Long before the mortgage crisis began rocking Main Street and Wall Street, a top FBI official noted that the booming mortgage business, fueled by low interest rates and soaring homes values, was starting to attract shady operators and billions in losses were possible. It has the potential to be an epidemic, Chris Swecker, the FBI official in charge of criminal investigations, told reporters in September 2004. But, Swecker added reassuringly, the FBI was on the case. We think we can prevent a problem that could have as much impact as the S&L crisis, he said.
Unfortunately, Richard B. Schmitt reported in the Los Angeles Times (8/25), the Bush administration was not interested. FBI criminal investigators sought more help to take on the mortgage scoundrels but they ended up with fewer resources. In 2007, the number of agents pursuing mortgage fraud shrank to around 100. Thats down from the 1,000 agents deployed on banking fraud during the S&L bust of the 1980s and 90s. Nobody wanted to listen, Sharon Ormsby, the chief of the FBIs financial crimes section, told the Times. In addition to the ramp-up in national security and terrorism investigations after the Sept. 11 attacks, the administration diverted resources to efforts against illegal immigration and child pornography.
Now that banks and brokerages have written off more than $500 bln of mortgage-backed securities (according to Bloomberg News, 8/25) after a gross failure of regulation, the FBI says it now has about 200 agents working on mortgage fraud and it has 21 open investigations into possible large-scale fraud related to the subprime meltdown. Ormsby says the FBI is working with other federal investigative agencies in the hope they will pick up the slack. The Secret Service, for example, in a departure from its traditional missions of protecting presidents and heads of state and investigating counterfeiting, has assigned more than 100 agents to examine mortgage fraud, spokesman Edwin Donovan told the Times.
MCAINS SLEEPING PILLS RAISE QUESTIONS. During the Democratic convention the McCain campaign ran an ad that referred to Hillary Clintons ad about who is best prepared to handle the 3 a.m. crisis call, but TalkingPointsMemo.com (8/26) recalled that ABC News reported (5/23) that McCain takes the sleeping pill Ambien, which raises concerns about possible side effects that could impair his judgment in a crisis. Taking more than the recommended dosage or combining it with other sedative-hypnoticsfor example, alcoholmay result in amnesia, fugue states and sleep walking, said Dr. Peter A. Fotinakes, medical director of the St. Joseph Sleep Disorders Center in Orange, Calif. Patients who claimed that they engaged in a bizarre variety of activities while asleep after taking the drugfrom binge eating to driving their cars while asleeplodged class action lawsuit in 2006 against Sanofi-Aventis, the maker of the drug.
MCAINS SCORNED SIS-IN-LAW SURFACES. The Texas Republican Party is committed to eliminating Social Security, church-state separation, modern biology, income taxes, the Federal Reserve and the minimum wage. But Steve Benen of WashingtonMonthly.com noted (8/25) it has produced a video that argues that Obama cant be trusted because he has a half-brother whos poor, showing a picture of George Obama standing in front of a shack in Kenya. The video argues, ask yourself this: If Obama cares so much about your family, why doesnt he take care of his own family first?
But Benen notes, if neglect towards half-siblings is going to become a campaign issue, Texas Republicans have a very poor sense of timing, since Cindy McCain apparently has forgotten her own half-sister, Kathleen Hensley Portalski, who is a little upset that Cindy claims to be an only child. Portalski told NPR: Im upset. Im angry. It makes me feel like a non-person, kind of. She was born to Jim and Mary Jeanne Hensley in 1943, when he was a bombardier on a B-17 during World War II. While in West Virginia recuperating from injuries, but while still married to Mary Jeanne, Hensley met Marguerite Smith, NPR reported. He divorced Mary Jeanne and married Marguerite in 1945. Cindy Lou Hensley was born nine years later, in 1954.
Jim Hensley supported Kathleen and provided credit cards and college tuition for his grandchildren. When Hensley died in 2000, his will named not only Kathleen but also a daughter of his wife Marguerite from her earlier marriage. But Cindy McCain was the sole inheritor of his estate, including the Budweiser beer distributorship. The grandchildren found their credit cards were cut off about the time of Jim Hensleys funeral.
HOW MANY MCAIN HOMES? After John McCain was unable to remember how many homes he has and had to refer the inquiry to his staff, the McCain campaign claimed the Arizona senator has four homes: condos in Arlington, Va., and Coronado, Calif., the main McCain residence in Phoenix, Ariz., and a compound in Sedona, Ariz. The Obama campaign counted seven McCain homes, But TalkingPointsMemo.com concluded (8/22) that the grand total is anywhere from eight to 11 houses, depending on how you count them. For example, the McCains in 2006 spent $4.66 mln to buy two condos adjacent to combine with their first condo into a single mega-condo of more than 6,000 square feet. Cindys corporation later bought another condo in the same building but on a different floor. So that could be three to four homes in Phoenix. They own two vacation condos in Coronado, valued at $4.7 mln, and a condo in La Jolla, Calif., valued at over $1 mln (this is the one for which the McCains were delinquent in their property taxes). The McCains have three houses in their compound near Sedona, including a main residence, a guest house and servants quarters. Cindys family trust also owns a $700,000 loft in Phoenix, which is used by their daughter. Cindy also owns other rental properties through their family corporations, but the grand total of homes owned by the McCains is 8 to 11, with a combined value of $12,991,000.
JUST A GIGOLO. Whats most notable about John McCains confusion over the number of homes he owns isnt merely that it demonstrates that, after running his campaign based on depicting Barack Obama as an out-of-touch elitist and himself as the all-American Everyman, McCain lives a life that is about as far removed from the Average American as one can get, and has done so for decades. Glenn Greenwald noted at Salon.com (8/22) that McCain lives off the inherited wealth of his much younger, former mistress and now-second-wifefor whom he dumped his older and disfigured first wifeand who then used her familys money to fund his political career and keep him living in extreme luxury (while insisting that he sign a prenuptial agreement, which would make McCain the first US president to have one).
In 2004, Greenwald noted, numerous leading right-wing pundits had many things to say about John Kerrys marriage to the wealthy heiress Teresa Heinz Kerry. Joseph Farah wrote in President Gigolo at the right-wing WorldNetDaily.com (5/27/04) that Kerrys first wife, Julia Thorne, was worth an estimated $100 mln. After receiving an annulment of that marriage, he married the widow of a Senate colleague who was worth $500 mln. Farah commented, if there is one characteristic of Kerrys life that should disqualify him absolutely as a candidate for president, it is the fact that he has sought out millionaire wives to take care of him. Not to put too fine a point on it, hes a serial gigolo.
Rush Limbaugh called Kerry a gigolo throughout 2004: I mean, [Kerry]s been there, but hes basically a skirt-chaser, folks. Hes a gigolo ... Kerry is cheap. Most gigolos are. I mean ... I think it goes with the, with the definition. ... [W]hat do you consider a fair wage? John Kerry considers a fair wage a wife with 500 million.
On Hannity & Colmes (1/24/04), Ann Coulter said, John Kerry cant really speak to the middle class tax cuts, inasmuch as he is ... a kept man. He lives off the money made by other men and left to their daughters or wives.
Rabbi Shmuley Boteach wrote at World Net Daily (5/25/04) that Before they married, Teresa Heinz made John Kerry sign a prenuptial agreement. Which begs the question: If his own wife doesnt trust him with her money, why should we trust him with ours?
FAIR TRADE VICTORY. Fair-trade advocates scored a victory with the Democratic Party platform that for the first time commits to amending past trade deals, ending more NAFTA-style agreements and reforming institutions like the G8 and World Trade Organization. The North American Free Trade Agreement was negotiated by President George H.W. Bush, but Bill Clinton made its passage a priority in 1993. Since then, Democrats have often split on the issue of so-called free trade, and have increasingly moved away from supporting the NAFTA model in favor of reform. This platform gives a clear indication, for the first time, where the Democratic Party is on fair trade, said Andy Gussert, national director of Citizens Trade Campaign. They want more of it. Mark Levinson, chief economist of the labor union UNITE HERE, said it was important to see a movement away from failed trade models. The Obama Agenda describes trade as a positive international tool for bringing about enforceable labor and environmental standards, human rights, poverty alleviation and climate control, he said. This is a major step forward. Members of the farming community are also supportive. Theyve hit on several of the most egregious unfair trade practicesincluding currency manipulation, lax consumer standards and violations of environmental standards, said Tom Buis, president of the National Farmers Union. More importantly, theyve promised to stand firm against future agreements that fail to live up to these benchmarks. This will allow American farmers to better compete on a more level playing field.
The platform outlines that no future bilateral trade agreements will stop the government from protecting the environment, food safety, or the health of its citizens; give greater rights to foreign investors than to US investors; require the privatization of our vital public services; or prevent developing country governments from adopting humanitarian licensing policies to improve access to life-saving medications. The platform also adds that trade deals must not come as blank checks, and American support will only be coupled with an insistent call for reform. See www.citizenstrade.org.
CORN GROWERS BACK OBAMA. Barack Obama earned the endorsement of the American Corn Growers Association with his plans to rebuild rural America and his commitment to renewable energy. Keith Bolin, ACGA president and a corn and hog farmer in Obamas home state of Illinois, noted that John McCain has perhaps the single most negative record of any senator on agriculture and ethanol. When compared to Sen. Obama, who supports the expansion of renewable energy such as advanced ethanol, biodiesel and wind-generated electricity, our decision was obvious. Obama also supported the farm bill, he noted, while McCain has opposed every farm bill during the past decade. Farmers and rural voters understand the importance of farm bills, Bolin said. These packages not only address agriculture and farms, but cover the full dynamic scope of issues vital to rural America: conservation, trade, rural development, research, nutrition, rural credit, and more. In fact, the new farm bill spends over 80% of its resources on non-farm programs ... This marks only the second time in the organizations 21-year history it has endorsed a presidential candidate. ACGA represents 14,000 members in 35 states. See www.acga.org.
POLITICIZING PETRAEUS. After reciting the GOP talking points about how disappointed they are by Obamas selection of Sen. Joe Biden as his running mate, Minnesota Gov. Tim Pawlenty (R), who is reportedly on the short list for John McCains ticket, said Gen. David Petraeus, the top US commander in Iraq, would have been a better choice for Obama. Hes an outstanding leader and somebody who would better represent the mainstream of the country, Pawlenty said, according to ThinkProgress.org (8/24). The McCain campaign had floated Petraeus as a VP choice, despite the generals previous declaration that he has no desire to run for public office. Michael Clark noted at DailyKos that the Chairman of the Joint Chiefs wrote an open letter this spring reiterating the policy that the US military must remain apolitical at all times and in all ways. McCain was forced to apologize after he used Petraeus photo in a fundraising letter.
A GOP adviser told the New York Times (8/22) the campaign was putting forth his name in part in a bid for attention at a time when Sen. Barack Obamas choice of running mate, which is to be announced in the next few days, was dominating the media.
In other words, the demands of the news cycle practically require Republicans to politicize the military, Clark wrote. For the GOP an Army general is just a pawn in political game-playing. No wonder poor Tim Pawlenty figured that it made just as much sense to insert Gen. Petraeus into contention on the Democratic side of things as well. There was no sense to begin with, so what difference did it make?
CHINA BEATING US ON GREEN TECH. China is ready to pass the US as a leader in energy technology, Jim Rogers, chief executive of Duke Energy Corp., told the World Affairs Council of Charlotte after a 12-day trip to China before the Beijing Olympics. While the Asian giant plans to build the equivalent of 1,000 coal plants by 2016, Rogers noted, China already leads the world in manufacturing solar energy panels, he said in remarks reported by the Charlotte Business Journal (8/21). Next year China will become the worlds top manufacturer of wind turbines. They are living the balanced solution on energy, he said. They are making it happen while we are still talking about it. Rogers said its time the US and its leadersincluding both major presidential candidatesface the fact that this country can no longer claim to be a leader on global-warming and clean-energy issues. We need to step up and work with the rest of the world, he said.
IRAQ IS SELLING OUR OIL. Iraq is on the verge of reviving an 11-year-old contract with China worth $1.2 billion, its largest oil deal since the invasion in 2003, an Oil Ministry official said, according to the New York Times (8/20). The deal sets new terms for an agreement reached between China and Iraq under Saddam Hussein in 1997. Jonathan Taplin noted at TalkingPointsMemo.com (8/26), Russia is probably next. We spend $2 tln on what (former Fed Chairman Alan) Greenspan called a war for oil, and our global rivals get half the oil. We continue to live in Dick Cheneys old colonial illusion that our military power gives us some mercantile advantage.
COURT CUTS DELAY A BREAK. A Texas appeals court has cleared the way for former House Republican Leader Tom DeLays release from remaining felony charges because the 2002 money laundering case involved checks instead of cash. The Austin American-Statesman reported (7/25) that the all-GOP panel of the 3rd Court of Appeals in Austin upheld the money-laundering indictments against two of DeLays campaign associates, John Colyandro of Austin and Jim Ellis of Washington, but the panel concluded that the statute, which was written to combat illicit drug activity by focusing on cash in criminal transactions, did not apply to checks at the time DeLay is accused of laundering corporate money into campaign donations, which state law generally prohibits. Colyandro allegedly sent $190,000 in corporate contributions to Ellis, who gave the corporate donations to the Republican National Committee, which days later sent contributions totalling $190,000 to seven Republican candidates for the Texas House of Representatives. Last summer the Texas Court of Criminal Appeals confirmed the dismissal of conspiracy charges, ruling that conspiracy did not apply to the election code until 2003, a year after the $190,000 exchange.
DEMS SEE SENATE GAINS. If the election were held today, Democrats would win five Republican-held seats, in Virginia, New Mexico, Alaska, New Hampshire and Colorado. They would also hold the only two Democratic-held seats considered even slightly vulnerable, in Louisiana and New Jersey, Arjun Jaikumar (brownsox) wrote at DailyKos.com (8/24). This would give the Democratic Party a total of 56 Senate seats controlled, including Bernie Sanders and Joe Lieberman. Democrats also hope to unseat Republican incumbents in Mississippi, North Carolina, Oregon and Minnesota. Longer shots include Maine, Kentucky, Georgia and Oklahoma. The opportunity for a pickup looks better in North Carolina, where a poll by Public Policy Polling (8/20-23) showed Kay Hagan (D) leading Sen. Elizabeth Dole (R), 42-39, after the Democratic Senatorial Campaign Committee spent $800,000 attacking Doles effectiveness. The DSCC has reserved another $7.3 mln in airtime after Labor Day.
MCAIN WANTS WESTERN WATER REDO. Colorado is expected to be a key state in the general election but John McCain didnt win many friends there when he was quoted in the Pueblo Chieftain (7/15) saying that the 1922 water compact among seven western states should be renegotiated to give Arizona, Nevada and California (the Lower Basin states) more water. Thats unlikely to appeal to Wyoming, Utah and New Mexico (the Upper Basin states) any happier than its made Colorado, Joan McCarter noted at DailyKos.com (8/16). There's nothing more controversial in the West than water, and the single water issue that is most pressing is what happens as the Colorado (River) drainage continues to experience drought and demand continues to grow, McCarter wrote. Californias water rapaciousness was the issue in 1922 that brought the seven states governors to negotiate the compact, and Californias huge thirst is still the problem. But massive population growth in and around Las Vegas and Phoenix have the Lower Basin statesand the Republican nominee for presidenteyeing a greater share of the Colorado (River). Reaction in Colorado was swift and incensed. Sen. Ken Salazar (D-Colo.) said opening up the Colorado River Compact would only happen over my dead body. The Denver Post editorialized in an open memo to McCain, Forget about winning our nine electoral votes next November. We dont vote for water rustlers in this state; we tar and feather them! McCain later clarified his statement (8/20), saying his call to renegotiate may have been mistakenly construed as a call to rescind the Colorado Compact when all he wanted was a more measured approachwhich nevertheless could mean less water for the Upper Basin.
GOP: RICH COUNTIES DOING WELL. The Roanoke Times reported (8/20) that as Barack Obama convened a discussion about unfair trade policies in economically ravaged regions of Virginia, the national Republican Party countered by citing Fairfax County as proof the economy is doing just fine. It doesnt take a lot of courage to go to Martinsville and talk about trade, said US Rep. Tom Davis (R-Va.) in a conference call arranged by McCains campaign. What would be courageous is to come to Fairfax County, where you have 362 foreign-owned companies and tens of thousands of employees with foreign-owned firms ... and take the same stand up here. David Sirota commented in Trade Report at OurFuture.org (8/21), Besides the tone deafness of holding up foreign-owned firms as proof of a solid domestic economy, Davis forgot to mention that according to Forbes magazine, Fairfax County has long been the wealthiest county in the United Statesa place where the median (the median!) household income is over $100,000 a year. The county is home to many of the millionaire corporate lobbyists that have been instrumental in the passage of rigged trade deals. Davis citing Fairfax County today as proof that trade policies are working for the vast majority of the country would be like Herbert Hoover citing the Rockefeller family as proof that the economy was working for most Americans during the Great Depression.
NEW CENSUS DATASAME REALITY. New Census data continues to show how George W. Bush has ravaged the American economic landscape, Alex Carter noted at ourfuture.org (8/26). Since 2000, median income has decreased 1%. But while the median income for whites has decreased only $12, for African Americans it has decreased $1,804; for Hispanics it has decreased $1,256, and for Asians it has decreased $1,030. Those are huge disparities and continue to display the realities of Americaracial inequality still exists, there is no way around it, Carter wrote. Poverty follows a similar pattern. Since 2000, individuals in poverty have increased by 5.7 mln; families in poverty have increased by 1.2 mln; and children in poverty have increased by 1.7 mln. In 2007; 37.3 mln people are in poverty.
TV NEWS MAKES YOU STUPID. A Pew Survey on News Consumption (8/17) revealed that viewers of Comedy Centrals news and talk satires *The Daily Show* and *The Colbert Report* are more knowledgeable about current events than those who watch NBC, ABC, Fox News, CNN, C-SPAN and daily newspapers. Some 30% of *Daily Show* viewers and 34% of *Colbert Report* viewers correctly named which party held a House majority (Dems), the US secretary of state (Condi Rice) and the British prime minister (Gordon Brown), compared to the national average of 18%. One in three respondents got all the questions wrong. Most knowledgeable were readers of The New Yorker and The Atlantic magazines (48% correctly answered all three), NPR listeners (44%) Hardball (43%) and Hannity & Colmes (42%). Viewers of ABC News, CNN and Fox News each scored 19%just below NBC News 21%, daily newspapers 22% and MSNBCs 25%. CBS News 10% score narrowly beat out readers of the National Enquirer (9%). See people-press.org.
MCAIN 'FORGETS' MISSED VOTES. Sen. John McCain claimed in in interview at the Aspen Institute (8/14) that he had not missed any crucial vote on energy legislation, but ThinkProgress.org noted (8/15) that McCain actually has missed several crucial energy votes. In July alone, he missed every single energy vote brought to the floor. He skipped votes supporting renewable energy tax credits four times, all of which were filibustered. In June, he missed a vote on the landmark Lieberman-Warner climate change legislation. In December, when legislation stripping tax break giveaways to Big Oil and investing in cleaner sources failed by one vote, 59-40, McCain missed that vote to campaign. In February, McCain skipped a vote on extending tax credits to renewables, which also failed by one vote. Both times, McCain was the only senator absent. McCain holds the title of most absent US senator, missing 61.8% of the votes in the 110th Congress, ThinkProgress.org noted (7/8). He even beat Sen. Tim Johnson (D-S.D.), who took several months off while recovering from a brain hemorrhage. Important votes McCain missed included the economic stimulus package, six votes on the housing bill, which he criticized Congress for not passing, and at least seven votes of prominence on Iraq.
McCain also has falsely claimed credit for creating the Do Not Call list in 2003. ThinkProgress.org noted (8/15) the Federal Trade Commission chairman announced the list two years earlier.
MCAIN PLANS TO TAX HEALTH BENEFITS. A feature of John McCains domestic policy that has not gotten much attention is his proposal to tax millions of middle-class workers who receive health insurance from their employers. McCain does not consider it a tax increase because he would offer families up to $5,000 in tax credit to buy their own insurance. But James Kvaal of the Center for American Progress Action Fund noted that McCain would tax workers health benefits, which are largely tax-free today, and many workers would pay more in taxes on their insurance than they would get from the new credit. Also, Kvaal noted that the value of McCains tax credit would erode quickly. While health care premiums are expected to grow 7% a year, McCains credit would increase by 2% a year. In contrast, current tax beneits keep up with rising premiums. See The Wonk Room at ThinkProgress.org (8/14).
KUCINICH SCORES AT DNC. The star of the Tuesday afternoon, Aug. 26, session at the Democratic convention was Ohio Congressman and former presidential candidate Dennis Kucinich. Alex Koppleman of Salon.com noted that Kucinich managed to score not one but two sustained standing ovations during his speech at the Pepsi Center, his passion growing as he fed off his audiences enthusiasm, and vice versa. Especially popular was a continuing theme in Kucinichs speech a call, actually: Wake up, America.
Wake up, America. The insurance companies took over health care ... Wake up, America. The speculators took over Wall Street, Kucinich said, the applause growing with each repetition. Wake up, America. They want to take your Social Security. Wake up, America. Multinational corporations took over our trade policies, factories are closing, good paying jobs lost. Wake up, America. We went into Iraq for oil. The oil companies want more... Wake up, America. Weapons contractors want more.
TAXPAYERS SUBSIDIZE EXEC PERKS. US taxpayers subsidize excessive executive compensation by more than $20 bln per year. The 15th annual Executive Excess report from the Institute for Policy Studies and United for a Fair Economy found the following tax and accounting loopholes that encourage excessive executive pay:
1. Preferential capital gains treatment of carried interest ($2.6 bln)
2. Unlimited deferred pay ($80.6 mln)
3. Offshore deferred compensation ($2.1 bln)
4. Unlimited deductibility of executive compensation ($5.2 bln)
5. Stock option accounting double standard ($10 bln)
These loopholes allow top executives to avoid paying their fair share of taxes. As a result, ordinary taxpayers wind up picking up the bill, explains report co-author and IPS Associate Fellow Sam Pizzigati. Members of Congress have attempted to plug each of these five loopholes, but their efforts have stalled in the face of strong opposition from corporate lobby groups. See the report at faireconomy.org.
PRESS BUREAUS CLEAR OUT. Layoffs and cutbacks at newspapers and wire services have affected every area in the country. A decade ago, the Regional Reporters Association in D.C. had more than 200 members. Only 84 remained in February, Michael Calderone noted at Politico.com (2/27). The Deseret News in Salt Lake City, Utah, shuttered its bureau in July. Newhouse News, which had a dozen reporters six years ago and covered for 26 daily newspapers, closed its D.C. bureau in July.
The Portland Press Herald/Maine Sunday Telegram, which reduced is reporting and editing staff through four rounds of layoffs and buyouts, closed its D.C. bureau in July, leaving Maine without a full-time reporter in the nations capital. Jonathan Kaplan, who lost his job, wrote for the Washington Post (7/24) that people will still get their news from plenty of other sources, including television, radio and the Internet.
So the problem isnt that all those press releases that lawmakers send out will go unchallenged, although they might go unread in standard newsprint, Kaplan wrote. But readers will miss some nuance simply because theres nobody in the Capitol. They wont know how Sen. Olympia Snowes eyes light up when she recalls being selected as an intern for the states Democratic governor in the summer of 1967, even though she considered herself a Republican. Theyll probably never learn that, at a press conference in May, just minutes before a vote on a massive farm bill, Collins praised a provision in the measure to close the so-called Enron loophole. She then headed straight to the Senate floor and voted against the bill.
We regional reporters put readers in rooms like that and give them a voice, Kaplan wrote. But were disappearing fast, and its not clear who can pick up the slack.
Bill Walsh expressed similar sentiments in July remarks later published in the American Journalism Review as he accepted the National Press Clubs Robin Goldstein Award for Washington Regional Reporting, two months after he quit as the New Orleans Times Picayunes D.C. reporter to take a job with a D.C.-based non-profit organization. Given the state of the newspaper industry, I suspect that had I not left voluntarily I wouldnt have had a choice eventually, he said, adding, The slot I left hasnt been filled. As Washington bureaus hemorrhage reporters or close altogether, he said, The result is that members of Congress, except for the leaders, are getting less scrutiny than ever. Even before I left, I was so busy covering the daily stories that I had little time to do what I was sent here to do: Dig into what local members of Congress were up to, find out who was influencing them and figure out if they were truly representing the folks back home.
From The Progressive Populist, Sept. 15, 2008
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