The liberal economist who's become Obama's chief critic

Forget the Republicans, the biggest thorn in the President's side is Paul
Krugman. Stephen Foley reports

Saturday, 4 April 2009

Paul Krugman On the bank bailout: 'The plans are a classic exercise in
'lemon socialism': taxpayers bear the cost if things go wrong,
stockholders and executives get the benefits if things go right

EPA

Paul Krugman On the bank bailout: 'The plans are a classic exercise in
'lemon socialism': taxpayers bear the cost if things go wrong,
stockholders and executives get the benefits if things go right

* Photos enlarge

His apocalyptic warnings have sent readers flocking to his blog. A viral
video of a Californian man literally singing his praises is a hit on
YouTube. Tickets to a lecture he was giving in California last night were
going for $135 (91). Newsweek magazine just put him on the cover and
dubbed him the head of "the loyal opposition". Paul Krugman is the man of
the moment. And Team Obama is rattled.

While the US leader has been entrancing foreign statesmen on a whirlwind
tour of Europe and trying to craft an era of bipartisanship back home, his
staunchest opponent has appeared from very close quarters from the left
threatening a crisis of confidence that could capsize his infant
presidency.

The Obama administration has been blindsided by the emergence of Mr
Krugman not even a politician, but an economist as a focus for
dissidents who believe it is not doing enough to repair the economy.

On both pillars of Mr Obama's economic strategy the $800bn package to
stimulate the economy and the $1 trillion bailout for the financial sector
the bearded Princeton university professor has been the President's most
coruscating critic.

Mr Krugman has been doing his New York Times column for a decade. He has
long been a staple on political talk shows and gained new respect last
year when he won the Nobel prize for economics for his work on
international trade. But in the past few months, he has tapped into the
anxiety of a wider audience, which is asking the question of the moment:
will the Obama recovery plan work?

His answer is no. The economic stimulus Bill was far smaller than required
to combat soaring job losses, which yesterday passed five million since
the start of the US recession. Worse, the plan to repair the banking
system lending private investors up to $1 trillion to buy toxic mortgage
assets from the country's ailing banks, in the hope of freeing them up to
start lending again is doomed, because it is based on the flawed notion
that the major US banks are fundamentally sound.

"Why am I so vehement about this?" he asked in a blog post. "Because I'm
afraid that this will be the administration's only shot that if the first
bank plan is an abject failure, it won't have the political capital for a
second. So it's just horrifying that Obama and yes, the buck stops there
has decided to base his financial plan on the fantasy that a bit of
financial hocus-pocus will turn the clock back to 2006."

Mr Krugman is hardly the only economist arguing the US is making the same
mistakes as Japan in the 1990s, when it kept dead banks walking, resulting
in a decade or more of economic stagnation. But he is the de facto
spokesman for a movement that argues the worst banks Citigroup, Bank of
America, et al should be nationalised and the federal government should
funnel more borrowed money to the unemployed or into infrastructure
projects to keep the economy from shrivelling.

Because of all his heavyweight economic credentials, it is not often noted
that the basis of Mr Krugman's current appeal is an emotional one.

He speaks to that nagging voice inside the millions of liberals swept up
in the Obama phenomenon. Their hope is a brittle thing at the altitude to
which it soared last year and his words are little hammers, tapping away
and threatening to shatter their optimism.

The economist's columns are at their most devastating when they portray
his own emotional response to the Obama presidency and invite one from
the reader, too. "I don't know about you, but I've got a sick feeling in
the pit of my stomach," he wrote, three weeks after the inauguration, "a
feeling that America just isn't rising to the greatest economic challenge
in 70 years."

At the root of the problem is Mr Obama's nave attempt to woo a Republican
party still dominated by headbanging free marketeers, Mr Krugman often
suggests. The President "compromised in advance" and is "alarmingly
willing to settle for half-measures".

Mr Obama first began having to respond to the economist's accusations of
timidity during the battle over the economic stimulus.

"If Paul Krugman has a good idea in terms of how to spend money
efficiently and effectively to jumpstart the economy then we are going to
do it," he said at the time.

The President's increasingly frustrated circle now seems to be publicly
debating Mr Krugman on a daily basis. Larry Summers, the President's chief
economic adviser, professed himself surprised and confused by the critique
of the bank bailout plan. Quotes from critical columns are thrown at Tim
Geithner, the Treasury Secretary, in every interview he undertakes.

Earlier, Rahm Emanuel, the White House chief of staff, lashed out when Mr
Krugman damned the compromise deal made with three Republican senators
that got the stimulus Bill passed. "How many Bills has he passed?" Mr
Emanuel told a journalist for New Yorker magazine, thumping the table.

Compromise was vital when the Senate still hadn't seated Al Franken, the
Democrat winner in Minnesota, whose wafer-thin election faces legal
challenge. "Write a fucking column on how to seat the son of a bitch. I
would be fascinated with that column. OK?"

Despite his decade in the commentariat, Mr Krugman is not used to the
ferocity of this debate. The 56-year-old son of Russian immigrants, who
grew up a shy boy on New York's Long Island, is standing his ground,
though, and plans to scale back the university teaching in favour of more
time on the lecture and TV circuit.

So if the Obama administration hopes that Mr Krugman is going to fall
happily into line when the current emergency subsides, they are likely to
be disappointed.

The economic lines are being drawn in ways similar to those during the
early period of the Bill Clinton presidency, when left-wingers argued for
more government spending to juice recovery from the first Bush recession
and deficit hawks from the centre (and the Republicans in Congress) urged
priority for the repayment of the country's huge debt.

Mr Obama is promising aggressive deficit reduction as soon as the US is
over the worst; Mr Krugman said last weekend that "advanced countries with
stable governments can run up a lot of debt and be forgiven by markets".

He is set to remain a thorn in the President's side for a full term. Mr
Krugman himself, though, is wryly modest about it all. In a blog post the
day before Newsweek hit the stands, he said: "I've long been a believer in
the magazine cover indicator: when you see a corporate chieftain on the
cover of a glossy magazine, short the stock.

"There's even empirical evidence supporting the proposition that celebrity
ruins the performance of previously good chief executives. Presumably, the
same effect applies to, say, economists. You have been warned."

The thoughts of Paul Krugman

*On the stimulus package: "There's still time to turn this around. But Mr
Obama has to be stronger looking forward. Otherwise, the verdict on this
crisis might be that no, we can't." (2009)

*On the bank bailout: "The plans are a classic exercise in 'lemon
socialism': taxpayers bear the cost if things go wrong, stockholders and
executives get the benefits if things go right." (2009)

*On the Bush economy: "The problem isn't that people don't understand how
good things are. It's that they know, from personal experience, that
things really aren't that good." (2005)

*On fraudulent business practices: "I predict that in the years ahead
Enron, not September 11th, will come to be seen as the greater turning
point in U S society." (2002)

http://www.independent.co.uk/news/world/americas/the-liberal-economist-whos-become-obamas-chief-critic-1662253.html

NEW submission policies for PNEWS-L and for DARK MATTER:

PNEWS is a distribution link-list for links to important news and views. [Not for promoting your site no commercial posting. Advertising will not be tolerated and all submissions will be reviewed before they are accepted.]. Links should include a short one or two paragraph summary as a preface and a link to the entire news or views item. Also see the CRYPT, a depository of articles from the Worm Hole and the Epsilon Weblog.

DARK MATTER has moved to dark-matter <at> yahoogroups.com
Dark Matter is a distribution list for articles. Nothing has change except the address so if you were subscribed at Dark Matter here, you must resubscribe at the following address:

Group Email Addresses
Related Link: http://inyourface.info/
Post message: dark-matter <at> yahoogroups.com
Subscribe: dark-matter-subscribe <at> yahoogroups.com
Unsubscribe: dark-matter-unsubscribe <at> yahoogroups.com
List owner: dark-matter-owner <at> yahoogroups.com

[wormhole] replaces the old Dark Matter. To continue receiving articles from Dark Matter, send "subscribe wormhole" (without quotes) in subject line to:
ecartis <at> inyourface.info

Are the laws of nature the same everywhere in the Universe?
Or, is our little piece of the Universe what it is because of the
environment where we live?

OR, is the Universe the way it is, our piece of it at least, just so
physicists can be here to observe it? (g) We live on a unique planet with
liquid water and our laws of nature have adapted to this unique
environment.

I think the Universe is a big random place, very inhospitable to our
kind of life, but for other forms of life the possiblities are unlimited.

I think each pocket of space has different laws of nature and vastly
different landscapes and much more than we can imagine is possible.

Ponder this: Dark Matter is 25%. Dark Energy is 70% of the Universe.
And Atoms only make up about 5% of the Universe.

Ponder This:

What if to the whole of everything we are small like subatomic human particles?

Or what if we are food for aliens who seeded this rock millions of
years ago with DNA and let it evolve and they will one day return to eat us.

Peter Wesson, a scientist in Canada recently wrote that our universe is
actually in a black hole and may be in another universe, which also might be in
a black hole, and so forth and so on. We know what we know but there is much we
do not know.

What if our human existence doesn't mean any more than the fact we are
here - and we have a brain? (because that is all I believe it means) And
if we have a brain we should be enlightened enough by the accumulated
wisdom of 500 years of books to want to be the species that saves the
world for us and for them (all the rest) and only by doing that can we
insure a quality of life that will make it all worth while and then we
won't be so insignificant after-all.

* Life on Earth is a product of evolution by natural selection
operating in the medium of carbon chemistry. However, in theory,
evolution is not limited to Earth, nor to carbon chemistry.

* Just as it may occur on other planets, it may also operate
in other media, such as the medium of digital computation

AND, "what-if" we are somebody else's computer simulation?

Also See: http://pnews.org/ArT/ZioN/EvO.shtml

Hank

TheCrypt - http://pnews.org/archives/
The WormHole - http://pnews.org/

ENIAC

ELECTRONIC NUMERICAL INTEGRATOR AND CALCULATOR

The Electronic Numerical Integrator and Calculator (Eniac), was
only a dream in the 40s. My interest in computers goes way back
to the late 50s to the ENIAC. I had been a Ham Operator since
1955 (K4EVY), when I was still in high school. There was no such
thing as a personal computer then.

But, my excitement about computers really began when I saw the
first computer, the ENIAC, at Aberdeen Proving Grounds in Maryland
in the 50s. I was in military school in Georgia then but on one of
our family visits to Pennsylvania and Maryland my uncle invited me
to see his laboratory and the ENIAC.

As early as the 40s (1943) scientists at the University of Pennsylvania
proposed a machine which would calculate "firing tables" - settings used
for directing artillery under varying conditions vis-a-vis weather,
distance to the target, etc. to be used for aiming artillery, which
up to that time sometimes took hours to calculate. That is when the
computer age was actually launched. The ENIAC, which weighed 30 tons,
was funded by the U.S. Army.

Dr. Goldstine lobbied a committee headed by Oswald Veblen, mathematician,
who influenced the army to go forward with funding at the Aberdeen
Proving Grounds (in 1943) with a request for half a million dollars
to pay for the research and the computer. Up to that time the army
had been shipping their guns without firing tables. Col Leslie E. Simon
was then the director of the Army's Ballistics Laboratory, where my
uncle worked. Simons retired as a general. Dr. Goldstine was in charge
of the operation for the army. A team of scientists and engineers at
Penn's Moore School built the computer. The project was secret.

After three years of military school and one year of regular high
school I enlisted in the army. It was there that I was selected for
a secret assignment and after extensive investigations by the FBI and
the Secret Service I worked at the White House for the President of
the United States. I had a top secret clearance but also a crypto and
nuclear clearance. I was privy to everything the President said and
later on the Chiefs of Staff ("need to know" was extended to everything
I heard). In the 60s I worked in the War Room for the Chiefs of Staff at
the Pentagon (before going to helicopter school and before the Yom Kipper
War in 73).

My uncle was a physicist who died when he was only about 49 years old
from a cardiac condition but while he was employed as a scientist for
the army he invented the fastest camera in the world and he used the
very first computer in the ballistics lab at the base, which was also
his research facility for developing munitions for the military.

In 1957 I enlisted in the army because a war was about to
start and I wanted to get in on it.

One of the most exciting days of my life however was when I saw the
world's first computer, the ENIAC in the 50s, which was built at the
Ballistic Research Laboratory at Aberdeen Proving Ground, Maryland,
and was funded by the Ordnance Corps of the United States
Army.

My memory is admittedly a bit vague by now, because it was such a long
time ago, but I do remember, the ENIAC used thousands of vacuum tubes
and generated a lot of heat. Obviously there was very little memory and
it was extremely slow.

Later on a subsequent tour of duty in the War Room at the Pentagon, just
down the hall from where I worked they were using a newer generation
computer, which still used tubes - and I recall how huge it was also
and all those diode multipliers and bullion adders with their flashing
lights. I also remember the heat and an array of tubes which military
personnel were constantly replacing as they burned out. It seemed like
that was their only job. To this day I don't know what this equipment
was used for. But I do know the tubes were a problem and RCA had to
develop a new tube which had a longer life just for the application
there at the Pentagon.

I worked cryptology in the War Room and my equipment used mechanical
coding wheels and also used tubes. The wheels were metal rings which
had to be lined up in exactly the same configuration and started exactly
at the same time as those who we communicated with in the Six Fleet
or where-ever they were. Army Security Agency (ASA) kept trying to break
our codes but they couldn't.

These were not text devices. They generated synthesized speech which
did not sound at all like the person using them - and speech was encrypted.
We were armed with sawed off shotguns. And we not only guarded the equipment,
we swept the room for bugs and we monitored all of the speech.

My job was the same at the White House when I did a three year tour
there but included other things, a lot of other things and my training
was at Ft Monmouth and at NSA. I worked in all kinds of communications
including the first television hookups for the White House, which we
assisted in the engineering process. I taught single sideband and
various types of multiplexing, including packet communications when
it was new.

ENIAC was the first electronic computer which could compute a trajectory
in only one second (pretty damn fast when it took an hour before the
computer was developed). It was completed in 1945 and it was very BIG. It
was enormous. The system was 80 feet long and was 8 feet high. It
contained 18,000 vacuum tubes. The speed was 100,000 pulses per second.

It didn't really begin to calculate firing tables until the war was over
since it took so long to build. From the time it was imagined in 43 to the
time it was completed in 1945.

It became public in 1946. It was built at the Moore school and moved to
Aberdeen in 1947 where it was utilized until 1955.

When I finally left the military I went to school under the G.I.Bill and I
got an LL.B degree but I also studied programming and systems design. I
learned COBOL, RPG, Lisp, BASIC and various other languages, including
assembly code. I built and owned several computers and all of the first
ones I learned to program them using their individual machine language. In
those days that was not uncommon. COBOL was probably my favorite
programming language because although bulky it was plain English
and easy to use - but still no personal computers then and I had
to program main frames using punch cards. My very first personal
computer was a Commodore 4K and later a Commodore 2001. My first
hard drive cost me $1,700 for that Commodore. My next computer
was better; it was an IBM XT. Since then I have had more computers
than I can remember and the operating system for most of them has
been Linux. I cut my teeth on UNIX. And I still prefer DOS to
Windows (g).

Hank Roth
Go to the Worm Hole at http://up-yours.us/
More Article in The Crypt at http://inyourface.info/
Bio - http://pnews.org/bio/

- PNEWS - http://pnews.org/ (on the InterNUT since 1982)

Obama's Muslim Outreach

International Analyst Network

April 1, 2009

Obama's Muslim Outreach

Ted Belman

One year ago I wrote about Obamas Muslim connection (
http://www.israpundit.com/2008/?p=579 ). No matter how strong this
connection was, the main stream media and ultimately Jewish Americans
ignored it.

The person who made me proudest of all, Obama wrote, was Roy. Actually,
now we call him Abongo, his Luo name, for two years ago he decided to
reassert his African heritage. He converted to Islam, and has sworn off
pork and tobacco and alcohol.

On February 27th, Barack Hussein Obama said the Muslim call to prayer is
one of the prettiest sounds on Earth.

Although Obama played the Christian card while campaigning, he is playing
the Muslim card now in such a blatant fashion that even I am astounded.
Here is his record to date after inauguration,
- Obama's first call was to Mahmoud Abbas who is not even a head of
state. Obama was delivering a message to Israel and the world.
- Obama's first interview, within days of inauguration, was with the
Dubai-based Al-Arabiya Networks. In it, he stressed his own Muslim ties
and his hopes for a Palestinian state. His message was "U.S. not your
enemy ( http://www.israpundit.com/2008/?p=8566 )
And as I said during my inauguration speech, if countries like Iran are
willing to unclench their fist, they will find an extended hand from us,
- on February 10th, Obama ordered ( http://www.israpundit.com/2008/?p=9273
) the expenditure of $20.3 million in migration assistance to the
Palestinian refugees and conflict victims in Gaza.
- In February, he pledged to provide $900 million (
http://www.israpundit.com/2008/?p=10070 ) in aid for rebuilding the
Hamas-controlled Gaza Strip
- On March 19th Obama delivered a customary speech to the Iranian people
on their New Year but sold them out by referring to the Islamic Republic
of Iran which amounted to an acceptance of the regime.
- Obama is reaching out to the Taliban to cut a deal.
- Obama is looking to hire a select group of Muslims for the White House
- Obama has been reaching out to Syria for some time now but in the last
two months he has matched words with deeds, He has lifted sanctions on
Syria and intends to meet personally with Assad hereby bringing him in
from the cold. He wants to see if Syria is serious about peace, which
means breaking from Iran, in which case he will force Israel to give up
the Golan.
- Obama has also been calling Erdogan and Gull in Turkey looking to
improve relations with Turkey. He praised Erdogan for his efforts at
peace making between Syria and Israel and wants him to continue. He is
looking to Turkey to help with Iran and Afghanistan and to permit US
forces to exit Iraq through Turkey.

Essentially this outreach is intended to upgrade the US relationship with
the Muslim world which will necessitate downgrading the relationship with
Israel.

For decades now this is what the State Department has wanted but couldn't
say so publicly. As I pointed out in Give the Palestinians what they want
or else ( http://www.israpundit.com/2008/?p=11585&cpage=1 ) there is a
coordinated attack under way to bring about the downgrading of the
US/Israel relationship.

In the last few weeks, I posted many articles which made this point. Here
are two.

The West is tiring of Israel ( http://www.israpundit.com/2008/?p=11382 )

I have every reason to believe, based on what Ive seen at my level of
[security] clearance especially over the last several years, that Israel
will soon be completely on their own or worse. When asked what could be
worse than losing the support of the United States, he stated: when our
administration provides more support to Arab countries [with] financial
and military aid, undercutting Israels defense efforts all while pushing
Israel to succumb to the pressure of unreasonable demands designed to end
with their political annihilation as a nation.
CIA report: Israel will fall in 20 years (
http://www.israpundit.com/2008/?p=10985 )

The CIA report predicts an inexorable movement away from a two-state to a
one-state solution, as the most viable model based on democratic
principles of full equality that sheds the looming specter of colonial
Apartheid while allowing for the return of the 1947/1948 and 1967
refugees. The latter being the precondition for sustainable peace in the
region.

These are only a few of the articles published since Obama's inauguration
which provide the handwriting on the wall. The core issue that the West
is now recognizing is, that given the enmity of the Arabs to the state of
Israel, the Sate of Israel is doomed and shouldn't be supported by the US
to her detriment.

Debka reported this week, Obama set to betray Israel, big time (
http://www.israpundit.com/2008/?p=11628 )

DEBKAfiles Washington sources report that the Obama administration is on
the threshold of a major rapprochement with Tehran, a reversal of US
policy dramatic enough to block out international sanctions. Iran will be
allowed to keep its nuclear program, including military elements and
enriched uranium stocks, up to the point of actually assembling a weapon.
[..]

The US president is willing to ditch Israel as a friend. This will be
brought home to Jerusalem when he makes his big speech on April 7
appealing for a grand US-Muslim global reconciliation. The US president is
preparing to tie a Palestinian-Israeli settlement - on Washingtons terms -
to such unrelated issues as Afghanistan and Pakistan as the currency for
purchasing Muslim and Arab backing for accommodations of these outstanding
terrorist fronts.

To lend wings to Obama's outreach to the Muslims, White House circles
Monday, March 30, leaked word that his team took a hand in persuading
Israel to accept a ceasefire which cut short its anti-Hamas operation in
Gaza in January. The radical Islamist terrorists had to be spared from
total defeat by Israel and their leaders from capture otherwise Assad, as
their backer, would be restrained from resuming peace talks with Israel
for some time.

The ceasefire gave Assad enough political room to continue the
negotiations without losing credibility in the Arab world.

It's not going to get better.

http://www.analyst-network.com/article.php?art_id=2864

"High-risk HPV types are detected in 99 percent of cervical cancers, and
worldwide approximately 70 percent of cervical cancers are due to HPV
types 16 and 18....."

Science News

Human papillomavirus is estimated to be the most common sexually transmitted
infection in the United States. However, there have been no data on the
prevalence of HPV among women across a broad age range and representative of
the U.S. population. High-risk HPV types can cause cervical, anal, and other
genital cancers. High-risk HPV types are detected in 99 percent of cervical
cancers, and worldwide approximately 70 percent of cervical cancers are due to
HPV types 16 and 18, according to background information in the article. A
highly effective vaccine against HPV types 6, 11, 16, and 18 was licensed in
June 2006 and recommended for routine use in females age 11 to 12 years in the
United States. Data on type-specific prevalence of HPV in the United States
could help measure the effectiveness of the vaccine for reducing infection and
could help evaluate its impact and cost effectiveness.

Eileen F. Dunne, M.D., M.P.H., of the Centers for Disease Control and
Prevention (CDC), Atlanta, and colleagues estimated the prevaccine prevalence
of HPV in the U.S. by performing HPV DNA testing on 2,026 self-collected
vaginal swabs among females age 14 to 59 years participating in the National
Health and Nutrition Examination Survey (NHANES) 2003-2004.

Of the 1,921 adequate specimens, 26.8 percent were positive for any HPV DNA.
Using January 2004 population estimates and extrapolating this prevalence rate
to the population, the authors estimate that approximately 24.9 million females
in this age range have prevalent HPV infection. Prevalence of any HPV infection
was highest among females age 20 to 24 years (44.8 percent); overall HPV
prevalence among females age 14 to 24 years was 33.8 percent. This prevalence
corresponds with 7.5 million females with HPV infection, which is higher than
the previous estimate of 4.6 million HPV infections among females in this same
age group in the United States.

There was a significant trend for increasing HPV prevalence with each year of
age from 14 to 24 years, followed by a gradual decline in HPV prevalence
through 59 years. Independent risk factors for HPV detection were age, marital
status and increasing numbers of lifetime and recent sex partners.

Overall, HPV types 6, 11, 16, or 18 were detected in 3.4 percent of the study
participants, corresponding with 3.1 million females with prevalent infection
with HPV types included in the quadrivalent HPV vaccine.

"Our study provides the first national estimate of prevalent HPV infection
among females aged 14 to 59 years in the United States," the authors write.
"Our data indicate that the burden of prevalent HPV infection among women was
higher than previous estimates."

http://www.sciencedaily.com/releases/2007/02/070227171051.htm

Optimism Opium By Gerald Celente

CELENTE_Gerald Kingston, NY -- In an Op-Ed piece in The New York Times
(October 16, 1998), Trends Research Institute Director Gerald Celente
predicted that government intervention to rescue private corporations
deemed too big to fail, would result in the demise of free-market
capitalism.

Back then he called it Capitalism for Cowards. (Click here to read Op-Ed
piece.)

Today its called stimulus programs and rescue packages.

Back then, Mr Celente warned the bailouts wouldnt work.

Today, Mr Celente repeats the warning they still wont work.

Back then, the government warned that if Long Term Capital Management, a
hedge fund, was not rescued, the global financial markets would implode.

Today, with the markets imploding, the government warns that if favored
banks, brokerages, leverage buyout firms, insurance companies, etc. are
not rescued, the global economy will collapse.

Back then, Mr Gerald Celente accurately forecast, The global contagion may
be temporarily suppressed by doses of monetary amoxicillin, but when an
outbreak recurs, it will be in a bailout-resistant and far more virulent
strain.

The global contagion was suppressed, the outbreak has recurred, and the
more virulent strain is upon us. And, as Mr Celente predicted, it is
proving bailout resistant.

Today, Mr Celente forecasts that no amount of monetary amoxicillin can
cure the spreading virus.

Trend Warning #1: Whats being pitched today by the government has been
tried before. It didnt work then, and it wont work now.

Following the Group of 20 summit, Barack Obama, while acknowledging there
are no guarantees of success, declared, I have no doubt, though, that the
steps that have been taken are critical to preventing us sliding into a
depression.

Given that President Obama cannot provide guarantees, how can he have no
doubt? Moreover, all of the bailouts, rescue packages, stimulus plans that
he has supported/and or initiated to date, have already failed. And since
the new plans are but variations upon tried, tested and failed policies,
they, too, are destined to fail. The G-20 will not be a turning point and
while the steps taken may slow, they will not prevent us from sliding into
a depression.

Trend Warning #2: Dont be seduced by temporary equity market spikes or
leading economic indicator upticks. Be especially wary of pitchmen
claiming the markets have bottomed and headlines insinuating that the
worst is over (Car sales not as horrid in March and Investors jump on good
financial news, USA Today, 2 April 2009).

What is being sold as good financial news is, upon examination, news that
is marginally less dismal than expected. Nevertheless, for insiders and
professional gamblers, there will be opportunities to briefly ride the
market waves.

There may also be ephemeral selling opportunities following accounting
rule changes allowing banks to set their own prices for assets regardless
of market values, and thus dramatically reduce their losses. This is not a
step to recovery. This little reported Financial Accounting Standards
Board (FASB) ruling is accounting flimflam, a capitulation that allows
banks to set values to their own toxic assets.

Pessimism Porn

Back in 1998, Mr Gerald Celente was virtually alone in forecasting both
increased government intervention, its inevitable failure and its
catastrophic consequences. In the midst of the dot.com euphoria, with
markets flying high, fortunes being made and optimism pandemic, any
negative vision was ignored or sloughed off as gloom and doom.

Today, with every element in that decade-old forecast a daily reality and
making global headline news, derision has replaced neglect. No longer able
to dismiss, they attack. First it was TV clowns, now it is equally
unqualified commentators.

Unwilling to face inescapable realities themselves, they try to deflect
the publics attention away from uncomfortable truths with unhappy endings.
In his New York Times Op-Ed piece, Ben Schott, having cited Celente for
correctly forecasting The Asian Crisis and other calamities, sneers away
his current predictions as Pessimism Porn. (NYT, 26 March 2009.)

Presumably, Mr Schott is more comfortable with the exhortations to Hope,
Confidence and Optimism delivered by the Confidence-Man-in-Chief and his
cadre of boosters. But if we are purveying Pessimism Porn, Schott & Co.
are peddling Optimism Opium.

This pernicious panacea anesthetizes the public. Optimism Opium dulls the
pain lost jobs, foreclosure, financial ruin relaxes anxiety, decreases
alertness, impairs coordination, and is highly addictive. Repeated or
chronic use results in mental deterioration. Overdoses can result in
stupor, coma and death.

America is facing crises far beyond the financial. The implications are
momentous. We are witnessing the decline of Empire America.

Learn more about Trends Research Institute online, or call 1-845.331.3500,
ext. 1.

MMIX The Trends Research Institute

From Yonkers Tribune April 3rd 2009

http://yonkerstribune.typepad.com/yonkers_tribune/2009/04/optimism-opium-by-gerald-celente.html

Azure no. 35, Winter 5769 / 2009
After the Deluge
By Assaf Sagiv

A specter is haunting the financial markets of the world. A crisis of
enormous proportions, which developed slowly from mid-2007 and achieved
dizzying momentum after Lehman Brothers collapsed on September 14, 2008,
is currently becoming a global economic catastrophe the likes of which
have not been seen since the Great Depression. No one dares to accuse the
doomsayers of being hysterical and melodramatic now. On the contrary,
pessimism has become the order of the day.
As anyone who has been following the news over the past few months knows
all too well, this calamity originated in the false prosperity of the
American housing market during the years 2001-2006. As a result of low
interest rates set by the Federal Reserve and other factors, this market
underwent a dramatic expansion without any real supervision or oversight.
Lenders approved billions of dollars worth of mortgages to people with
limited financial resourcesclassified as sub-prime borrowerswho
understandably jumped at the chance to own their own homes, often for the
first time in their lives. As housing prices steadily increased, lenders
were confident that borrowers would be able to make good on their loans.
This in turn fueled a frenzy of speculation on Wall Street. Large and
small investment houses began to repackage mortgage-backed securities in a
decidedly creative way that only the sharpest mathematical minds could
understand. These securities were then bought and sold around the world by
financiers who largely ignored the huge risks involved in such
transactions.
Alas, this financial bacchanalia did not last long. In 2006, housing
prices began to drop. The beneficiaries of the sub-prime mortgage bubble
suddenly started taking considerable losses that became more and more
severe as time passed. From Wall Street to Tokyo, stocks went into a
nose-dive. Worst of all, the chaos created a worldwide credit crunch. In
short, the bubble burst, and major financial institutions once thought
invulnerable burst with it.
In order to limit the scope of the disaster, governments and central banks
around the world rushed to take emergency measures. Trillions of dollars
were earmarked to prop up shaky financial institutions, protect bank
deposits and savings, and reinvigorate paralyzed economies. However,
countries such as Iceland had already suffered a crippling blow. Indeed,
even the worlds largest and most powerful economies now appear unable to
protect themselves from severe recession.
Among informed and uninformed observers alike, the sheer dimensions of
this crisis have created an atmosphere of apocalyptic panic. Some
commentators, especially journalists with a sensationalist streak, have
not been satisfied with broadcasting gloomy forecasts of an approaching
recession, but have rushed to announcein tones either dismal or elated,
depending on their ideologythe imminent demise of capitalism itself.
Indeed, even more restrained analysts have declared that the market
economy will have to undergo dramatic changes. Everyone seems to agree
that the Anglo-American version of capitalism, so-called neo-liberalism,
has suffered a major setback after three decades of economic dominance.
Yet if the reports of capitalisms demise are likely exaggerated, rumors of
the return of the New Deal are certainly well founded. Major political and
economic leaders are pushing for extensive government spending in order to
revive sclerotic economies and provide jobs for the huge numbers of people
who are or will soon be unemployed. Barack Obama, the new president of the
United States, announced before his electionand again shortly afterwardhis
intention to initiate a series of large-scale public-works projects in a
manner reminiscent of the programs enacted by Franklin Delano Roosevelt in
order to salvage his country from the horrors of the Great Depression. The
affinity between the two leadersone of whom became a legend during his
term in office, and the other even before he entered the White Househas
already been translated into visual images by the American media. The
November 13, 2008, cover of Time magazine, for instance, displayed a
Photoshopped picture of Obama resplendent in Roosevelts iconic fedora,
pince-nez, cigarette holder, and toothy grin. In the accompanying article,
entitled The New Liberal Order, journalist Peter Beinart articulated the
expectations of many voters when he urged the president-elect to do what
FDR did [take] aggressive action to stimulate the economy, regulate the
financial industry, and shore up the American welfare state.
There is no doubt that desperate times call for desperate measures. Even
the Bush administration, which no one would accuse of secretly aspiring to
bigger government, understood this and has swiftly come to the aid of
financial institutions nearing collapse. In order to cope with the
challenges of this crisis, however, policymakers must demonstrate not only
aggressive action, but also judgment. They must be able and willing to
distinguish between what is right for times of crisis, and what is right
in general. This distinction is crucial. If political and economic leaders
choose to ignore it, they may inadvertently transform a temporary
emergency into a permanent economic malaise.

Today, the term state of emergency is usually linked to the war on terror.
Since 9/11, several Western countries, led by the United States and
Britain, have enacted a series of exceptional measures to protect
themselves from the threat posed by radical Islamic terrorism. In some
cases, these policies entailed the suspension of basic constitutional
rights in accordance with urgent security needs. The United States, for
example, has imprisoned hundreds of suspected terrorists in the Guant?namo
Bay Detention Camp in Cuba, as well as in secret CIA facilities around the
world, where they have not been granted due process according to American
law. This state of affairs has been publicly opposed by liberal-minded
members of the legal community and by human rights activists. One reason
for this reaction is the fear that the exception will become the rule. An
ongoing, indefinite state of emergency, the critics warn, will lead to the
demise of enlightened legal standards, and thus the destruction of Western
democracy. (A discussion of various aspects of this issue can be found in
my essay, The State of Freedom and the State of Emergency, Azure 28,
Spring 2007; and in Benjamin Kersteins review Batmans War on Terror, Azure
34, Autumn 2008.)
The current financial crisis has forced many countries to transpose the
state-of-emergency paradigm onto the economic sphere. There are, of
course, substantial differences between the two situations: Granting huge
loans to banks and nationalizing insurance companies are not the same as
detention without trial or invasion of privacy. Moreover, an economic
crisis does not stem from the subversive actions of hostile forces, and
does not require the state to expose and neutralize a known or unknown
enemy. Most importantly, the emergency economic measures that have been
implemented thus far do not entail limitations on freedom or basic rights.
However, there is a common denominator between the interventionist
policies that the United States and various European governments are now
promoting and the steps they have taken as part of the war on terror: In
both cases, the state and the institutions acting on its behalf have
expanded the reach of their authority beyond its normal limits, and they
have done so in order to secure public order and prevent social chaos. As
a result, market forces and institutions that were once relatively
autonomous have come under government control. The economic sea, in which
a wide variety of fish once swam, belongs once again to Leviathan.
Opponents of neo-liberalism are making the most of this opportunity to
sneer at adherents of laissez-faire economics. You see? they are saying.
The market isnt so nice anymore. Now everyone is rushing into the arms of
government. For the most part, however, theirs is a straw-man argument.
Even the most outspoken advocates of the invisible hand have been aware of
its potential cruelty. One of them was the renowned economist Milton
Friedman, who led the charge against government intervention in the
economy during the 1970s and 1980s. Despite his staunch free market
stance, he was of the opinion that certain policies of the New Deal were
indeed the right thing to do at the height of the Great Depression. In an
interview with PBS, the American public broadcasting network, in 2000, he
explained his position, saying that it was a very exceptional
circumstance. Wed gotten into an extraordinarily difficult situation,
unprecedented in the nations history. You had millions of people out of
work. Something had to be done; it was intolerable. And it was a case in
which, unlike most cases, the short run deserved to dominate.
There are, of course, those who think otherwise. Some historians deny that
the New Deal was effective even as a temporary solution to a national
emergency. In her recent study, The Forgotten Man: A New History of the
Great Depression, which provoked fierce controversy when it was published
in 2007, the journalist Amity Shlaes presents a serious indictment of
Roosevelts economic policy. Shlaes attempts to debunk the widespread myth
that the New Deal saved America from the quagmire into which it began to
sink in 1929. In reality, she claims, the opposite is true. From 1929 to
1940, she writes, from Hoover to Roosevelt, governmental intervention
helped make the Depression Great. Shlaes maintains that swelling public
expenses, incessant economic experimentation, a higher tax burden placed
on the wealthy and the middle class, and a systematic abuse of the private
sector all contributed to prolonging the Depression until World War II. In
1938, she writes, the unemployment rate in the United States was still
frighteningly high: One out of every six Americans was jobless, and many
others had no job security whatsoever. Ironically, this economic failure
only increased Roosevelts political power. He had the backing of major
interest groups as well as broad support from the masses, who believed the
New Dealers populist rhetoric that blamed big business for the gloomy
situation.
Shlaess book is convincing enough to give the new-New Deal enthusiasts
pause. At least it should. Experience demonstrates that, in the long run,
a massive expansion of the public sector does not help the economy. It
creates an inflated and ineffective bureaucracy, increases the deficit,
squeezes taxpayers, and suffocates free enterprise. Given our current
circumstances, however, it is hard to justify a sweeping objection to
emergency measures. Abandoning the global economy to the invisible hand is
simply unacceptable. In a crisis like this, swift and decisive government
intervention is inevitable. It prevents, or at least restrains, the kind
of mass panic that could lead to further deterioration, and gives the
economytrapped in a worsening credit crunchroom to breathe. It is also,
unfortunately, hugely expensive. But at the moment, such actions are all
that stand between billions of people and a life of poverty and despair.
No government can avoid intervening in such a situation with all the power
at its disposal. We can only hope that it will also know when the time has
come to withdraw.

In the long run, John Maynard Keynes once said, we are all dead. This may
be true, but that is no excuse for shortsighted thinking. Indeed, it is
precisely because todays politicians and economists are being forced to
consider extreme measures that they must also contemplate what will happen
after the crisis is over. They must remember that a policy suitable for
times of crisis may notand perhaps should notbe suitable in times of
normalcy. After all, a drug that cures a critically ill patient may be
poisonous to a healthy person.
So what will the global economy look like when the storm has passed? It is
clear that the American financial sector, and probably those in other
countries as well, will be placed under stricter public supervision.
Investment banks, insurance companies, and credit-rating agencies, all of
which bear the lions share of the blame for this catastrophe, will be much
more heavily regulated by the government. In all likelihood, the most
important lesson these regulators will take from the experience of the
past two years is the need to change incentive structures. In an article
published in Harpers in November, Nobel Prize for Economics laureate
Joseph Stiglitz warned that:

Too many bankers and other lenders have been focused on trying to beat
the system by getting around accounting and banking regulations (through
what is called accounting and regulatory arbitrage). Indeed, with bonuses
based on short-term profits, they had every incentive to gamble and
connive. And now that theres a bust, no one is being asked to pay back the
hefty bonuses earned during the boom. On the contrary, even as they are
dismissed, those who helped send their firms and the American economy into
a tailspin are rewarded with generous severance packages. They are
enriched regardless of what happens to investors, homeowners, and others
who lost so much. Unless we reform incentives, the financial sector will
only try to circumvent whatever new regulations are put in place. We
simply have a short respite before the next crisis.

It seems, therefore, that there is no way of avoiding a certain degree of
regulation in the short run, and perhaps even in the long run as well. Yet
it is best to minimize this regulation and not set our hopes too high.
After all, bad regulation is no less responsible for the current downturn
than lack of regulation. Indeed, decisions made by senior government
bureaucrats turned out to be just as ruinous as the shenanigans of
financial moguls. The United States Securities and Exchange Commissions
2004 decision to allow investment houses to use their reserves as
investment capital proved disastrous. Likewise, the fact that Freddie Mac
and Fannie Mae are sponsored by the American government did not prevent
them from acting in an extremely reckless manner, accumulating such
enormous losses that they had to be nationalized in September 2008.
In the final analysis, this crisis, however severe and unprecedented, does
not change one basic truth: The state is not the most qualified or
rational actor in the economy. Its conduct tends to be inefficient and
often simply unintelligent. In most cases, it is best to permit the
mechanisms of the free market to operate without hindrance. Their ability
to repair themselves is vastly more efficient than bureaucratic attempts
at central planning. Accordingly, governments that currently control
larger and larger segments of the financial market would be wise to
transfer some of this power back to private hands as soon as possible. The
most troubling question that remains, however, is when that soon as
possible will be, and what we must do until then in order to weather the
storm.

Assaf Sagiv
December, 2008

http://www.azure.org.il/include/print.php?id=482

Algae Can Save the World From Global Warming While Producing Biofuel
http://www.naturalnews.com/026010.html

UPDATE: Obama Immigration Policy Begins to Take Shape: Amnesty by
Administrative Inaction
Over the coming months Americans will find out if the Obama
administration and the congressional leadership are preparing another
attempt to pass an amnesty bill in 2009. But, with or without
legislation, the administration is sending unmistakable signals to
illegal aliens that they will not vigorously enforce laws against
illegal immigration. Read the full story . . .

http://www.rightsidenews.com/200904114344/border-and-sovereignty/obama-immigration-policy-begins-to-take-shape-amnesty-by-administrative-inaction.html