I can think of would be to give the Mafia free reign to start a new crime wave “in the taxpayers’ interest” so as to raise enough money to pay its fines to the Justice Department. Imagine how our world would look like if the economy had been turned over to Al Capone as head political capo and to Mafia financial manager Meyer Lansky as Treasury Secretary in the 1930s, with the pyramid schemer Carlo Ponzi heading the Federal Reserve and bank robber Willie Sutton as Attorney General.

The last thing the economy needs is a new real estate bubble. To prevent it, local property taxes need to be raised, not lowered. But this is not the Treasury’s plan. Instead of representing the national interest, it is representing the banking sector whose profits come from making more and bigger loans. This is just the opposite from what a well-run economy needs to recover its growth and competitive power. It needs debt write-downs to what homeowners can pay.

But Mr. Paulson has made it clear that aid for homeowners is not part of the Treasury’s plan. On Sunday, September 21, he resisted suggestions that his program be amended to include further relief for homeowners facing mortgage foreclosures. Because financial markets remain under severe stress, he claimed, there is an urgent need for Congress to act quickly without adding other measures that could slow down passage. “We need this to be clean and to be quick,” he said in an interview on ABC’s “This Week.” He expressed concern that debate over adding all of those proposals would slow the economy down, delaying the rescue effort that is so urgently needed to get financial markets moving again. "The biggest help we can give the American people right now is to stabilize the financial system," Mr. Paulson said.

If you doubt that this is the government’s ideal plan, just look at what it is rejecting. You hear no talk from Mr. Paulson or Mr. Bernanke about bailing out homeowners by writing down their debts to match their ability to pay. This is what economies have done from time immemorial. Instead, the Republicans – along with their allied Wall Street Democrats – have chosen to bail out investors in junk mortgages presently far exceeding the debtor’s ability to pay, and far in excess of the current (or reasonable) market price. The Treasury and Fed have opted to keep fictitious capital claims alive, forgetting the living debtors saddled with exploding adjustable-rate mortgages (ARMs) and toxic “negative amortization” mortgages that keep adding on the interest (and penalties) to the existing above-market balance.

The question to be asked is just how much will the economy’s debt overhead grow, and what will it cost debtors (a.k.a. “taxpayers”)? And how will the economy look when the dust settles?

Economically the act gives a new meaning to the classical concept of circular flow. The traditional textbook meaning has referred to the circulation between producers and consumers, from wage payments by industrial companies to their employees, who use their wages to buy what they produce. This is why Henry Ford famously paid his workers the then-towering $5 a day. This was Say’s law: Income paid for production is finds its counterpart in consumption to maintain equilibrium in a way that enables the economy to keep on growing. The new circular flow runs from the Fed and Treasury to Wall Street in the form of bailouts, and then back to Republicans in Washington in the form of campaign contributions. The money circulates without having to go through the “real” economy of production and consumption at all.

The Treasury Department issued a fact sheet on the proposal on Saturday evening: “Removing troubled assets will begin to restore the strength of our financial system so it can again finance economic growth.” In everyday language the euphemism “removing troubled assets” means buying junk mortgages at way above current market price, as if the banks didn’t know all along that they were junk but hoped to pawn them off on their clients. The problem is that the banks have not been financing growth in the form of tangible capital investment, but have found their quickest profits to lie in a combination of asset stripping and asset-price inflation.

On Sunday a BBC World Service reporter asked me to list three things that the financial sector would like to see. Taking the open-ended question on the highest philosophical plane, I said, first of all, the banks would love to free themselves of all deposit liabilities – simply to keep the money for themselves. That is their objective when they see a client, after all: How much of the client’s earnings and money can they shift into their own pockets. Second, they would like to see politicians elected directly by the amount of money they could raise, thereby doing away with the actual problem of elections. If politics is going to be privatized, this is the way to do it. Rome’s voting system was organized along these lines. Third, the financial sector prefers not to have to report any data at all or pay any taxes. It has lobbied Congress to block collection of statistics, on the premise that what is not seen will not be taxed. And at present, banks and brokerage houses are still screaming to repeal Sarbanes-Oxley bill calling for full and honest accounting. For financial ideologues this is an equivalent watershed dragon to Rowe vs. Wade, now that they have repealed the Glass-Steagall Act that had separated banks from casinos.

Somewhat taken aback by the rawness of these principles, the reporter asked what outcome was most likely. If Congress does what it is supposed to do, there should be quite a showdown. But how unlikely to be achieved is the above scenario? A few hours earlier on Sunday my friend Eric Janszen of itulip.com sent me a note he had received from a fund manager attesting to the lack of care for clients of financial institutions, giving a flavor of the predatory spirit guiding the bailout’s planners and its beneficiaries:

RAIDS OF INDIVIDUAL ACCOUNTS

This is so important a topic, that it deserves top billing!!! Hidden inside the AIG bailout funding package, surely hastily cobbled together, but carefully enough to include a totally corrupt clause, was a handy dandy clause that permits raids. The conglomerate financial firms are permitted at this point to use private individual brokerage account funds to relieve their own liquidity pressures. This represents unauthorized loans of your stock account assets. So next, if the conglomerate fails, your stock account is part of the bankruptcy process. ...

The actual evidence for legalized stock account raids by the financial firms can be found in recent articles in Financial Times and Wall Street Journal. So this is not a wild claim. The September 14th article on the Wall Street Journal entitled "Wall Street Crisis Hits Stocks" was the first exposure.

The runs on US banks are in progress. See Washington Mutual, where private email messages have been shared by WaMu bank officers. WaMu alone could deplete the entire Federal Deposit Insurance Corp fund for bank deposit coverage. Eventually the FDIC will compete for USGovt federal money for bailouts and nationalizations, which would be funded by the US Govt because they will not let FDIC run dry.

My Kucinich-campaign colleague David Kelley and I agree on how Wall Street’s action plan ideally would work. The Republicans will take the $800 billion of U.S. Treasury securities presently earmarked for the Social Security Administration accounts, and achieve the privatization that Pres. Bush and his backers have been pressing for so hard for the past eight years. Under emergency conditions – today’s 9/21 as the modern analogue to 9/11 just seven years ago (the well-known natural lifespan of locusts) – will swap these Treasury bonds for junk mortgages, at face value of course. Then, a few months from now (after the new president takes office in February, or perhaps a few days before to achieve the usual political clean slate) the government will tell prospective retirees and workers who have been suffering FICA withholding all these years, “Oops, the government has just lost all your money. Well, that just shows how government planning is the road to serfdom. Next time save yourself by handling your own accounts – or at least choosing whether to consign your forced retirement savings to Lehman Brothers, Bear Stearns or kindred predatory money managers. If only we could have done this a few months ago, there would have been no meltdown and Wall Street would have been doing just fine.”

If you are going to take such a step, you of course say you are doing it to “save” the economy. You even proclaim yourself to be a hero. This is how the nation’s newspaper and TV media responded after news of the bailout of AIG and, more to the point, the Wall Street gamblers and derivatives traders whose gains and losses – that is, the ability of trillions of dollars worth of computer-driven trading gambles – to collect their winnings and avoid losses.

Today’s financial markets are well personified in the classic Hollywood westerns. They typically are about towns taken over and run by a banker (“Wall Street” in miniature), for whom a retinue of outlaws and their gangs work (the boys in the back room). The banker runs the town, usually doing business from its biggest building, the local saloon or casino where most of the action occurs. It has a brothel upstairs (the usual Hollywood simile for Congress). The good-hearted prostitute (sometimes the madam) with a heart of gold usually is the movie’s only honest secondary character (a stand-in for one of the bleeding-heart Congressmen on the finance or mortgage-credit committees lisping well-scripted lines promising that all new legislation will benefit homeowners, not predatory mortgage lenders).

There also is a good-hearted investigative newspaper publisher-journalist. He almost always gets killed and his printing press destroyed. (Today his paper is simply bought out by a conglomerate and merged into the pro-Wall Street mass media.) The banker’s gang appoints the sheriff (on today’s larger scale, the Federal Reserve and Justice Department), and also the mayor (who rarely is seen except to sign papers). The sheriff’s job is the same as in today’s world: to evict debtors from homes and properties on which the land-greedy banker is foreclosing. This is the common theme of westerns, after all: They are all about the great American land grab – situated out West so as to protect the identities of the guilty here in the East on Wall Street.

Attentive readers will notice that I have left out of this script the hero. His role is to fight the banker/land grabber and the gang he has brought into town. Wearing a white hat, he rides into town to clean it up, and in the final showdown shoots the head gunslinger (or perhaps the banker himself, who is done for in any event). This is the position that Mr. Paulson portrays himself. But what the audience doesn’t see (at first) is that the bullets he is shooting are merely blanks. It is in fact only a movie after all! The showdown is staged! He works for the banker himself! Goldman Sachs turns itself into a big-fish bank and gobbles up all the little fish in a great financial squeeze.

An alien class of financial mock-heroic poseurs has taken over – land grabbers and banksters of various stripes. Almost unnoticed, an invasion of government snatchers, bank snatchers, money snatchers pretending to be Main Street, pretending to be “the economy” and now claiming to need to be rescued – at the cost of saying goodbye to public finance as we have known it, goodbye to Social Security, to peoples’ hope for upward economic mobility.

It looks like Wall Street will receive government support at Main Street’s expense. This is hardly surprising when you look at who the major campaign contributors are – to both parties. Understandably, Mr. Paulson and Mr. Bernanke are trying to muddy the issue for their financial constituency. Hedge fund traders and kindred banksters have metamorphosized into “the financial system to be saved” and hence “the economy” itself. As if it is necessary to save peoples’ savings deposits and bank accounts by rescuing the casino companies with which the banks have merged – the predatory mortgage brokers, the insurance companies with their fraudulent accounting, the crooked asset-management firms, all of which have merged into conglomerates “too large to fail.” If they are too large, simply un-merge them. Restore Glass-Steagall, which worked for 65 years to prevent this kind of problem from erupting.

The most egregious pretense is that the problem is only temporary, not structural. We are merely “freeing up” the market for new loans. This is precisely the opposite of what the classical economists meant by “free markets.” What America has is a bad debt problem, not a “liquidity” problem. There is no “illiquidity” when people refuse to buy a junk mortgage on a property worth only a fraction of the mortgage’s face value. Many of these bad mortgage loans are fraudulent. The Treasury bailout seeks to make $700 billion of fictitious financial claims “real” – that is, way overvalued as compared to their actual worth(lessness).

What is reducing real estate and corporate stocks and bonds to junk is the exponential growth in the economy’s debt overhead. Debts that cannot be paid have little market value at any price. The nation must make a choice: If the government bails out the large financial institutions for having made bad loans – or to be more precise, for not being able to pawn off these bad loans on foreigners or other financial prey in a timely fashion – then the only way in which the government (or other new creditors) can be paid back is by not forgiving the debts owed by strapped homeowners. This would tighten the debt terms on debtors at the bottom of the food chain – those against whom the bank-sponsored new bankruptcy has been aimed. This is why I deplore the government bailout of Fannie Mae and Freddie Mac for the junk mortgages it has been packaging from predatory lenders such as Countrywide Financial, Washington Mutual and other deceptive lenders. The wrong parties have been gifted.

I should add that the solution does not lie simply in creating a new regulatory system, much less a single regulatory agency. After all, it was at Wall Street’s command that the Bush Administration installed deregulators in all the key regulatory positions. This meant that regulations didn’t matter at the Environmental Protection Agency (EPA), at the Fed under Alan Greenspan, at the Securities and Exchange Commission (SEC) under Mr. Cox (after William H. Donaldson resigned when the White House would not let him regulate as much as he thought necessary) or at the Department of Justice under Bush yes-men such as Alberto Gonzales. Politics and people have turned out to be more important than the law. We have seen the Supreme Court scrap the Constitution in the 2000 election – with acquiescence from the Democrats, starting with Mr. Gore’s refusal to contest Florida.

To appoint a single regulator would prevent all other regulators – and law enforcement officers, attorneys general, the SEC and so forth – from enforcing honest financial policies in the event that an incoming president should appoint another Greenspan, Gonzales or other ideological extremist averse to the idea of applying existing regulations and honest laws. Under these conditions “consolidated regulation” would mean a free ride for crooks much like J. Edgar Hoover gave the Mafia under his tenure.

My alternative solutions are as simple as Mr. Paulson’s, but of course are quite different. The public interest does indeed call for maintaining the economy’s basic credit, money-transfer, credit card and depository checking and savings functions. But not under the current venal and predatory management practices. It is this management that has lobbied so hard for deregulation, and whose industry representatives have insisted so strongly to place extremist ideological deregulators into the economy’s major positions. Therefore, the Treasury only should buy junk mortgages at current market price. The losses should be taken in order to re-even out the wealth pyramid that has become so much steeper under the Greenspan-Bernanke ploys. The banks knew full well that these mortgages lacked underlying value. The price of making use of this borrowing facility is to forfeit all equity stock to the government. The Treasury should prohibit any financial institution that sells or swaps securities to the Fed from paying any dividends to shareholders or stock options and bonuses to managers. It also should give the government priority over other creditors. Otherwise, firms that have negative equity will benefit purely at public expense, using the money to pay dividends, bonuses and exorbitant salaries.

Second, we need to restore the Glass-Steagall separation of commercial banks from risk-taking investment banks, mortgage brokers and other financial-sector flotsam and jetsam. Break up the mergers between banks and casino sell-side financial and real estate institutions. Just the opposite is occurring: On Monday, Sept. 22, the financial universe was transformed by the announcement that Mr. Paulson’s Wall Street firm, Goldman Sachs, was transforming itself into a bank holding company. The casinos are to take over the banking system as big fish eat little fish in the present financial emergency. It looks like new giants are emerging, already larger than the government in terms of the magnitude of the debts they have run up – and certainly in their earning power. Indeed, who is to say that extracting interest from the U.S. economy will not emerge as the new form of taxation?

Third, re-write the bankruptcy laws to favor debtors once again, not creditors. This means reversing the current bankruptcy code sponsored by lobbies from the credit-card companies. The interests of the five million mortgage debtors faced with foreclosure and expropriation this year should rightly be placed above the interest (literally) of predatory creditors.

Fourth, sharply increase property taxes, shifting them back off labor and sales. We need to return to the classical idea of taxing unearned and unproductive income instead of adding to the price of labor and industry. What has been freed from the tax collector by the shift of taxes off property has not lowered the cost of housing and other real estate, or corporate costs of doing business. The income “freed” has ended up being paid to the banks as interest. The government still has had to raise money – but in the form of taxes that fall on labor’s wages and industry’s profits. So labor and industry now pay twice for what they formerly paid only once. They still pay the same overall amount of taxes, but also pay an equivalent amount of interest. The financial system is crowding out the government.

In the fifth place, we need to start discussing whether we really need a banking system that behaves in the way the present one does. In recent decades banks have made loans mainly to inflate asset prices by loading real estate and industry with interest-bearing debt. What if all banks were to be organized along the lines of savings banks, with 100% reserves. This is the Chicago Plan from the 1930s (currently revived by the American Monetary Institute, which holds its annual meeting this week in Chicago, by the way). This at least would go back to basics to provide a foundation from which to re-begin to discuss just what kind of credit the economy needs and what would be the best terms on which to structure financial markets.

Any solution does indeed need to be radical. But it can be much less radical than Mr. Paulson’s power grab for his Morgan Stanley firm and the rest of Wall Street in the closing days of the Bush administration just before the Republicans look like losing power. The indicated solution is to reverse predatory finance, not bail it out at permanent taxpayer expense. Government funds are not unlimited. Is it worth wiping out hopes for Social Security and public health care, for renewed national infrastructure spending and industrial restructuring in order to bail out a banking and financial system that has not contributed to economic growth but has weighed it down with reckless debt regardless of the economy’s ability to pay?

Is it right to blame the five million homeowners now in arrears and facing foreclosure, but rewarding the irresponsible bankers and outright fraudulent institutions who have used Enron accounting to make a once-in-a-lifetime rip-off? That is what Mr. Paulson would do in insisting that Congress pass his legislation without taking time to discuss the issue and above all without “assigning blame.” But without such assignation, how do we know where to go from the current mess caused by financial deregulation, repeal of Glass-Steagall, the financial system’s Enron-style accounting and predatory mortgage lending?

Before leaving from his post as Federal Reserve Chairman, Alan Greenspan’s speeches sounded like “Apres moi, le deluge.” We are living in a world whose economic and political pressures are much like those in the interregnum between Louis XIV and the French Revolution. Where are the revolutionists today?

Michael Hudson is a former Wall Street economist specializing in the balance of payments and real estate at the Chase Manhattan Bank (now JPMorgan Chase & Co.), Arthur Anderson, and later at the Hudson Institute (no relation). In 1990 he helped established the world’s first sovereign debt fund for Scudder Stevens & Clark. Dr. Hudson was Dennis Kucinich’s Chief Economic Advisor in the recent Democratic primary presidential campaign, and has advised the U.S., Canadian, Mexican and Latvian governments, as well as the United Nations Institute for Training and Research (UNITAR). A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) He can be reached via his website, mh@michael-hudson.com

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