NightBlogger

Simon Tisdall
The Guardian
Congress approval rating just 10% as Bush goes from ‘lame to dead duck’
The controversy over the failure of the Bush administration’s unpopular financial bail-out is infecting every aspect of government and the presidential election campaign. Eminent reputations lie in ruins; the august institutions of Congress, the treasury, the Federal Reserve tremble; the presidency itself is shaken. In America’s year of living dangerously, few will emerge unscathed. The consensus view, if there is one in so divided a nation, is that the US has suffered a calamitous, across-the-board failure of leadership. The bankruptcy is political as well as economic. This conclusion is widely held among both supporters and opponents of the bail-out.

“Monday’s crash and burn of the Paulson plan on Capitol Hill reveals a Washington elite that has earned every bit of the disdain that Americans have for it. This crowd can’t even make sausage,” snarled a Wall Street Journal editorial yesterday. Black Monday’s shambles marked a “historic abdication”. Republicans and Democrats in the House of Representatives were excoriated for political cowardice, childish disputatiousness, and a selfish desire to get re-elected next month at any cost. It’s clear, whatever they do next, the public simply does not trust them to do it right.

“A political establishment held in higher regard may have been able to hold together some kind of coalition of the willing,” wrote Joel Achenbach in the Washington Post. “But distrust of the nation’s leaders, from the leaders of Congress to the president, foreclosed that possibility.”

This was not mere rhetoric. Congress’s public approval rating was down to 18% before the crisis hit. By some estimates, it is now 10% and falling. Washington has seen a “throw the bums out” mood before, notably Newt Gingrich’s 1994 anti-government “Republican revolution”. But this is something else. Like some others, Gingrich is calling for the resignation of Hank Paulson, the treasury secretary, for presiding over a train wreck and then failing to persuade people why $700bn was needed to get back on the rails.

Other heads enthusiastically recommended for the chopping block include Democratic house speaker, Nancy Pelosi, for being “too partisan” and the Republican house minority leader, John Boehner, for not being partisan enough. An unhappy Boehner said before the vote that the bail-out was a “crap sandwich” that he and colleagues were obliged to eat. As it turned out, 133 Republicans and 95 Democrats found it too much to swallow. Many members of Congress found themselves caught between party leadership and angry constituents and sought to explain themselves.

“We are now in the golden age of thieves. And where I come from we put thieves in jail, we don’t bail them out,” said Pete Visclosky, an Indiana Democrat who voted ‘no’. The signal failure, as critics see it, of President George Bush to show a lead out of the morass has provoked a new crop of political obituaries. “No longer a lame duck, he’s a dead duck,” said Democratic strategist Paul Begala.

Barry Grey
WSWS
The US government takeover of the mortgage finance giants Fannie Mae and Freddie Mac has dealt a shattering blow to the ideology of market capitalism, which has been used for decades to justify a relentless assault on the working class and a vast transfer of wealth to the American ruling elite. The endless invocations of the virtues of private enterprise, individual entrepreneurship and self-reliance, used to demonize socialism and defend a system that exploits the vast majority for the benefit of a financial elite, have been exposed as frauds. When it comes to big capital, losses are socialized. Only profits remain private.

The same forces who year after year have inveighed against “big government” in order to justify the removal of all legal impediments to the accumulation of corporate profits and private fortunes, and carry out the destruction of social safeguards for the working class, have engineered a massive expansion of government power to safeguard the interests of the financial elite. The bailout has as well exposed the real relations of political power and influence behind the façade of American democracy. The largest government bailout of private companies in world history—whose ultimate cost to taxpayers is likely to reach hundreds of billions—was sanctioned in advance by the Democratic Congress and given instant approval by the leadership of both parties and both of their presidential candidates.

There have been no investigations into the greatest financial scandal in world history. Neither party has any interest in bringing to light the swindling and skullduggery of the Wall Street moguls, because they are both bound hand and foot to those responsible for the financial debacle. What has been revealed is the existence in the United States, behind the increasingly tattered veneer of democratic institutions, of a plutocracy—the political rule of the rich. When it comes to the basic interests of the financial aristocracy, both parties and all of the official institutions of society snap to attention and do the bidding of their Wall Street masters.

The bailout of the two mortgage giants—which account for 80 percent of new home mortgages in the US—is a demonstration of the historic failure of American capitalism and the profit system on a global scale. It was precipitated by the deepest economic crisis since the Depression of the 1930s, whose epicenter is the United States. The Bush administration moved to take over Fannie Mae and Freddie Mac under conditions of a rapid erosion of international confidence in the solvency of not only these two companies, but of the United States government itself. Over the past several months, global investors, including central banks and government investment funds, primarily in Asia and Russia, have been dumping their vast holdings in mortgage-backed securities issued by the US government-sponsored firms. Fannie Mae and Freddie Mac have a combined liability of $5.3 trillion in mortgage-backed securities which they own or guarantee. The run on their assets has not only intensified the crisis of the two companies, which are massively leveraged and have suffered billions of dollars in losses as a result of the collapse of the US housing market, it has thrown into question the status of all US government debt, including US Treasury bonds.

The US, by far the world’s largest debtor nation, with a current account deficit of nearly $800 billion, is sustained by the inflow of hundreds of billions of dollars from abroad. It currently imports $1 trillion in foreign capital every year, or over $4 billion every working day. But the assumption by the US government of the debts of the two mortgage companies, while averting an immediate financial meltdown, only compounds the crisis of American capitalism. As Martin Wolf, the financial correspondent of the Financial Times, wrote on Tuesday, “As a result, US housing finance has been brought under direct government control and, in the process, the gross liabilities of the US government, properly measured, have increased by $5,400 billion, a sum equal to the entire publicly held debt and 40 percent of gross domestic product.”

At a stroke, US sovereign debt has doubled and is now roughly equal to America’s gross domestic product. On July 14, one day after US Treasury Secretary Henry Paulson called for legislation to give him unilateral and unlimited powers to use public funds to rescue Fannie Mae and Freddie Mac, the Wall Street Journal editorialized on the implications of a government bailout of the two companies. It wrote: “But with financial woes mounting, some investors are betting they may profit from weighing the unthinkable question: Could the US government default?” This immense increase in US government indebtedness can only further undermine international confidence in the credit-worthiness of US Treasury bonds, resulting in a further decline in the dollar and a sharp increase in the interest paid by the US to borrow from its international creditors. More

Raw Story
Author Ron Suskind, whose new book charges that the Bush administration ordered the CIA to forge a letter from the head of Iraqi intelligence linking Iraq to al Qaeda, will now be releasing a transcript of the interview with one of his primary sources to defend himself against charges of inaccuracy. Suskind told MSNBC’s Joe Scarborough on Friday, “I’ve never done this in 25 years as a journalist, but I’m posting transcripts of my conversations with Rob Richer.” More

Webster G. Tarpley
…the United States and NATO now escalating the hopeless and unwinnable Afghan war, and is preparing to send US and NATO forces on the ground to seize parts of Pakistan, a country which is almost 3 times more populous than Iran, and possesses a nuclear arsenal and the means to deliver it. The Bush-Cheney-neocon era in foreign policy is over, and the Brzezinski-Trilateral-Rockefeller-Soros phase of aggression has begun; the US hit list now features Chinese allies like Sudan, Zimbabwe, and Pakistan. Brzezinski is striving to put together some huge provocation for the Beijing Olympics, to make the Chinese government lose face and begin disintegrating. The ultimate targets of the new Obama-Brzezinski foreign policy are Russia, China, and the other members and friends of the Shanghai Cooperation Organization, the main pole of resistance in the world to the designs of Washington and London. The stakes are now much higher than a mere conventional clash in the Persian Gulf. Brzezinski’s adventurism goes far beyond that of the neocons, and objectively places the danger of a thermonuclear exchange on the world agenda. Watch for the Polish-Czech-Lithuanian missile crisis, a Balkan crisis, and a crisis between Georgia and Russia to point the world in this ominous new direction.

The US government is now being run by the Principals’ Committee, an interagency cabal that includes Defense Secretary Gates, Secretary Of State Rice, Joint Chiefs Chairman Mullen, Secretary of the Treasury Paulson, and other operatives of the Trilateral Wall Street financier faction. It is clear that under the new policy, Iran will be able to continue to process uranium: ‘The Bush administration’s decision to send a senior American official to participate in international talks with “More news and information about Iran.” Iran this weekend reflects a double policy shift in the struggle to resolve the impasse over the country’s nuclear program. First, the Bush administration has decided to abandon its longstanding position that it would meet face to face with Iran only after that country suspended its uranium enrichment, as demanded by the “More articles about Security Council, U.N.” United Nations Security Council. Second, an American partner at the table injects new importance to the negotiating track of the six global powers confronting Iran - France, Britain, Germany, Russia, China and the United States - even though their official stance is that no substantive talks can begin until uranium enrichment stops. The increased engagement raised questions of whether the Bush administration would alter its stance toward Iran as radically as it did with North Korea, risking a fresh schism with conservatives who have accused the White House of granting concessions to so-called rogue states without extracting enough in return.’ (New York Times, July 17, 2008) This gambit of appeasing Iran is being done in the hopes of turning Iran against Russia and China ­ a project of incalculable folly. Brzezinski is glad to see the Iranians have nukes, because he thinks he can keep them, pointed at Moscow. More

David DeBatto
If the United States attacks Iran either this summer or this fall, the American people had better be prepared for a shock that may perhaps be even greater to the national psyche (and economy) than 9/11. First of all, there will be significant U.S. casualties in the initial invasion. American jets will be shot down and the American pilots who are not killed will be taken prisoner - including female pilots. Iranian Yakhonts 26, Sunburn 22 and Exocet missiles will seek out and strike U.S. naval battle groups bottled up in the narrow waters of the Persian Gulf with very deadly results. American sailors will be killed and U.S. ships will be badly damaged and perhaps sunk. We may even witness the first attack on an American Aircraft carrier since World War II.

Israel (who had thus far stayed out of the fray by letting the U.S. military do the heavy lifting) is attacked by Hezbollah in a coordinated and large scale effort. Widespread and grisly casualties effectively paralyze the nation, a notion once thought impossible. Iran’s newest ally in the region, Syria, then unleashes a barrage of over 200 Scud B, C and D missiles at Israel, each armed with VX gas. Since all of Israel is within range of these Russian built weapons, Haifa, Tel Aviv, Jerusalem and virtually all major civilian centers and several military bases are struck, often with a result of massive casualties.

The Israeli Air Force orders all three squadrons of their F-16I Sufa fighter/bombers into the air with orders to bomb Tehran and as many military and nuclear bases as they can before they are either shot down or run out of fuel. It is a one way trip for some of these pilots. Their ancient homeland lies in ruins. Many have family that is already dead or dying. They do not wait for permission from Washington, DC or U.S. regional military commanders. The Israeli aircraft are carrying the majority of their country’s nuclear arsenal under their wings. More

Newsweek
A previously undisclosed CIA report written in the summer of 2002 questioned the “credibility” and “truthfulness” of an Al Qaeda detainee who became a key source for the Bush administration’s claims about links between Saddam Hussein and Osama bin Laden.

The statements of the detainee–a captured terrorist operative named Ibn al-Shaykh al-Libi–were the principal basis for President Bush’s contention in a major pre-Iraq War speech that Saddam’s regime had “trained Al Qaeda members in bombmaking and poisons and deadly gases.” The speech was delivered in Cincinnati on Oct. 7, 2002, just as Congress was taking up the White House-backed resolution authorizing the president to invade Iraq.

But two months before Bush’s dramatic assertion, the CIA had raised serious doubts about whether al-Libi might be inventing some of what he was telling his interrogators, according to a 171-page Senate Intelligence Committee report on pre-war intelligence released last week.
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It’s about time. Some men have been held at Guantanamo Bay for more than 6 years.
The Supreme Court ruled Thursday that foreign terrorism suspects held at Guantanamo Bay have rights under the Constitution to challenge their detention in U.S. civilian courts. The justices handed the Bush administration its third setback at the high court since 2004 over its treatment of prisoners who are being held indefinitely and without charges at the U.S. naval base in Cuba. The vote was 5-4, with the court’s liberal justices in the majority. Justice Anthony Kennedy, writing for the court, said, “The laws and Constitution are designed to survive, and remain in force, in extraordinary times.” More

WSWS
Former White House press secretary Scott McClellan’s new book indicting the Bush administration for employing a “political propaganda campaign” and deception to drag the US into an “unnecessary war” in Iraq has unleashed a wave of bitter recriminations from the Republican right, while prompting opportunist attempts by Democrats to exploit the tell-all memoir for their own political purposes.

[But] No attempt was made to draw out the staggering implications of the confirmation, from inside the White House, that a war that has cost over one million Iraqi lives and killed or wounded tens of thousands of US troops was launched through “deception and propaganda.” It was merely used as a talking point…One Democratic congressman, Robert Wexler of Florida, called for McClellan to testify under oath before the House Judiciary Committee. More