Today's Stories

January 30 / February 1, 2009

Michael Hudson
Obama's New Bank Giveaway

Dave Lindorff
The Ugly Truth: the American Economy is Not Coming Back

Saul Landau
Freedom Fighters, Terrorists or Schlemiels?

Andy Worthington
Blame the Chef: How Cooking for the Taliban Can Get You Life in Gitmo

Subcomandante Marcos
Gaza Will Survive

Robert Jensen
Future Farming: an Interview with Wes Jackson

Ron Jacobs
Return of the Democrats

Gareth Porter
Is Gates Undermining Another Opening to Iran?

Laura Carlsen
NAFTA's Dangerous Security Agenda

Rev. William E. Alberts
The Feelings of a Stranger

Christopher Brauchli
From Gitmo to Supermax?

Jules Rabin
Israel and the Bomb

Col. Dan Smith
Thoughts From an Inauguration Refugee

Tom Barry
Obama's Immigration Challenge

J. Michael Cole
The Downfall of an Academic

Manuel Garcia, Jr.
Burning the First Amendment

David Rosen
Last Gasp of the Culture Wars?

Don Monkerud
Religion in the American Bedroom

Binoy Kampmark
Apostle of the Middlebrows

January 29, 2009

Peter Linebaugh
Tom Paine's Birthday

Paul Craig Roberts
Is It Time to Bail Out of America?

Riz Khan
The Future of Gaza: an Interview with Jimmy Carter

M. Reza Pirbhai
Pakistan: a New Cambodia?

Wajahat Ali
Obama's Al-Arabiya Interview

Gregory Vickrey
What About the Environment? Cap and Trade and Selling Out

Dina Jadallah-Taschler
Whither the Two State Solution?

Alison Weir
Killing Palestinians Doesn't Count: Fact-Checking Ceasefire Breaches

Alan Farago
Economy Without Escape Routes

Walter Brasch
Taxing a House of Cards

Website of the Day
Madoff Inc.

January 28, 2009

Norman Finkelstein
Behind the Bloodbath in Gaza

Noam Chomsky
Obama's Emerging Policies on Israel, Iraq and the Economic Crisis

Patrick Cockburn
Is Mitchell's Mission Already Doomed?

Rob Larson
The Clinton Foundation Donors

George Wuerthner
Who Will Speak for the Forests?

Allan Nairn
South-East Asian Groups Threaten Retaliation Over Gaza Invasion

M. Junaid
Levesque-Alam
A Muslim's Memo to Obama

Stefan Simanowitz
The Silent Trade

Charles R. Larson
The Autumn of the Patriot

Website of the Day
Veggie Love: PETA's Banned Superbowl Ad

January 27, 2009

Winslow T. Wheeler
Save the Economy by Cutting the Defense Budget

Yigal Bronner /
Neve Gordon
Fueling the Cycle of Hate

Joshua Frank
Obama's Neocon: the Curious Case of Richard Holbrooke

Jordan Flaherty
Torture at a Louisiana Prison

Ralph Nader
Access to Economic Justice

Rev. José M. Tirado
How Iceland Fell: a Hundred Days of (Muted) Rage

Benjamin Dangl
Bolivia Looking Forward

Russell Mokhiber
What If Israel Were in Your Neighborhood?

Martha Rosenberg
Who Says Technology Transfer Doesn't Pay?

C. G. Estabrook
The Inaugural Address: the Digested Read

Website of the Day
Who Profits From the Occupation?

January 26, 2009

Paul Craig Roberts
Speaking the Truth is a Career-Ending Event

Deepak Tripathi
The BBC's Day of Shame

Vijay Prashad
The India Lobby: Drunk with the Sight of Power

Peter Lee
Geithner's Pop Gun Volley at China

Allan Nairn
The Torture Ban That Doesn't Ban Torture

Uri Avnery
On the Wrong Side of History

John Sayen
The Next Shoe to Drop

Dave Lindorff
Afghanistan is No Threat to America

Lawrence R. Velvel
Investing with Madoff

David Macaray
Obama vs. Labor

Roger Burbach
Winds of Change in Cuba

Norman Solomon
The Ghost of LBJ

Website of the Day
Landscapes of Occupation

January 23 / 25, 2009

Alexander Cockburn
The Ghosts at Obama's Side

P. Sainath
The Freefalling Economy

Patrick Cockburn
In Israel, Detachment From Reality is the Norm

Saul Landau
Reasons for War?

Sasan Fayazmanesh
Our Current Economic Crisis: the Monks' Cure

Alan Farago
The Problem with the Stimulus

Christopher Brauchli
When Due Diligence is a One-Way Street

Andy Worthington
Return to Law?

Ron Jacobs
Obama's Pentagon: Bowing to the Masters of War?

Lawrence Velvel
Investing with Madoff: My Experience (Part Four)

Henry A. Giroux
The Audacity of Educated Hope

David Yearsley
The Music That Wasn't There: Chamber Music for Obama's Masses

Raymond F. Gustavson
Here We Go Again: General Shinseki and Veterans

Dave Lindorff
The Way Forward

Roberto Rodriguez
Fighting for Migrant Justice in the Desert

Dina Jadallah-Taschler
The Struggle of an Un-People

Fidel Castro
Meeting Cristina

J. Michael Cole
Can Obama's Shift on Terror Succeed?

Bob Fitrakis /
Harvey Wasserman
It's Time to Free Leonard Peltier

Ramzy Baroud
Breaking Gaza's Will

Mohammad Ali Shabani
The Aftermath of the War on Gaza

Richard Rhames
Panning for Pyrite on a Cold Day at the Mall

Stephen Martin
Voices in the Mirror

Lorenzo Wolff
Jurassic Radio

Kim Nicolini
Katrina's Endless Loop

Poets' Basement
Fleming, Henson, First, Jaramillo and Glendinning

Website of the Weekend
Cartoon Love

January 22, 2009

Paul Craig Roberts
Another Real Estate Crisis is About to Hit

Kathy Kelly
Worse Than an Earthquake

Allan Nairn
US Intel Nominee Lied About Church Murders

Lawrence Velvel
Investing with Madoff: My Experience (Part Three)

Andy Worthington
Halting the Gitmo Trials

Peter Morici
How to Fix the Banks

Joseph G. Davis
The First MBA Presidency and the Business Academy: a Damage Assessment

Adriana Kojeve
The Democrats on Israel: a Brief Oral History

Benjamin Dangl
Bolivia Poised for Historic Vote

Website of the Day
Support the Gaza Community Mental Health Program

January 21, 2009

Gabriel Kolko
Understanding Gaza

Harry Browne
Obama's Work Ethic

Michael Colby
Ready. Aim. Organize.

Lawrence R. Velvel
Investing with Madoff: My Experience

Audrey Stewart
Starting Over in Gaza

Wajahat Ali
Obama and the Muslims

Binoy Kampmark
The Marketing of Hope

David Kεr Thomson
Abolition

John Ross
In My Own Bones

Allan Nairn
Killer in Chief: Will This President Murder Civilians?

Sheldon Richman
The Peaceful Transfer of Violent Power

Website of the Day
Globistan

January 20, 2009

Chuck Spinney
Hosing Obama Israeli Style

Kathy Kelly
The Strongest Weapon of All

Raymond Deane
The EU, Gaza and the Lisbon Treaty

Ralph Nader
State Terrorism Against Gaza

Audrey Stewart
Why I am in Gaza

Jonathan Cook
Israel's Doctrine of Destruction

Harvey Wasserman
A Ten-Point Solar Agenda for Obama

Christopher Ketcham
Inauguration Ad Nauseam

Robert Jensen
A Citizen's Oath of Office

Dave Lindorff
Commie Chorus on the Mall: This Land Really is Made for You and Me

David Macaray
SAG Watches It All Slip Away

January 19, 2009

Kevin Alexander Gray
Time for an New Divestment Campaign

Uri Avnery
The Boss Has Gone Mad

Kathy Kelly
Respite in Gaza

Mike Whitney
What Obama Left Out of His Economic Recovery Plan

Lawrence R. Velvel
Investing with Bernie Madoff

Mats Svensson
For Fatima in Gaza

Harry Browne
Obama's Bard: Springsteen's Working on a Dream

Norman Solomon
The Return of Triangulation

Jeffrey Sommers
The Baltic Riots: Really Existing Thatcherism

Kenneth Libby
Manipulating MLK Day

Peter Ewart
Robbie Burns, Mackenzie and Gaza

Bob Sommer
"The Fierce Urgency of Now"

Website of the Day
Death of a Whaler

January 16-18, 2009

Alexander Cockburn
Hail to the Chief

Caoimhe Butterly
Terribly Bloodied, Still Breathing

Audrey Stewart /
Kathy Kelly
Suddenly Bombs Started Falling: Report from Gaza

Jeffrey St. Clair
High Plains Grifter: Geo. W. Bush, a Concise Biography

Ellen Cantarow
I Could Not Save a Single Child

Neve Gordon
How to Sell "Ethical" Warfare

Vijay Prashad
An African-American in Gaza

Jonathan Cook
Israeli Attack Injures 1.5 Million Gazans

Rannie Amiri
The UN in Israel's Crosshairs

Andy Worthington
Guantánamo's Forgotten Child

Joshua Frank
Forecasting Obama

Dave Lindorff
Prosecuting Bush and Cheney

Brian Cloughley
Who Runs America?

Belén Fernández
Changing the Equation

Missy Beattie
Peace and Justice Denied

Fred Gardner
Growing Pot for Research

George Ciccariello-Maher
"Oakland is Closed!"

John V. Whitbeck
Democracy Not Partition

Stephen Fleischman
Card Check

Mischa Gaus
Medicare for All! Tackling Union Opposition to Single-Payer

Saul Landau
The End of the Affair

Norm Kent
Perils of the Grow House

Alejandro López
Give Bush the Shoe! (and Send Us the Photo)

David Yearsley
The Glory That Was Dresden

James McEnteer
Doin' the Time Warp Again

Lorenzo Wolff
An Album That Lives Up to Its Cover

Kim Nicolini
Patti Smith's Dream of Life

Poets' Basement
Three Financial Poems by Brian J. Foley

Website of the Day
Lancet: Medical Conditions in Gaza

January 15, 2009

Pam Martens
Wall Street Powerhouses Invested Alongside Madoff

Karl Grossman
Obama and the Military - Industrial - Scientific Complex

M. Shahid Alam
Gaza's Shattered Mirror

Jules Rabin
Gaza Besieged, Gaza Mauled

Alan Farago
The Nail-Gun Bailout

Ron Jacobs
The State of Black America: From Oscar Grant to Barack Obama

Timothy Seidel
Just Violence in Gaza? The Calculus of Proportionality

George Ochenski
Why No Montana Wilderness?

Todd Chretien
Taking a Stand for Justice in Oakland

Bob Fitrakis /
Harvey Wasserman
Obama's Marijuana Prohibition Acid Test

Website of the Day
Uranium Watch

January 14, 2009

Henry A. Giroux
Killing Children With Impunity

Kathy Kelly
Cease Fire, Cease Siege

Franklin Lamb
A Second Front? Hezbollah Militants Chafe as Gaza Burns

Mike Whitney
The Big Contraction: Why the Stimulus Alone Won't Work

Paul Craig Roberts
The Humiliation of America

Glen Ford
Sullying Dr. King's Legacy: the Congressional Black Caucus and Israel

Aditya Chakrabortty
The End of Property Porn

Dave Lindorff
Fattening the Rats: Feeding at the Bailout Trough

Jonathan Cook
Israel Bars Arab Parties From Elections

David Swanson
Conyers Explains Why He Didn't Push Impeachment

Martha Rosenberg
Fragile: Handle with Risperdal

Website of the Day
Report of a Red Cross Worker in Gaza

January 13, 2009

Norman Finkelstein
The Facts About Hamas and the War on Gaza

Jonathan Cook
Is Israel Using Experimental Weapons in Gaza?

Michael Neumann
Hamas and Gaza: Slave Revolts and Passionate Evasions

Coleen Rowley /
William John Cox
No Victors in the War on Dissent

Robert Sandels
Cuba and the Obama Administration: Subversion Through Trade?

Saul Landau
The Changeling: an Obama Nightmare

David Swanson
What to Ask Eric Holder

Wajahat Ali
Waltzing with War Crimes

Sam Bahour
No Other Option? A View From the West Bank

Stanley Heller
Why It's Useless to Lobby Congress on Gaza

Robert Jensen
Beyond Grief and Rage

Robin Mittenthal
Eating Away at the Land That Feeds Us

Website of the Day
The 50 Most Loathsome People in America

January 12, 2009

Uri Avnery
The Blood-Stained Monster Enters Gaza

Paul Craig Roberts
Our Collapsing Economy

Mike Whitney
Israel's Moral and Political Insanity

Ewa Jasiewicz
Oh, Quiet Night: Only Six Homes Were Bombed

Bill Quigley
A Day in Gaza

Dave Lindorff
From Vietnam to Gaza

Bill and Kathleen Christison
Blowback From a Tragic Error: a Message to Barack Obama

Jonathan Cook
Israel Ponders the Third Stage

Andy Worthington
Seven Years of Guantánamo

Kara N. Tina
Oakland on Fire

Brenda Norrell
Palestinians and American Indians: Russell Means Breaks the Silence on Obama

Nour Kharma
A Plea From a Teen in Gaza: "Will I Die, Too?"

Website of the Day
The Villages Group: an Antiwar Alliance in Sderot

January 9/11, 2009

Alexander Cockburn
Israel's Onslaught on Gaza: Criminal, for Sure; But Also Stupid

Kathy Kelly
Tunnel Vision: Report from Arish, Egypt

Bill Quigley
Report From Rafah: Doctors Stopped at the Border

George Ciccariello-Maher
Oakland's Not for Burning?

Elaine C. Hagopian
Gaza: History Matters

Mike Roselle
Drowning in a Toxic River: What Can be Done to Save Appalachia?

Steve Hendricks
The Torturer-Elect?

Gary Leupp
Revisiting the Tale of Samson

Jonathan Cook
Outcry Over Israel's War Crimes

Karim Makdisi
The Ceasefire Plan: the UN Finally Acts, But Does It Mean Anything?

Rannie Amiri
Livni's Big Lie

Peter Morici
In the Jaws of a Depression

Peter Montague
Can Chemicals be Regulated?

Ralph Nader
Move Fast to Restore the Rule of Law

Andy Worthington
The Dying Days of the Guantánamo Trials

Nadia Hijab
A Music School Silenced in Gaza

Dan Bacher
Unholy Alliance: Nature Conservancy Backs Schwarzenegger's Big Ditch

Catherine Fenton
The American Peace Movement and Israel

David Macaray
Wal-Mart Caught Stealing

Valia Kaimaki
Why Greek Youths Took to the Streets

Richard Morse
Haiti's Gas Gang

David Yearsley
To Gotham City with Dexter Gordon

Charles R. Larson
The Horror, the Horror

Richard Rhames
Gaza and the Goon Squad Meet the Wizard

Stephen Martin
Meltdown Memo to Come?

Lorenzo Wolff
What They Sing About When They Sing About Love

Poets' Basement
Anderson, Beatty and Valentine

Website of the Weekend
Gaza Protest

January 8, 2009

Jean Bricmont /
Diana Johnstone
Gaza Seen From Paris

Franklin Lamb
How Dershowitz Misstates, Misrepresents and Misapplies the Law

Paul Craig Roberts
The Difficulty of Being an Informed American

Kevin Alexander Gray
Give Burris His Seat

Chris Floyd
The Enduring Priorities in Obama's Time of Change

Ewa Jasiewicz
Riding on Fire in Gaza

Steve Conn
Sanjay Gupta and Obama

Harvey Wasserman
Kill the Nuclear Stimulus!

Wayne S. Smith
An Opening to Cuba?

Linda Mamoun
Re-settling Gaza: the Real Goal of the Israeli Invasion?

Adam Turl
Unions and Young Workers

Chris Papaleonardos
Mourning Maria Dimitriadi

Website of the Day
On the Wing

January 7, 2009

Saree Makdisi
What Kind of Security Will This Barbarism Bring Israel?

Franklin Lamb
Bend Over Professor Dershowitz, It's Time for Your Check Up

William Blum
America's Other Glorious War

Belén Fernández
The Trauma Vortex: Israel's Monopoly on Psychological Suffering

Lawrence Davidson
What is New About Gaza?

Allan Nairn
Adm. Dennis Blair and the Church Killings in East Timor

Jonathan Cook
What is Israel's Objective?

Muhammad Idrees Ahmad
Watching the War on BBC

Deepak Tripathi
Bush, as He Leaves

Cal Winslow
Now is the Hour to Defend Democracy in the Labor Movement!

Manuel Garcia, Jr.
To Students Planning Careers: Be Mindful

Dr. Hannah Safran
No More Recycled Military Solutions

Website of the Day
CNN: Israel Broke the Ceasefire First

January 6, 2009

Pam Martens
It's All One Big Lie

Victoria Buch
Real Estate War in Gaza: the History and "Morals" of Ethnic Cleansing

Neve Gordon
Israel's New War Ethic

Tami Sarfatti /
Yonatan Mendel
What Silence Says: Gaza is Still Waiting on Obama

Mike Whitney
The Gaza Bloodbath

Alan Farago
After the Fall

Gary Leupp
A Hamas Coup d'Etat in 2007?

Larry Everest
Silent Partner: the US-Backed War on Gaza

Ron Jacobs
The New Iraqi Sovereignty

David Macaray
Union-Busting is Alive and Well

Stephanie Basile
Where's Anna's Money?

Stacey Warde
An Uncle's Unrest

Website of the Day
Israeli Refusenik on Gaza

January 5, 2009

Paul Craig Roberts
Will There be a Recovery?

Sousan Hammad
Phoning Home to Gaza

Wajahat Ali
Flying While Brown

Mats Svensson
Longing in Gaza

Jen Marlowe
Abeer's Baby

Muhammad Ali Khalidi
Gaza Phone Tag

Brian Cloughley
Israel is Immune From Criticism

Faheem Hussain
Gaza and India: a View From Pakistan

William Cook
Consider the Realities of Gaza

Dr. Trudy Bond
The Madness Among Us

Christopher Ketcham
The Revenge of the Blogger at the National Press Club: a Rotten Washington Interlude

Steve Early
Who Rules SEIU?

Dave Lindorff
When It Comes to Terrorism and POW Cases, Equal Justice Under Law is a Joke

Website of the Day
The Endangered Fish of the Colorado River Basin

January 2 - 4, 2009

Alexander Cockburn
Diary of 2008: an Incredible, Hope-Filled Year

Uri Avnery
Molten Lead in Gaza

Jonathan Cook
The Real Goal of the Gaza Assault

Paul Craig Roberts
Whatever Happened to Western Morality?

Brian Eno
Stealing Gaza: an Experiment in Provocation

Ralph Nader
America Must Stop Shirking Its Responsibility on Gaza

Omar Barghouti
UN Complicity in Israel's Massacre in Gaza

Graham Usher
Where Pakistan's Generals and the ISI Draw Their Lines

P. Sainath
The Economy is Worse Than It Appears

Belén Fernández
Pardon Our Dust: Israel's PR Campaign for Gaza

Deb Reich
Shiv'a in Gaza, December 2008

Gary Leupp
Defacing Mr. Jefferson's Wall: Preachers and the Inauguration

Michael Yates
Top Chef or Top Wage Thief? Tom Colicchio and the Economics of Restaurants

Joanne Mariner
How to Close Guantánamo

Seth Sandronsky
Funding the Israeli Military: the US Pipeline

Cynthia McKinney
We Lived to Tell the Story

Sonja Karkar
Israel's Dogs of War

Deepak Tripathi
Gaza in Perspective

Robert Fantina
Obama, Afghanistan and Israel

John Ross
The Year No One Can Remember

Norm Kent
The Heat on Duval Street: Why Head Shop Raids are Unfair and Unjust

Larry Portis
Syria and the Arab Barbie Doll--Before the Deluge

Richard Rhames
Is Conscience Dead?

Dee C. Lubell
We Come From the Sun: Zora Neale Hurston and Richard Wright

David Yearsley
A Gay German at the Courts of the Medici and Hanover, and of Course the BBC

Lorenzo Wolff
Joe Ely, the Fighting Rooster of Rock

Marc Catone
Looting Lennon's Legacy

Poets' Basement
Five Poems by Grzegorz Wróblewski

Website of the Weekend
Earth in High Rez

January 1, 2008

Jennifer Loewenstein
If Hamas Did Not Exist

Oren Ben-Dor
The Self-Defense of Suicide

Wajahat Ali
The U.S. Response to the Gaza Crisis: Unfair and Unbalanced

Saul Landau
In Cuba No One Man Could Steal $50 Billion From Other People

David Michael Green
What to Expect While We're Expecting

Website of the Day
Morbid Anatomy

December 31, 2008

Pam Martens
Wall Street's Collapse and the Ownership Society

Neve Gordon /
Jeff Halper
Where's the Academic Outrage Over the Bombing of a University in Gaza?

Ted Honderich
The First Casualty of Israel's War

Brian Cloughley
Five Little Girls on a Sofa: Gaza's One-Sided Images

Ron Jacobs
What is Hamas, Really?

Vijay Prashad
Hot Rod and His Sikh Warrior: Blago's Indian Connections

Franklin Lamb
Mr. Mubarak, Tear Down That Wall!

Mike Whitney
My Brilliant Career

David Macaray
What Really Killed the Auto Bailout

Richard Thieme
The Betrayal of the Commons

Mary Lynn Cramer
Who Wins What in Gaza?

Stephen Lendman
The Troubling Case of the Fort Dix Five

Worthy Group of the Day
Western Shoshone Defense Project

December 30, 2008

Paul Craig Roberts
May We No Longer Be Silent

Tariq Ali
The Gaza Ghetto and Western Cant

Robert Bryce
The $775,000-a-Year GI

Jonathan Cook
Electioneering with Bombs

Gary Leupp
The Fishbarrel War

Dave Lindorff
Tough Guys Don't Walk: Will Cheney Seek a Pardon?

Brian McKenna
Ted Downing and Troublemaker Anthropology

John Walsh
The End of the Green Party

Ramzy Baroud
Gaza and the World

Bob Sommer
The Education of David Frost

Worthy Activist of the Day
Support Marie Mason

December 29, 2008

Jennifer Loewenstein
Israel's Attempted Endgame in Gaza

Neve Gordon
What, Exactly, is Israel's Mission?

Joshua Frank
Obama and the "Special Relationship"

George Salzman /
Manuel Garcia, Jr.
The War Against Palestine: Exception From Humanity

Norman Solomon
A Hundred Eyes for an Eye

Ewa Jasiewicz
Gaza Today: "This is Just the Beginning"

Rob Larson
The Banks Laugh All the Way to the Bank

Kenneth Libby
Arne Duncan's Dark Years in Chicago

Robert Weissman
The 10 Worst Corporations of 2008

Elsa Johnson
High Noon at Black Mesa: Bush's Farewell Gift to Peabody Coal

Nicola Nasser
Resolution 1850: Bush's Parting Gift

Belén Fernández
Hanukkah Games

Worthy Group of the Day
Nuclear Information and Resource Service

December 26-28, 2008

Alexander Cockburn
The Medusa's Head

Dr Eyad Al Serraj
The Boming of Gaza: "An Earthquake on Top of Your Head"

Jeffrey St. Clair
Cancerous Air

Bradley Simpson
Obama's New Intel Chief, Dennis Blair, Ran Interference for Indonesia's Butchers

Ralph Nader
Government Without Laws

Gary Leupp
Obama and the Graveyard of Empires

Ellen Cantarow
Richard Falk, Israel and the NYT

Matt Landon
The Great Coal Ash Flood: a Report From Swan Pond Road

David Macaray
SAG's Terrible Dilemma

Patrick Bond
End of Neoliberalism? Sorry, Not Yet

Norm Kent
Invoking Bigotry: Obama and Rick Warren

Brian T. Ketcham
Fuel Efficiency is Easy--Just Don't Let Detroit Tell You How to Do It

Rannie Amiri
War Clouds Over Gaza

Larry Portis
Changing the Ethnic Vocabulary

Richard Rhames
Welcome to Soup Kitchen America

Stephen Lendman
29 Red Flags: Early Suspicions About Bernard Madoff

James L. Secor
Unheralded Coup

Ramzy Baroud
Iraq, the Plot Thickens

Harold Pinter
Art, Truth and Politics: the Nobel Lecture

Cpt. Paul Watson
Tracking the Cetacean Death Star

Howard Lisnoff
Nixon's Cambodian Shock Treatment

Michael Dee
The Bill of Rights, Killed in Action by the War on Drugs

Steve Conn
Eight Predictions for 2009

Poets' Basement
Valentine, Kaung, Moser and Graham

Worthy Group of the Weekend
United Mountain Defense

December 25, 2008

Judy Gumbo Albert
What Were Those 1960s Terrorists Thinking, Anyway?

Rev. William E. Alberts
The Sole of Christmas

Hannah Mermelstein
Caution: Settlers Ahead

Worthy Group of the Day
Citizens' Coal Council

December 24, 2008

Bill Quigley
Five Bailout Lessons From Katrina

Saul Landau
Then and Now: Venezuela and Cuba, 1960-2008

Sam Smith
Evangelism and Politics

Brian Cloughley
Torture, Slaughter and Lies

John Ross
Where's al-Zaidi's Pulitzer?

Eric Walberg
Cold War Shivers

Norm Kent
What Will Obama Do About Marijuana?

Stephen Martin
Reasons for Cheerfulness

Worthy Group of the Day
Collateral Repair Project

December 23, 2008

Michael Hudson
The Ponzi Paradigm

Michael Yates
The Tombstone Economy

Chuck Spinney
The New York Times Flames Out in Defense Dogfight

Vijay Prashad
India's Reckless Road to Washington, Through Tel Aviv

Brian Horejsi
Interior Decorating: Obama, Salazar and the Future of America's Public Lands

David Macaray
Obama's Best Pick?

Neil Watkins /
Sarah Anderson
Ecuador's Conscientious Default

David Michael Green
Hey, Reagan Democrats! Now Do You Get It?

Worthy Group of the Day
Focus on the Corporation

Weekend Edition
January 30 / February 1, 2009

How Schemes to Rescue Wall Street Gamblers Are Prolonging this Recession

"Too Big to Fail:" a Bailout Hoax

By ISMAEL HOSSEIN-ZADEH

Using the “too big to fail” scare tactic, the U.S. government has kept a number of terminally ill Wall Street gamblers on an expensive life-support system that is estimated to cost taxpayers $8.5 trillion [1]. In light of the fact that (according to IRS Data Book) there were 138 million taxpayers in 2007, this figure represents a burden of $61,594.20 per tax payer. Or, to put it differently, it represents a burden of $28,333.33 per man, woman and child for the entire U.S. population.

This massive giveaway of public money has been devoted to a wide range of fraudulent programs, including asset purchases of insolvent institutions, loans and loan guarantees, equity purchases in troubled financial companies, tax breaks for banks, assistance to a relatively small number of struggling homeowners, and a currency stabilization fund.

The rationale behind this unprecedented taxpayer rip-off is that the current economic crisis is largely due to the ongoing credit crunch in financial markets; and that government injection of money into financial institutions will help unfreeze the credit market by absorbing toxic assets off their balance sheets.

Despite the massive infusion of public money into the coffers of Wall Street giants, however, the banking industry has shown no interest in lending. Government’s showering mega banks with taxpayers’ money is thus very much like throwing people’s money into a black hole without any questions asked as to where it all ended up, or how it was spent. Not surprisingly, the credit crunch continues unabated and economic conditions deteriorate out of control.

The question is why? If “illiquidity is the core economic problem,” as policy makers argue, why is then the government’s injection of enormous amounts of liquidity failing to unfreeze the credit market?

The answer is that government policy makers, Wall Street financial gamblers, and the mainstream media are misrepresenting the ongoing financial difficulties as a problem of illiquidity or lack of cash. In reality, however, it is not a problem of illiquidity or lack of cash, but of insolvency or lack of trust and, therefore, of hoarding cash. The current credit crunch is a symptom, not a cause, of the paralyzed, unreliable financial markets.

John Maynard Keynes, the well-known British economist, attributed this type of credit crunch to what he called “liquidity trap,” not lack of liquidity, implying that under market conditions of widespread insolvency and distrust lending comes to a standstill not because money is scarce but because it is hoarded, or “trapped,” as a safe instrument of preserving assets.

The theory of “liquidity trap” has been corroborated by empirical evidence from the Great Depression of the 1930s, as well as from the recent financial difficulties in Japan—known as “Japan’s lost decade.” It is also evidenced in the current credit crunch in global markets.

There is strong evidence that major money-center banks (such as Citigroup and Bank of America) that have received huge sums of the bailout money are technically bankrupt, but they are not declared as such out of a fear that it may cause turbulence in global financial markets. “Here is the ugly, unofficial truth that neither Wall Street nor the government will acknowledge: the pinnacle of the US financial system is broke—with perhaps $2 trillion in rotten financial assets on the books. Nobody knows, exactly. The bankers won't say, and regulators won't ask, or at least don't dare tell the public” [2].

By virtue of years of Wall Street’s expanding bubble, which came to a burst in the late 2007 and early 2008, these banks managed to accumulate huge sums of fictitious capital on their balance sheets. However, since there is no transparency and the extent of toxic assets thus accumulated is not disclosed, nobody really knows the amount of the worthless assets that are hidden in the books of major Wall Street banks and brokerage houses [3].

One thing is certain, however: the amount of these toxic assets is in terms of trillions or (as some experts point out) tens of trillions of dollars [4]. There is simply not enough money—in the United States or in the entire world—to bailout these toxic assets. Although not many people know of this fraudulently kept secret, the banks of course know it. And that’s why inter-bank lending has come to a standstill, as the banks do not trust each other or, for that matter, businesses and consumers.

This explains what happened to hundreds of billions of bailout dollars that government bestowed upon Wall Street mega banks: they simply grabbed the loot and stashed it into their coffers, without dispensing a single penny of it as credit to businesses or consumers.

It also explains the continued freeze of credit markets and the ongoing financial or market stalemate: neither the giant financial institutions (in collusion with government policy makers) are willing to accept the consequences of their gambling policies and submit to their deserved fate of bankruptcy; nor is there enough money to bailout all of their toxic assets.

Either of these two options could remove the massive toxic assets from financial markets and restore confidence in lending. But since the former alternative is not acceptable to the powerful financial interests and the latter option is not feasible due to insufficient money to buy a ton of worthless assets, the oppressive debt overhang continues to keep credit markets frozen and the economy paralyzed—hence, the persistent stalemate and prolonged crisis.

In a subtle but real sense, this stalemate is a reflection of two opposing forces: on the one side stand the competitive forces of market mechanism that require exposure, transparency and the cleansing of the balance sheets of the insolvent mega banks. On the other side stand the monopolistic power of these financial giants, supported by government policy makers, that is preventing the forces of competition from determining the value of their toxic assets.

The apparent rationale behind the refusal to acknowledge the bankruptcy of Wall Street mega banks is that they are “too big to fail,” implying that admission of their failure may cause major turbulence in global financial markets. A closer examination of this claim reveals, however, that it is more of a scare tactic designed to protect the powerful interests vested in these financial giants than a genuine rationale to protect national interests.

While it is true that exposing Wall Street mega banks for what they are—bankrupt—may cause a severe short-term jolt to global financial markets, such a short-term turbulence would be a necessary price to pay for a “clean break” from the current financial stalemate and a long, protracted economic malaise. It would also serve as an effective way to prevent massive redistribution of resources from taxpayers to Wall Street gamblers. In the history of socio-economic developments such cataclysmic but inescapable shocks are variously called “regenerative or creative destruction,” “shock therapy,” or “birth pangs” of a new dawn and a fresh start.

The alternative to a painful but swift cleansing of the mega banks’ toxic assets is to keep these technically bankrupt banks on a financial life-support system that, like parasites, would suck taxpayers’ metaphorical blood, drain national resources, and eventually corrupt or devalue the dollar. What’s more, there is no timeframe as to how long these mega banks should or would be kept on the costly crutches provided by the taxpayers, which means the financial stalemate and economic paralysis can go on for a long time. Two historical precedents can be instructive here.

In the face of the Great Depression of the 1930s, the Hoover administration, using the “too big to fail” scare tactic currently used to bail out the insolvent Wall Street Gamblers, created the Reconstruction Finance Corporation that showered the influential bankers with public money in an effort to save them from bankruptcy. All it did, however, was to postpone the inevitable fate of the banking industry: almost all of the banks failed after nearly three years of extremely costly bailouts policies.

In a similar fashion, when in the mid- to late-1990s major banks in Japan faced huge losses following the bursting of the real estate and/or lending bubble in that country, the Japanese government embarked on a costly rescue plan of the troubled banks in the hope of “creating liquidity” and “revitalizing credit markets.” The results of the bailout plan have been disastrous.

Although the amount of sour assets has never been disclosed, it is obvious (in retrospect) that such worthless assets must have been colossal. For despite a number of huge bailout giveaways, no noticeable improvement in the ailing conditions of Japan’s troubled banks is visible.

Not surprisingly, more than a decade after the debt overhang of Japan’s troubled banks first came to surface in 1997-98, most of the affected banks continue to be vulnerable, the nation’s credit market still suffers from a lack of trust, and the broader economic activity remains anemic.

So, the undisclosed, tightly-kept-secret tons of toxic assets simply cannot be bailed out. Not only will efforts to do so fail, they are also bound to make things worse by draining public finance, redistributing national resources in favor of incompetent and irresponsible financial institutions, accumulating national debt, weakening national currency, and prolonging economic crisis.

Only by burying the oppressive deadweight of mountains of fictitious assets and cleansing the market off their toxic effects can trust be restored in credit markets. This requires opening the books of the troubled financial institutions and letting them go belly up if they are technically bankrupt. As William Greider of The Nation magazine puts it, “Facing facts will be painful, but it's better than continuing a costly charade” [5].

The current policy of keeping the toxic assets of insolvent financial institutions on costly crutches is nothing short of price fixing. The logical way to realistically evaluate the price of these assets is, therefore, to do away with the current policy of price fixing and let market forces determine the price. As Mike Whitney points out,

The appropriate way to establish a price for complex securities in a frozen market is to create a central clearinghouse where they can be auctioned off to highest bidder. That establishes a baseline price, which is crucial for stimulating future sales. . . . Bernanke [the head of the Federal Reserve Bank] would be better off letting the market decide what these debt-instruments are really worth. There are always buyers if the price is right [6].

While pulling the plug on the insolvent banks and letting them go belly up may cause short term convulsions in financial markets, it will have several advantages that would far outweigh such temporary pains.

To begin with, this would shorten the wrenching economic crisis and usher in a clean start. Second, it would avoid rewarding mismanagement, inefficiency and irresponsibility. As Jim Rogers, founder of the Quantum Fund, points out:

What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent. . . . What’s happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics.

“Governments are making mistakes. They’re saying to all the banks, you don’t have to tell us your situation. You can continue to use your balance sheet that is phony…. All these guys are bankrupt, they’re still worrying about their bonuses, they’re still trying to pay their dividends, and the whole system is weakened [7].

Many smaller but financially sound regional and community banks could greatly benefit from the opportunity to buy out the realistic, market-based or devalued assets of the insolvent mega banks. Not only will this benefit the healthier financial institutions, it will also lighten taxpayers’ bailout burden.

Third, in light of the fact that the bailout giveaway dollars represent a subtle redistribution of national resources from taxpayers to Wall Street gamblers, declaring these gamblers bankrupt would protect taxpayers from having to shoulder the costly bailout burdens, thereby helping to protect the nation from further plunging into debt. There is absolutely no reason why taxpayers should bailout giant banks, insurance companies, investment banks, and hedge funds.

Indeed, for all the money that the government is (or would be) paying for the insolvent banks’ toxic assets, taxpayers could actually own those banks if they are let to be priced according to realistic market values, which are bound to be only a small fraction of their inflated book values.

For example, in exchange for the $20 billion bailout money that the Citigroup received on November 23rd, 2008, the government/taxpayers could technically take the possession of the bank since its net market worth at the time was estimated to be only equal to $20.5 billion—down from $255 billion in mid 2007 [8].

But Citigroup has received much more than $20 billion of taxpayers’ money. The $20 billion injection was in addition to the $25 billion the company had received the month before (October 2008) under the Troubled Asset Relief Program (TARP). More importantly, at the same time that Citigroup received the $20 billion injection, it also “received $306 billion of U.S. government guarantees for troubled mortgages and toxic assets to stabilize the bank after its stock fell 60 percent last week” [9].

Obviously, this means that, while Citigroup’s ownership remains legally in the existing private hands, taxpayers have, in fact, paid for the company’s net market value of $20.5 billion 17 times over with the $351 billion paid to date (351 = 20 + 25 + 306).      

With varying degrees, what is true in the case of Citigroup is also true in the case of a number of other mega banks. For example, Bank of America has received $45 billion cash and $118 billion worth of guarantees against bad assets. Yet, its market value as of January 20th, 2009, was estimated to be only $33 billion—down from $228 billion in mid-2007 [10] This means that, like the case of Citigroup, taxpayers have purchased (paid for) Bank of America many times over.

That the ownership of these banks remains, nonetheless, in the existing private hands is indicative of the fact that government policy makers are more committed to the interests of Wall Street gamblers than those of taxpayers.

In the absence of corrupt, incestuous Wall Street-government relationship (including the new, Obama administration), nationalization of insolvent financial institutions is not as complicated or difficult as it sounds. It is certainly easier than public ownership and management of manufacturing enterprises that require much more than record keeping and following regulatory or legal guidelines. “Nationalizing the banks sounds more radical than it is, since banking law already empowers regulators to impose extraordinary controls and close supervision over troubled institutions” [11].

The idea of nationalizing banks under conditions of a financial meltdown is not necessarily socialistic or ideological. It has, indeed, been occasionally used to deliver capitalism from its own systemic sins. Thus, in the face of the Great Depression of the 1930s, and following the Hoover administration’s failed policy of trying to bailout the insolvent banks, the FDR administration was compelled to declare a “bank holiday” in 1933, pull the plug on the terminally-ill banks and (temporarily) take control of the entire financial system.

Likewise, in the face of the collapse of its banking system in early 1992, the Swedish state assumed ownership and control of all the insolvent banks in an effort to revive its financial system and prevent it from bringing down its entire economy. While this wiped out the existing shareholders, it turned out to be a good deal for taxpayers: not only did it avoid costly redistributive bailouts in favor of the insolvent banks, it also brought taxpayers some benefits once banks returned to profitability.

Both in Sweden and the United States once profitibility was returned to insolvent banks (following policies of nationalization), their ownership was once again returned to private hands! It is perhaps this kind of government commitment to powerful financial-corporate interests that has prompted a number of critics to argue that one definition of capitalism is that it is a system of socializing losses and privatizing profits [12].

This is, indeed, a classical political economy argument, maintaining that “in the advanced capitalist societies, what actually happens is that state policies assure that more resources flow to the rich than to the poor. . . . The term corporate welfare is widely used to describe the bestowal of favorable treatment to particular corporations by the government. One of the most commonly raised forms of criticism are statements that the capitalist political economy toward large corporations allows them to ‘privatize profits and socialize losses’,” [13].

Few governments in the world have been so utterly under the influence of corporate-financial interests as in the United States. According to the Government Accountability Office (GAO), two-thirds of corporations in America paid no federal income taxes at all between 1998 and 2005. This includes a fourth of all large US companies (those with assets worth of $250 million or more). An earlier GAO report showed that 61 per cent of US corporations paid no federal income taxes between 1996 and 2000—a period of high growth and huge corporate profits [14].

After reviewing these and similar statistics, which indicate a steady redistribution of national resources from the bottom up since the early 1980s, P. Sainath, author of Everybody Loves a Good Drought, wrote: “There's 'corporate governance' for you—they simply run the country. Administrations exist. Corporations govern” [15].

There are strong indications that Barack Obama’s administration is no exception to this pattern—all the promises of change and elevated hopes notwithstanding. Of course, this is not to deny the truly historic importance of his election, an event or victory that should be celebrated as such.

Nor is it meant to deny or downplay the importance of a number of reforms he was elected to bring about. These would include improvements in largely non-economic (or non-class) issues and areas such as civil liberties, the environment, regulatory issues, race relations, diplomatic protocols, and so on—areas that would rehabilitate some of the excesses and damages done by George W. Bush without burdening powerful financial-corporate interests.

Obama’s changes, however, would not include some of the more fundamental economic or class issues such as reversing or stopping the costly bailout giveaways to Wall Street gamblers and nationalizing the insolvent banks, downsizing the military establishment and reallocating part of the military to non-military public spending, implementing an affordable universal healthcare program, reversing the excessive neoliberal tax cuts for the wealthy, and the like.

Obama’s commitment to powerful business interests is best reflected in his unwavering support for giant Wall Street gamblers. Instead of calling for dismissal and accountability of the economic team of advisors that played a catalyst role in bringing about this systemic financial meltdown, he has placed them in decision-making positions, ensuring the continuance of the failed Bush policies of looting taxpayers and giving it to Wall Street financial titans.

The longer his administration (in concert with the labial congress) continues on this doomed path, the longer the crisis, the more indebted the nation, and the more oppressive the economic hardship will get.

There is some speculation that the Obama administration might be compelled to nationalize the insolvent banks. Considering the financial-economic team of neoliberal advisors who would be in charge of carrying out the rumored nationalization, this measure would be committed largely to the powerful Wall Street interests. If  implemented, the measure would be tantamount to the proverbial palace coup designed to salvage the rule of the royal family, that is, of the financial Kleptocracy.

There is no indication that, in the process of the rumored bank nationalization, there would be a seat around the decision-making table for taxpayer representation, or any room for public oversight and control of the nationalization policies and procedures. Instead, as pointed out by Jerry White, “taxpayers would assume responsibility for the worthless assets held by the banking giants so they could take these liabilities off their books and once again become profitable. After a temporary period of government direction, the banks would be turned over once again to private investors, who would buy the now lucrative shares for pennies on the dollar” [16].

While representing an improvement over the currently-confused bailout/rescue plans, this kind of (Wall Street-Sponsored) bank nationalization would not be able to wipe out all of the worthless assets of the insolvent banks and bring about an effective economic recovery, as it would not break free from the fraudulent influence of powerful financial interests.

Only a swift and unadulterated nationalization that does not pay taxpayers’ cash for gamblers’ trash would be able to cleanse the badly tainted financial markets of the gamblers toxic assets, shorten economic pains and cut taxpayers’ losses. By bringing the insolvent banks under public control (independent of the Treasury or the Fed that have abundantly proven to be representing the interests of Wall Street giants, not the people), this measure can then lead to the issuance of loans at reasonable rates by the thus nationalized banks, thereby unfreezing credit markets and rekindling investment and economic activity.

Furthermore, by allowing insolvent homeowners to pay affordable mortgage installments based on reduced or realistic home prices, this alternative would help citizens facing the specter of homelessness stay in their homes, thereby also gradually restoring trust in the mortgage market.

This type of nationalization of insolvent banks would, of course, require new politics on the part of the people who are suffering the most from the daunting economic hardship but do not seem to have a voice or representation in the fraudulent process of the bailout scam, which means the overwhelming majority of the American people.

The new politics has to go beyond the traditional channels of demanding change. It needs to draw upon the lessons of the protest movements of the 1930s that squeezed  all kinds of economic guarantees and social safety net programs (known as the New Deal reforms) out of the Congress and the FDR administration.

The financial-corporate governments rarely, if at all, carry out grassroots-targeted reforms voluntarily. Only people pressure, pressure that would include a sustained and widespread protest movement, that is, pressure that would threaten the status quo, can bring about reforms that would benefit the grassroots.

Ismael Hossein-zadeh, author of the recently published The Political Economy of U.S. Militarism (Palgrave-Macmillan 2007), teaches economics at Drake University, Des Moines, Iowa.

References:

[1] Kathleen Pender, “Government bailout hits $8.5 trillion,” San Francisco Chronicle (26 November 2008)

[2] William Greider, “Time for a Bank Holiday,” The Nation (19 November 2008)

[3] Mike Whitney, “Every Trick in the Book,” Information Clearing House.

[4] Ellen Brown, “A Radical Plan for Funding the New Deal,” YES! Magazine (14 December 2008)

[5] William Greider, “Time for a Bank Holiday,” The Nation (19 November 2008)

[6] Mike Whitney, “Every Trick in the Book,” Information Clearing House.

[7] Jonathan Stempel, “Jim Rogers calls most big U.S. banks bankrupt," Reuters (11 December 2008)

[8] Anil Kashyap, Professor at University of Chicago’s Booth School of Business, as quoted by Kathleen Pender, “Government bailout hits $8.5 trillion,” San Francisco Chronicle (26 November 2008; see also the Financial Times Alphville.

[9] Bradley Keoun, “Citigroup Gets Guarantees on $306 Billion of Assets,” Bloomberg (24 November 2008).

[10] MISH’E Global Economic Trend Analysis, “Extreme Leverage In Reverse Portends Global Systemic Crash"; based onto Financial Times Alphaville. 

[11] William Greider, “Time for a Bank Holiday,” The Nation (19 November 2008)r; see also Naomi Klein, Robert Kuttner and Michael Hudson, Robert Kuttner and Naomi Klein, “Dissect Obama's New Economic Team & Stimulus Plan."

[12] Michael Harrington, The Other America (Penguin Books: 1962).

[13] As described in Wikipedia: “Socialism for the rich and capitalism for the poo."

[14] As cited by P. Sainath, “The Free Falling Economy,” Counter Punch (23 January 2009).

[15] Ibid.

[16] Jerry White, “The capitalist market and Obama’s stimulus plan,” World Socialist Web Site (27 January 2009).

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