Now even the rich must admit they’re getting richer while the poor are getting poorer

According to a headline in a Wall Street Journal e-mail bulletin, based on IRS data, “the wealthiest 1% of Americans earned 21.2% of all national income in 2005 — a postwar record. The bottom 50% made 12.8%.”

According to the article, “academic research suggests the rich last had this high a share of total income in the 1920s.

“Scholars attribute rising inequality to several factors, including technological change that favors those with more skills, and globalization and advances in communications that enlarge the rewards available to ‘superstar’ performers whether in business, sports or entertainment.”

Meanwhile, “The data highlight the political challenge facing Mr. Bush and the Republican contenders for president. They have sought to play up the strength of the economy since 2003 and low unemployment, and the role of Mr. Bush’s tax cuts in both. But many Americans think the economy is in or near a recession. The IRS data show that the median tax filer’s income — half earn less than the median, half earn more — fell 2% between 2000 and 2005 when adjusted for inflation, to $30,881. At the same time, the income level for the tax filer just inside the top 1% grew 3%, to $364,657.”

What we don’t know from this article is how many people are working multiple jobs to accumulate even this relatively low income, or how many do so without benefits, such as health care or paid vacation. We don’t know how many do so with no hope of advancement or how many do so and spend most of their income on rent. For this, we need an article on Alternet, which describes working class prospects:

While the Bush administration and others on the right try to paint Americans’ growing economic insecurity as some sort of irrational manifestation of the Zeitgeist — a common claim is that the economy is going gang-busters but people are too down about the mess in Iraq to notice — the truth is that stagnating wages and rising costs for housing, food, healthcare and gas are driving working America’s pessimism. As one participant who hadn’t seen a raise in some time put it, “There’s no progress. There’s no option. No more salary. That’s it. We’re static there. We all [have a] fear of being dismissed … if you leave there’s like ten people in line waiting to get your job.”

Healthcare and retirement security are both key issues for working people that the business class in D.C. dance around but never address. Two-thirds of those surveyed said that they are either now or have recently been without health insurance, and more than half believe that they will retire at a later age than they had planned just five years ago.

And things are only getting worse. Economic security is decreasing. Intergenerational mobility, a measure of the economic prospects between generation, is decreasing, meaning that today’s children have less opportunity to do better than their parents.

Robert Scheer on Che Guevarra

In Robert Scheer’s analysis, Che Guevarra “was either an Argentine Trotskyite or an anarchist, but Che was not a Communist in what we think of as the heavily entrenched, bureaucratized Cuban mold. Che was restless in post-revolutionary Cuba because his anarchist temperament caused him to bristle at the emerging bureaucracy. He was, like Trotsky in his dispute with Stalin, skeptical that the kind of socialism that truly served the poor could survive in just one country; hence, he died attempting to internationalize the struggle.

“It also turned out that killing Che was a big mistake, as his message was spread more effectively by his execution than by his guerrilla activities, which were, after he left Cuba, quite pathetic. This is the case in Latin America, where political leaders he helped inspire are faring better than those coddled by the CIA. Daniel Ortega, whom the CIA worked so doggedly to overthrow, is the elected president of Nicaragua. Almost all of Latin America’s leaders are leftists, some more moderate than Che (as in Brazil), and others as fiery as the guerrilla (in Venezuela), but all determinedly independent of yanqui control. Fortunately, they differ from Che in preferring the ballot to the gun. But all recognize that poverty remains the region’s No. 1 problem and that the free-market model imposed by the United States hardly contains all the answers.”

More on El-Masri

The Los Angeles Times offers considerable background on the case, particularly as regards the secrecy defense:

The state secrets rule dates to 1953 with a case involving the crash of a B-29 bomber. When the widows of three crewmen sued and sought the official accident report, the Air Force refused, saying the plane was on a mission to test secret electronics equipment.

The court ruled, in U.S. vs. Reynolds, that the need to protect the nation’s security outweighed the widows’ claim. Recent disclosures show that the justices apparently had been misled. When the accident reports were declassified, they revealed the plane had been poorly maintained but did not contain military secrets.

Since then, the state secrets privilege has been invoked by every president to shield certain evidence from being disclosed in court.

El-Masri was not even in the United States when he was seized. According to the story:

El-Masri was on vacation in the Balkans in 2003 when he was stopped at a border crossing in Macedonia and his passport was taken. He said he was questioned intensely and accused of associating with Islamic radicals.

According to his complaint, he was then blindfolded, taken to an airport and stripped of his clothes by a team of masked men. He said they drugged him and chained him inside an airplane, and he was flown to Afghanistan, where he was held in a CIA-run prison for five months. . . .

Two years ago, German Chancellor Angela Merkel said after a meeting with Secretary of State Condoleezza Rice that U.S. officials “admitted this man had been taken erroneously.” In January of this year, German prosecutors issued arrest warrants for 13 CIA agents for their roles in the abduction and abuse of El-Masri.

But the Germans have dropped these warrants after the Bush administration indicated it would not cooperate.

Pelosi passes the buck

In November 2006, voters handed control of both houses of Congress to the Democrats, despite their complicity in Bush administration policy to date, expressly to get the United States out of Iraq. That’s the Democrats, not the Republicans, for those who think there is a significant difference.

Speaker of the House Nancy Pelosi now asserts that it is Republicans who have the power to get us out. Despite the facts that it was the Democrats who were elected to do just this, and that few, if any, Republicans have ever promised anything of the sort.

Activists who want to target congressional Democrats for lack of action on the war are misguided, the speaker argued. “I think it is a waste of time for them to go after Democratic members. They ought to just persuade Republican members who are representing areas that are opposed to the war,” she said. “We said we would change the debate; we would fight to end the war. We never said we had the veto pen or the signature pen.”

Just so we’re clear on what is really going on, Pelosi expressed support for domestic spying.

Pelosi disputed a story in Tuesday’s New York Times that reported that Democrats appear ready to make concessions that would extend for several years the blanket authority for the National Security Agency to eavesdrop that was originally granted by Congress last August in the “Protect America Act.” One reason, the story said, was fear that Democrats will be called soft on terror if they insist on strict curbs on gathering intelligence.

“This isn’t Democrats being concerned about the next election. This is about Democrats saying the law must be followed. And we will collect whatever intelligence we need to protect the American people under the law,” the speaker said.

This sounds neither like a change in the debate, nor, if the Constitution can be considered law, let alone the highest law in the land, a demand that “the law must be followed.” It sounds like Democrats, elected to do one thing, instead continue to behave as they did before the election; as many besides me have pointed out, it shows that Democrats not only do not oppose Republicans, but support them and it shows that those who seek change still have no viable choice at the ballot box.

Supreme Court, by default, endorses police state

In a case that highlights the United States government’s ability to detain persons at will, and to hold them incommunicado, for “interrogation,” while denying any semblance of due process, the Supreme Court has dismissed without comment the case of Khaled al-Masri, who “alleges he was tortured during five months in detention, four months of which were spent in a prison in Kabul, Afghanistan, nicknamed the ‘salt pit’.

“On his flight to Afghanistan, he says, he was stripped, beaten, shackled, made to wear ‘diapers’, drugged and chained to the floor of the plane.

“By his account, he was finally released in Albania after the Americans realised they had got the wrong man.”

Lower courts had refused to hear the case on grounds of national security. By this action, the Supreme Court has affirmed that a government claim of “national security” trumps the inalienable rights of human beings. Until now, it has been possible for me to hold out hope that many actions taken by the Bush administration and all too often endorsed by Congress to abridge civil liberties would not survive a court challenge. I can no longer hold that hope. Where before I merely suspected that we live in a police state, I no longer see any room for dispute.

Just Foreign Policy Iraqi Death Estimator Revolution is no longer merely desirable. It has become a necessity. I have worried that violent revolution would simply replace one set of thugs with another. But we already have thugs who have killed over one million people in Iraq, who inherit an unbroken legacy of murderous imperialism dating back even to before the U.S. was even a country. In our name, these thugs are killing people. They are “disappearing” them. And on the mere suspicion that persons may pose a threat to national security they may hold and torture them even after they have concluded that they are not such a threat. And they do all this while continuing to overlook our own domestic terrorist white supremacist organizations and their own legacy of state terrorism against peoples around the world.

This set of thugs must be replaced. We have asked questions for too long. The time has come for action.

Last minutes of Che Guevara

Forty years ago today, Che Guevara was shot in Bolivia. Walt Rostow wrote a memo to President Lyndon Johnson in which he wrote that the killing “shows the soundness of our ‘preventative medicine’ assistance to countries facing incipient insurgency.” But apparently this was not a unanimous view.

CIA operative Felix Rodriguez now tells the Independent, “I went into the room, I stood in front of him and said ‘Commander Guevara, I’m sorry, I tried my best. But this is an order from the Bolivian high command’. He perfectly understood what I was saying; he turned white like a piece of paper, I’ve never seen anybody look depressed like he did. But he said, ‘It’s better this way, I should have never been captured alive.’ It was one o’clock in the afternoon, Bolivian time, when we left that area. And between 1.10 and 1.20, I heard the burst.”

Afghanistan mission stresses NATO alliance

A story in the Telegraph confirms what only makes sense about NATO involvement in Afghanistan:

Asked whether the future of Nato was at stake, [U.S. General Dan] McNeill said: “I think all 26 members realise that from a military context, and that is primarily why Nato is here, this is a decision point. Either we are going to get it done, or we won’t.”

McNeill claims that there are insufficient NATO forces “to clear and hold every part of this country.” I have read elsewhere that while NATO forces defeat Taliban forces in every engagement and supposedly enjoy the support of the Afghanistan people (but see this story in Afghan News Net) and a democratically elected (!) government, the Taliban are making strategic gains. According to the Guardian, “wide areas of the south – in Helmand, Kandahar and Uruzgan provinces – are controlled by the Taliban, and the fighting is migrating north, into Ghazni province – where 23 South Koreans were kidnapped in July – and Wardak, right next door to Kabul, the capital.”

But support for the United States in Afghanistan frees U.S. forces for Iraq, and, potentially, Iran, and helps to sustain U.S. hegemony around the world. Citizens in the rest of the world aren’t nearly so deluded as in the U.S.; the Telegraph story observes that “political pressure grows in Canada and Holland to downgrade the combat status of their soldiers in southern Afghanistan, where British troops are based.

“The governments of Germany and Italy are also under huge pressure over their deployments in the north.” I have previously written on the fragility of the political situation in Pakistan.

The U.S. relies on its self-image as a “shining city on the hill” to sustain imperialism. To the rest of the world, this appears as hubris. Hubris might not seem so bad, until all of a sudden the support the U.S. is counting on isn’t there.

Ahmadinejad is Iran’s Bush?

In an InterPress Service story:

“I was astonished when I was [in Iran]. I actually had more on-the-record conversations criticising Ahmadinejad with Iranian politicians and businessmen than I have here in Washington criticising Bush,” said [Newsweek Senior Editor Michael] Hirsch.

In one interview with an Iranian newspaper editor, Hirsch said that the editor remarked, “You know, one of the things we say around here is that Bush is your Ahmadinejad.”

“They’re similar personalities, both sort of pandering to their conservative religious political base, crudely spoken, not especially masters of their native languages,” said Hirsch.

As for Ahmadinejad’s remarks on the Holocaust:

“[Ahmadinejad] actually crossed an invisible red line that exists inside Iran’s own internal politics,” said Trita Parsi, an Iran specialist and head of the Washington-based National Iranian American Council.

“Criticising Israel was never something the Iranians were sensitive about — they’re quite thick-skinned about to be frank — but talking about the Holocaust was no longer about Israel, and this was something about the entire Jewish experience,” he said. “[Ahmadinejad] caused a tremendous amount of anger.”

It appears that Israeli politicians are also using the rhetoric to their advantage.

“Netanyahu, he has a metaphor. It’s 1938, and Iran is Germany, and he goes on to imply that Ahmadinejad is Hitler,” said Parsi, referring to the former Israeli prime minister and head of the right-wing Likud bloc in Israel’s Knesset.

“If Iran is Germany and Ahmadinejad is Hitler, who in his or her right mind wants to play the part of Neville Chamberlain?”

It is a poor metaphor. Iran has not sought to expand its boundaries as did Nazi Germany. It was instead Saddam Hussein who sought to capitalize–with much U.S. sympathy–on a vulnerability he perceived following the Iranian revolution. And it is the U.S. that occupies territory (in Iraq and in Afghanistan) on two sides of Iran.

Hopefully all this does not lead to war. “Despite hard-line rhetoric on both sides – and a lengthy story by Seymour Hersh in The New Yorker posted on Sunday that suggests the Bush administration is ready for “surgical strikes” against Iran – analysts say diplomacy is the far more likely outcome,” according to the Christian Science Monitor

Black Monday?

Last night, I received a particularly alarming article posted in the Mountain Sentinel that wrote:

Monday, October 1st is the day of fiscal reckoning. October 1st is New Year’s Day for businesses, and on that day all the banks are required to open their books and honestly assess their current standing. The fear for the last couple months is that more than a few banks may close their doors. On Monday, we will find out for sure.

For several years now, the banks have been playing wide and loose with loans and investments. Spurred by low interest rates, they lured in consumers and home owners into mortgages and loans that they simply could not afford. It used to be that a bank would underwrite and fund every loan it made. But in the past decade, banks have developed the practice of making loans, storing them on their balance sheets for a short period of time and then packaging them into derivatives called collateralized debt obligations (CDOs). These CDOs were then sold off to investors expecting a high rate of return on the investment. Through this mechanism, the banks did not tie up their own collateral with the loans they issued, so they could issue more and more loans.

The article predicts that “a dollar crash is nearly inevitable,” as it has already lost so much value and other nations cannot follow the Federal Reserve’s recent interest rate cut. According to the article:

For many years we have depended on foreign investors to support our economy by stockpiling our currency. These foreign investors cannot hold onto their dollars for much longer. Already they have lost over 40% of their investment. They will have to cut their losses and divest.

So today is October 1, and a story in the New York Times reports that Citigroup “estimat[ed] a 60 percent drop in third-quarter earnings because of write-downs for securities backed by subprime mortgages and loans tied to corporate takeovers, . . . UBS, Europe’s biggest bank, predicted an unexpected loss in the third quarter because of a $3.42 billion write-down for the value of mortgage-backed securities.”

Citigroup’s warning comes as other Wall Street firms have hinted they will face serious profit declines. Last month, Merrill Lynch warned that its third-quarter results would suffer, and Bank of America’s financial chief said the turbulent markets would have a “meaningful impact” on third-quarter results. J. P. Morgan Chase has not publicly commented on its third-quarter results, but executives there have acknowledged tougher market conditions, which will likely have an effect.

So far, Wall Street investment houses that have announced their third-quarter results have run the gamut. Goldman Sachs powered through the turmoil in the credit markets to post a 79 percent increase in profit, its third-best quarter ever. At Bear Stearns, earnings fell 61 percent on sharp losses related to its hedge funds and exposure to subprime investments. Third-quarter profit was down 3 percent at Lehman Brothers and 7 percent at Morgan Stanley, but the performance at both companies was stronger than expected.

According to the Wall Street Journal, the dollar held its own against the euro, gaining .14% to close at 1.4238. And Michael Connolly, in an e-mail newsletter, expresses the mere concern that Citigroup’s “$5.9 billion stumble” might “cost Chief Executive Charles Prince his job.”

A Reuter’s story includes the news that “Credit Suisse Group also said its third quarter results would be ‘adversely impacted’ by the credit market turmoil but said it would remain profitable in the third quarter.”

Investors are now bracing for more bad news from other banks. “I don’t think we are out of the woods. I don’t think it’s over,” said an analyst with a major British bank.

Persistent worries about the health of the banking system have weighed on financial markets around the world.

Financial markets appeared to greet the announcements with relief after weeks of uncertainty among many investors who have been trying to work out exactly what the exposures of the world’s largest banks are to subprime.

The Mountain Sentinel article, however, predicts a far more grim scenario:

A Black Monday will likely be followed by a bloody Tuesday as the banking news leads to a route on the stock market. In this climate, the dollar is likely to plummet even farther as foreign investors hurry to divest themselves of their shrinking dollars. It could all be over for the US economy before the week is out. And we may well see our once vain public standing in soup lines by the beginning of November.

What we already knew about Blackwater

According to a story in the New York Times, a “report . . . compiled by the Democratic majority staff of the House Committee on Oversight and Government Reform, which is scheduled to hold a hearing on Blackwater activities on Tuesday, . . . ‘Blackwater . . . has the highest incidence of shooting first, although all three [private military contractors] shoot first in more than half of all escalation-of-forces incidents,’ . . . there is no evidence in the documents that the committee has reviewed that the State Department sought to restrain Blackwater’s actions, raised concerns about the number of shooting incidents involving Blackwater or the company’s high rate of shooting first, or detained Blackwater contractors for investigation . . . [and] Blackwater sometimes engaged in offensive operations with the American military, instead of confining itself to its protective mission.”

Meanwhile, InterPress Service reports:

“Blackwater has been a contractor in the past with the department and could certainly be in the future,” said the U.S.’s top-ranking military officer, General Peter Pace, at an afternoon press conference here.

The future arrived just two hours later when the Pentagon released a new list of contracts — Presidential Airways, the aviation unit of parent company Blackwater, was awarded the contract to fly Department of Defence passengers and cargo between locations around central Asia.