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Today's Stories February 15, 2008 George Szamuely The Absurdity of "Independent" Kosovo February 14, 2008 Kathleen and Bill Christison Palestine in the Mind of America Mike Whitney Swan Song for NATO Clancy Sigal Strike Notes from a Screenwriter George Wuerthner A Bloody Sham: the Yellowstone Bison Slaughter Peter Morici Is Bernanke Headed for the Exit? John Ross Drug War Mayhem Boils Over from Border to Border Allan Nairn Mafia Rules in the Middle East: If You're Big Enough, You Can Whack Anyone Rannie Amiri Lebanon's Warmongers Niranjan Ramakrishnan The New Tractatus: Where Wittgenstein Meets Feinstein Donna Volatile Be Careful What You Vote For, You Just Might Get It Seth Sandronsky The Student Squeeze: Fighting California's Tuition Hikes Website of the Day Conventions: the Land Around Us   February 13, 2008 Nikolas Kozloff Meet John McCain: Mr. Big Stick in Latin America Alan Farago Hell to Pay: Warren Buffett on the Goal Line Christina Kasica King's Dream Foreclosed: the Subprime Crisis in Black America Vicente Navarro How to Read the U.S. Primaries Hall Greenland Australia's Finest Hour Lee Sustar Strange Stimulation: Too Little for Those Who Need It Most David Macaray The Writers' Strike Finally Ends Roderick Frazier Nash Celebrating Wilderness Patrick Irelan Hugo Chávez and High Anxiety at the NYT Anthony Papa Mean Mister Mukasey: AG Tries to Block Crack Cocaine Releases Carl Finamore Another Parade Passes Me By: Don't Let Your Movement be Coopted by Politicians Website of the Day John He Is   February 12, 2008 Frank J. Menetrez The Case Against Alan Dershowitz Paul Craig Roberts War Without End Dr. Trudy Bond The Elephant at Gitmo: Camp 7 and the Torturer's Shrink Andy Worthington The Guantánamo Six: Why Charge Them Now? What About the Torture? Col. Dan Smith The Psychology of Killing: Close In or Far Away? Ronnie Cummins Globalization: Standing at the End of the Road Ralph Nader Open the Government John V. Walsh Antiwarriors, Divided and Conquered Dave Lindorff Obama and Progressive Change: Let's Hope the Movement Transforms the Candidate Michael Donnelly Who's Pimping Whom? The Clintons' Selective No Talk Rules Ron Jacobs La Lucha Continua: Castro's "Life" Ben Tripp Beggars Collide Website of the Day Springsteen and Youngstown   February 11, 2008 Cockburn / St. Clair Lessons for Obama: When is a Delegate Not a Delegate? Wajahat Ali A Discussion with Walt and Mearsheimer on the Israel Lobby Ray McGovern Waterboarding for God and Country Allan Nairn The Shooting of Jose Ramos Horta Uri Avnery An End Foreseen? Chris Floyd American Psycho: the Meaning of Mitt Romney's Exit Speech Martha Rosenberg School Lessons in a Lunchbox: Lunchmeat from Tortured Cows Stephen Fleischman The Bonnie and Clyde of American Politics Marc Lamont Hill Not My Brand of Hope Liliana Segura Obama and Torture: the Sounds of Silence and Equivocation Peter Morici Challenges for the New President Christopher Brauchli A Drug Rant from a Former Taker Website of the Day Annie vs. the Blue Angels   February 8 / 10, 2008 Paul Craig Roberts Does the GOP Have Aces Up Its Sleeves? Patrick Cockburn Will Moqtada al-Sadr's Truce Hold? Mike Whitney The Great Bust of '08 Anthony DiMaggio How the Press Covers Waterboarding Andy Worthington The Guántanamo Trials: Where are the Terrorists? Linn Cohen-Cole Hillary, Will You Renounce Your Ties to Monsanto? Firmin DeBrabander Notes from the Foreclosure Front: Suing Your Way to Solvency Cpt. Paul Watson The Other Whaling Industry: How Greenpeace Cashes In on the Suffering and Deaths of the Great Whales Kenneth S. Pope Why I Resigned from the American Psychological Association Jacob G. Hornberger American Soldiers Will Pay the Price for Bush's Torture Policy Robert Bryce Beyond Group Think on Climate Change: If More CO2 is Bad ... Then What? P. Sainath The Last of the Buccaneer Editors Allan Nairn Give Me Back My Land Fred Gardner / Pebbles Trippet "The District Attorney of Shasta County Doesn't Know the Law!" Andrew Wimmer Growing Up Catholic: Ignorance is Death Robert Fantina America's Disgrace: the Case of Omar Khadr David Michael Green Partycide in Six Easy Steps: Watch the Democrats Destroy Themselves Kevin Zeese Is Dennis Kucinich Being McKinney'd? Peter Morici Wall Street Gives Bernacke a Vote of No Confidence Chris Driscoll Could Nader be the Come-Back Kid of 2008? Prairie Miller Black August: Bringing George Jackson's Life to the Screen Poets Basement Davies and Buknatski   February 7, 2008 Patrick Cockburn Why Baghdad Will Explode Again Bill Christison Potholes Bigger Than Ever for Palestinians David Anderson NBC's "To Entrap" a Predator: Perverting Justice for the Sake of Ratings Ron Jacobs Innocent Flesh: Recruiting Kids to Kill Nikolas Kozloff Hugo Chávez's Coca: It's the Real Thing Jane Rockefeller The Moral Economy of an Anti-Poverty Foundation Andy Worthington On Waterboarding: Two Questions for Michael Hayden Dave Zirin Instep Intifada Saul Landau The "Honestest" Candidate Since Lincoln Susie Day Our Blob in the White House Website of the Day George Carlin on Voting   February 6, 2008 Cockburn / St. Clair Super Tuesday's Vote for Chaos Ben Rosenfeld Informant Games: The Disturbing GreenScare Case of Briana Waters Vijay Prashad An Intellectual Hustler Lays It All Out Joe Bageant Nine Billion Little Feet on the Highway of the Damned Michael Donnelly What White Women Do In Private Voting Booths Allan Nairn Does the US Need a Civilizing Mayan Invasion? Kathryn Gray Wilderness on Edge: The Fate of Donner Summit Ray McGovern Powell's UN Fiasco Sheldon Richman The Whining Empire Paul Cantor / Roger Sparks A Presidential Aptitude Examination John Chuckman Political Bits and Pieces Website of the Day Save the Albatross February 5, 2008 Winslow T. Wheeler The Chaos in America's Vast Security Budget Tariq Ali Why I Will Not Participate in the Turin Book Fair Stephen Soldz The Secret Rules of Engagement in Iraq: Did Rumsfeld Authorize War Crimes? Chris Floyd Strange Fruit: America's Gulag and the Good War William S. Lind Saddam's Secret War Strategy: Die and Win Martha Rosenberg Live From the Killing Floor Heather Gray Conversations with Georgia Voters Ayesha Ijaz Khan Obama, Bhagwandas and the Battle for a Secular Politics David Macaray Unions Need to Stop Being So Nice Eliza Ernshire Making Music and Laughing Till the Tears Run Brenda Norrell Hated Nation Website of the Day The Things I Used to Do     February 4, 2008 Marc Levy Winter in America Patrick Cockburn The Bird Market Bombings Saree Makdisi Strangling Gaza Uri Avnery From Stalingrad to Winograd Alan Farago Let's Get Bambi! Someone is Slaughtering Florida's Key Deer Ben Tripp Spare Change: the Whine of the Progressive Voter Paul Wolf Civil Wars North and South Paul Craig Roberts Why Were the 9/11 Tapes Destroyed? Joshua Frank MoveOn's Obama Endorsement: Why There's No Hope for Change John Halle Whither Progressive Democrats? Website of the Day How to Cheat in School   February 2 / 3, 2008 Alexander Cockburn Hot Democratic Properties Pam Martens Bankers Gone Bonkers: Global Finance and the Insanity Defense Ralph Nader The Great Clinton-Obama Debate: Questions They Weren't Asked John Ross Hilaria vs. "El Moreno" Wajahat Ali Hillary, Obama and the Clash of Civilizations: an Interview with Imam Zaid Shakir Robert Fantina A Colony by Any Other Name: Iraq as Stepchild of the American Empire B. R. Gowani Not All Veils and Guns James L. Secor China in Winter: On the Western Edge of the Great Snow John V. Walsh The Invisible Green Primary Niranjan Ramakrishnan Barack's Bubble, Bubba's Trouble Dave Zirin Who Stole the Super Bowl's Soul? Jeremy Scahill Blackwater and Blood Fidel Castro Reflections on Lula Joe Allen Tet Reconsidered: the Turning Point in the Vietnam War Stephen Lendman Life in Occupied Gaza Patrick Irelan What Happened to the Streetcars? Andrej Grubacic Ziga Vodovnik Caligula's Horse: the USA, New Europe and Kosovo Josh Karpoff Dead Soldiers and the Antiwar Movement Ron Jacobs Carl Oglesby's War Paul Krassner Tom Waits Meets Super-Joel Website of the Weekend Company Woman: Hillary and Wal-Mart   February 1, 2008 Ray McGovern The Iniquities and Inequalities of War Diane Farsetta The Wild Career of James "Dow 36,000" Glassman Patrick Cockburn The Most Dangerous Country in the World for Journalists Tariq Ali Et Tu, New York Times? Allan Nairn Eating Dirt for Lunch in Haiti Rannie Amiri Collective Punishment in Beirut Ramzy Baroud People Power in Gaza: They Simply Did It Kenneth Couesbouc The Mother of All Snowballs Peter Morici Recession Looms Mumia Abu-Jamal Witha "Brutha" Like This: Bill Clinton as White Negro Rosemary Jackowski 27 Reasons Nader Should Run for President Scott Campbell Direct Action to Stop the War Re-emerges Website of the Day Betes et Hommes   January 31, 2008 Saul Landau Return to Afghanistan Andy Worthington Horror at Guantánamo Mike Whitney Rate Cut as Dagger: America's Teetering Banking System Jeff Ballinger Sustainability for Dictators Initiative? Clinton Praises the "Suharto of the Steppe" Tiffany Ten Eyck The Saga of the Freightliner Five William Loren Katz Waterboarding: Torure or Mystery? Alan Farago Why the Republicans are in Deep Trouble Col. Dan Smith Oh Say Can You See the 2009 Budget? China Hand Slouching Toward Islamabad Dave Lindorff The Usual Suspects Once Again Wadner Pierre Fake Democracy in Haiti Website of the Day One Big Union   January 30, 2008 Cockburn / St. Clair McCain vs. Clinton? Christopher Ketcham The Genius of the Development Industrial-Complex Robert Weissman America By the Numbers: The Shameful State of the Union Neve Gordon An Experiment in Famine Paul Craig Roberts Regulation or Deregulation, Which is Worse? Joanne Mariner How Anti-Terror Laws Threaten Free Speech David Macaray Labor's Only Real Weapon Liaquat Ali Khan Is NATO Committing Genocide in Afghanistan? Raymond J. Lawrence Prankster-in-Chief: Bush's Troubling Non-Verbal Communication Dan Bacher The Collapse of the Central Valley Salmon Website of the Day Onward Through the Fog   January 29, 2008 Franklin C. Spinney Bush's New War Budget: the $70 Billion Hand-Off Mike Whitney The Great Credit Unwind of 2008 Alan Farago Buyer Beware: Florida, the Candidates and the Latin Builders Association Patrick Cockburn "The Americans Bring Us Only Destruction" Gary Leupp "We Can't Afford to Let Them Spill the Beans:" a Sibel Edmonds Timeline R. F. Blader A World Without Abortion: USA v. Romania Ahmad Faruqui Musharraf's Post-Electoral Prospect Fran Shor Obama, the Kennedys and "Change We Can Believe In" Jeremy Scahill Secret Trials and Criminal Convictions: the Ordeal of the Blackwater Protesters Allan Nairn Bush's SOTU: Entitlement, Justice and the War of All Against All Website of the Day The Ghost of Rambo   January 28, 2008 Patrick Cockburn Return to Fallujah Paul Craig Roberts The End of American Liberty Allan Nairn The Breaking of the Gaza Wall Eyad al-Sarraj / Sara Roy Ending the Stranglehold on Gaza Martha Rosenberg Obit for the "Front Page" City Corporate Crime Reporter How They Rip Us Off David Michael Green Kristolizing Iraq: What a Great Freakin' War Jennifer Van Bergen What's Left? Nancy Oden Survival Tips for Hard Times Divya Karnad Saving India's Sea Turtles James L. Secor Pissed About Pistorious: Why the Olympics Needs a Gimp Website of the Day Yellow Journalism?   January 26 / 27, 2008 Uri Avnery Worse Than a Crime JoAnn Wypijewski How the Clintons Lost It, Whatever the Outcome in S. Carolina Ralph Nader Ambition, Power and the Clintons Paul Craig Roberts How Bush Destroyed the Dollar Paul Watson I'm Proud to be a Pirate! John Ross Murder and Cover-Up in Mexico Fred Gardner Ross v. Raging Wire: Employer's Right to Fire Workers Held Sacred by California Supreme Court Allan Nairn Little Hands with Fever: Some Consequences of Poverty Death Joshua Frank Why Bush Wants to Legalize the Nuke Trade with Turkey Binoy Kampmark Société Générale and the Economic Meltdown James T. Phillips America's Sick Comedy: Bringing the War Home Stan Cox The Depressing Truth About Anti-Depressants Eamonn McCann Hillary's Lie: "I Brought Peace to Northern Ireland" Ron Jacobs The Horizons of History: What's at Stake in Bolivia Seth Sandronsky California's Health Care Crisis Ben Terrall The Future is Unwritten Poets' Basement Tripp, Gardner, Gibbons and Davies Website of the Weekend City of Immigrants     January 25, 2008 Douglas Valentine Operation Two-Fold: How the CIA Infiltrated the DEA Patrick Cockburn US Troops Will Be In Iraq for 10 More Years: an Interview with Iraqi Foreign Minister Hoshyar Zebari JoAnn Wypijewski Down to the Wire in South Carolina Heather Gray Are We Seeing a Racial Shift in the South? Conversations with South Carolina Voters Marjorie Cohn Senate Democrats Poised to Fold to Cheney on FISA Erica Rosenberg Environmentalists Out on a Limb: the Perils of Collaboration Alan Farago Jeb Bush Goes Nuclear Robert Weissman Reclaiming Economic Freedom Laura Carlsen Wild Cards: Mining the Hispanic Vote in Nevada Stephen Lendman Israeli Repression in the Hebron Website of the Day The FIX is In   January 24, 2008 JoAnn Wypijewski Obama as Anthologist of Uplift Paul Craig Roberts President Hillary Alexander Cockburn Hillary Wants to Talk About Dirty Legal Dealings? Remember Her Nursing Home Scam? Kathleen Christison One and Two State Solutions and the Myth of International Consensus Jeff Halper Power to the (Palestinian) People! Stanley Heller The Siege of Gaza is Broken George Wuerthner The Moronic Sport: ORVs on the Public Lands Patrick Cockburn Desperate Iraqi Farmers Turn to Opium Jeff Sher Just How "Good" is Your Health Insurance? Patrick Irelan Musharraf, the Steadfast Ally? Charles Modiano Restoring the Anti-War King Website of the Day An Illustrated History of Trepanation   January 23, 2008 David Rosen The Great Disappearing Act: the Presidential Candidates and the Politics of Sex David Isenberg Is It Really So Hard to Believe That Iran Stopped Its Nuclear Weapons Program? Farzana Versey Hillary's Harem Paul Craig Roberts The Empire That Must Be Obeyed Alan Farago Where Did All the Good Times Go? Allan Nairn Indonesian Intelligence Service Threatens to Kill Human Rights Activist Kenneth Couesbouc Another Turn of the Screw Niranjan Ramakrishnan How the West was Re-Sold Michael Donnelly Obama Strikes Back Norman Solomon The Power of Love Website of the Day Rafah Today   January 22, 2008 Paul Craig Roberts Farewell to Old Economic Nostrums JoAnn Wypijewski King Day in Columbia, South Carolina Al Giordano Divide and Conquer Politics: How the Clinton Campaign Armed a Black-Latino Time Bomb in Nevada Felice Pace Power Politics in the Klamath: Water, Dams and Salmon Paul Wolf Bolívar's Sword Robert Weissman Deregulation and the Financial Crisis Dave Lindorff The Bush Dollar Trap Marjorie Cohn Cheney Impeachment Gains Traction Richard Neville Keeping Shakespeare in a Box Don Fitz / Zaki Baruti St. Louis Mayor Booed Off MLK Platform Ben Terrall Cindy Sheehan and the Virtues of Divisiveness Sam Husseini Stoning Martin Luther King, Jr. Website of the Day Defend the Mapuche!     January 21, 2008 Kevin Alexander Gray Playing the Race Card Linn Washington, Jr. Deferring Dreams, Delusions of Democracy Pam Martens How Wall Street Blew Itself Up David Macaray Labor's Grim Dilemma: Do We Need a Labor Party? Uri Avnery Look Who's Talking Omar Barghouti Europe's Collusion in Israel's Slow Genocide Joe DeRaymond Protest and Trial in D.C. B.R. Gowani Why Islam Should Tolerate Images Shepherd Bliss The False U.S. Economy Jean-Guy Allard Philip Agee Versus the CIA Dan Bacher Leaping Steelhead! Website of the Day Destroyed By a Rising Flood January 19 / 20, 2008 Alexander Cockburn The Campaign in Black and White Saul Landau Good Time Charlie's War China Hand Endgame for Pakistan? Conn Hallinan Desert Mirage: What Was the Bombing of Syria Really About? Ron Jacobs No Retreat Dave Lindorff A Tax Rebate Won't Fix This Mess Andy Worthington Canada's Humiliating Double Standard on Torture Paul Armentano What's the Going Price for a Joint? More Than You Might Think Seth Sandronsky High Crimes and Economics Michael Donnelly Dodging Ecocide Patrick Irelan The Ordeal of Dr. Safdar Sarki Martha Rosenberg The Drug Industry Takes Another Hit Sherwood Ross Making the World Safe for Despots: Bush's Global Arms Trade David Michael Green So You Want to be My President, Eh? James Rothenberg Unimpeachable: Under House Protection Daniel Gross Starbucks Shortchanges Dr. King Peter N. Carroll In Memory of Milton Wolff Susie Day Croakin' on Hudson Paul Krassner Woody Allen Meets Tongue Fu Poets' Basement Wolff, Buknatski and Orloski Website of the Day Rocky Mountain Blues   January 18, 2008 Allan Nairn Killing Civilians, Carefully Ralph Nader When the Big Boys Get in Trouble, Who Pays the Ultimate Bill? Joanne Mariner Terrorism and Preventative Detention Alan Farago The Stimulus and the Meltdown P. Sainath Pity the Brahmins R.F. Blader Beyond Steinem's Feminism Andy Worthington A Letter from Guantánamo John Jonik Private Insurance is Bad for Your Health Brian McKenna Where Even Sharing is Prohibited: Notes from Inside a Michigan Women's Prison Daoud Kuttab This Time Next Year? Website of the Day Those South Carolina Voting Machines   January 17, 2008 Paul Craig Roberts Leader and Vassal Christopher Brauchli The FBI's Bills Come Due Robert Fantina Leadership, Bush and the New York Times Patrick Irelan Eternal War Paul A. Moore When the Rich Pay No Taxes Stephen Lendman Institutionalized Spying on Americans Beena Sarwar Bhutto and the "State Within a State" Walter Brasch Buzzwords in the Echo Chamber: Change and the Establishment Brenda Norrell Bush Legacy in Texas Sours Adam Federman End of the Left? Website of the Day Democrats for Romney   January 16, 2008 Jeffrey St. Clair Return of the Native Franklin Lamb The Bombing at Qarantina Julian Sanchez David Weigel Who Wrote Ron Paul's Newsletters? Sharon Smith Ron Paul and the Left: a Slippery Slope? Allan Nairn Economic Indicator: No Free Lunch, No Free Market Ayesha Ijaz Khan How the American Media Enables Bush's Iran Fixation Andy Worthington A Strategic Call to Close Guantánamo Richard Behan Nancy Pelosi, You Must Impeach! Website of the Day Obama the New JFK? He's Not That Bad!   January 15, 2008 Andrea Peacock Breach of Trust in America's Most Toxic Town: How the EPA is Rubbing Poison Into Libby's Wounds Wajahat Ali An Interview with Seymour Hersh on Iraq, Bush Foreign Policy and the Prospects of War with Iran Joe Bageant Getting Out the Bling Vote Ralph Nader The Candidate Taboos John Ross Zero Hour: NAFTA and Mexico's Agrarian Apocalypse Elaine Cassel Jose Padilla vs. John Yoo: Can a National Disgrace be Rectified? Peter Morici The Fed Needs More Than a New Communications Strategy Beena Sarwar Pakistan's Dirty Tricks Brigade Robert Weissman Big Business is Even More Unpopular Than You Thought Binoy Kampmark Going Tata in India Dave Zirin Dennis Brutus Smacks Down the Hall of Fame Website of the Day David Lynch on the iPhone   January 14, 2008 Ishmael Reed Ma and Pa Clinton Flog Uppity Black Man Roger Morris Burials in the Sind Uri Avnery The Hands of Esau Mike Whitney Bush's Voodoo Stimulus Package Allan Nairn General Suharto of Indonesia: One Small Man Leaves a Million Corpses William Blum Oh, By the Way, the Iraqis Don't Really Want Us Alan Farago A Subprime Wake Up Call David Macaray Are Labor Unions Ready for Prime Time? Eva Liddell Getting Drunk with Obama Zoe Blunt Road Kill: New Highway Blocked by Protesting Raccoons Website of the Day Doug and Andrea Peacock on Grizzlies   January 12 / 13, 2008 Andrew Cockburn How the New England Journal of Medicine Undercounted Iraqi Civilian Deaths Saul Landau 60 Years of Empire Corey D. B. Walker Barack Obama and the Crisis of the White Intellectual Col. Dan Smith Bush, Iran and the Magician of the Tarot Eric Toussaint The US Subprime Crisis Goes Global Ron Jacobs Television, Murder and Vietnam Fred Gardner The People vs. Christopher James Chakos Stan Cox Don't Take That Pill! Jacob G. Hornberger The Warfare State Ramzy Baroud The Good, the Bad and the Ugly Joseph Grosso The Anglosphere: a Special Relationship of Elites David Díaz-Arias Imagining An/Other Latin American Left Stacey Warde Before We Move On ... Dan Bacher Pumped to Extinction: the Decline of the Delta Smelt Michael Dickinson Georgie in Jesusland Website of Weekend CounterPunchers Protest Outside NYT Offices   January 11, 2008 Dave Lindorff Did Hillary Really Win New Hampshire? More Questions About Diebold Voting Machines Paul Craig Roberts No Escape from War and Unemployment Andy Worthington Six Years of Guantánamo Kenneth Couesbouc Banking on Thin Ice Jeff Ballinger Inside the Vienna Consensus Christopher Brauchli Lethal Injection, the Supremes and China Manuel Garcia, Jr. Paying No Attention to the Presidential Campaigns Andrew Silverstein Bush's Weepy Visit to Jerasulem Marwan Bishara Bush in the Middle East Robert Weissman The First Amendment Gone Wild Patrick Irelan Damn the Small Boats! Website of the Day Hillary and the Superdelegates: Or Why She Wins Even When She Loses     January 10, 2008 Alexander Cockburn Now Nader Claims He Didn't Endorse Edwards Bob Wing Marqueece Harris-Dawson Race Within the Race: Obama, the NH Vote and the Specter of Tom Bradley Michael Donnelly White Women Gone Wild? David Macaray Three Big Reasons for the Decline of Labor Unions China Hand Bush's Delusional Policy Pushes Pakistan to Brink of Catastrophe Ayesha Ijaz Khan Saudi Arabia and Pakistan: Brotherly, Friendly Countries? Rannie Amiri Obama, Man of Kansas or Kenya? Website of the Day Iranian Video of the Hormuz Incident   January 9, 2008 Cockburn / St. Clair The Empire Strikes Back Dave Lindorff The Bad News from New Hampshire: Death By Triangulation John Chuckman Pardon My Laughter: Watching the US Primaries from Canada James Bovard Stomping Freedom: Inside the Martial Law Act of 2006 Alan Farago As Florida Sinks: the View from the Titanic Russell Mokhiber Why Picket the New York Times in DC on Friday? William S. Lind Kicking the Can Down the Road in Iraq Peter Morici Beyond the Sophistry: Why the Trade Deficit Matters Josh Reubner Sudan vs. Israel: Double Standard on Divestment Mike Roselle The Pursuit of Happiness Website of the Day Bottles of Tears on the Wall: Steve Perry on NH       Subscribe Online

February 15, 2008 "The Worst is Just Beginning" Henry Paulsen's Wild Ride on the Economic Hindenberg By MIKE WHITNEY It's a good thing Henry "Hank" Paulson wasn't around in 1929 or we'd all be hawking apples on a street-corner. Paulson is currently on a losing-streak that would have been the envy of Marvelous "Marv" Thorneberry and the '67 Mets. In the last three months he's put together three new programs to deal with the subprime crisis which have fizzled out in a matter of weeks. First, he tried to entice struggling investment banks to put their mortgage-backed bonds in a Super SIV (structured investment vehicle) to see if it would help off-load billions of dollars of down-graded junk onto unsuspecting investors. That flopped. Then he brokered "Hope Now" (1-888-995-HOPE) which was designed to help the banks and homeowners work out the details for a rate freeze on mortgage resets. Paulson assured the public that 500,000 homeowners would take advantage of the program, which would dramatically reduce rate of foreclosures. So far, the Hope Now hotline has provided counseling to just 36,000 borrowers. Representatives have suggested loan workouts for fewer than 10,000 of them, a small fraction of borrowers in need." (Earlier Subprime Rescue Falters; Wall Street Journal) "Only 10,000 homeowners; and Paulson promised 500,000? Another slight miscalculation. This week, Paulson announced another new program, "Project Lifeline", which targets homeowners who are delinquent 90 days or more on their mortgages. Here's a run-down of how it works: (thanks to Calculated risk) "Project Lifeline involves servicers sending letters to borrowers -- prime, Alt-A, or subprime, we're past pretense on that part -- who are very seriously delinquent (90 days or three payments down or more). The letter says that if the borrower contacts the servicer within ten days, agrees to homeowner counseling, and provides sufficient financial documentation that the servicer can consider a case-by-case, deep-analysis style modification of the mortgage terms, the servicer will agree to put the foreclosure process on hold for 30 days while the workout is considered. If the borrower fails to respond to the letter, foreclosure proceeds." At the very best, the program just buys a little more time for the homeowner to pick out a nice rental where he and is family can live after the bank repos his home. So far, all of Paulson's solutions have been nothing more than "business-friendly" band-aids which fail to address the core issues of rising foreclosures, falling home prices, skyrocketing inventory, and tumbling sales. Yesterday, at a press conference in Washington, Paulson made this shocking admission in response to a reporter's question: Reporter: "Sir, is the worst over, yet? Will 2008 have fewer foreclosures?" Secretary of the Treasury Paulson: "In terms of sub-prime and the resets, the worst isn't over. The worst is just beginning.... There's close to 2 million adjustable rate mortgages where the rate is going to be reset over the next couple of years. These loans are of a vintage where there was the most lax underwriting. So, this is the biggest challenge and this is why this is so important." Paulson is right; it is important. So, why is he wasting time with these bogus public relations gambits when he should be making serious recommendations? Paulson's so called "mortgage modifications" just don't cut it. They're pointless. They just put off foreclosure until a later date. The only real solution to the problem is renegotiating the mortgages with the lenders so that people with negative equity" have an incentive to continue making their monthly payments. Otherwise, the number of "walkaways" will mushroom and wreak havoc on the entire industry. This week's housing stats from California illustrate how desperate the situation really is. DataQuick Information Systems said Wednesday a total of 9,983 homes were sold in Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties last month, a drop of nearly 50 per cent from January last year. 50 per cent. That is unprecedented. California is in a housing depression. Is a 30-day grace period really the best that Paulson can come up with? That's nuts. California is a vital part of the US economy. In fact, California and Florida combined represent two-fifths of the nations' GDP. Is Paulson planning to let California go the way of New Orleans? For the last four months, housing sales in California have plummeted 40 per cent (year over year) At the same time, prices in Southern California have dipped 16.7 per cent. The market is freefalling. So far, the only analyst to come up with a reasonable solution is Professor Nouriel Roubini who suggests a three year rate-freeze and a reduction of the face value of the mortgages by the banks. Of course the banks will scream bloody murder, but it's the only way to stem the tide of foreclosures and prevent a crisis that could suck the rest of the economy down a black hole. And, for those who still doubt that a collapse in housing will batter the broader economy, listen to Yale economist Robert Schiller. He predicted the dotcom bust in 2000 and is widely respected for his analysis of the real estate bubble. "We are in a historic housing bust comparable to that of the Great Depression. Prior to the Depression housing prices only rose 19% (between 1921 to 1925) and then fell 30% The cycle we are going through now, is a unique cycle; it will go down as the subprime cycle. The excitement in housing was unprecedented and the unraveling of that (bubble) will have unpredictable consequences....Real estate owned by households is roughly $20 trillion and we've already seen an 8% decline which means a loss of $2 trillion. That has a powerful impact on the economy...The losses are throwing peoples' balance sheets off. So now household balance sheets are in bad shape. People who used to be able to borrow against their house are facing new constraints. This is an ongoing thing that will last for more than a year. So we have unfolding problems to forward to. "We should be thankful that we have Ben Bernanke, who is an expert about the Great Depression at the helm. I don't think he will make the same mistakes that the Fed made that last time around... On the other hand, it (the bubble) is a major misalignment and cutting rates -- when homes prices have doubled in the last decade -- won't change that. The correction (in home prices) is not going to be stopped by the Fed." "If this isn't handled right, this could be a serious recession." Notice how Schiller dismisses inflation as a major concern and emphasizes the potential dangers of a deflationary downturn. It's clear that he would prefer to see Bush increase the $168 billion than face an economy that is stuck in neutral. In other words, he anticipates a collapse in consumer spending. Schiller continues: "I am a big believer that 'confidence matters'. What is happening now, is that people are getting a succession of scare stories and personal savings are down... If you look at what happened before the Great Depression.....there was evidence of a sudden and sharp drop in consumer confidence and people pulled back and stopped spending. And we are seeing consumer confidence falling and I expect that it could take a much bigger tumble if we don't do something." Are you listening, Hank Paulson? Consumer spending is down (excluding food and fuel) and consumer confidence is falling at the fastest pace since the 1990-91 recession. Also, $2 trillion has been wiped out from falling home prices and another $600 billion will vanish this year from mortgage equity withdrawals (MEWs). Traffic to the shopping malls has slowed to a crawl and retail shops had their worst January on record. Homeowners are hoarding their earnings to cover basic expenses and to make up for their lack of personal savings. The spending spigot has been turned off. America's consumer culture is in full-retreat. Everything Schiller said is taking place right now. So, where's the political leadership? Does anyone in Washington even have a game plan? In the fourth quarter of 2007, new foreclosures averaged 2,939 a day, double the pace of a year earlier. Business inventories are on the rise. This week's release of the Institute for Supply Management's Non-Manufacturing Index (ISM) showed steep declines in all areas of the nation's service sector -- including banks, travel companies, contractors, retail stores etc. The Business Activity Index, the New Orders Index, the Employment Index, and the Supplier Delivery Index have all contracted at a historic pace. These are the classic signs of overproduction. The next shoe to drop will be rising unemployment. Layoff notices have already gone out in new construction, retail, car manufacturing and financial services. This is all the predictable outcome of low interest" bubble-making. It invariably ends in a painful deflationary spiral. "Confidence matters," Schiller warns. Yes, it does. But the American people lost confidence in their leaders long ago. So -- like Paulson says -- the worst is probably just beginning. Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

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