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October 15, 6:58 PM Current issue: November 2008 · Archive
Ken SilversteinJohn McCain: The only man in America with reception for his iPhone
Scott HortonThe Torture Presidency
Wyatt MasonWyatt Mason is Reading…
Paul FordWeekly Review
Steven StollFear of Fallowing: The specter of a no-growth world
Mr FishA Cartoon

I published a story last week that discussed Senator Norm Coleman’s cozy relationship with several of his campaign donors. Coleman’s office declined repeated requests for comment, but I said I would update the story if he ever offered a reply. He finally did–at a press conference last Friday. (I’ve been traveling for much of the past week and also re-interviewing my sources, or I would have noted this already.)

I had reported that Coleman’s wife, Laurie, was employed by The Hays Companies, a risk management and commercial insurance firm whose executives, spouses and employees had donated generously to Coleman between 2002 and 2006. I’d also reported that two sources had told me that Minnesota businessman Nasser Kazeminy (who previously paid for Coleman’s travel to the Bahamas and to Paris) had in the past covered the bills for Coleman’s lavish clothing purchases at Neiman Marcus in Minneapolis. [MORE . . .]

John R. MacArthur is publisher of Harper’s Magazine and author of the book You Can’t Be President: The Outrageous Barriers to Democracy in America. This column originally appeared in the October 15, 2008 Providence Journal.

It’s not as though no one saw it coming. Here’s the economist Michael Hudson, writing in the May 2006 issue of Harper’s Magazine: “The reality is that, although home ownership may be a wise choice for many people, this particular real-estate bubble has been carefully engineered to lure home buyers into circumstances detrimental to their own best interests…. The bubble will burst, and when it does, the people who thought they would be living the easy life of a landlord will soon find that what they really signed up for was the hard servitude of debt serfdom.” [MORE . . .]

The last hundred days of any presidency are frequently known as “legacy time.” The die may be cast, but the occupant of the White House begins making plans to leave and wonders inevitably about how he will be seen by posterity. So what image will dominate the Bush presidency? The Iraq War? The management of Hurricane Katrina? The meltdown of the financial markets? I believe one issue is likely to shape the historical perception of the Bush 43 presidency: torture. And as Team Bush prepares its spectacular finale, its darkest secrets keep bubbling to the surface. Just two weeks ago, Condoleezza Rice’s lawyer, John Bellinger, confirmed to Senator Levin that Rice led the discussions at Principals’ Committee meetings of the NSC with Ashcroft, Rumsfeld, Cheney and others at which specific torture practices were okayed. On Monday, the producers of a new documentary (airing Thursday night on WNET) posted a U.S. military memorandum confirming administration authorization the use of torture techniques as part of the standard operating procedures for prisoners at Guantánamo. And today, the Washington Post drops another bombshell:

The Bush Administration issued a pair of secret memos to the CIA in 2003 and 2004 that explicitly endorsed the agency’s use of interrogation techniques such as waterboarding against al-Qaeda suspects — documents prompted by worries among intelligence officials about a possible backlash if details of the program became public. The classified memos, which have not been previously disclosed, were requested by then-CIA Director George J. Tenet more than a year after the start of the secret interrogations, according to four administration and intelligence officials familiar with the documents. Although Justice Department lawyers, beginning in 2002, had signed off on the agency’s interrogation methods, senior CIA officials were troubled that White House policymakers had never endorsed the program in writing.

[MORE . . .]
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From the House Committee on Oversight and Government Reform:

A draft Committee report circulated by Chairman Waxman finds that in the months before the 2006 elections, the White House Office of Political Affairs “enlisted agency heads across government in a coordinated effort to elect Republican candidates to Congress,” directing them “to make hundreds of trips—most at taxpayer expense—for the purpose of increasing the electability of Republicans.”

In recent days both the Washington Post and the New York Times have lionized Brooksley E. Born, who during her 1996 to 1999 tenure as head of the Commodity Futures Trading Commission (CFTC) pushed to regulate the trading of derivatives. “A decade ago, long before the financial calamity now sweeping the world, the federal government’s economic brain trust heard a clarion warning and declared in unison: You’re wrong,” a Post article from today opened.”

That “clarion warning,” said the story, was issued by Born and was “met with hostility” by Federal Reserve Chairman Alan Greenspan, Treasury Secretary Robert E. Rubin and Securities and Exchange Commission Chairman Arthur Levitt Jr.—“all Wall Street legends, all opponents to varying degrees of tighter regulation of the financial system that had earned them wealth and power.” [MORE . . .]

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…and will return next week.

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From my colleague Scott Horton:

This spring, PBS’s distinguished Frontline series aired a mildly critical account of the lead-up to the Iraq War entitled “Bush’s War.” As the airing of the program was announced, the Bush Administration proposed to slash public funding for PBS by roughly half for 2009, by 56% for 2010 and eliminating funding entirely for 2011. Did PBS get the message? Perhaps.

On Thursday evening WNET in New York will air an important new documentary by Emmy and Dupont Award winning producer Sherry Jones entitled “Torturing Democracy.” It appears on WNET and several other affiliates independently because PBS would not run the show—at least not until President Bush has left office.

The world economy continued its collapse. The Dow Jones Industrial Average declined 22 percent over eight days, Wall Street lost $2.4 trillion in market value, and Iceland went bankrupt.1 2 The head of the International Monetary Fund warned that the world was on the “brink of systemic meltdown,”3 and Democrats in Congress called for a $150 billion economic stimulus plan to rebuild America's crumbling infrastructure.4 Barack Obama called for firms that create jobs to be rewarded with tax credits and for a moratorium on foreclosures;5 John McCain refused to answer questions about his economic plan, but was reportedly considering a cut in the capital gains tax.6 “I'm not sure anyone is FDR this time,” said one historian of Wall Street. “I don't think either candidate has a clue what they're dealing with here.”7 General Motors was talking to Chrysler about a merger,8 and a yachtmaker in Snohomish, Washington, announced it would lay off 780 employees and close its doors.9 The British funeral-services industry faced a backlog of hundreds of corpses as undertakers, unable to obtain credit, refused to perform burials for the poor until the government guarantees reimbursements.10 Britain, France, Germany, and other European nations agreed to provide hundreds of billions of dollars to guarantee loans and to prop up banks, leading to a 936-point rally in the Dow,11 and the big counter in New York City that tracks the national debt ran out of digits.12 [MORE . . .]

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From ABC News:

West Palm Beach Congressman Tim Mahoney (D-FL), whose predecessor resigned in the wake of a sex scandal, agreed to a $121,000 payment to a former mistress who worked on his staff and was threatening to sue him, according to current and former members of his staff who have been briefed on the settlement, which involved Mahoney and his campaign committee. Mahoney, who is married, also promised the woman, Patricia Allen, a $50,000 a year job for two years at the agency that handles his campaign advertising, the staffers said…

Mahoney was elected two years ago following the abrupt resignation of his disgraced predecessor, Republican Mark Foley, whose lewd internet messages to teenage boys and Congressional pages created a national outrage. The affair between Mahoney and Allen began, according to the current and former staffers, in 2006 when Mahoney was campaigning for Congress against Foley, promising “a world that is safer, more moral.”

At the time, Mahoney’s campaign ads featured a picture of him with his wife, Terry, with the line, “Restoring America’s Values Begins at Home.”

Discussed in this essay:

The Age of Abundance: How Prosperity Transformed America’s Politics and Culture, by Brink Lindsey. Collins. 394 pages. $26.95.

The Moral Consequences of Economic Growth, by Benjamin M. Friedman. Vintage. 570 pages. $16.95 (paper).

Deep Economy: The Wealth of Communities and the Durable Future, by Bill McKibben. Holt. 272 pages. $14 (paper).

From the March 2008 issue. Steven Stoll is Senior Fellow at the Rutgers Center for Historical Analysis. His book The Great Delusion: A Mad Inventor, Death in the Tropics, and the Utopian Origins of Economic Growth was published this year by Hill and Wang.

Costco shoppers navigate with carts broad enough to seat two children side by side. The carts had better be big. They need to haul gallon jars of mayonnaise, 117-ounce cans of baked beans, 340-ounce jugs of liquid detergent, and 70-ounce boxes of breakfast cereal. The coolers advertised for summer picnics hold 266 cans. Giant warehouse stores, shelved to the ceiling with goods from all the waters and forests of the world, make no excuses for consumption. But although Costco sells its goods in large packages, there is no item here that cannot be found at a corner grocery. So why don’t I lighten up and buy a pallet of mango salsa? Because thundering all around me is the scope and scale of American economic growth. Here it is possible to see the enormous throughput of the economy—its capacity to mobilize resources and energy and turn out waste. One store manager, on the floor for fourteen years, tells me he has seen eight pallets of paper towels move out the door in a single day. At forty packages to a pallet, twelve rolls to a package, this means nearly 4,000 rolls. I can hear the sound of chain saws laying off as falling trees cut the air somewhere high in the Cascades. The question that comes to my mind whenever I catch a glimpse of aggregate consumption is always the same: How can it last?

The question is a discomforting one. Consumption is the essence of economic growth, the sustained expansion in goods and services as measured by the gross domestic product. Economists credit growth for declining rates of child mortality, widening opportunities for education, and the continuing flow of new technology that in turn powers our ever greater productivity. Many trace the beginnings of growth to the seventeenth and eighteenth centuries, when war and revolution dismantled feudal states, opening up new social spheres in which individuals were free to pursue their private interests. Since then, growth has become intrinsic to how we understand progress. By the nineteenth century, machines that captured heat from burning coal radically magnified the scale of human labor, shattering a ceiling to accumulation that had defined agrarian societies since the domestication of wheat. In that hot glow, it became clear that increasing knowledge about the world would translate into increasing control over it. All those who felt their teeth rattle in their head as hundreds of looms shook the beams and floors of a water-powered factory, watching bolts of cloth roll out like eggs from a giant hen, walked away thinking that the human economy no longer possessed definite limits. [MORE . . .]

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From May 1955

The stunt book–wherein our author undertakes an activity of dubious or dangerous oddity and emerges, huzzah, with an inspiring tale of unlikely trancendence–has its risks. It is one thing to read about an average Joe’s sixty seconds in professional sports, but perhaps another to experience the drama of an average Jane’s year without shopping. The most interesting (to me, of course) of the recent stunt books is surely Ammon Shea’s latest, Reading the OED, a book that put me in the mind of my favorite stunt book, Noah Webster’s An American Dictionary of the English Language (1828). Whereas Shea’s is the story of his sitting down to read through the 21,730 pages of the twenty volumes of the 2nd edition of the Oxford English Dictionary in one year, Webster’s was the tale (embodied) of his sitting down and, over the course of twenty-seven years, writing the last English dictionary composed by a single individual. [MORE . . .]

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Not Bob Barr–it’s newcomer Joad Cressbeckler. This video was posted a few weeks back, but it’s especially timely now that Cressbeckler has begun threatening McCain’s core support among “grizzled and ornery” voters. These voters are looking for an “antiquated and unhinged candidate,” and they had been strongly gravitating towards McCain. Yet despite his recent desperate appeals to the “unhinged” voters, Cressbeckler appears to have made significant inroads.
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Senator Norm Coleman in a nice suit

Senator Norm Coleman’s office continues to hedge when asked about his relationship with donor Nasser Kazeminy. MinnPost.com provides some background:

I had heard this allegation [about a businessman buying suits for Coleman] before it became public and had asked [the senator’s campaign manager] Sheehan whether the senator had an arrangement with a businessman to pay for his clothes. He told me no, and I did not pursue the matter. But I now understand that to have been a technical, but not candid, answer…

  • In August, I heard a tip that a wealthy local businessman had an arrangement with Coleman under which the senator could pick out whatever clothes he wanted and the businessman would pay the bill. Not wanting to be tricky, I directly asked Cullen Sheehan whether there had ever been any such arrangement.

 He replied that Coleman had disclosed all gifts he was required to disclose. 

I suggested that this non-denial denial seemed to lend credibility to the rumor. The question was not about the reporting requirements but about whether Coleman and the businessman had any such arrangement.

  • On the second round, Sheehan repeated that all required disclosures had been made and added: “No, he has never had such an arrangement.”

I left the story there for several weeks, until the Harper’s piece ran. I called Sheehan back and asked if he was prepared to rebut the Harper’s piece, or whether he had been less than candid with me when he told me that Coleman “never had such an arrangement.”

  • After a couple of rounds of Coleman-disclosed-everything-he-was-required-to-disclose, Sheehan told me that his no-such-arrangement answer to me had been based on the word “arrangement.” In other words, Sheehan was not denying that Coleman received clothes from Kazeminy, only that he never had an “arrangement,” such as the one I suggested by my question, under which Coleman could pick out whatever clothes he wanted and Kazeminy would pay the bills.

 Sheehan never did say that Kazeminy has bought clothes for Coleman, but he might as well have. If Kazeminy had never bought clothes for Coleman, he could have laid the matter to rest any time, but instead he has given artful answers, not fully responsive to the questions.

MinnPost.com also writes: [MORE . . .]

We will all be able to sleep more soundly tonight knowing that a serious criminal has been apprehended. The Associated Press reports:

David Kernell, 20, of Knoxville, Tenn. entered the plea in federal court in Knoxville, the same day prosecutors unsealed an indictment charging him with intentionally accessing Palin’s e-mail account without authorization. Kernell, an economics student at the University of Tennessee, was brought into court wearing handcuffs and shackles on his ankles.

He was released without posting bond, but the court forbade him from owning a computer and limited his Internet use to checking e-mail and doing class work.

[MORE . . .]
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Alfred Nobel, wondering: can the United States

produce great literature?

No one would think to begrudge the grower of a prize-winning pumpkin tipping the scales at a country fair. Pity, though, the poor writer saddled with similar, heavyweight fortune. With any honor bestowed, she is guaranteed equal obloquy. Both Doris Lessing and Elfriede Jelinek, with their recent $1,415,969.81 checks (at today’s rate for 10,000,000 Swedish Kroner), also earned the opprobria of professional readers who took some measure of glee in dismissing work more polysemous than one might have been led to suppose. [MORE . . .]

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October 8: In a stellar display of political weaselry, Cullen Sheehan, campaign manager for Senator Norm Coleman, tells reporters that he will not “respond to unnamed sources on a blog,” then refuses to answer direct questions asking him whether another man paid for Senator Coleman’s suits—repeating “the Senator has reported every gift he has ever received” at least eight times.

Two of my stories for this blog have become issues in current congressional campaigns. One story was about Minnesota Senator Norm Coleman and his close relationship with political donors, including a businessman named Nasser Kazeminy. The story raised the possibility, based on two confidential sources, that Kazeminy has helped underwrite Coleman’s wardrobe, specifically with purchases at Neiman Marcus.

The second story, which ran last November, reported that “Family Values” Congressman Ric Keller of Florida had, after winning office,

divorced his wife and married a young woman who worked on his congressional staff. I spoke with four people, each of whom would only speak with me on condition of anonymity, and each of whom told me that Keller’s relationship with the staffer began while he was still married.

I reported then that House disclosure records showed that Keller and his staffer (and future bride) traveled together on his campaign’s dime, during the same month in 2002 that he separated from his wife, and that she was his only staffer that year to receive a year-end bonus. Now Keller’s opponent has apparently sent out my story as a campaign flyer.

Both Coleman and Keller have denounced the stories–apparently because I published them online in this weblog. “There are very awful things that are said about people on the blogs,” Coleman told one reporter. And Keller issued a statement saying that the story I had written was all “innuendo” and that I was a “discredited blogger” who had previously reported that Hillary Clinton was a lesbian. That is, very simply, a lie, as anyone can see if they bother to read postings I wrote earlier this year making fun of the dumb rumors about Hillary’s alleged “Sapphic excursions.”

In other words, neither Coleman nor Keller wants to discuss the issues raised by the stories; both prefer instead to shift the topic and rail against “bloggers.” What’s particularly striking is that I gave both Coleman and Keller ample opportunity to comment before the stories were published. Both posts were based on interviews, public documents, and published accounts, and were reviewed by an editor before publication. Keller’s office refused to comment at all, whereas Coleman’s office refused to provide a simple “yes” or “no” answer to the question about his clothing purchases. (I reproduced those emails in my post.)

Politicians do this all the time: instead of answering questions, no matter how specific and direct, they hope a “no comment” or dissembling will kill a story. And it often works. I spent significant time on both the Coleman and Keller stories, and I reported what I knew to be true. I made clear in the specific case of Coleman’s wardrobe that I did not have all the details confirmed, but that the accounts I had were highly detailed and credible. And instead of replying, Coleman was, and remains, evasive. If he ever gives a straight answer, I’ll be happy to report it. But blaming “bloggers” should not be a substitute for elected officials replying to specific, detailed questions.

When last spotted, Professor S. Frederick Starr was snuggling up with Washington lobbyists employed by the Kazakh government. Starr, the one-time Soviet advisor to President Reagan who currently heads the Central Asia-Caucasus Institute at the Paul H. Nitze School of Advanced International Studies (SAIS), is now teaming up with former defense secretary Donald Rumsfeld in another venture of dubious academic integrity.

Rumsfeld, who has kept a low profile since being fired from his post as Secretary of Defense, has created a foundation whose goals include “encouraging young people to go into government” and generating “support for Central Asian republics.” One of its major grants, I’ve been told, went to fund a new CACI fellowship program for “young leaders” from the region. The first group of fellows has just arrived at CACI. [MORE . . .]

[Image: All In My Eye, December 1853]
An American cattleman.

The U.S. Senate and House of Representatives passed the Emergency Economic Stabilization Act of 2008. The legislation, which originated as a three-page proposal by Treasury Secretary Henry Paulson and grew to 451 pages after House and Senate negotiations, established the Troubled Asset Relief Program (TARP) to grant the Secretary of the Treasury up to $700 billion to buy troubled assets owned by financial institutions, to allow the Treasury to limit executive compensation and “golden parachutes” at those institutions, and to establish an oversight board to monitor the Treasury. The act also provides wooden arrow manufacturers an exemption from excise tax. House Speaker Nancy Pelosi rushed the legislation to President George W. Bush, who signed it and promised that the United States would maintain “a leading role in the global economy.” “If I were dictator,” said Senator John McCain, who voted for the act, “which I always aspire to be, I would write it a little bit differently.” McCain also suggested the act be vetoed because it included so much pork. “No matter what the stakes are,” he said, “you've got to stop this.”1 2 3 4 5 California Governor Arnold Schwarzenegger emailed Paulson to say that he may need a $7 billion loan for the state,6 and in Akron, Ohio, a 90-year-old woman named Adele Polk shot herself in the chest as police tried to evict her from her foreclosed home. “I saw that blood,” said a neighbor, “and I said, 'Oh, no. Miss Polk musta done shot herself.'” Responding to public outcry, Fannie Mae forgave Polk's mortgage, which will allow her to return home if she recovers from her wounds.7 After the bailout was signed into law, the Dow Jones Industrial Average fell below 10,000 for the first time in five years. “Today,” said an income strategist, “is watching the sky fall.”8 [MORE . . .]

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Archive > 2008 > Jan · Feb · Mar · Apr · May · Jun · Jul · Aug · Sep · Oct · Nov

NOVEMBER 2008

HOW TO SAVE CAPITALISM
Fundamental Fixes for a Collapsing System
A Forum with James K. Galbraith, Michael Hudson, Eric Janszen, Barry C. Lynn, Bill McKibben, Joseph E. Stiglitz, Elizabeth Warren, and Amelia Warren Tyagi

USEFUL AMATEURS
How the Smearing of Barack Obama Got Crowd-Sourced
By Ken Silverstein

Also: David Means and David Foster Wallace

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