060309 News As Talked About On The Harry Thomas Show week in review

Business models that revolve around “free” are never free since someone always foots the bill. Meanwhile, far more companies think they have more growth and scale to lower costs than they actually do. YouTube may be one of those companies that merely thinks it has the scale to eventually make money. In fact, those 20 hours of video uploaded every minute on YouTube costs money—too much money. The solution? Charge a small fee for uploads.

That’s the crux of an argument by Bernstein analyst Jeffrey Lindsay. He maintains that YouTube’s business model is doomed and that network effects—the increased value derived from increased usage—are never an excuse to avoid coming up with a business model. The argument is notable given all the hubbub over free vs. subscription (micropayments and otherwise) are front and center. Let’s dismiss the backlash that would ensue if YouTube started charging and listen to the argument.

The problem: Many Internet businesses have network effects, software effects or market effects. The rub: Most of them don’t. This network effect delusion leads companies to grow at any costs in hopes of being valued by subscribers instead of revenue growth. Through the lens of the late 1990s, only AOL, Amazon, eBay and Yahoo had true network effects. The rest: Pets.com, eToys, Webvan etc. YouTube may fall into that latter category (we’ll never completely know since it’s part of Google).

What we have here is a lack of business model innovation. Lindsay notes that AOL, Yahoo, eBay and Amazon tapped into real business models. Those companies were hungry. In addition, the latest dot-com heroes are mired in a corporate structure that forgoes joint ventures and other models that may work. In the end, the model doesn’t matter—as long as you cash out in time.

Getting back to his YouTube example Lindsay says that YouTube goofed by not partnering with Viacom. In fact Hulu will be the Amazon while YouTube will play eBay.

Lindsay’s eBay-Amazon analogy with YouTube and Hulu goes further. YouTube looks like a flea market (like eBay). Hulu looks professional. YouTube quality is lacking. Hulu’s isn’t. Lindsay’s point: Professional content will eventually win and ads will follow. YouTube’s chore: Minimize the cost of the video it can’t sell.

So what should Google do with YouTube? Charge small listing fees just like eBay does.

The goal: Prevent folks like Lindsay’s co-worker who constantly uploads video of his pet mouse.

Lindsay acknowledges that YouTube usage may plummet, but by eradicating the site of “irrational uses” Google would discover what people really want. Anything that was good enough to garner advertising would be free. The rest would pay 5 cents an upload. In the meantime, Google should pursue more joint ventures.

Sounds great—in theory. The backlash to YouTube would be stunning if it started charging even a few pennies. You can almost hear the screams of “sell out!” now. Lindsay writes:

The Obama administration’s new Cybersecurity system will only make the Internet more vulnerable to attack, while creating the framework for a massively upgraded government surveillance grid that will control and regulate every aspect of our daily lives through the implementation of “smart” technology.

Obama’s announcement of the new cybersecurity grid dovetails with a recently introduced Senate bill, the Cybersecurity Act of 2009, that would hand the president the power to shut down the entire Internet in the event of a “cybersecurity” crisis.

“The bill’s draft states that “the president may order a cybersecurity emergency and order the limitation or shutdown of Internet traffic” and would give the government ongoing access to “all relevant data concerning (critical infrastructure) networks without regard to any provision of law, regulation, rule, or policy restricting such access,” reports Raw Story.

The legislation would allow the government to tap into any digital aspect of every citizen’s information without a warrant. Banking, business and medical records would be wide open to inspection, as well as personal instant message and e mail communications.

This is President Bush’s warrantless wiretapping program on steroids, yet the reaction from the liberal left has been muted to say the least.

Furthermore, the reasoning behind the proposal is a farce, since cybersecurity will make the Internet even more vulnerable to attack.

According to Jennifer Granick, director of civil liberties at the Electronic Frontier Foundation, the program would “basically establish a path for the bad guys to skip down.”

One of the bill’s authors, Democratic Sen. Jay Rockefeller of West Virginia, admitted that the bill was about more than just military or intelligence concerns. “It is a lot more than that. It suddenly gets into the realm of traffic lights and rail networks and water and electricity,” said Rockefeller.

Essentially, this is the framework within which every aspect of our lives will be managed and regulated by a gargantuan government bureaucracy designed to control and shape every aspect of our behavior through our dependence on technology.

Under the cybersecurity grid, our electricity consumption, our water consumption and every other basic utility that we rely upon will be subject to state regulation.

This is already being introduced through “smart” technology, manifesting in such things as fridges that are controlled by power companies and not the individual. If you are deemed to have bypassed government-approved levels of consumption, your fridge will be automatically turned off remotely.

“A domestic refrigerator that can be turned on and off by the electricity supplier without the homeowner being aware is to go on trial,” reported the Daily Mail in January. “Npower will distribute 300 ‘smart fridges’ free to homeowners throughout Britain within the next five weeks as part of the energy companies’ efforts to tackle climate change.”

“At times of high demand, the National Grid will activate the switches in the fridges to achieve a balance in the power supply. The development means that, for the first time, consumers will lose control over the use of electricity in their own homes,” stated the report.

All British homes are also set to have “smart” electricity and gas meters installed by law by 2020. The meters would “record energy use” according to a Reuters report.

Likewise, water companies are preparing to force homeowners to install water meters so that water consumption can be accurately recorded and restricted in times of drought.

This is just the beginning of the imposition of a suffocating prison planet whereby our every action will not only be recorded by big brother but also subject to government approval and control.

The Cybersecurity grid will also be an upgrade of the pervasive snoop network that has already been operating under NSA auspices for decades.

During a speech last week on “cybersecurity,” Obama told a whopper. He said the government’s effort to protect us from cyber bad guys “will not include monitoring private sector networks or Internet traffic. We will preserve and protect the personal privacy and civil liberties that we cherish as Americans.”

Is it possible Obama has never heard of Mark Klein, the retired AT&T communications technician who said years ago that the company shunted all Internet traffic — including traffic from peering links connecting to other Internet backbone providers — to semantic traffic analyzers, installed in a secret room inside the AT&T central office on Folsom Street in San Francisco? There are similar rooms in Seattle, San Jose, Los Angeles and San Diego, all sucking up internet data.

Klein explained that the multinational corporation is doing this at the behest of the NSA. It is “vacuum-cleaner surveillance” approach that grabs everything. “Despite what we are hearing, and considering the public track record of [the Bush] administration, I simply do not believe their claims that the NSA’s spying program is really limited to foreign communications or is otherwise consistent with the NSA’s charter or with FISA [the Foreign Intelligence Surveillance Act],” said Klein in 2006.

After the NSA showed up in 2002 at AT&T’s Folsom Street facility, Klein began connecting the dots. “You might recall there was a big blowup in the news about the Total Information Awareness [TIA] program, led by Adm. [John] Poindexter, which caused the big upsetness in Congress, because what Poindexter was proposing to do was draw in databases from everywhere — and this was in The New York Times — draw in Internet data, bank records, travel records, everything into one big conglomeration which could be searchable by the government so they could find out everything about what anybody’s doing at any time of day,” Klein told PBS. “And all this would be done without any warrants. This is how it was presented by Poindexter himself in The New York Times, and that caused a great upset, brouhaha, in Congress.”

On January 16, 2003, Senator Russ Feingold introduced legislation to suspend the activity of the Total Information Awareness program pending a Congressional review of privacy issues involved. In February 2003, Congress passed legislation suspending activities of the IAO (Information Awareness Office) pending a Congressional report of the office’s activities.

Congress acted after William Safire published an article in the New York Times claiming “[TIA] has been given a $200 million budget to create computer dossiers on 300 million Americans” (see You Are a Suspect, November 14, 2002).

Of course, the program didn’t go away. Legislators included a classified annex to the Defense Appropriations Act that preserved funding for TIA’s component technologies, if they were transferred to other government agencies. TIA projects continued to be funded under classified annexes to Defense and Intelligence appropriation bills.

“Total Information Awareness — the all-seeing terrorist spotting algorithm-meets-the-mother-of-all-databases that was ostensibly de-funded by Congress in 2003, never actually died, and was largely rebuilt in secret by the NSA, according to the Wall Street Journal’s Siobhan Gorman,” Ryan Singel wrote for Wired on March 10, 2008. “There’s been no real debate in Congress or in the press about whether the government should be allowed to track every Americans phone calls, emails and web browsing.”

Jon Stokes, writing for Ars Technica, notes that TIA technology is nothing new. “TIA-like efforts are still going on” Stokes wrote in 2005, and “the government has been trying to use new technology, like database tech and voice recognition, for domestic surveillance for a long time. And when I say a long time, I mean well before the current administration came into office.” It really got a boost under Clinton in 1995 when the Communications Assistance for Law Enforcement Act (CALEA) was passed. “CALEA mandated that the telcos aid wiretapping by installing remote wiretap ports onto their digital switches so that the switch traffic would be available for snooping by law enforcement.” In other words, Mark Klein had but scratched the surface.

Truman created the NSA in 1952, supposedly to serve as “America’s ears” abroad, but the agency has long served as a secret Stasi-like organization dedicated to snooping on Americans. The NSA, writes Siobhan Gorman for the Wall Street Journal, “and other intelligence agencies were found to be using their spy tools to monitor Americans for political purposes.”

The NSA’s predecessor, the Armed Forces Security Agency, launched Project SHAMROCK in 1945. It obtained copies of all telegraphic information exiting or entering the United States with the full cooperation of RCA, ITT and Western Union. A sister project known as Project MINARET involved the creation of “watch lists,” by each of the intelligence agencies and the FBI, of those accused of “subversive” domestic activities. The watch lists included such notables as Martin Luther King, Malcolm X, Jane Fonda, Joan Baez and Dr. Benjamin Spock, according to Patrick S. Poole, writing for Nexus Magazine in 1999. The FBI, the NSA, and other intelligence agencies were actively involved in creating the watch lists.

NSA has attempted to keep up on technology as the secretive agency continues to snoop on “subversives” and others the government considers miscreants. In February, trade publications reported the agency is offering “billions” to any firm able to offer reliable eavesdropping on Skype IM and voice traffic. Skype is particularity troublesome because it utilizes P2P networks, that is to say peer-top-peer (no central server owned and operated by a telecom required). The government and the corporate media may tell you they want to crack down on P2P — for instance, the vastly popular BitTorrent — because of copyright infringement, but a more practical reason is because the government has yet to figure out how to crack the file sharing protocol. Skype and BitTorrent account for a large amount of traffic on the internet.

If you think Obama will roll back the government’s massive and unconstitutional snoop program, think again. On April 3, the Obama Department of Justice filed a motion to dismiss one of the Electronic Frontier Foundation’s landmark lawsuits against illegal spying by the NSA. The DOJ demanded that the entire lawsuit be dismissed based on both the Bush administration’s claim that a “state secrets” privilege bars any lawsuits against the executive branch for illegal spying, as well as a novel “sovereign immunity” claim that the Patriot Act bars lawsuits of any kind for illegal government surveillance (see the EFF press release, Obama Administration Embraces Bush Position on Warrantless Wiretapping and Secrecy).

In March, Obama’s coordinator for cybersecurity programs, Rod Beckstrom, a former Silicon Valley entrepreneur, quit because he opposed the role of the NSA in the so-called cybersecurity initiative. Beckstrom said “the threats to our democratic processes are significant if all top level government network security and monitoring are handled by” the NSA.

“Obama’s moves drew praise from key lawmakers on Capitol Hill, who vowed to work with the president to implement new security measures as needed,” CQPolitics reported shortly after his “cybersecurity” speech. “Obama said his cybersecurity adviser — who will be a member of both the National Security Staff and the National Economic Council staff — will head a new office within the White House.”

“We applaud President Obama for highlighting the extraordinarily serious issue of cybersecurity,” Sens. Johns D. Rockefeller IV, D-W.V., and Olympia J. Snowe , R-Maine, said in a joint statement. “No other president in American history has elevated this issue to that level and we think him for his leadership.”

No other president so far has had the power to shut down the internet. The Rockefeller-Snowe bill, S 778, would grant Obama dictatorial power declare a so-called “cyber emergency” and pull the plug, or at least cripple networks deemed a threat. The U.S. government is not seriously worried about Chinese hackers or mischievous kids in Latvia (as Rockefeller cited as a danger) but rather fear free and unfettered speech and activism on the part of its own citizens.

Obama’s promise is merely an effort to string you along with a big fat lie. He has absolutely no respect for you or the Bill of Rights.

The Department of Homeland Security filled out its cybersecurity team Monday, two months after Rod Beckstrom resigned as director of the department’s National Cybersecurity Center. He had clashed with the National Security Agency and complained about lack of funding.

Reitinger will continue to hold his position at the NPPD, where he heads up Homeland Security-specific cybersecurity efforts. “Holding both positions simultaneously will allow Reitinger to provide broader strategic direction to the department’s cybersecurity efforts while ensuring preparedness and response capabilities across all federal computer systems,” the Department of Homeland Security said in a statement. It’s unclear how his role would shift as the White House brings in its new cybersecurity czar.

CHARLESTON, W.Va. — A Charleston woman agreed in Kanawha Circuit Court Monday to a judge’s suggestion that she have her fallopian tubes tied as part of her probation.

Egnor, a retired Cabell County Circuit judge who has been hearing cases while Judge Paul Zakaib Jr. recovers from an illness, said he had made arrangements for Butterworth to have the sterilizing procedure free of charge.

“[Butterworth] recognizes the need to make changes in her life in order to provide for herself and her family,” Egnor’s order reads. “After inquiring of the defendant, the Court further recognizes [her] desire to have a tubal ligation and has located a provider who will do it free of costs, with arrangements to be made in the next 30 days.”

Leading Democrats: Congress, Senate Owned And Run By Bankers

Those who created the banking crisis are also the most powerful lobby on Capitol Hill

The Democratic Chairman of the Agriculture Committee yesterday announced to the press that “The banks run the place,” in reference to the US Congress. He is the second notable elected official to speak out in recent weeks over the gross and institutionally corrupt conflict of interest on Capitol Hill.

“I will tell you what the problem is,” Collin Peterson told the New York Times, “they give three times more money than the next biggest group. It’s huge the amount of money they put into politics.”

Peterson is pushing for legislation to regulate derivatives trading. His proposed bill would limit derivatives trading to public exchanges, rather than private clearinghouses, which are managed by banks.

In this sense he directly opposes the proposal of Treasury Secretary Timothy Geithner, to have the transactions monitored by the New York branch of the Federal Reserve, a move also (coincidentally?) proposed by the heads of the banking industry.

Over-exposure to credit derivatives of mortgage-backed securities - or credit default swaps (CDS) was a key reason for the failure of Bear Stearns, Lehman Brothers, Merrill Lynch, American International Group, and Washington Mutual last year, and is at the centre of a financial black hole that is engulfing the economy.

“Peterson’s bill specifically bars derivatives trading in a clearinghouse regulated by the New York Federal Reserve, which he said in an interview ‘is a tool of the big banks’ that ‘wouldn’t do much’ to regulate the contracts,” the New York Times writes.

“Because the banks’ lobbyists persuaded some of his Republican colleagues to resist more sweeping changes, Mr. Peterson said, he has had to modify a bill he introduced that is similar to Mr. Harkin’s in calling for wide-ranging limits on derivatives.”

Peterson’s warning mirrors that of Democratic Senator Dick Durbin, who just a few weeks ago uttered the same rarely acknowledged truth.

“And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place,” he said.

According to the Center for Responsive Politics, Barack Obama received $69,823,872 in contributions from the banking industry, while John McCain got $60,605,254, with the total between the two exceeding $130 million.

This makes the banks the biggest donor to the presidential campaigns by a clear $35 million, second only to lobbyists and lawyers. Feel the democracy in action.

The New York Times reports that the top five financial sector companies — Goldman Sachs, Citigroup, JP Morgan Chase, Bank of America and Credit Suisse — gave $22.7 million and spent more than $25 million combined on lobbying activities in one year.

In this sense the vast swathe of regulatory powers eventually handed over to the government will first be filtered through the very interests they are supposed to be overseeing, and we are back to where we started.

We have tirelessly exposed how the very people tasked with rescuing the economy by both the Obama and Bush administrations are the same ones who helped create the financial crisis in the first instance. Geithner is a prime example, being as he is a protege of former Goldman CEO and Citigroup director Robert Rubin.

Salon journalist Glenn Greenwald has exposed more ties between the House and the banks, and how financial policy is now almost wholly dictated by the banking industry.

Last month, a little-known company where Summers served on the board of directors received a $42 million investment from a group of investors, including three banks that Summers, Obama’s effective “economy czar,” has been doling out billions in bailout money to: Goldman Sachs, Citigroup and Morgan Stanley. The banks invested into the small startup company Revolution Money, right at the time when Summers was administering the “stress test” to these same banks.

A month after they invested in Summers’ former company, all three banks came out of the stress test much better than anyone expected—thanks to the fact that the banks themselves were allowed to help decide how bad their problems were. (Citigroup “negotiated” down its financial hole from $35 billion to $5.5 billion.)

The fact that the banks invested in the company just a few months after Summers resigned suggests the appearance of corruption, because it suggests to other firms that if you hire Summers onto your board, large banks will want to invest as a favor to a politically connected director.

Last month, it was revealed that Summers, whom President Obama appointed to essentially run the economy from his perch in the National Economic Council, earned nearly $8 million in 2008 from Wall Street banks, some of which, like Goldman Sachs and Citigroup, were now receiving tens of billions of taxpayer funds from the same Summers. It turns out now that those two banks have continued paying into Summers-related businesses.

According to filings obtained for this story, Summers first joined the board of directors of Revolution Money back in 2006 (when it was called GratisCard), the same year that Summers was forced to resign as president of Harvard after his disastrous tenure. Revolution Money/GratisCard was a startup headed by former AOL chief Steve Case. Revolution Money billed itself as the Next Big Thing in online payment, “PayPal meets MasterCard,” according to their own pitch.

In September 2007, Revolution Money announced that it had raised $50 million from a group of investors including Citigroup, Morgan Stanley and Deutsche Bank. Some found the investment strange even then, because normally big banks don’t get involved in seeding small startups—that’s the domain of venture capitalists, not mega-banks. Especially not in September 2007, when these same megabanks were Chernobyling their way into full-fledged balance-sheet meltdown.

What seems clear is that at least part of Revolution Money’s success in raising funds was due to their star-studded board of directors—which included not only Larry Summers, but also the notorious Frank Raines, the former Fannie Mae chief whom Time Magazine named to its “25 People to Blame for the Financial Crisis” list. Raines is still a board member.

Over the next year and a half, Revolution Money didn’t quite live up to its promise of competing with PayPal or Visa/MasterCard. At least some of this could be attributed to the difficulty of starting up an online credit card company in the middle of a triple-cluster credit crunch, banking crisis and recession. But there is also evidence that the company wasn’t run well. Another one of Steve Case’s “Revolution” brand startups, Revolution Health (which also features a star-studded board of directors including Carly Fiorina, Colin Powell and several future Obama administration officials), essentially folded when it was sold to Everyday Health last September and merged into that company’s operations.

In spite of all of this, on April 6, 2009, Revolution Money announced the happy news: it had just successfully raised $42 million in the most difficult market since the 1930s. The investors? Goldman Sachs, Citigroup and Morgan Stanley—bankrupt institutions that Larry Summers was transferring billions in bailout funds to.

When the stress test results were finally released, the banks all came out with glowing reports that beat expectations and caused plenty of skepticism.

In an interview for this article, William Black, a former bank regulator who exposed the $160 billion savings and loan scandal and its ties to powerful U.S. senators, remarked: “Summers wasn’t hired [by Revolution Money] for his expertise, because he doesn’t have relevant expertise in this kind of credit card operation.”

“He’s not a techie. He doesn’t have business expertise,” Black said. “So this is solely someone hired for the name and contacts, because he’s politically active and politically connected. And that’s made all the more clear by the fact that Frank Raines was put on the board at a time when he was pushed out in disgrace from Fannie Mae. Why? Because of his political connections.”

“That’s the pattern of this entity,” said Black, “which hasn’t been doing well financially and desperately needs to get money from others, and has been able to get money from banks at a time when [these same banks] largely stopped lending to productive enterprises. But with this politically connected entity [Revolution Money], they’re happy to dump money.”

According to a company spokesperson, Summers resigned from the board of directors at Revolution Money this past January, just three months before the banks invested. On one of Revolution Money’s main Web sites, Revolution Money Exchange, you could still see Summers’ name still listed as a director when this story was filed.

(Oddly, company filings obtained for this article show that Summers wasn’t even on Revolution Money’s board of directors in 2007-08, even though both he and Revolution Money repeatedly stated that he was on the board, and only served on GratisCard’s board in 2006.)

Whatever the case, Summers was pushing Revolution Money as recently as last September in an interview with Portfolio magazine:

“I’ve enjoyed being involved with a number of smaller companies such as the Revolution Money venture, which has a potentially very exciting credit-card technology, using credit and debit technology, using the Internet that, in a sense, brings together bricks and clicks by providing both a capacity for regular retail transactions and also for online.”

Whether or not Summers has a personal interest in the company, it still stinks that a company where the head of the National Economic Council served on the board until just a few months ago subsequently received millions in investment funds from banks that Summers bailed out. Taxpayer dollars went into these banks, and from the banks into the Summers-connected firm, a firm he was hired onto precisely because his connections could bring in this kind of money.

His involvement wasn’t just incidental. If you look at the press releases, Larry Summers’ name is always touted as part of the selling point. One press release in 2007 refers to Summers as “legendary.”

Moreover, Summers’ longtime chief of staff, Marne Levine, who also served as Summers’ chief of staff when he was in Treasury under Clinton and again at Harvard, joined Summers at Revolution Money, serving as “Director of Product Management.”

Black pointed out another sleazy aspect of Revolution Money’s pitch: it proudly boasted in late 2007 that it would make it easier than ever for people with low credit ratings to find access to lines of credit. In other words, Revolution Money billed itself as the ultimate ghetto loan shark.

That same 2007 press release that boasted of the “legendary” Larry Summers also said: “Unlike most bank credit card issuers who are limited to a narrow scope of credit approval guidelines specific to their bank, RevolutionCard seamlessly utilizes multiple partners to achieve unparalleled consumer approval rates.”

Nineteen months later, Summers, now in control of the economy, appeared on “Meet The Press” and declared: “We need to do things to stop the marketing of credit in ways that addicts people to it and so that our households are again saving, and families are again preparing to send their kids to college, for their retirement and so forth.”

So once again, Summers creates a problem that the rich profit from, then is put in charge of “fixing” it after vulnerable Americans have been picked clean.

Whether or not the three bailed-out banks’ investment in Revolution Money last month represents some kind of bribe or kickback or even the appearance of corruption is almost secondary, because shameless cronyism is the problem, and it’s the reason why America is in such a horrible mess today.

“Polite society was supposed to impose social pressures to make sure this wasn’t tolerated,” Black said. “Like the old phrase about hogs being slaughtered. But now the hogs get even wealthier, even fatter.”

Everything about Summers, from his horrible track record in the developing world in the 1990s to the sleaze and plunder he’s overseeing in the White House should make us terrified. Hell, he even looks like some old Batman villain: Summers, whose trademark bullfrog neck was enough of a distraction before Obama brought him into the White House, has seen his gelatinous layers of neck-fat swell up like an amphibian guarding its eggs ever since he took control of the economy.

With demand for accountability soaring, the GAO has been given audit power over Fed’s TARP lending, even as Geithner opens "giant loophole" for banker secrecy in derivatives clearinghouse plan

"The banks run the place," Rep. Collin Peterson cried out this week. The New York Times reports that he has a bill that would specifically ban derivatives from trading in a clearinghouse regulated by the New York Federal Reserve, which Peterson blasted as "a tool of the big banks."

A "tool" because the nine biggest banks in the derivatives market– including JP Morgan Chase, Goldman Sachs, Citigroup and Bank of America– all met secretly to discuss how to use the lax regulation and institutional secrecy of the NY Fed to shield their credit-default swaps business from prying eyes and attempts at regulation, as the Times reports:

What’s more, the banks formed a lobby– the CDS Dealers Consortium– only weeks after accepting TARP funds in October 2008 to protect its interests. Heading this effort is Edward Rosen, who previously helped fend off derivatives regulation. Rosen wrote and circulated a "confidential memo" to the ‘Treasury Department and leaders on Capital Hill’ making their agenda clear, the Times reported.

Rosen and his backers propose that derivatives be "traded in privately managed clearinghouses, with less disclosure," according to the Times. The clearinghouse of choice for the big banks in Rosen’s CDS Consortium is ICE U.S. Trust, which is in turned regulated only by the Federal Reserve system.

featured stories Bankers lobbied secretly to keep derivatives under Federal Reserve oversight and away from real scrutiny

Ironically, the Times notes, Treasury Secretary Tim Geithner, former president of the New York Federal Reserve, submitted a plan similar to Rosen’s, although Treasury officials stated the proposal was "independent." Although Geithner vowed to make derivatives "more accountable", critics say the emphasis on clearinghouses in the plan is a "major loophole" because ‘little disclosure would be required’ for any ‘customized’ swap.

It is clear that banks, who wanted their credit swaps to remain private, counted on the lack of transparency over Federal Reserve affairs to keep derivative affairs in the dark, thus enhancing their profit potential. It is further clear that Treasury Secretary Geithner intended to help them in that aim.

Senator Tom Harkin said the loophole "could be worth trillions and trillions of swaps," blasting it as "a loophole big enough to drive a truck through."

Derivatives are the bulk of the "toxic assets" TARP was set up to fight– and total an astounding $1.5 quadrillion in estimate.

Bloomberg reported Friday that the "Fed’s Role in AIG May Be First Target of GAO Audit." President Obama signed into law on May 20 a "Fed clause" giving the Government Accounting Office (GAO) the "power to examine the Federal Reserve’s emergency aid to specific companies, such as AIG, Bank of America Corp. and Citigroup Inc."

Under what Bloomberg has called "war powers", the Fed has issued "an unprecedented expansion of credit to nonbank financial firms… invoking emergency powers and doubling its assets the past year."

The authority is notably only a half-measure. Bloomberg notes that it "doesn’t remove limits from a 1978 law that prohibits the GAO from peering into Fed activities involving monetary policy or discount-window loans to banks."

Bloomberg makes a distinction from the "more intrusive" legislation introduced in the House by Ron Paul and in the Senate by Bernie Sanders. Those bills now have well over a hundred sponsors. Sanders was rebuffed by Ben Bernanke previously during TARP hearings after he demanded to know who the Fed lent money to and was told frankly, "No."

Nevertheless, information about the meeting of the big banks shows that there is a desire to keep the Federal Reserve and its dealings quiet at a time when interest in the Fed’s actions is at an all-time high. Any move to bring accountability to that institution is positive, even if insufficient.

The Federal Reserve appears to be increasingly nervous about the long term bond market. This is serious. How panicked are they? After leaking a story on Friday, they are back at it on Sunday.

The Federal Reserve leaked to CNBC’s Steve Liesman on Friday that they weren’t targeting long rates. Why such a leak? Probably because the Fed did not want to appear impotent in controlling the long rate. So they put out the word through Liesman that they weren’t targetting the long rate. Can you imagine what would happen to the markets if it sensed long rates were beyond the control of the Fed?

The Fed can of course print money to buy up every Treasury bond in existence, but the inflationary ramifications would be Zimbabwe like, and crush the dollar on international currency markets. Are we near the phase where all hell breaks loose? I have never even answered, maybe, to this question before. It’s always been, “no.” Now it’s maybe.

What really has me spooked is another article out this afternoon (on a Sunday) that Drudge has even picked up. It’s a Reuters story by Alister Bull. The headline: Federal Reserve puzzled by yield curve steepening.

Translation, the Fed doesn’t know what is going on, but they are really scared.

The Federal Reserve is studying significant moves in the U.S. government bond market last week that could have big implications for the central bank’s strategy to combat the country’s recession.

But the Fed is not really sure what is driving the sharp rise in long-dated bond yields, and especially a widening gap between short and long term yields.

Do rising U.S. Treasury yields and a steepening yield curve suggest an economic recovery is more certain, meaning less need for safe haven government bonds and a healthy demand for credit? If so, there might be less need for the Fed to expand the money supply by buying more U.S. Treasuries.

Or does the steepening yield curve mean investors are worried about the deterioration in the U.S. fiscal outlook, or the potential for a collapse in the U.S. dollar as the Fed floods the world with newly minted currency as part of its quantitative easing program. This might be an argument to augment to step up asset purchases.

Another possibility is that China, the largest foreign holder of U.S. Treasury debt, has decided to refocus its portfolio by leaning more heavily on shorter-term maturities…

The U.S. Treasury must sell a record net $2 trillion in new debt in 2009 to fund a $1.8 trillion projected fiscal deficit, resulting from falling tax revenues, an economic stimulus package and sundry bank bailouts.

It’s the Chinese, and any other Treasury bond buyer who follows the markets, that have pulled away, to varying degrees from buying Treasury long securities. No one wants to be the last one holding bonds, where the new debt about to be issued is in the trillions.

Bull continues with the part of the message the Fed really wanted to get out: With officials still grappling to divine the factors steepening the yield curve, a speedy decision on whether to ramp up the Treasury debt purchase program or the related plan to snap up mortgage-related debt seems unlikely.

“I’m in wait-and-see mode,” said one Fed official who spoke on the condition of anonymity. “We laid out the asset purchase plan and we’re following it. That is going to have some affect on various interest rates, but together with a hundred other things. So I don’t think we should be chasing a long-term interest rate,” the official said. It’s the same message as Friday. The Fed does not want to spook the world into thinking that it can’t push long term rates down, so it says it is not trying. But if rates continue to climb, a panic out of Treasury securities is a very likely scenario. And Bernanke has only one play to force long rates back down, buy every long bond in sight, which of course is highly inflationary and puts upward pressure on rates. How’s that for a dilemma?

The end of the current financial system, as we know it, may be iminent. If you would have asked me even two weeks ago if collapse was imminent, I would have said it was highly unlikely, now I am saying it is possible. Bernanke may be able to patch things up short-term, if he is lucky, but long term the U.S. financial structure is in serious trouble. There is just too much Treasury debt that needs to be raised. An international panic out of Treasury securities, even a slow controlled panic, means the Fed will be the major buyer. This will ultimately mean record inflation.

And keep this in mind, we have never seen a collapse of a currency like the dollar. Even the hyperinflation during Germany’s Wiemar Period can not serve as an example. Since the dollar is the reserve currency of most of the world, a panic out of the dollar means more dollars will return to the U.S. shores than any country has ever experienced.

Other countries have had collapsed currencies, but never in the history of world of finance has so much currency been held outside a country of issue that could come flying back, almost on a moments notice. If the panic out of the dollar starts, even if Bernanke stops printing money (unlikely), all the dollars flying back into the U.S. could cause a huge price inflation all on its own.

The Federal Reserve Is Poison And Needs To Be Stopped

The dollar dropped to its lowest level against the euro this year on speculation record U.S. borrowing will undermine the greenback, prompting nations to consider alternatives to the world’s main reserve currency.

The 16-nation euro gained for a fourth day versus the dollar as the Russian government said emerging-market leaders may discuss the idea of a supranational currency. The pound strengthened to $1.65 for the first time since October.

“There’s been a lot of talk out of Russia about a new global currency, and that’s contributing toward this latest bout of dollar weakness,” said Henrik Gullberg, a currency strategist at Deutsche Bank AG in London. “These latest comments are just adding to the general dollar weakness we’ve seen recently.”

The dollar slid 0.9 percent to $1.4289 per euro at 10:52 a.m. in New York, from $1.4159 yesterday. It touched $1.43, the weakest level since Dec. 29. The dollar fell 0.5 percent to 96.08 yen, from 96.59. The euro rose 0.4 percent to 137.36 yen from 136.78. The pound traded at $1.6557, compared with $1.6443, after touching $1.6564, the highest level since Oct. 30.

The U.S. currency pared its decline versus the yen as the National Association of Realtors said pending sales of existing homes climbed 6.7 percent in April. The median forecast of 32 economists surveyed by Bloomberg News was a 0.5 percent gain.

Texas Governor Rick Perry may be on the receiving end of some political mockery for his recent endorsement of his home state’s right to secede from the country. But he has the backing of one decidedly anti-establishment Republican from the Lone Star State.

Rep. Ron Paul released a video on Sunday offering support for the principles of secession, calling them “very much American.” And he described Perry’s recent talk about pulling Texas out of the union a discussion worth having.

“We came together voluntarily,” said Paul. “A free society means you can resolve it voluntarily.”

The decidedly libertarian Texas Republican and former presidential candidate is one of the few elected national figures to offer support for the stance taken by his governor. And it’s not unexpected. The tea parties that Paul’s candidacy helped galvanize were the same forum where Perry expressed some of his sentiments.

In his video address, Paul framed talk of secession as a uniquely American right, pulled straight from the same thread as the American Revolution.

[Perry] really stirred some of the liberal media, where they started screaming about: ‘what is going on here, this is un-American.’ I heard one individual say ‘this is treasonous to even talk about it.’ Well, they don’t know their history very well, because when you think about it… it is very American to talk about secession. That’s how we came in being. Thirteen colonies seceded from the British and established a new country. So secession is a very much American principle. What about all the strong endorsements we have give the past decade or two to all the republics that seceded from the soviet system? We were delighted about it.
“I think it is worth a discussion,” said Paul, later in his four-and-a-half minute long video. “I think people should discuss this. Because right now the American people are sick and tired of it all. And I think the time will come when people will consider it much more seriously, is when the federal government can no longer deliver. That will come when the dollar collapses.”

The real obstacle to any such discussion, in the end, is legal as much as political. The Joint Resolution Annexing Texas to the United States of 1845 allows for Texas to be drawn into five separate states but not secede from the union.

A federal appeals court in Chicago ruled today that the Second Amendment doesn’t bar state or local governments from regulating guns, adopting the same position that Judge Sonia Sotomayor, President Barack Obama’s nominee to the Supreme Court, did when faced with the same question earlier this year.

The decision applied only to the District of Columbia, a federal enclave that is not a state. It left open whether the amendment also limits the powers of state government.

A string of 19th century Supreme Court decisions limited application of the Bill of Rights to state governments. During the 20th century, the Supreme Court held that certain constitutional rights, but not the Second Amendment, could be enforced against the states.

Gun-rights groups challenged ordinances in Chicago and Oak Park, Ill., as unconstitutional in light of the Supreme Court’s decision last year. A federal district judge rejected their arguments, a decision affirmed Tuesday by the Seventh U.S. Circuit Court of Appeals.

Caption: U.S. Marines participate in a practice raid on Flushing Meadows Park with a CH-46 helicopter to demonstrate for civilians the tactics the U.S. Marine Corps uses while raiding an area in enemy territory, May 25, 2009. The Marines are assigned to the 6th Marine Regiment’s 2nd Battalion. The demonstration was part of Fleet Week 2009 activities. U.S. Marine Corps photo by Lance Cpl. Carl Payne.

On May 23, the Staten Island Real-Time News reported on “mock raids at the public park to give civilians a feel for how soldiers operate in battle.”

Or maybe that should be “mock raids” to give civilians a taste of things to come and, of course, get them acclimated to the presence of uniformed and armed soldiers in their midst.

It is interesting the Marines characterized Flushing Meadows Park as “enemy territory.” In fact, according to our rulers and their military functionaries, the entire United States is “enemy territory” in need of martial law.

World Bank head honcho and globalist Robert Zoellick said as much last week when he warned that the banker contrived “stimulus” will not stem rising unemployment and forestall “political unrest across the globe.” Increasing poverty and the coming fire sale of corporations and infrastructure here in the former land of the free and brave will be a “political combustible issue,” according to Zoellick and the World Bank loan sharking operation.

It’s a combustion that will need to be dealt with — and that’s why the Marines are landing CH-46 helicopters in public spaces.

The U.S. Army is set to start testing a computerized, high-tech projectile launcher that can take out bad guys hiding around corners and in caves or trenches, even if they’re out of the soldier’s line of sight.

“The way a soldier operates this is you basically find your target, then laze to it, which gives the range, then you get an adjusted aim point, adjust fire and pull the trigger,” deputy program manager Richard Audette told Army News Service. “Say you’ve lazed out to 543 meters … when you pull the trigger it arms the round and fires it 543 meters plus or minus a one-, two- or three-meter increment, then it explodes over the target.”

As of today, June 1, 2009, even U.S. citizens are officially prisoners in the USA, or exiles barred from entering our own country without the government’s permission.

We are now forbidden by Federal regulations from leaving or entering the USA, anywhere, by any means — by air, by sea, or by land, to or from any other country or international waters or airspace — unless the government chooses to issue us a passport, passport card, or “enhanced” drivers license (any of which “travel documents” are now issued only with secretly and remotely-readable uniquely-numbered radio tracking beacons in the form of RFID transponder chips), or unless the Department of Homeland Security chooses to to exercise its standardless “discretion” to decide — in secret, with no way for us to know who is making the decision or on what basis — to issue a (one-time case-by-case) “waiver” of the new travel document requirements.

If you’re in the USA without such documents — even if you were born here, or are a foreigner who entered the USA legally without such documents (a Canadian, for example, who entered the USA by land yesterday when no such documents were yet required), or your document(s) have expired or have been lost or stolen — you are forbidden to leave the country unless and until you procure such a document, or unless and until the DHS gives you an exit permit in the form of a discretionary one-time waiver to leave the country — but not necessarily to come home, unless they again exercise their discretion to “grant” you another waiver.

If you are a U.S. citizen abroad without such a document (for example, if you entered Canada legally without it yesterday by land, when it wasn’t required, or again if your document(s) are expired, lost, or stolen) you are forbidden to come home unless and until you can procure a new document acceptable to the DHS, or unless and until the DHS gives you permission to come home in the form of a discretionary one-time waiver.

The DHS admits, at the top of its GetYouHome.gov propapganda website, that it might take “several weeks” to obtain such a document if you don’t have one already or if it expires or is lost or stolen. A temporary paper drivers license without a photo, or even a standard photo licnese or state ID, won’t suffice — only an extra-fee EDL with an RFID chip, which also takes several weeks to obtain in those few states that issue them at all. Backlogs for even “rush” passport issuance can be even longer, as we pointed out in our comments to the DHS. It doesn’t matter if your next-of-kin is dying in Canada or Mexico. (Suppose a relative gets sick or injured, and needs you there to make medical decisons or escort them home, but you were’t going on the trip with them, and don’t have a passport.) You can’t go unless the U.S. government approves your papers or approves a standardless discretionary “waiver” for you to leave the U.S. — which won’t guarantee that they’ll let you come back.

This is the final stage, effective June 1, 2009, of implementation of the so-called “Western Hemisphere Travel Initiative” (WHTI).

You don’t need us to tell you what’s wrong with this picture. But if you want it spelled out, you can read the comments here and here that we submitted to the DHS when they proposed the WHTI regulations imposing these ID and exit and entry permit requirments, first for airports and seaports and then for land border crossings.

We shouldn’t have needed to point out to the DHS that the WHTI travel document requirements are in flagrant violation of the International Covenant on Civil and Political Rights (ICCPR), one of the most important human rights treaties which the U.S. has signed and ratified. Article 12 of the ICCPR guarantees that, “Everyone shall be free to leave any country, including his own,” and “No one shall be arbitrarily deprived of the right to enter his own country.”

This article of the ICCPR has been interpreted by the U.N. Human Rights Committee (and by the U.S. when it has criticized other countries such as Cuba for their exit restrictions on their citizens) as making those rights near-absolute. The WHTI document rules are also in violation of the North American Free Trade Agreement (NAFTA) and the NAFTA Implemdentation Act, by imposing a barrier to Canadians and Mexicans wishing to come to the U.S. to compete for business — the requirement for a passport or enhanced drivers license (EDL) — that doesn’t apply to U.S. citizens doing business within the U.S.

And that’s not to mention the incompatibility with the U.S. Constitution of these restrictions on travel, movement, and assembly.

DHS APIS regulations already require airlines to obtain individualized prior permission from the DHS before they allow anyone (even a U.S. citizen) to enter, leave or transit the U.S. by air, and the the Secure Flight scheme will require the same for domestic flights as soon as the travel industry can build the elaborate and expensive infrastructure needed for such a real-time travel surveillance and control program. Meanwhile, the DHS is exapnding their assertion of similar and increasingly intrusive powers of search, seizure, interrogation, and above all surveillance (monitoring and logging) and control of travel and movement within the U.S. through warrantless, suspicionless checkpoints on roads that don’t cross any border and are up to 100 miles from coasts or borders, and at airports for passengers on domestic flights.

Previous court decisions upholding government discretion in whether or not to issue passoports has been premised on the assumption that passports were useful to facitlitate travel, but were not required for travel or for the exercise of any other rights. Those decisions will, obviously, need to be revisited in light of the fact that government-issued documents are now explicitly required as a condition of the exercise of those aspects of the right to travel — the right of anyone to leave the U.S., and the right of U.S. citizens to return to our own country — that are most explicitly guaranteed by international treaties to which the U.S. is a part, and which under the U.S. Constitution are “the supreme law of the land”. The DHS is cleverly saying that at first they will only issue warnings and waivers, in most cases, to U.S. citizens seeking to enter or leave the U.S. without the newly-required travel documents. Presumably, they hope that the new ID and permission-based travel control regime will become a well-established fait accompli before anyone is able to bring a court challenge of a DHS decision to bar someone from leaving the U.S., or barring a U.S. citizen from entering the country.

For many young Americans, reselling video games to pick up the newest, latest and greatest is simply the only choice to keep up with the fast-paced, high-dollar industry (which is about to kick off a massive annual trade show in Los Angeles as I write this).

GameStop, the largest games retailer on the planet, has made billions from the trade, building an empire off the business model that one Florida county appears to now view as a haven for criminals.

Now, I’ve got a little personal insight into this issue. As a teen and young adult, well before I found myself tasked with the journalisms, I was employed by Blockbuster, Movie Trading Company, Borders Books and Books-A-Million. Library science — or, at least inventory management and customer service — was my forte as a student. (We’ve all got to get by somehow.)

At Movie Trading Company, we had tons and tons of DVDs and VHS cassettes for sale, almost all of them brought in by customers looking for cash or store credit. After about six months, it became quite easy to spot the thieves among them.

I’m talking about people who’d walk in 10 minutes before closing with a stack of Simpsons box set DVDs, or five copies of that week’s big, new release. We had one regular customer, Eddy (a sex offender, I later found out), who offered a couple of us, myself included, methamphetamine in exchange for more cash back from his stolen DVDs. The man was obviously desperate. I’d even go so far as to guess that stealing DVDs was essentially his job.

It was policy that we accept what customers bring in unless the condition was beyond repair, so every time he’d show up with a backpack full of DVDs and games, we had to give him cash. But by the same measure, he had to submit some form of identification. We’d record it, pay out and go about our business.

One day a cop walked in with Eddy’s photo and asked if we’d see him and if we had records of what he had sold us. I told the officer yes, but the management stepped in after that and I never found out what happened … And I never saw Eddy again.

Case in point: That happened in Texas, where there is no requirement for fingerprints to sell used media like games or DVDs. Crimes were committed openly and law enforcement (apparently) worked. It wasn’t that difficult.

Surely Florida does not lack basic law enforcement capabilities. Why should such draconian measures be necessary just to trade in a video game?

One Colorado police chief is preparing to launch a controversial practice in the fight against drunken driving by seeking search warrants that would give his officers the power to have blood drawn from uncooperative suspects.

“This is actually a search warrant to search a person for evidence of a crime,” Kozak said of the plan he intends to implement this summer. “We believe the blood, of course, of a suspected drunken driver is very important evidence.”

Kozak’s plan is part of the “100 days of heat” crackdown on drunken driving by law enforcement agencies across Colorado. Kicking off this Memorial Day weekend, the unprecedented summer-long effort will involve 150 sobriety checkpoints and increased enforcement around holidays.

Kozak’s proposal is the most controversial, and it’s far from clear whether it will stand up in court.

“He’s going to run afoul of established case law and statutes,” predicted legal analyst Scott Robinson.

A 72-year-old woman is pulled over for speeding, then tasered and sent to jail. Kathryn Winkfein says she drives to Austin about twice a month to do her shopping. But on a Monday afternoon, a Travis County Constable deputy pulled her over, on her way back to Granite Schoals.

Winkfein admits she was speeding in the dangerous strip of Highway 71 and Bee Creek.

“He explained to her,” Constable McCain said, “sign the ticket stub, it’s not an admission of guilt. It’s a promise to appear in court. She didn’t want to. She said take me to jail.”

That’s when the officer says Winkfein exited her vehicle and didn’t cooperate.

We expected broken promises. But the gap between the soaring expectations that accompanied Barack Obama’s inauguration and his wretched performance is the broadest such chasm in recent historical memory. This guy makes Bill Clinton look like a paragon of integrity and follow-through.

From health care to torture to the economy to war, Obama has reneged on pledges real and implied. So timid and so owned is he that he trembles in fear of offending, of all things, the government of Turkey. Obama has officially reneged on his campaign promise to acknowledge the Armenian genocide. When a president doesn’t have the nerve to annoy the Turks, why does he bother to show up for work in the morning?

Obama is useless. Worse than that, he’s dangerous. Which is why, if he has any patriotism left after the thousands of meetings he has sat through with corporate contributors, blood-sucking lobbyists and corrupt politicians, he ought to step down now — before he drags us further into the abyss.

I refer here to Obama’s plan for “preventive detentions.” If a cop or other government official thinks you might want to commit a crime someday, you could be held in “prolonged detention.” Reports in U.S. state-controlled media imply that Obama’s shocking new policy would only apply to Islamic terrorists (or, in this case, wannabe Islamic terrorists, and also kinda-sorta-maybe-thinking-about-terrorism dudes). As if that made it OK.

In practice, Obama wants to let government goons snatch you, me and anyone else they deem annoying off the street.

Preventive detention is the classic defining characteristic of a military dictatorship. Because dictatorial regimes rely on fear rather than consensus, their priority is self-preservation rather than improving their people’s lives. They worry obsessively over the one thing they can’t control, what George Orwell called “thoughtcrime” — contempt for rulers that might someday translate to direct action.

Locking up people who haven’t done anything wrong is worse than un-American and a violent attack on the most basic principles of Western jurisprudence. It is contrary to the most essential notion of human decency. That anyone has ever been subjected to “preventive detention” is an outrage. That the president of the United States, a man who won an election because he promised to elevate our moral and political discourse, would even entertain such a revolting idea offends the idea of civilization itself.

Obama is cute. He is charming. But there is something rotten inside him. Unlike the Republicans who backed George W. Bush, I won’t follow a terrible leader just because I voted for him. Obama has revealed himself. He is a monster, and he should remove himself from power.

“Prolonged detention,” reported The New York Times, would be inflicted upon “terrorism suspects who cannot be tried.”

Any “terrorism suspect” (can you be a suspect if you haven’t been charged with a crime?) can be tried. Anyone can be tried for anything. At this writing, a Somali child is sitting in a prison in New York, charged with piracy in the Indian Ocean, where the U.S. has no jurisdiction. Anyone can be tried.

What they mean, of course, is that the hundreds of men and boys languishing at Guantánamo and the thousands of “detainees” the Obama administration anticipates kidnapping in the future cannot be convicted. As in the old Soviet Union, putting enemies of the state on trial isn’t enough. The game has to be fixed. Conviction has to be a foregone conclusion.

The Old Grey Lady explains why Obama wants this “entirely new chapter in American law” in a boring little sentence buried a couple of paragraphs past the jump and a couple of hundred words down page A16: “Yet another question is what to do with the most problematic group of Guantánamo detainees: those who pose a national security threat but cannot be prosecuted, either for lack of evidence or because evidence is tainted.”

In democracies with functioning legal systems, it is assumed that people against whom there is a “lack of evidence” are innocent. They walk free. In countries where the rule of law prevails, in places blessedly free of fearful leaders whose only concern is staying in power, “tainted evidence” is no evidence at all. If you can’t prove that a defendant committed a crime — an actual crime, not a thoughtcrime — in a fair trial, you release him and apologize to the judge and jury for wasting their time.

It is amazing and incredible, after eight years of Bush’s lawless behavior, to have to still have to explain these things. For that reason alone, Obama should resign.

Despite President Barack Obama’s formation of a new task force to review government secrecy, and an ongoing investigation into use of the so-called state-secrets doctrine, lawyers for the new administration refused last week to disclose information on the government’s use of warrantless wiretaps and backed legislation to block the release of photos of prisoner abuse in Iraq and Afghanistan.

Last week, Obama announced the formation of a task force to review government classification policies, proposing the creation of a National Declassification Center to facilitate public disclosure of once-secret information.

The president reaffirmed his commitment “to operating with an unprecedented level of openness.”

But the next day, Department of Justice (DOJ) lawyers filed notice of the government’s intention to challenge in the Supreme Court a New York federal appeals court ruling ordering the administration to make public the photographs allegedly depicting the abuse of terrorism suspects in U.S. custody.

The American Civil Liberties Union (ACLU) had filed a Freedom of Information Act (FOIA) suit to force their disclosure. A federal court judge agreed and ordered the government to release the photos.

President Obama initially indicated he would comply with the court’s order but later changed his mind, saying that release of the photos might risk the lives of U.S. armed forces personnel.

At the same time, the DOJ told the court that a formal appeal by a June 9 deadline could be unnecessary if Congress quickly passes the Detainee Photographic Records Protection Act of 2009.

That measure is supported by the White House and was passed by the Senate on May 2. It would forbid disclosure of photographs taken between Sept. 11, 2001, and Jan. 22, 2009, “relating to the treatment of individuals engaged, captured, or detained after September 11, 2001,” by U.S. Armed Forces in operations outside the U.S. if “the defense secretary and the chairman of the Joint Chiefs of Staff have determined would endanger military personnel if released.”

Earlier this year, Attorney General Eric Holder rescinded Bush-era FOIA guidelines and replaced them with new rules to preserve FOIA’s purpose of making public important information about the workings of the government.

In the wiretapping case, lawyers for a now-defunct Saudi charity claim they were victims of electronic spying by the government. A federal judge ordered the Obama administration to disclose documents relating to that charge.

The wiretapping allegedly took place as part of the so-called terrorist surveillance program that was initiated by then-president George W. Bush following the 2001 terrorist attacks.

The DOJ, responding to a federal judge’s inquiry into whether the administration should be sanctioned for “failing to obey the court’s orders,” refused to turn over the documents and asked the court for permission to appeal its decision.

It urged the court to permit appellate review over the fundamental and significant separation of powers questions presented before any disclosure or risk of disclosure in further proceedings,” Anthony Coppolino, the DOJ’s special litigation counsel, wrote to Federal Circuit Court Judge Vaughn Walker.

The lawsuit was brought in San Francisco by two U.S. lawyers who claim their telephone calls were illegally intercepted by the National Security Agency (NSA) under the Bush administration. The lawyers represent the al-Haramain Islamic Foundation, a charity that the Treasury Department claims was linked to terrorism.

Jon Eisenberg, the attorney for the two lawyers, told Judge Walker at the time that the purpose of the lawsuit was to “obtain an adjudication of the legality of President George W. Bush’s warrantless electronic surveillance program and, more broadly, the Bush administration’s expansive theories of presidential power.”

Bush claimed that his war powers gave him the authority to eavesdrop on U.S. citizens’ electronic communications without warrants.

Eisenberg told IPS, “The DOJ attorneys repeat all the same arguments that Judge Walker has already rejected. They’re treating Judge Walker as if he were irrelevant.”

The San Francisco lawsuit began when the government accidentally sent the plaintiffs documents that showed their overseas communications with al-Haramain officials were intercepted without warrants. The pair sued, but was forced to return the documents because they were marked “top secret.”

In the al-Haramain case, the Bush administration’s Treasury Department found that the group was funneling money to terrorists in Chechnya and shut it down. But the government inadvertently released a classified document to the group’s lawyers. The lawyers contend that this document revealed that the government had been wiretapping both the organization and its lawyers without a warrant.

The organization sued the Bush administration. But when the case came to court in 2006, the government invoked the so-called state-secrets privilege, claiming that the case could not go forward because it would reveal information that would compromise national security.

But Judge Walker rejected the government’s claims. He ruled that the president could not invoke the state secrets privilege to conceal the evidence and dismiss the case.

Al-Haramain’s lawyers said they needed the classified documents to represent their clients. They said they were surprised to see the Obama administration arguing so vigorously for the same expansive Bush-era view of executive power.

Al-Haramain lawyer Eisenberg told IPS, “I anticipated that the Obama Department of Justice would take a more reasonable approach to moving forward with litigating this case in a manner that doesn’t jeopardize national security, which I think can be easily done.”

“They’re taking as hard a line as the Bush administration did on state secrets,” he said. “If anything, they’re being more aggressive about it.”

“In three years of litigating this case,” Eisenberg added, “I’d come to expect this sort of thing from the Bush Department of Justice, but I’m astounded to see the new Obama DOJ continuing down the same path. So far, at least, we’re not seeing any ‘change we can believe in’ regarding presidential abuse of the state-secrets privilege.”

Obama has ordered a DOJ task force to study the government’s use of the state-secrets privilege. The Bush administration invoked the privilege more than any other government in U.S. history.

In 2005, Bush admitted authorizing electronic surveillance of U.S. citizens without first obtaining warrants from the FISA court.

President Bush said that he secretly ordered the NSA to eavesdrop on citizens with suspected ties to terrorists because it was “critical to saving American lives” and “consistent with U.S. law and the Constitution.”

Without the prior approval of Congress or any legislation authorizing the act, President Obama plans to announce on Monday that the federal government will take a 60-percent ownership stake in General Motors as part of a bankruptcy and reorganization plan for the company.

In December, Congress failed to pass legislation authorizing a federal bailout of the auto industry.

Lacking legislative authority—and despite the fact that Congress had specifically declined to approve a bailout of the auto industry—President Bush went ahead and provided General Motors and Chrysler with $17.4 billion in taxpayer money.

Analysts James Gattuso and Andrew Grossman of the Heritage Foundation argued at the time that this was “legally wrong” because Bush took the money from the $700-billion Troubled Asset Relief Program (TARP) that was authorized specifically for purchasing assets from “financial institutions” such as banks, savings and loans, credit unions, brokerages and insurance companies. The Heritage analysts argued that auto manufacturers are not “financial institutions” as envisioned by Congress under the law.

Barack Obama is prepared to stake his own political prestige on getting climate change legislation through Congress, and would be willing to intervene directly to ensure passage of America’s first law to reduce the carbon emissions that cause global warming.

Nancy Sutley, who is pivotal in setting Obama’s green agenda as the chairwoman of the White House Council on Environmental Quality, told the Guardian that the president is ready to use his considerable personal popularity to rally Congress behind a sweeping climate change bill.

“When the bill is further along in the legislative process there are some things where it may make a difference in expressing a strong view,” Sutley said in an interview. “What [Obama] has been saying consistently is that he wants a bill and that this represents a very important step forward.”

Congress is now working against a six-month deadline to pass a sweeping package of environmental legislation through both houses before the world gathers at Copenhagen in December for talks on a global climate change treaty.

World leaders have warned US officials that Congress needs to take concrete action to reduce emissions if Washington hopes to bring China and other major polluters to a deal at Copenhagen.

The world is about to end, or at least that’s according to ABC’s “Good Morning America.” The June 2 segment promoted a new special called “Earth 2100.” The program follows Lucy, a girl born in 2009, and her dramatic story about how if we don’t take drastic measures immediately climate change will cause droughts, floods, mass migration, and starvation.

This may sound straight from a science-fiction movie, but “Good Morning America” went to great lengths to assure viewers this wasn’t science fiction and that by airing this series they were changing journalism. Bob Woodruff, host of the special, called making up what will happen in the future “a different kind of journalism.” The segment quoted him saying, “not a prediction of what will happen, but what might happen.”

The clips shown from the “Earth 2100” premiere painted a devastating picture that resembled the science-fiction movie “The Day After Tomorrow.” The cartoon of Lucy and her family showed an invasion of dragon flies, people migrating away from climate-ravaged areas for a better life, and, of course, New York City flooding. Clips from previous natural disasters were shown as well.

After the preview, “Good Morning America’s” Diane Sawyer responded and tried to pretend the whole program had some news value. “Amazing someone born into 2009. We’re not talking about sci-fi here and to come up with a human voice for it, a family voice, for it.” ABC left out the necessary crystal ball from the segment, so the audience was left to guess how they could predict 2100 so accurately.

Woodruff did attempt to establish some credibility for the project. “The idea that within this century a civilization can lie in ruins is unbelievable. But according to some of the world’s leading minds it’s a real possibility.” He never did mention exactly who these so-called “world’s leading minds” were or how ABC chose its experts.

Van Jones, White House adviser for Green Jobs, was one of only two sources in the segment – apparently a “leading mind.” ABC mostly used “fictional character” Lucy for it’s supposedly fact-based piece. Lucy’s family escaped to New York from Florida. Jones backed up the cartoon fictional series’ future predictions. “You’re going to see greenhouses, multi-story greenhouses and each floor will be growing, you know, carrots and potatoes, etcetera and that’ll just be considered normal.” Jones’ rosy picture of the greener future forgot to mention who exactly was going to mandate people growing potatoes from their greenhouses and how New York suddenly transformed to an eco-paradise complete with blimps in the sky in just a few decades.

Woodruff’s green predictions turn black by 2070 when sea levels rise and flood New York – “the streets were filling with water.” Stanley Feder, a former CIA analyst, described it as: “When New York begins to flood, it will be total chaos.”

What “Good Morning America” failed to show was the other side of the picture of their far-cast “Earth 2100.” By creating a series used to scare people about the future of the planet, it failed to show that this might not happen. The segment even closed with Woodruff discussing how if we do nothing this is how the Earth will end up like; we must act quickly.

Yet, “Good Morning America” was clearly pleased with not only the series, but themselves. Woodruff stated, “This is also, I have to say, this a different kind of journalism. In the past we’ve always looked at those that have already happened in the past, and those happening in the present, but what about the future?”

This is a different kind of journalism, and a complete rewrite from ABC’s original plans for “Earth 2100.” Working with left-wing activists in June 2008, the network warned viewers that civilization was poised to go the way of the Roman Empire and the Mayan civilization. The Web site promo for “Earth 2100” discussed “100 years from now when New York is abandoned.” Now that part of the Web site is down and it simply promotes the new version of the special.

As “Good Morning America” co-anchor Chris Cuomo put it on June 12, 2008: “We’re asking you to create a story that has yet to unfold – what our world will look like in 100 years if we don’t save our troubled planet.” The network invited viewers to turn into prophets and “report back” about what life is like in the year 2100.

The call went out for user-generated content depicting what life would be like in the future. According to the story, ABC was seeking video submissions. “We are asking you to use your imagination to create short videos about what it would be like to live through the next century if we stay on our current path. Using predictions from top experts, we will brief participants on global conditions in the years 2015, 2050, 2070 and 2100 – and we want you to describe the dangers that are unfolding before your eyes. “

The Media Research Center submitted a video and will post its submission on June 3.

When genetically modified foods were first introduced, the biotech industry hailed tomatoes that were frost resistant and round-up ready crops. Now, there is a further development in biotech that has received little attention in the mainstream media. Serious environmental and health concerns still surround GM food safety, but new technologies are being developed to turn foods into vaccine delivery systems. While there may be positive angles to this technology, we must take into account the long term goals of the establishment, which is already invested in the research and development of edible vaccine technology.

In 1996 the Rockefeller Foundation supplied grant money for early research on edible vaccines. The $58,000 grant, given to the Boyce Thompson Institute for Plant Research at Cornell University, was aimed at developing and transferring edible vaccine technology to developing countries. Cornell University reports,

Charles Arntzen, who served as President of the Boyce Thompson Institute, can be heard here explaining the use of bananas as edible vaccines in developing countries.

In 1998 the Boyce Thompson Institute became the first to develop genetically modified potatoes which were successfully tested on human subjects. “The potatoes were developed through a process known as transgenic implantation, in which a gene is transferred from one species to another. In this case the gene for a bacterial antigen — the protein that stimulates the production of protective antibodies — was inserted into the potato plant cells,” reports BTI.

Edible vaccines - which have been given scant coverage in the mainstream media - received attention in the wake of the recent swine flu outbreak. Iowa State University research “…may someday allow pigs and humans to get a flu vaccination simply by eating corn or corn products,” reports ISU. “The corn vaccine would also work in humans when they eat corn or even corn flakes, corn chips, tortillas or anything that contains corn, said Harris.”

The prospect of delivering vaccines through food inevitably raises the issue of mass medication. Calls for statins and lithium to be placed in tap water have recently been made in the name of promoting “good mental and physical health.” A recent AP report stated that lithium, along with hundreds of other active pharmaceutical ingredients have already been found in drinking water. Mosquitoes are also being turned into mass medication systems. The Bill and Melinda Gates Foundation recently gave a $100,000 grant to a Japanese research program aimed at genetically engineering mosquitoes to act as “flying syringes” to deliver vaccines.

The Rockefeller family - and in turn the entire Anglo-American establishment - has a history of consistently supporting population control and reduction. David Rockefeller, Bill Gates, and other billionaire philanthropists met in secret in New York City recently to discuss this very issue. The meeting was secret, according to an attendee, because “…anything they said would end up in the newspapers, painting them as an alternative world government.” Research in the realm of biotech and edible vaccines, as openly stated in prominent medical journals, will aid this long term agenda. This same group, primarily the Rockefeller family and their various foundations, was instrumental in shaping twentieth-century science, from the molecular sciences to social engineering. Dr. Lily E. Kay’s seminal work, The Molecular Vision of Life: Caltech, The Rockefeller Foundation, and the Rise of the New Biology, documents this fact.

In 1989 research was conducted by the National Institute of Immunology in New Delhi India into the use of hCG conjugated Tetanus and Diphtheria vaccines as a method of birth control. The research discussed the use of Tetanus and Diphtheria ‘carriers’ to bypass the immune system and deliver the female hormone called human chorionic gonadotrophin (hCG). While hCG is required to maintain pregnancy, the injection of hCG bound to Tetanus Toxoid triggers an auto-immune response against hCG. The Rockefeller Foundation is listed in the document as giving grants for the research.

On November 4, 1996 the publication Vaccine Weekly carried an article titled “Study Suggests Women Were Injected with Contaminated Tetanus Vaccine.” The article details an investigation that was carried out by the Philippine Medical Association into the discovery of hCG in tetanus vaccines. Similar incidents have also occurred in Thailand.

Further evidence is found in a 1995 BBC documentary titled “The Human Laboratory”. The film covered the Philippines Tetanus hCG controversy in depth. The transcript for the program states,

Word has spread in the developing world of these documented cases, but these stories are dismissed as rumor by the United Nations and World Health Organization. Vaccination has been met with increased resistance across many developing countries. UNICEF reports from Ethiopia that, “All sorts of misguided rumours go round that the injections will sterilize them or harm them in some way. But here, the village elders are on board. They are here, encouraging the women to come along.”

Edible vaccines, according to the Indian Journal of Medical Microbiology, will be a more socioculturally acceptable alternative to needles. In other words, people will be less resistant to eating a mundane banana than taking a shot in the arm. The Journal states that new edible vaccine technology may serve a dual purpose of birth control. As stated,

The journal points out that, “There is growing acceptance of transgenic crops in both industrial and developing countries,” and that, “Resistance to genetically modified foods may affect the future of edible vaccines.” Indeed, GM foods are increasingly being presented as a solution to world hunger and food crises.

Will edible vaccines be used as a tool for birth control in the developing countries? The ability to do so has been demonstrated, and the agenda for population reduction and control has been admitted by the billionaire philanthropists who’s foundations are involved with developing the technology.

The White House is asking Congress for $2 billion to help prepare for a possible swine flu pandemic. The request is contained in a measure to pay for military and diplomatic efforts in Iraq and Afghanistan. Obama requested the new anti-flu funding out of "an abundance of caution" even as the panic surrounding the H1N1 swine flu outbreak has faded considerably.
===============================================================================

The head of the US Central Command, General David Petraeus, said Friday that the US had violated the Geneva Conventions in a stunning admission from President Bush’s onetime top general in Iraq that the US may have violated international law.

“When we have taken steps that have violated the Geneva Conventions we rightly have been criticized, so as we move forward I think it’s important to again live our values, to live the agreements that we have made in the international justice arena and to practice those,” Gen. Petraeus said on Fox News Friday afternoon.

Petraeus made the comment in the context of being asked about the Bush administration’s so-called “enhanced interrogation techniques.” The now-Central Command chief said he believed that banning the more extreme techniques had taken away “a tool” employed by “our enemies” as a moral argument against the United States.

Petraeus didn’t say which parts of the Geneva Conventions he thought he and other administration officials had violated.

Asked about a “ticking time bomb” scenario — which is often employed by torture’s defenders — Petraeus said that interrogation methods approved for use in the Army Field Manual were generally sufficient.

“There might be an exception and that would require extraordinary but very rapid approval to deal with but for the vast majority of the cases our experience… is that the techniques that are in the Army Field Manual that lays out how we treat detainees, how we interrogate them, those techniques work, that’s our experience in this business,” he said.

He also acknowledged that the US prison at Guantanamo Bay has inflamed anti-US hostility.

“I do support is what has been termed the responsible closure of Gitmo,” Petraeus said. “Gitmo has caused us problems, there’s no question about it. I oversee a region in which the existence of Gitmo has been used by the enemy against us. We have not been without missteps or mistakes in our activity since 9/11 and again Gitmo is a lingering reminder for the use of some in that regard.”

“I don’t think we should be afraid of our values we’re fighting for,” he added. “What we stand for and so indeed we need to embrace them and we need to ope rationalize them in how we carry out what it is we’re doing on the battle field and everywhere else. So one has to have some faith I think in the legal system. One has to have a degree of confidence that individuals that have conducted such extremist activity would indeed be found guilty in our courts of law.”

This video is from Fox’s Live Desk, broadcast May 29, 2009.

WASHINGTON (Reuters) - The U.S. Supreme Court ruled on Tuesday that police, under certain circumstances, can initiate an interrogation of a suspect without the defendant's lawyer being present.

By a 5-4 vote, the conservative majority overruled a 23-year-old Supreme Court decision that barred the police from initiating questioning after a defendant asserted the right to an attorney at an arraignment or similar proceeding.

The 1986 decision held that once a defendant invoked the right to counsel, only the suspect, and not the police, can initiate the contact.

The ruling was the latest in a recent string by conservative justices expanding the power of police to question suspects, but it does not change the landmark 1966 ruling barring the police from questioning a suspect who invoked the right to remain silent or have a lawyer present.

The decision was a defeat for Jesse Jay Montejo, a Louisiana death row inmate. He was convicted and sentenced to death for the murder of a dry-cleaning operator during a robbery in 2002.

He initially waived his right to a lawyer and was questioned by the police. He told several conflicting stories. Several days later, he appeared in court for a preliminary hearing and a local judge appointed a lawyer to represent Montejo, who could not afford an attorney.

Later that day, police investigators approached Montejo in prison and he again waived his right to a lawyer.

But Montejo later claimed the police had violated his constitutional right to counsel by interrogating him without his lawyer being present and pressuring him to write a letter confessing and apologizing to the victim's wife. That letter was later introduced as evidence against him at his trial.

The Louisiana Supreme Court and then the U.S. Supreme Court rejected Montejo's appeal.

Writing for the court majority, Justice Antonin Scalia said there was little if any chance a defendant will be badgered into waiving the right to have counsel present during police-initiated questioning.

In overruling the 1986 decision, Scalia said, "The considerable adverse effect of this rule upon society's ability to solve crimes and bring criminals to justice far outweighs its capacity to prevent a genuinely coerced agreement to speak without counsel present."

In dissent, Stevens said the dubious benefits of overruling the decision are far outweighed by damage to the rule of law and the integrity of the constitutional right to an attorney.

----------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------

FAIR USE NOTICE:
This site may contain copyrighted material, the use of which may not always have been specifically Authorized by the copyright owner. Such material is made available for educational purposes, and as such this constitutes 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Act. In accordance with Title 17 U.S.C. Section 107, the material on this site is available without profit to those who have expressed an interest in the included information for research and educational purposes.




	Marines invade Clove Lakes Park during a demonstration as part of Fleet Week last month. Note the "civilians" in the background who are being trained to accept martial law.




	Department of State’s U.S. Passport Card.