Today's Stories

October 27, 2009

Mike Whitney
Black Tuesday and How We Got Out of It

October 26, 2009

Bill Quigley /
Deborah Popowski
When Gitmo and Abu Ghraib Come Home

Paul Craig Roberts
Are You Ready for the Next Crisis?

Uri Avnery
A Tsunami Called Goldstone

Mike Whitney
Will the Dollar Remain the World's Reserve Currency in Five Years?

Michael Snedeker
The Execution of Cameron Willingham

Shamus Cooke
Obama's Dirty War on Immigrants

David Michael Green
Paranoia for Breakfast

Martha Rosenberg
Gagging Michael Pollan

Patrick Bond
Gridlock on the Way to Copenhagen

Binoy Kampmark
Heading for the Tiber

Website of the Day
Goldman Sachs Abandons Kittens

October 23-25, 2009

Alexander Cockburn
All the Populism Money Can Buy

Christopher Ketcham
Unlearning the CIA: the Education of Bob Baer

Jeff Gore
Palestine in Pieces: an Interview with Bill and Kathleen Christison

Gareth Porter
What Really Prompted Iran to Build the Qom Enrichment Facility?

Jayne Lyn Stahl
The Power Behind the Drone

Saul Landau
Fidel on Obama and Consumerism

Mike Whitney
The Great Dollar Collapse Debate

Nikolas Kozloff
Challenging the Dollar Dictatorship: an Interview with Economist Ethan Kaplan

Ron Jacobs
The Vatican's Takeover Bid

Russell Mokhiber
The Weiner Charade

Missy Beattie
Gainful Employment

Ricardo Alarcón de Quesada
Posada and the Cuban 5: Without Any Exception Whatsoever?

Stephen Lendman
Cashing In, Selling Out: AARP's Tradition of Betrayal

David Ker Thomson
Natural History: Make Some Today

Rannie Amiri
Saada Under Siege

Ronnie Cummins
The Organic Revolution

Norm Kent
Bring It On: Fox News vs. Team Obama

Charles R. Larson
Zimbabwe's Unravelling

David Yearsley
Damn Near Dead at Yale

Lorenzo Wolff
A Fistful of Your Own Teeth

Ben Sonnenberg
Costa-Gavras's "Z": an Excellent Thriller

Kim Nicolini
Where the Wild Things Are: Max's Hollow Utopia

Poets' Basement
Three Poems by Leonard J. Cirino

Website of the Weekend
Truth Squading Timberland: Join the Fray!

October 22, 2009

Dan Pearson /
Kathy Kelly
The Rotten Fruits of War

Jonathan Cook
Israeli Police Don Arab Disguises

Paul Craig Roberts The US as Failed State

Mark Engler
Pranksters Fixing the World: and Interview with the Yes Men

Johann Hari
Three Myths Driving the Afghan War

Brian M. Downing
Losing the War

Eric Toussaint
Small Oversights and Big Lies About Latin America

Tom Mountain
Busting the Darfur Myth

Israel Shamir
Russia's Daring Vote

Charles Thomson
What is Damien Hirst Playing At?

Website of the Day
Hitler Upset At Balloon Boy Hoax

October 21, 2009

Pam Martens
The Next Financial Crisis Hits Wall Street: Judges Start Nixing Foreclosures

Linn Washington, Jr.
A Kafkaesque Deportation

Liaquat Ali Khan
Now Pakistan: Sequential Destruction of Muslim Nations

D. K. Wilson
Rush Limbaugh and the NFL

Franklin Lamb
Syria's Golan Heights

Norman Solomon
Uncle Sam in Afghanistan

Stephen Fleischman
Hypocrisy Unbridled

Patrice Higonnet
On Harvard's Financial Crisis

Binoy Kampmark
Herta Müller's Nobel

Kevin Coval /
Josh Healey
Searching for a Minyan

Website of the Day
How Wall Street is Making Its Bilions

October 20, 2009

Sharon Smith
Et Tu, Codepink?

Tariq Ali
Farce in Kabul, Tragedy in Pakistan

Mark Brenner
Pensions: the Next Casualty of Wall Street

Bouthaina Shaaban
The Adoption of the Goldstone Report: What Does It Mean?

Michael D. Yates
Down in the Valley With Cesar: Power, Paranoia and Purges in the UFW

Dean Baker
Does Citibank Need China?

Dave Lindorff
Depleted Uranium Weapons: Dead Babies in Iraq and Afghanistan are No Joke

John Ross
Chronicle of a Tormenta Electrica, II

Ricardo Alarcón de Quesada
Cuban Five: a Very Important Liar

Kevin Zeese
Can the Democrats Avoid a Populist Health Care Rebellion?

Gilad Atzmon
Autumn in Shanghai

Website of the Day
A Message From the Gyre

October 19, 2009

Mike Whitney
The Dollar Will Not Crash

Greg Moses
The Cash Cops of Tenaha

John Ross
Chronicle of a Tormenta Electrica

Michael Donnelly
Outside Agitator

Jayne Lyn Stahl
Dick's Fringe Army: Tea Baggers and Birchers?

Eric Walberg
The Battle in Canada

Russell Mokhiber
Pennsylvania, First in the Nation for Single Payer?

Barbara Rose Johnston
War, Peace and the Obamajority

John V. Whitbeck
Zionism: an Anti-Semite's Dream?

Christopher Ketcham
Swine Fools

Website of the Day
Greenspan: Break Up the Big Banks?

October 16-18, 2009

Alexander Cockburn
White House v. Fox News: a War Obama Can Win

Saul Landau
Autumn of the Patriarch

Paul Craig Roberts
The Rich Have Stolen the Economy

Carl Ginsburg
Where $18 an Hour is Too Much

Ralph Nader
Barney Frank the Bankers' Consort

Nikolas Kozloff
Rainforest Beef, Factory Farms and Anthony Bourdain's War on Vegetarians

Carlo Galli
Berlusconi: Still Doing Nothing, Still There

Dave Lindorff
Agent Orange in Vietnam: Ignoring the Crimes Before Our Eyes

Catherine Rottenberg / Neve Gordon
Educating Children in War Zones

Marshall Auerback
Dollar Spasms

Nicola Nasser
The Realistic Way Out of Iraq

Windy Cooler
The Ghost of John Brown

James L. Secor
Why I Miss China

Ron Jacobs
Escalation Unopposed

Wes Jackson
A Way of Knowing

Jesse Lerner-Kinglake
Global Food Fight

David Ker Thomson Against Leaders

Missy Beattie
Dinner With the President

Emily Ratner
Taping Our Mouths Shut to Scream Out Our Dissent

Stephen Martin
The Scorched Earth Mindset of the International Banker

Michael Snedeker
"A Place of Greater Safety"

Charles R. Larson
Cheeta: the Last of the Hollywood High-Rollers

David Yearsley
Judith Leyster's Sensuous Passions

Peter Stone Brown
It's a Bob Christmas for Halloween

Poets' Basement
Keeler, Beatty and Anderson

Website of the Weekend
Elements of Nature

October 15, 2009

Andrew Cockburn
Our Cheap Politicians

Brian M. Downing
Rethinking the Afghan Insurgency

Ramzy Baroud
Abbas and the Goldstone Report: Our Shame is Complete

Danny Weil
A Neo-Liberal Arts Education: Diploma Mills and Debt Peonage

M. Idrees Ahmad
Return to Peshawar: a Journey Home

Margaret Kimberley
Michelle's Family Tree

Ricardo Alarcón de Quesada
Cuban Five: Which Side Are You On?

Harvey Wasserman
Nuking the Climate Bill

Nirmal Ghosh
A Tale of Two Protocols: How Montreal Could Save Us From the Mire of Kyoto

Charles R. Larson
Sarah Palin Bears It All

Website of the Day
Tortured Law

October 14, 2009

Michael Neumann
Fearsome Words? a Suppressed Talk on the Israel/Palestine Conflict

M. Reza Pirbhai
Fighting the Taliban: What, Exactly, is Being Fought in Afghanistan?

Gareth Porter
Hawks Play Up the Taliban's Ties to Al Qaeda

Paul Craig Roberts
War Criminals Are Becoming Arbiters of the Law

John Strausbaugh Fortress Moon

Ralph Nader
The CBO's Flawed Report on Medical Malpractice

Dean Baker
Won't You Please Come to Chicago to Greet the Bankers?

Charles Modiano
White Silence: Where Does Brett Favre Stand on Rush Limbaugh?

Nadia Hijab
Abandoning "Women and Children"

Walter Brasch
An Extension of Her Motherhood: Sherry Carpenter, Journalist and Animal Care Provider

Website of the Day
Nader: Obama Has a "Concessionary Personality"

October 13, 2009

Peter Linebaugh
Putting the Spine Back in the Commonwealth

Shamus Cooke
What Obama Isn't Telling American Workers

John Ross
War on Mexican Women

Brendan Cooney
Ask Awal Khan About Obama's Prize

Frida Berrigan
Operation Enduring Detentions: Losing the Moral High Ground

Yves Engler
Is Canada More Pro-Israel Than the US?

David Macaray
Why the Government Fears Unions

Dave Lindorff
Democrats: Selling Out, But Still Getting Screwed

Mark Weisbrot
Occupying Afghanistan is Making Things Worse

Ricardo Alarcón de Quesada
History Repeats Itself

Binoy Kampmark
That Dirty Colonial War

Website of the Day
The Health Insurance Industry's Latest Doublecross

October 12, 2009

Pam Martens
Secret Deal Between Wall Street and Washington Shines a Harsh Light on Federal Housing Agency

Mike Whitney
A Dollar Rout or More Bernanke Trickery?

Martha Rosenberg
Yale Lab Tech Causes Two Problems for Animal Researchers

Jessica Arents
The Price of Peace: Our Arrest at the White House

Eamonn McCann
Massacre in Ireland, Massacre in Iraq

Bill Hatch
Dairy Industry Goes Down the Tubes

Sen. Russell Feingold
Time for a Timetable in Afghanistan

Niranjan Ramakrishnan
The Siren Song of World Praise

Gideon Levy
Obama's Betrayed Mission in the Middle East

Iyad Burnat
Why Does Obama Get a Prize and Bush Got Shoes?

Alan Cabal
Why Obama Deserves the Nobel

Dan Bacher
The Astroturf Method

Website of the Day
The Palestine Chronicle Needs Your Help

October 9-11, 2009

Alexander Cockburn
War and Peace

James Bovard
Eight Years of Big Lies on Afghanistan

Kathleen and Bill Christison
New Crisis Developing in Palestine

Andy Worthington
Congressional Depravity on Gitmo

Marc Levy
Talking Dirty to the Kids

Tariq Ali
Ahmed Rashid's War

Mike Whitney
The Securitization Boondoggle

Paul Craig Roberts
Warmonger Wins Peace Prize

Alan Nasser
Cockeyed Economics

Jack Z. Bratich
The Twitterest Pill: Policing Dissent in the Information Age

Steve Breyman
Time for a War Tax

David Michael Green
A Hapless Presidency

Dave Lindorff
The WTF Prize

Paul Buchheit
Fear of the Rich

Jim Goodman
Feedlots and E. Coli

Missy Beattie
Theater of the Absurd

Michael Leonardi
Ships of Poison

Nadia Hijab
The Plight of the Right of Return

Mel Packer
The Crackdown on Pittsburgh

David Macaray
The Raiding Game

James T. Phillips
Getting Burned

Charles R. Larson
One Man's Walk Through Hell

Michael Donnelly
Behind the Capitalist Curtain

David Yearsley
The Biggest Blot on Mel Gibson's Rap Sheet

Lorenzo Wolff
Rap That Threatens ... and Endures

Poets' Basement
Heyen, Ames and Buknatski

Website of the Weekend
Jobs Conference

October 8, 2009

Saul Landau
A Late September Morning With Fidel

Paul Fitzgerald /
Elizabeth Gould
Dark Omens for the US in Afghanistan

Linn Washington, Jr.
Pot and Perversion: Judicial Antics Expose Drug War Insanity

Marshall Auerback
Neo-Classical Economics Misses What Matters

Dave Lindorff
A Nation of Snoops

David Rosen
Bankrupt Morality: the Staying Power of Republican Sinners

Chris Darimont / Misty MacDuffee
The Bear Essentials: New Thinking Needed to Save BC's Salmon and Grizzlies

John V. Walsh
Remembering Hinton's Fanshen

Stewart Lawrence
The Edwards / Hunter Affair Reconsidered

Charles R. Larson
Conservatives in the Sandbox

Website of the Day
Et Tu, Code Pink?

October 7, 2009

Brendan Cooney
Are Republicans Breaking US Law in Honduras?

Paul Craig Roberts
Dead Labor: Marx and Lenin Reconsidered

Dean Baker
Bernanke's Recovery: Unemployment Up, Wages Down (But the Banks Have Been Saved ... Sort Of)

Jonathan Cook
A Third Intifada?

John Stanton
HTS: Congress Rewards Failure, Puts Personnel in Harms Way

Joanne Mariner
Tortured Language

Ricardo Alarcón de Quesada
Cherry Blossoms

Stephen Lendman
The Gaza War's Effect on Women

Sen. Russell Feingold
Time to Draw Down in Afghanistan

Mary Lynn Cramer
Doublespeak on Health Care

Website of the Day
How to Bag a Wolf by Aerial Assault

October 6, 2009

Mike Whitney
Dollar Hysteria: Is the Sky Really Falling?

Gareth Porter
The Iranian Rift in the IAEA: Leaked Paper Based on Disputed Intel

Jonathan Cook
How Israel Buried the UN's War Crime Probe

Boris Kagarlitsky
My Hour as Talking Head in Moscow

Iain Boal
The New Crisis at Pacifica

Ron Jacobs
Why Are We in Afghanistan?

John Ross
Wave of Anarchist Bombings Strikes Mexico

Michael Dickinson
Panic in Istanbul: Smoke, Mayhem and the World Bank

Stephen Fleischman
Beware the Predator

Ira Glunts
The Audacity of Nope

Missy Beattie
Outside Looking In

Website of the Day
Round Up the Usual Suspects

October 5, 2009

Pam Martens
Wall Street Titans Use Aliases to Foreclose on Families While Partnering with a Federal Agency

Mike Whitney
Dead Man Walking: Welcome to the US Economy

Paul Craig Roberts
How the Feds Imprison the Innocent

Harry Browne
Ireland Says, "Yes, Please"

Sara Mann
My Little Town: Nothin' But the Dead and Dyin'

Omar Barghouti
Dissolve the Palestinian Authority

Shamus Cooke
A Jobless Recovery?

Brenda Norrell
A Dirty New Low for Peabody Coal

Fred Gardner
Situation NORML: Reconciling Medical Pot Use and Legalization

Binoy Kampmark Copenhagen Blues: McChrystal and the Afghan Trap

Website of the Day
In Goldman Sachs We Trust?

October 2-4, 2009

Alexander Cockburn
Geezer Renditions

Saul Landau
News From Raul Castro

Diana Johnstone
After the German Elections: Is Socialism Really Dead in Europe?

Greg Moses
Cramming for the Downside

William Blum
The Fall of the Berlin Wall: Another Cold War Myth

Brian Cloughley
Iran's Nuclear Program: Where's the Proof?

Russell Mokhiber
Welcome Back, Michael Moore

John Ross
Chomsky in Mexico

Ellen Brown
IMF Catapults From Shunned Agency to Global Central Bank

David Ker Thomson
Cop Shocks

David Macaray
The Audacity of Toyota

Gary Engler
Unions in a Rut

Robert Fantina
Meet the New Boss (Same as the Old Boss)

Lisa Stolarski / Naomi Archer
Pittsburgh: Still a (Coal) Company Town

Anthony Papa
Here is Your Chance to Help End the Failed War on Drugs

Joe Allen
The Good Wife: Bad View of a Corrupt System

Harry Browne
Tarantino Scalps His Audience

Ron Jacobs
Collective Fiction

Charles R. Larson
Cultural Warriors: Austrialian Aboriginal Art Triennial

David Yearsley
Hanns Eisler's Great National Anthem for East Germany is Available: Make It America's

Poets' Basement
Taylor, Gardner and Landau

Website of the Weekend
Wrongful Convictions of Youth

October 27, 2009

We've Been Here Before

Black Tuesday and How We Got Out of It

By MIKE WHITNEY

October 29, marks the 80th anniversary of the Stock Market Crash of 1929, the event which most historians point to as the beginning of the Great Depression. On Black Tuesday, traders dumped 16 million shares in one day, sending the markets into freefall.  In the months that followed, stocks rallied -- sometimes for long periods at a time -- but the underlying economy continued to deteriorate as consumers curtailed spending and cut back sharply on credit. As a result, hundreds of banks were shuttered, thousands of businesses failed, and unemployment soared to 25 percent. Public confidence plunged and the economy slipped into a decade-long slump. Tariffs were thrown up, international trade slowed to a crawl, and shanty towns began to sprout up across the country. 

In his article, "The Main Causes of the Great Depression" Paul Alexander Gusmorino said:

"Many factors played a role in bringing about the Great Depression, however, the main cause was the combination of the greatly unequal distribution of wealth throughout the 1920's, and the extensive stock market speculation that took place during the latter part that same decade".

Income disparity widened throughout the 1920's. While disposable income rose 9 percent from 1920 to 1929, those in the top 1 percent enjoyed a 75 percent boost in disposable income. A similar, though larger, gap has emerged in recent years as a larger share of the nation's wealth has been shifted to the country's richest people.

"By 2006 the top 1 percent of households received close to a quarter of all income and the top 10 percent got 50 percent of the income pie. In 2006, the 400 richest Americans had a collective net wealth of $1.6 trillion, more than the combined wealth of the bottom 150 million people. This degree of income and wealth inequality was last seen just before the beginning of the Great Depression." ("The ABCs of the Economic Crisis: What Working People Need to Know" By Fred Magdoff and Michael Yates, Monthly Review Press)

Also, between 1925 and 1929 total credit more than doubled (from $1.38 billion to around $3 billion) just as it has in the last decade. According to McKinsey Global Institute:

"Between 2000 and 2007 US households led a national borrowing binge nearly doubling their outstanding debt to $13.8 trillion. The amount of US household debt amassed by 2007 was unprecedented whether measured in nominal terms, as a share of GDP (98 per cent) or as a ratio of liabilities to personal disposable income (138 per cent) (McKinsey Global Institute, "Will U.S. Consumer Debt Reduction Cripple the Recovery?")

Stagnant wages, shrinking personal savings, and record household debt, have created conditions nearly identical to those preceding the Great Depression. The symptoms have been masked by the trillions in monetary and fiscal stimulus, but the glaring inequality and the huge burden of personal debt portend a long period of misery ahead.  People are poorer than before the crisis, and their needs need to be addressed by the government. The economist James K. Galbraith takes aim at the current policy in a recent article in the Washington Monthly:

"The oddest thing about the Geithner program is its failure to act as though the financial crisis is a true crisis—an integrated, long-term economic threat—rather than merely a couple of related but temporary problems, one in banking and the other in jobs. In banking, the dominant metaphor is of plumbing: there is a blockage to be cleared. Take a plunger to the toxic assets, it is said, and credit conditions will return to normal. This, then, will make the recession essentially normal, validating the stimulus package. Solve these two problems, and the crisis will end. That’s the thinking.

“But the plumbing metaphor is misleading. Credit is not a flow. It is not something that can be forced downstream by clearing a pipe. Credit is a contract. It requires a borrower as well as a lender, a customer as well as a bank. And the borrower must meet two conditions. One is creditworthiness, meaning a secure income and, usually, a house with equity in it. Asset prices therefore matter. With a chronic oversupply of houses, prices fall, collateral disappears, and even if borrowers are willing they can’t qualify for loans. The other requirement is a willingness to borrow, motivated by what Keynes called the "animal spirits" of entrepreneurial enthusiasm. In a slump, such optimism is scarce. Even if people have collateral, they want the security of cash. And it is precisely because they want cash that they will not deplete their reserves by plunking down a payment on a new car.

“The credit flow metaphor implies that people came flocking to the new-car showrooms last November and were turned away because there were no loans to be had. This is not true—what happened was that people stopped coming in. And they stopped coming in because, suddenly, they felt poor." ("No Return to Normal:Why the economic crisis, and its solution, are bigger than you think" James K. Galbraith, Washington Monthly)

Key policymakers in the Obama administration don't seem to grasp the problem at hand. That's made a bad situation even worse. Galbraith thinks that we're using the wrong model for dealing with a Depression. If the banking system is broken and consumers are too burdened with debt to spend, then alternatives need to be considered.

James K. Galbraith again:

"Roosevelt employed Americans on a vast scale, bringing the unemployment rates down to levels that were tolerable, even before the war—from 25 percent in 1933 to below 10 percent in 1936...

The New Deal rebuilt America physically, providing a foundation (the TVA’s power plants, for example) from which the mobilization of World War II could be launched. But it also saved the country politically and morally, providing jobs, hope, and confidence that in the end democracy was worth preserving. There were many, in the 1930s, who did not think so.

“What did not recover, under Roosevelt, was the private banking system. Borrowing and lending—mortgages and home construction—contributed far less to the growth of output in the 1930s and ’40s than they had in the 1920s or would come to do after the war. If they had savings at all, people stayed in Treasuries, and despite huge deficits interest rates for federal debt remained near zero. The liquidity trap wasn’t overcome until the war ended..... the relaunching of private finance took twenty years, and the war besides.

“A brief reflection on this history and present circumstances drives a plain conclusion: the full restoration of private credit will take a long time. It will follow, not precede, the restoration of sound private household finances. There is no way the project of resurrecting the economy by stuffing the banks with cash will work. Effective policy can only work the other way around."("No Return to Normal:Why the economic crisis, and its solution, are bigger than you think" James K. Galbraith, Washington Monthly)

History can help point the way out of this mess, but not if policymakers shrug-off the lessons of the past and press on with half-measures that just eat up resources and extend the misery.  Stuffing the banks with reserves and hoping that struggling consumers start borrowing again, is pointless. It is equally pointless to ignore tattered household balance sheets which will have to be patched before spending resumes. Government has to get more engaged and play a bigger role. This isn't a problem that can be worked out by the Fed and Treasury alone. It will take a major public mobilization, similar to preparing for a war. Federal money will have to be used to make up for lost state revenues. Government work programs will have to be created to rebuild critical infrastructure, expand green technologies, and modernize energy systems. At the same time, the administration will have to re-regulate the financial system, resolve or euthanize insolvent banks, and create a system of locally-controlled banks which function as public utilities to provide low interest loans to businesses and consumers.

All of this will cost trillions; trillions that won't be flushed down a black-hole on Wall Street or used as bonuses for shifty bank tycoons. In other words, money well spent.

Big government means big deficits, and the looming threat of capital flight. Will central banks and foreign investors grow wary of the deficits and ditch the dollar and US Treasuries? No way. The world is looking for leadership; for some indication that the US still knows how to shape its own future and clean up its own nest. They want to see the Obama administration "take charge" and fix the banking system, conduct criminal investigations, increase regulation, restore confidence in the markets, and rebuild the engine of global demand, the middle class.

This is a job for big government. Big government is back. 

Mike Whitney lives in Washington state. He can be reached at fergiewhitney@msn.com

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