Not Housebroken

Paul Krugman, in an op/ed for the New York Times, describes the subprime mortgage relief plan unveiled by the Bush administration as not “mainly intended to achieve real results. The point is, instead, to create the appearance of action, thereby undercutting political support for actual attempts to help families in trouble,” specifically, in fact, to undermine pending “legislation that would give judges in bankruptcy cases the ability to rewrite mortgage loan terms.”

[Updated] Steve Fraser has written an op/ed piece which appears in the Los Angeles Times:

Even the soberest economy watchers, pundits with doctorates — whose dismal record in predicting anything tempts me not to mention this — are prophesying dark times ahead. A depression, or a slump so deep it’s not worth quibbling about the difference, appears to be on the way, if indeed it is not already underway.

In his discussion, he points to several problem areas with the way it’s been since Ronald Reagan came to power. And Bloomberg.com carries a piece about how U.S. problems will affect the world. It seems that “‘The American consumer is the big gorilla on the demand side of the global economy,’ [Morgan Stanley in Asia chairman Stephen] Roach said. ‘As the slowdown goes from housing to consumption, we’ll find the world is not as decoupled as it thinks.'”

A picture that emerges here is that the corporate presumption that good-paying jobs could be exported overseas without affecting consumer demand has fallen short. Apparently, all those cheap foreign workers aren’t earning enough to make up for U.S. consumers who have lost good-paying jobs due to globalization and who have had to accept lower-paying jobs, requiring two incomes where one formerly sufficed, and offering far fewer benefits.

After going all year with maybe just a couple bands scheduled for entertainment, Dr. Mojo appeared at Lupin tonight. They put on a good show, but it is the slow season, and hardly anyone was here.

Some people watch horror flicks. I’m reading the Federalist Papers, the arguments advanced in the state of New York to support adoption of the Constitution. The Federalist Papers are also supposedly a definitive guide to interpretation of the Constitution. And I’m seeing a lot of ammunition for neoconservative arguments. It is truly scary stuff, that emphasizes consolidation of power in the hands of a privileged class judged solely fit to rule. I have yet to consult with a historian about the context, which also led to the adoption of the Bill of Rights as part of the deal, but I also don’t see among the amendments any guarantees of equality or democracy. Further, the Federalist Papers can be read as tempering any expansive view of liberties granted by amendments to the constitution. My analysis is in progress and will appear on disunitedstates.org when I get my web server back on line.

Meanwhile, Rand Clifford asks, I think rhetorically, “Why is it that Americans seem among the least aware that the radical changes needed for America to regain its Constitution, and survive as a Republic, will never happen within our rotted-out system?” Part of the answer here, surely, is that the Constitution is not what most people think it is, and a republic should not be confused with a democracy.

But Clifford’s argument runs to the rot in the U.S. system. He cites a former Italian President who claims that most intelligence agencies know that the 9/11 attacks were an inside job. Francesco Cossiga, we are to understand, “gained respect from opposition parties as one of a rare breed – an honest politician – and led the country for seven years until April 1992” and “was forced to resign after revealing the existence of, and his part in setting up, Operation Gladio – a rogue intelligence network under NATO auspices that carried out bombings across Europe in the 60’s, 70’s and 80’s.” It seems that these rogue operations conducted “what they coined ‘false flag operations,’ terror attacks that were blamed on their domestic and geopolitical opposition.”

On this basis, we are to doubt that Hillary Clinton or Rudy Giuliani, who both “are committed to The ‘War’ (criminal invasion and occupation of Iraq). Both lean toward expanding the ‘War’ to Iran, and beyond” can be trusted to get us out of Iraq or to “restore” the Constitution. “Both at least claim to believe the permanent ‘War On Terror’ is not the putrid baloney it really is; both support police state measures that ‘protect’ us from terrorists, eschewing our Constitution and its guaranteed civil liberties.”

But we don’t need a 9/11 conspiracy to support this argument. A far simpler argument relies on sociologist C. Wright Mills, who argued in the 1950s that the political, corporate, and military elites were allied and that their interests are barely distinguishable. Even conservatives have observed a “revolving door” for members of these elites that enable them to pass between political and corporate power, as power passes between Democratic and Republican factions of a one-party system. Retired military personnel at all levels often go on to government work and qualify for double pensions; at higher ranks, they often go on to highly-paid positions in the military-industrial complex.

As I observe in my analysis of the Federalist Papers, power is in the hands of an elite presumed exclusively worthy. The cost of entry to this elite, including attendance at Ivy League schools, membership in elite campus organizations and establishment clubs, the assets to gain acceptance among the very wealthy, and limited social mobility (a myth of unlimited opportunity notwithstanding) keeps all but a very few (very fortunate) outsiders out. These people have no interest in a more egalitarian system; the hierarchy guarantees their privileges. Further, by defining worthiness to hold power exclusively in terms of financial success, such success becomes the only standard to judge our fellow citizens. In combination with a myth of unlimited opportunity, we don’t just blame less successful members of society for their own misfortunes, we absolve ourselves of responsibility for their plights.

Paul Craig Roberts describes what he calls a shortage myth. As many out of work high technology workers can attest, there simply is no shortage of skilled workers in the United States. But employers prefer to hire less expensive guest workers or ship jobs overseas.

“The U.S. economy is really perched on the edge of a cliff right now,” says Bank of Tokyo-Mitsubishi UFJ economist Ellen Zentner, as Marketwatch reports “the markets get ready for a busy week of data, including numbers about the already damaged U.S. housing market, orders for durable goods and personal income and spending.”

There have been anecdotal reports of a better-than-last-year Black Friday (so named for when retailers traditionally see profits move out of the red and into the black on the day after Thanksgiving). But home sales, construction, and October consumer spending numbers are expected to drop. “Federal Reserve officials believe a substantial decline in home prices is a big risk to the economy, according to forecasts released for the first time by the Fed on Tuesday. The Fed’s forecasts, combined with the summary of its October meeting, appeared to show more concern about slower growth than higher inflation.” There are also fears that the labor market is weakening. “‘Recent data on initial jobless claims suggest layoff activity is gradually accelerating as the full effects of the fallout from tighter credit conditions and the housing recession are realized,’ notes [Ryan] Sweet [of Moody’s Economy.com].”

The question to answer, said [Jim] O’Sullivan [of UBS], is what kind of slowdown the economy’s heading for. “Is it a ‘suddenly falling off a cliff’ slowdown…or more of a gradual slowing?” he asked.

Australian Prime Minister John Howard’s [neo-]Liberal party was resoundingly defeated at the polls yesterday. Incoming Prime Minister Kevin Rudd has promised to ratify the Kyoto accords and negotiate a withdrawal from Iraq.

Australian opinion polls have shown that although Australians remain strong supporters of the so-called Anzus alliance — the security pact among Australia, New Zealand and the United States — they do not approve of Mr. Bush or the Iraq war.

The attempts by Mr. Howard’s coalition to stress its economic record apparently failed to impress voters. The Australian economy has had 17 years of continuous growth, lately driven by Chinese demand for Australian iron ore and coal. Mr. Howard had warned voters that a Labor victory would endanger the country’s prosperity.

Supporters of Bush administration policy in Iraq have claimed that “the surge” in U.S. forces is working, that violence has decreased. Opponents have argued that what is really going on is ethnic cleansing. The following comes to me from the International War and Peace Report:

DRIVEN TO EXTREMES

Sectarian tensions are running so high that Baghdadis risk their lives getting their cars fixed.

By an IWPR reporter in Baghdad

When Ali Sadiq’s car engine started acting up, he knew he was in trouble. Engine problems are bad enough under normal circumstances, but in Baghdad Ali faced an additional hurdle: he couldn’t fix his Mercedes because he is a Shia.

Mechanics who repair German and American vehicles are located in a predominantly Sunni area of the capital called Sheikh Omar. Third Street in Sheikh Omar is where most of them are based – but the area is such a Sunni militant hotbed that Shia dare not go anywhere near it.

Sadiq planned to have a Sunni friend drive it there to have it seen to.

“No other mechanics can fix the problem,” said 37-year-old Sadiq, closing the hood of his car. “But the specialists are in the Sheikh Omar area, and I’m too afraid to go there.”

Sunni insurgents have expelled non-Sunni from Sheikh Omar – once a mixed Sunni, Shia, Faili Kurd and Armenian area in the heart of Baghdad.

“Insurgents even seek out Sunni mechanics that repair cars for Iraqi officials,” said Mohammed Abdulqadir, a 43-year-old Sunni mechanic who specialises in Mercedes.

While insurgents wage a sectarian terror campaign in the neighbourhood, criminal gangs also intimidate and steal from mechanics and car owners.

Abdulqadir complains that his business had suffered because militants in the area were scaring off his customers. He says they target Mercedes owners, believing they are government officials because of their expensive cars.

Sectarianism has also seeped into al-Baya’, an industrial area dominated by Shia. The suburb is home to mechanics who specialise in Korean cars such as Opels, one of the most affordable and popular cars in Iraq.

Al-Baya’ was controlled by Sunni insurgents for a while but now Shia militias are in control. Sunnis who own Korean cars won?t risk entering the area.

Hatred of Sunni runs deep here, even among those who worked with them daily.

Mohammad Khalid, a 35 year-old Shia, lost three of his brothers to Sunni assassins at a time when they ruled the neighbourhood. But after the bombing of the Shia Samarra shrine in February 2006, the Shia of al-Baya’ rose up and turfed out the Sunni insurgents.

“The Samara bombing was a saviour for us, the Shia,” said Khalid in his repair shop. “The insurgents back then were powerful, and no one was
confronting them. They were controlling this area, and the [local] Sunni were supporting them. Now they have to pay the price.”

The raging sectarianism is ruining mechanics and many other small businesses by scaring off a substantial proportion of their custom[ers].

Some have given up and joined the exodus of millions of Iraqis to Jordan and Syria. Ziad Sa’d, a 40-year-old Sunni, said that his mechanic who had an auto repair shop in Sheikh Omar had relocated to Damascus.

“I know many Iraqi [mechanics] who have moved to Syria,” he said, “They fled the hell of Iraq.”

Abdullah al-Lami, spokesman for the ministry of labour, described the situation as a “disaster”.

“The security situation has severely affected skilled workers in Baghdad. Many of them have been forced to close down their businesses and leave the area,” he said.

Al-Lami said that his ministry doesn’t have figures of how many businesses have closed down and how many mechanics have been killed or forced to leave their business.

Car owners, meanwhile, regret not being able to have their motors serviced by their old mechanics. Aqeel Muhssin, 29, a Shia, said his Sunni mechanic, who was not [in any] event religious, was killed by Shia militias. “He didn’t even know how to pray,” he said.

According to the Associated Press, desertion rates are now 80% higher than when the U.S. invaded Iraq in 2003, and at the highest rate since 1980. Desertions have increased 42% from last fiscal year (beginning on October 1). “The increase comes as the Army continues to bear the brunt of the war demands with many soldiers serving repeated, lengthy tours in Iraq and Afghanistan. . . . Despite the continued increase in desertions, however, an Associated Press examination of Pentagon figures earlier this year showed that the military does little to find those who bolt, and rarely prosecutes the ones they get. Some are allowed to simply return to their units, while most are given less-than-honorable discharges.” Desertion totals are not yet as high as during the Vietnam War, however the article does not compare force size and avoids comparing rates.

[Updated] According to the BBC, Pakistan has been suspended from the Commonwealth. Canadian Prime Minister Stephen Harper supported the move, which comes in the wake of General Pervez Musharraf’s declaration of a state of emergency. Musharraf sacked many Supreme Court justices who may have been about to declare his re-election as Pakistan’s president invalid owing to his failure to resign from the Army. The deposed Chief Justice was prevented from leaving his official residence yesterday despite government claims he was now free to do so. The reconstituted court has now dismissed all challenges to his re-election, “pav[ing] the way for him to quit as army chief.”

Musharraf has defended his move, claiming it was necessary to establish order for upcoming elections and to fight terrorist groups, presumably including the Taliban group that now rules the Swat Valley–once “the Switzerland of Pakistan–with Musharraf’s acquiescence, even though “Mullah [Maulana] Fazlullah’s jihad is directed at Musharraf’s regime.”

American and European diplomats see the valley’s takeover as further evidence that their ally Musharraf is not entirely committed to fighting the extremists and that his army might not even be capable of doing so, despite the billions in aid it receives from Washington. “The government simply let the situation keep going,” says a high-ranking Western officer, “and now people are pretending this is a recent problem.” The USA and other countries have tried repeatedly to draw attention to the Swat Valley, but were reassured everything was under control. “Now it’s too late.”

Perhaps, but U.S. Deputy Secretary of State John Negroponte phrased it differently:

“Under [Musharraf’s] leadership,” Mr Negroponte said, great progress has been made “towards a moderate, prosperous and democratic Pakistan.”

“President Musharraf,” he added, “has been and continues to be a strong voice against extremism.”

And “officials in the district” have “imposed a food blockade in parts of Swat amid reports that a full-fledged ground assault is being planned by security forces.” They are also jamming Fazlullah’s FM broadcasts with a broadcast of “Quranic verses to counter Fazlullah’s pre-recorded broadcasts.”

Taliban “spokesman Sirajuddin threatened to unleash suicide bombers if the authorities did not lift [the blockade].”

President Bush also added his support, “saying the general ‘hasn’t crossed the line’ and ‘truly is somebody who believes in democracy.'” This, of course, is of little surprise, given Bush’s domestic record on constitutional principles.

“What exactly would it take for the president to conclude Musharraf has crossed the line? Suspend the constitution? Impose emergency law? Beat and jail his political opponents and human rights activists?” asked Joseph R. Biden Jr. (D-Del.), chairman of the Senate Foreign Relations Committee and a presidential candidate. “He’s already done all that. If the president sees Musharraf as a democrat, he must be wearing the same glasses he had on when he looked in Vladimir Putin’s soul.” . . .

Musharraf has provided extensive assistance to the United States in its efforts to seize high-profile al-Qaeda suspects, but his devotion to the fight has been increasingly questioned by some U.S. officials and outside experts. Musharraf “is not only not indispensable; he is a serious liability” to U.S. policy, a new report by the International Crisis Group said.