Wednesday, October 06, 2004

Why we are in Deep DEBT DOOODOOO

Leading Economists WRITE to George W. Bush

Open Letter to President George W. Bush

October 4, 2004

Dear Mr. President:

As professors of economics and business, we are concerned that U.S. economic policy has taken a dangerous turn under your stewardship. Nearly every major economic indicator has deteriorated since you took office in January 2001. Real GDP growth during your term is the lowest of any presidential term in recent memory. Total non-farm employment has contracted and the unemployment rate has increased. Bankruptcies are up sharply, as is our dependence on foreign capital to finance an exploding current account deficit. All three major stock indexes are lower now than at the time of your inauguration. The percentage of Americans in poverty has increased, real median income has declined, and income inequality has grown.

The data make clear that your policy of slashing taxes – primarily for those at the upper reaches of the income distribution – has not worked. The fiscal reversal that has taken place under your leadership is so extreme that it would have been unimaginable just a few years ago. The federal budget surplus of over $200 billion that we enjoyed in the year 2000 has disappeared, and we are now facing a massive annual deficit of over $400 billion. In fact, if transfers from the Social Security trust fund are excluded, the federal deficit is even worse – well in excess of a half a trillion dollars this year alone. Although some members of your administration have suggested that the mountain of new debt accumulated on your watch is mainly the consequence of 9-11 and the war on terror, budget experts know that this is simply false. Your economic policies have played a significant role in driving this fiscal collapse. And the economic proposals you have suggested for a potential second term – from diverting Social Security contributions into private accounts to making the recent tax cuts permanent – only promise to exacerbate the crisis by further narrowing the federal revenue base.

These sorts of deficits crowd out private investment and are politically addictive. They also place a heavy burden on monetary policy – and create additional pressure for higher interest rates – by stoking inflationary expectations. If your economic advisers are telling you that these deficits can be defeated through further reductions in tax rates, then you need new advisers. More robust economic growth could certainly help, but nearly every one of your administration’s economic forecasts – both before and after 9-11 – has proved overly optimistic. Expenditure cuts could be part of the answer, but your record so far has been one of increasing expenditures, not reducing them.

What is called for, we believe, is a dramatic reorientation of fiscal policy, including substantial reversals of your tax policy. Running a budget deficit in response to a short bout of recession is one thing. But running large structural deficits over a long period is something else entirely. We therefore urge you to consider the fiscal realities we now face and the substantial burden they are placing on our economy.

We also urge you to consider the distributional consequences of your policies. Under your administration, the income gap between the most affluent Americans and everyone else has widened. Although the latest data reveal that real household incomes have dropped across the board since you took office, low and middle income households have experienced steeper declines than upper income households. To be sure, the general phenomenon of mounting inequality preceded your administration, but it has continued (and, by some accounts, intensified) over the past three and a half years.

Some degree of inequality is inherent in any free market economy, creating positive incentives for economic and technological advancement. But when inequality becomes extreme, it can be socially corrosive and economically dysfunctional. Problems of this sort are visible throughout much of the developing world. At the moment, the most commonly accepted measure of inequality – the so-called Gini coefficient – is far higher in the United States than in any other developed country and is continuing to move upward. We don’t know where the breakpoint is for the U.S., but we would rather not find out. With all due respect, we believe your tax policy has exacerbated the problem of inequality in the United States, which has worrisome implications for the economy as a whole. We very much hope you will take this threat to our nation into account as you consider new fiscal approaches to address the nation’s most pressing economic problems.

Sensible and farsighted economic management requires true discipline, compassion, and courage – not just slogans. Given the tenuous state of the American economy, we believe that the time for an honest assessment of the problem and for genuine corrective action is now. Ignoring the fiscal crisis that has taken hold during your presidency may seem politically appealing in the short run, but we fear it could ultimately prove disastrous. From a policy standpoint, the clear message is that more of the same won’t work. The warning signs are already visible, and it is incumbent upon all of us to pay attention.

Respectfully submitted,

Francis Aguilar
Professor of Business Administration, Emeritus
Harvard Business School

Ramon J. Aldag
Glen A. Skillrud Family Chair in Business
School of Business, University of Wisconsin-Madison

Teresa M. Amabile
Edsel Bryant Ford Professor of Business Administration
Harvard Business School

Kenneth R. Andrews
Ross Graham Walker Professor Management Controls, Emeritus
Harvard Business School

James E. Austin
Eliot I. Snider and Family Professor of Business Administration
Harvard Business School

Joseph L. Badaracco
John Shad Professor of Business Ethics
Harvard Business School

and many, many others....

Conservative whitewash

Dick Cheney is relying on our cultural amnesia to wipe away his record on South Africa.

By Joe Conason
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August 01, 2000 |

"Whitewashing" is the only word to describe the weak explanations offered by Dick Cheney about his votes on South Africa during the apartheid era. Ever since the peaceful advent of democracy in Pretoria, politicians like Cheney who habitually coddled the old racist regime have escaped accountability for their actions. And he is still relying on our customary national amnesia to wave away the questions raised by his vice presidential nomination.

For American conservatives who misused their influence to defend apartheid, the controversy over Cheney's congressional voting record actually presents an opportunity to own up to their terrible mistakes. Unfortunately, however, Cheney and his supporters have prevaricated and obfuscated rather than admitting forthrightly that they were on the wrong side. This disingenuous response is a poor start for a man who boasts that he and George W. Bush will restore straight talk and integrity to the White House.

Cheney bristled in response to questions about his voting record, revealing a mindset that never understood what was at stake in South Africa -- or perhaps understood all too well. Challenged last Sunday to defend his 1985 vote against a House resolution urging the release of Nelson Mandela from 23 years of imprisonment, he first denounced such inquiries as "trivia." Does he really think that the oppression inflicted on millions of black citizens during more than five decades was a trivial matter?

He quickly tried to correct that gaffe, praising Mandela as "a great man." (He also remarked, with baffling condescension, that the African leader has "mellowed," whatever that means.) He had opposed the resolution to free Mandela, according to Cheney, because it was attached to recognition of the African National Congress.

"The ANC was then viewed as a terrorist organization," he said. "Nobody was for keeping Nelson Mandela in prison. Nobody was for supporting apartheid." Let's parse that feeble answer, one of several attempts to justify his votes that Cheney has offered in recent days.

The ANC, led of course by Mandela himself, was indeed regarded as "terrorist" by the Pretoria regime and its allies in Washington. But the ANC, which fought militarily and diplomatically for the human rights of South African citizens, was considered a legitimate representative of the black majority by civilized governments almost everywhere else. The resolution Cheney voted against called upon the Pretoria rulers to enter into negotiations with the ANC. That position was endorsed by governments around the world, and has been entirely vindicated by the events that followed.

If the ANC indulged in actions that might be considered "terrorist," it is at least as true that the entire apparatus of apartheid relied upon terrorism against millions of men, women and children. The Sharpsville massacre and literally hundreds of other atrocities committed against South African blacks and their neighbors in other states deserve no other description. That kind of state terrorism didn't much trouble the Reaganite ideologues such as Cheney.

Contrary to his sentimentalized recollection of that period, some people were indeed in favor of keeping Mandela behind bars and keeping South African blacks in bondage. The roster of infamy begins with Ronald Reagan, who upon becoming president in 1981 immediately reversed the Carter administration's policy of pressuring the Afrikaner minority toward democracy and human rights. In an early interview with CBS newsman Walter Cronkite, Reagan called South Africa a "friendly nation" whose reliable anticommunism and wealth of strategic minerals justified stronger ties between Washington and Pretoria.

Overtly and covertly, the Reagan administration moved to strengthen the apartheid regime. Jeanne Kirkpatrick, then the U.S. ambassador to the United Nations, fought every attempt to impose sanctions. The late William Casey, as director of the Central Intelligence Agency, intensified cooperation with the South African Bureau of State Security and military intelligence agencies. He went so far as to secretly visit Pretoria to confer with the racist murderers who ran those agencies.

Meanwhile, of course, the Republican leadership in Congress, including Cheney, also opposed every effort to impose economic sanctions. He voted against sanctions in various forms at least 10 times between 1983 and 1988. There is no evidence that Cheney ever spoke up for freedom and human rights in South Africa -- although in that respect he was merely a typical Republican politician of his time.

For Cheney, anticommunism excused a multitude of sins, including his own. Whenever they protected Pretoria from democratic change, conservatives like him would invoke Soviet backing for the ANC and the presence of communists in the ANC leadership. Yet it has long been obvious that the Republican tilt in favor of white supremacy was influenced as much by unsavory stateside domestic politics as by geopolitical concerns.

That sad fact was discovered by Henry Kissinger as early as 1976, when he delivered a stirring speech in Zambia calling for racial justice on the African continent as "an imperative of our own moral heritage." It was an unusually decent initiative on the part of the old reprobate, who could with some understatement be described as no friend of human rights.

Kissinger was immediately denounced by House Republican leader Robert Michel, later Cheney's mentor, because of his speech's "devastating effect" on Ford's reelection campaign in Southern primaries. According to Walter Isaacson's biography of Kissinger, Michel demanded that Ford "muzzle" his secretary of state. Apparently the "Southern strategy" adopted by the party of Lincoln meant appeasing racism, both at home and abroad.

So at a moment when the Republican Party is frantically rebranding itself as tolerant and inclusive, party leaders like Cheney ought to take responsibility for prolonging apartheid. In the spirit of Mandela's South Africa, they should admit the grievous errors of the past, stop trying to cover up and perhaps even apologize. There can be no reconciliation in the absence of truth.
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About the writer
Joe Conason writes about political issues for Salon News and other publications. For more columns by Conason, visit his column archive.

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Detainees: Officials Detail a Detainee Deal by 3 Countries

The New York Times > International > Middle East > Rated 3 in World Affairs on Jul 8, 2004 at 15:34:32 GMT.

American officials agreed to return five terrorism suspects to Saudi Arabia from Guantánamo Bay, Cuba, last year as part of a secret three-way deal intended to satisfy important allies in the invasion of Iraq, according to senior American and British officials. Under the arrangement, Saudi officials later released five Britons and two others who had been convicted of terrorist attacks in Saudi Arabia, the officials said. British diplomats said they believed that the men had been tortured by Saudi security police officers into confessing falsely. Officials involved in the deliberations said the transfer of the Saudis from Guantánamo initially met with objections from officials at the Pentagon, the Central Intelligence Agency and the Justice Department.

Those officials questioned whether some detainees were too dangerous to send back and whether the United States could trust Saudi promises to keep the men imprisoned. "To get people to take a chance on detainees who posed a threat was a new endeavor, so everyone moved cautiously," said one senior American official who supported the releases. "It was the first time we were doing this, and people did not want to do it." The Saudi prisoners were transferred to Riyadh, the capital, in May 2003. The five Britons and two others were freed three months later, in August.

The releases were public-relations coups for the Saudi and British governments, which had been facing domestic criticism for their roles in the Iraq war. At the time there was no indication the releases were related. But an American official with knowledge of the negotiations said, "There is a link," adding, "This was two courses that converged and had a mutual attractiveness to them." On Friday, a spokesman for the National Security Council denied that the Saudi detainees had been transferred in exchange for the British prisoners. "There is no recollection here of any linkage between these two actions," said the spokesman, Sean McCormick. He described the return of the Saudis as "part of the normal policy of transferring detainees from Guantánamo for prosecution or continued detention."

Why Don't Americans Care?

Do you know who Halliburton is? Dick Cheney? How about Karl Rove? Alas, most Americans don't
- By Mark Morford, SF Gate Columnist
Wednesday, October 6, 2004

Let's be honest. Percentage-wise, few people in America really give much of a crap about what's going on in the hallowed halls of politics and power.

This is what we in the media and maybe you in the media-consuming audience tend to forget far too easily: This country is simply jam-packed with millions of people who have no time for, or interest in, politics, or media, or environmental policy, or education, or global issues, or which presidential candidate lied his ass off about which aspect of his military career and which Orange Alert is totally bogus and how many soldiers are dying for what imbecilic war.

It seems hard to believe. But the general rule of thumb is that major cities are slightly more attuned due to aggressive media saturation and how issues tend to make themselves known more urgently, more immediately, whereas Middle America is a scattershot conglomeration of the politically apathetic and the actively disenfranchised, full of people far too busy with their lives and kids and jobs and zoning out on "Fear Factor" and "Monday Night Football" to care about following the elitist, ever dire dramas playing out on the nation's gilded stages.

Most Americans, in other words, have no idea what the hell a Halliburton is. Or a Karl Rove. Or a Donny "Shriveled Soul" Rumsfeld. Or a Lockheed Martin. Or a Carlysle Group. Or have any idea that Saddam had nothing whatsoever to do with 9/11. Or that WMDs were never found. Or that President Bush has taken more vacation time than any president in U.S. history. Or that Jesus thinks Dubya is "sort of a dink." Or where Iraq is on a map.

Fact is, in the past decade, TV-news ratings -- cable and network, combined -- has shrunk to a fraction of its former numbers. Newspaper subscriptions have been either flat or dropping for just about as long. Newsmagazines, radio, historical nonfiction: flat or dropping fast. Even the Internet, that vast teeming customizable firestorm of news and info streaming in from all over the planet, even the awesome Net draws far more people to its porn and gossip and shopping departments than any e-news joint could ever wet dream.

Is this unfair? Does it sound elitist and biased? It's not. There have been studies. And reports. And alarming indicators of all kinds telling us time and again that, for example, fully 50 percent of eligible Americans don't even bother to vote (a 15 percent drop since 1964), and many have no idea who's on the Supreme Court or what Congress does, and many can't even point to France on a globe.

Voter turnout, comparatively, in Italy, Spain, the U.K., or Germany? Anywhere from 75 to 92 percent, every time. The sad fact is, the United States ranks 139th out of 172 countries in voter turnout. Wave that flag proudly, baby.

You've seen the headlines. Alarming numbers of American high school students can't even identify the current vice president, much less name a half dozen presidents from history. Far too many citizens can't name the capital of their own home state or recognize their own senators, much less discern how Bush's environmental policy is poisoning their water or how Ashcroft wants to scan their email and tap their phones and suck the pith from their souls. Forty-nine percent of Americans aged 18-25 can't find New York on a map, and eleven percent can't even locate the United States. Now that's patriotism.

A recent report by the Organisation for Economic Co-Operation and Development states that upward of 60 percent of Americans ages 16-25 are 'functionally illiterate', meaning they can't, for example, fill out a detailed form or read a numerical table (like a time schedule). A recent Florida study shows at least 70 percent of recent high school graduates need remedial courses -- that is, basic reading and math -- when they enter community college. These are kids who, you can be assured, think Colin Powell is that nasty British dude on "American Idol."

And everyone you know seems to have a parent or a sister-in-law living somewhere conservative and podunk for whom politics and news media is like some sort of impossibly dense morass, alien and strange and vaguely threatening, like a nasty, painful growth on their big toe, best ignored in hopes that it will just dry up and go away.

Maybe this, then, is the most pressing question of our time: How to get the vast majority of Americans to care? To pay attention? To read? To effect change and demand accountability from bumbling spoon-fed leaders who count on voter apathy and force-fed ignorance to cram through their environmental rollbacks and homophobic laws and draconian Patriot Acts? Is it even possible? Are we too far gone?

How to make America more like, say, Europe, where knowledge of current events and political intrigue is not only hugely important to the vast majority of citizens but is also deeply woven into the very fabric of daily life, an integral part of the educational system and the café conversation and the workplace water-cooler chats, and to ignore it is considered, well, irresponsible and even a mite traitorous?

True, part of why they care so much is because America is the foremost bully on the block and it pays to know what makes the bully tick. And whine. And kill. In short, as the theory goes, most Americans don't give a damn because we're on top and we own everything and have more nukes than anyone and we're never the ones getting invaded. It's our unofficial motto -- America: We Don't Have to Care.

And this very column is frequently slapped with the accusation that it merely "preaches to the choir," and if I really want to affect minds I should consider tempering or sanitizing my opinions for a more "moderate" mainstream readership, as if the nation was chock-full of opinionated, well-read, temperate thinkers ready to be gently informed of new ideas, when in fact this group is but a fraction, a sliver, far overshadowed and overpowered by the real majority in America: The detached. The disinterested. The intellectually lazy.

So, what's the solution? It is as simple as dramatically changing the way we educate our children, our population? Is it desanitizing our vacuous history textbooks and making media studies and political science and current events as mandatory to the educational diet as macho sports and bad lunches and playground kickball?

Or maybe it's a new national draft? Will that galvanize the rest of the populace sufficiently? How about Iraq devolving even faster into Vietnam 2.0? Is it 10,000 dead U.S. soldiers and nary an imprisoned terrorist or fresh barrel of oil to show for it? How about five bucks a gallon? Ten? Is it legalizing pot and banning guns? What will it take?

Maybe another massive national catastrophe? Maybe a 9/11 cubed, and cubed again, something unthinkably horrific and unleashed upon the innocents and the children and the puppies, something that so jars and infuriates and undermines our desperate empire that even the cold-blooded neoconservative Right can't possibly leverage our sorrow and pain for its own political gain? Very possible. After all, nothing like a little hard-earned apocalypse to make you consider voting independent.

Or maybe it's something entirely different, maybe some sort of potent, unimaginable spiritual enlightenment that looks like revelation and smells like Vishnu and sounds like harmonic convergence and tastes like Buddha and has nothing whatsoever to do with fundamentalism or Christianity or Bush's angry homophobic flag-wavin' God. The mystics say we're very close. They claim the next decade will offer, to those who care to participate, one helluva transformational vibrational wallop. Possible?

Whatever it looks like, we can rest assured we're still not out of the dark, dank woods just yet. Our national apathy is well protected, our intellectual ignorance secure and our fears well fed and carefully, perpetually reinforced by the Powers That Be and the fact that the overall 50 percent voter turnout never moves by more than a point or two, usually downward.

And the Establishment, it only smiles knowingly, and nods, and says there there now. It'll be all right. Just go back to sleep.


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©2004 SF Gate

Iraq Chief Gives a Sobering View About Security

October 6, 2004


BAGHDAD, Iraq, Wednesday, Oct. 6 - In his first speech before the interim National Assembly here, Prime Minister Ayad Allawi gave a sobering account on Tuesday of the threat posed by the insurgency, saying that the country's instability is a "source of worry for many people" and that the guerrillas represent "a challenge to our will."

Hours later, the American military said it had launched its second major offensive of the last week, sending 3,000 troops, some of them Iraqis, in a sweep across the Euphrates River south of Baghdad. Led by the 24th Marine Expeditionary Unit, the troops overran a suspected insurgent training camp and detained 30 suspects, the military said in a written statement. They also seized control of a bridge believed to be part of a corridor allowing insurgents to move between strongholds in central Iraq, the military said.

The push followed a much larger and deadlier weekend offensive in the insurgent-controlled city of Samarra, 60 miles north of Baghdad. American and Iraqi officials have been saying they intend to take back rebel territory this fall to lay the groundwork for general elections scheduled for January.

The operation on Tuesday took place in northern Babil Province, a region that once served as a munitions-production base for the old Iraqi Army and has become a field of loosely knit insurgent cells in towns like Mahmudiya and Latifiya.

Bisecting the area is Highway 8, a crucial north-south artery nicknamed the Highway of Death because dozens of people have been ambushed and killed in small market towns along its length by insurgents and bandits.

In his speech, Dr. Allawi, who has cast himself as a tough leader since taking office in late June, insisted that elections would go ahead in January as planned, but he acknowledged that there were significant obstacles standing in the way of full security and reconstruction. The nascent police force is underequipped and lacks the respect needed from the public to quell the insurgency, he said, and American business executives have told him that they fear investing in Iraq because of the rampant violence here.

His tone was a sharp departure from the more optimistic assessment he gave to the American public on his visit to the United States last month. At his stop in Washington, Dr. Allawi made several sweeping assertions to reporters about the security situation in Iraq, including saying that the only truly unsafe place in the country was the downtown area of Falluja, the largest insurgent stronghold, and that only 3 of 18 provinces had "pockets of terrorists."

He did not directly contradict those statements on Tuesday, but his latest words reflected a darker take on the state of the war.

"It is true that the security situation in our country is the first concern for you, and maybe for your inquiries, too," Dr. Allawi said in the 100-member National Assembly, which asked him combative questions after his speech in the nearly hourlong session.

The insurgents "are today a challenge to our will," he continued. "They are betting on our failure. Should we allow them to do that? Should we sit down and watch what they are doing and let them destabilize the country's security?"

Though Dr. Allawi joined President Bush last month in boasting of having 100,000 fully trained and equipped Iraqi policemen, soldiers and other security officials, he acknowledged Tuesday that there were difficulties in creating an adequate security force.

"It's clear that since the handover, the capabilities are not complete and that the situation is very difficult now in respect to creating the forces and getting them ready to face the challenges," he said.

He added that "the police force is not well equipped and is not respected enough to lay down its authority" without backing from a strong army.

Dr. Allawi's talk, given inside the fortified government headquarters on the west bank of the Tigris River, comes at a crucial juncture for the American enterprise in Iraq. Insurgents have stepped up a deadly campaign of car bombings and assassinations even as American-led forces push back into guerrilla territory. The successes of the American offensives in Samarra and Babil Province will ultimately depend on whether the Iraqi security forces can combat the insurgency on their own after the American troops withdraw to their bases.

At stake now are the scheduled elections, which will appear legitimate only if there is a large voter turnout. In recent months, experts have voiced increasing doubts about the ability to hold such elections, given the instability here.

A nationwide poll of 3,500 Iraqis just completed by the Iraq Center for Research and Strategic Studies shows that the number of Iraqis who say they are "very likely" to vote in the elections has dropped to 67 percent, from 88 percent in June. About 25 percent say they will "probably" vote. The poll has a margin of error of 3.5 percentage points.

More than 52 percent of those polled said they would not vote for a candidate who was not from their ethnic, religious or linguistic group.

Violence flared up in other areas on Tuesday. Two car bombs exploded in the city of Ramadi, an insurgent stronghold west of Baghdad, killing four Iraqis and igniting a gun battle between insurgents and American soldiers, The Associated Press reported.

At noon, a car bomb exploded next to a military convoy in the northern city of Mosul, killing at least three civilians riding in a car behind the convoy, the American military said. Right after the explosion, insurgents ambushed the convoy with rocket-propelled grenades and small-arms fire. Four soldiers were wounded and taken to a military hospital in Mosul.

Police officials in Mosul said Tuesday that they had discovered four headless bodies. The bodies were those of a local woman and her family, the officials said. The woman was running a prostitution house and was apparently decapitated, along with her relatives, by a fundamentalist Islamic group, they added.

Several mortar blasts rocked Baghdad in the morning. One shell landed at a passport office in the center of the city, wounding one person seriously, the police said. The mortar had been fired from a vehicle driving along a highway.

Hospital officials in Sadr City, a vast slum in northeast Baghdad that is overwhelmingly hostile to the American occupation, said one person had been killed in an overnight airstrike by the Americans. For weeks, the military has been deploying an AC-130 gunship and fighter jets over the area to try to rout the Mahdi Army, a militia loyal to the firebrand Shiite cleric Moktada al-Sadr.

The airstrikes continued late Tuesday night and early Wednesday, with explosions and the jackhammer sound of the AC-130's cannons heard for miles around.

Dr. Allawi said at his appearance on Tuesday afternoon that he had met earlier in the day with leaders in Sadr City and that the two sides were working to reach an agreement to end the presence of heavy arms in the area. In the evening, he appeared on Iraqi television and said local sheiks had agreed to allow the police to patrol Sadr City. But a senior Sadr aide, Abdul Hadi Daraji, said in an interview that the Sadr organization had not agreed with some of the conditions laid out by the government.

An Iraqi employee of The New York Times contributed reporting from Mosul for this article.

Copyright 2004 The New York Times Company