Monday, July 21, 2008

BAUAW NEWSLETTER - MONDAY, JULY 21, 2008

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Urgent Meeting Tomorrow Evening!
Meeting to defeat pro-JROTC referendum set for November Ballot in SF
TUESDAY, July 22, 7:15-9:00 pm
Friends Meeting House
65 9th St, San Francisco (between Mission and Market Sts)
To RSVP or for additional information, please contact Alan Lessik at AFSC at 565.0201, x11 or alessik@afsc.org.

Dear Friends:

In 2006 San Francisco won attention across the country when the School Board voted to become the first large school district to eliminate an existing JROTC program. Now this achievement is being threatened by a group that recently submitted petitions for a ballot proposition on the November 2008 ballot in support of continuing JROTC in the San Francisco Unified School District. This group has been well organized, using as their base the JROTC students and instructors, as well as those in the community who are for military recruitment in our schools. We understand that pro-recruitment groups outside of San Francisco are interested in backing this proposition because of the devastating effect it would have if it was passed of anchoring JROTC in our schools.

We cannot let this happen. San Francisco voters are on record with past ballot propositions that expressed our desire to end military recruitment in our schools. We would like to invite you to attend an initial organizing meeting to create a campaign committee with the sole purpose to defeat this proposition. We would like to build a coalition of labor, peace groups, faith communities, students, parents, teachers and representatives from political clubs and constituencies across San Francisco.

The purpose of this organizing meeting is to set up our committee, to determine what resources organizations and individuals may be able to contribute to staff the committee and to run a successful campaign.

The meeting will take place on July 22, 7:15-9:00 pm at the Friends Meeting House, 65 9th St, San Francisco (between Mission and Market Sts). The American Friends Service Committee will convene this initial meeting.

To RSVP or for additional information, please contact Alan Lessik at AFSC at 565.0201, x11 or alessik@afsc.org.

We look forward to you and your organization's help in defeating this initiative.

American Friends Service Committee

JROTC Must Go

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STOP WAR ON IRAN !
An Emergency Call to Action AUGUST 2:
• An Attack could be Imminent
• We Can’t Afford to Wait
• Take It to the Streets This Summer
• U.S. out of Iraq, Money for human needs, not war!


MASS MARCH IN NYC
SATURDAY, AUGUST 2
Assemble 12 p.m.
at Times Square
43rd St. & Broadway

AN APPEAL TO ORGANIZERS AND ACTIVISTS ACROSS THE COUNTRY AND AROUND THE WORLD:

Consider as soon as possible if you can organize a STOP WAR ON IRAN protest in your locality during the weekend of August 2 – 3. Let us know so that your protest can be listed.

YET ANOTHER U.S. WAR?

The U.S. occupation of Iraq and Afghanistan is hated by the people there. These wars have no support at home and are ruining the domestic economy. Instead of pulling out, the Bush administration is preparing for still another warÃ…]this time against Iran . This must be stopped!

AGRESSION TOWARDS IRAN IS ESCALATING

On June 4, George Bush, with Israeli Prime Minister Ehud Olmert at his side, called Iran a “threat to peace.” Two days before, acting as a proxy for the Pentagon, Israel used advanced U.S. fighter planes to conduct massive air maneuvers, which the media called a “dress rehearsal” for an attack on Iran ’s nuclear facility. Under pressure from the U.S. , the European Union announced sanctions against Iran on June 23. A bill is before Congress for further U.S. sanctions on Iran and even a blockade of Iran.

IRAN “THREATS” A HOAX

Iran as a “nuclear threat” is as much a hoax as Bush’s claim of “weapons of mass destruction” in Iraq used to justify the war there. The International Atomic Energy Agency, which inspects Iran ’s nuclear facilities, says it has no weapons program and is developing nuclear power for the days when its oil runs out. Even Washington ’s 16 top spy agencies issued a joint statement that said Iran does not have nuclear weapons technology!

U.S. and Israel are the real nuclear danger. The Pentagon has a huge, nuclear-capable naval armada in the Persian/Arabian Gulf, with guns aimed at Iran . Israel , the Pentagon’s proxy force in the Middle East , has up to 200 nuclear warheads and has never signed the Nuclear Non-Proliferation Treaty. Iran did sign it.

WAR HURTS U.S. ECONOMY

While billions of dollars go to war, at home the unemployment rate had the biggest spike in 23 years. Home foreclosures and evictions are increasing; fuel and food prices are through the roof. While the situation is growing dire for many, Washington ’s cuts to domestic programs continue. A new U.S. war will bring only more suffering.

WHAT WE DO RIGHT NOW CAN MAKE A DIFFERENCE

While the summer is a difficult time to call protests, the August recess of Congress gives the White House an opportunity for unopposed aggression against Iran . We must not let this happen! From the anti-war movement and all movements for social change, to religious and grassroots organizations, unions and schools, let us join forces to demand “No war on Iran, U.S. out of Iraq, Money for human needs not war! “

This call to action is issued by StopWarOnIran.org , a network of thousands of concerned activists and organizations fighting to stop a new war against Iran since February 2006.

Endorse the Emergency Call to Action for August 2 at
http://stopwaroniran.org/aug22008endorse.shtml

List your local action at
http://stopwaroniran.org/aug22008volorgcent.shtml

Sign the Petition at http://stopwaroniran.org/petition.shtml

Make an Emergency Donation at http://stopwaroniran.org/donate.shtml

Tell a Friend
http://stopwaroniran.org/friend.shtml

Sign up for updates
http://stopwaroniran.org/updates.shtml

DONATE
Please help build a grassroots campaign to Stop War on Iran
http://stopwaroniran.org/donate.shtml

• Endorse the Emergency Call to Action for August 2
• List your local action
• Sign the Petition
• Make an Emergency Donation
• Tell a Friend
• Sign up for updates

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Monday August 14 - 7:30 pm
David Rovics Concert
Berkeley Fellowship of Unitarian Universalists
1924 Cedar St. at Bonita, a block east of MLK Jr. Way, Berkeley 948709
The "musical version of Democracy Now" per Amy Goodman! "The peace
poet and troubador for our time" per Cindy Sheehan!
Rovics is a radical and progressive singer and songwriter.
$15
co-sponsored by BFUU's Social Justice Committee
wheelchair accessible
510 528 4941
www.bfuu.org

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American Joe
Lisa Reynal’s story about one soldier on his way to Afghanistan and the effect that America’s war on terror has had on the lives around him.
--Chronicle
Every Thursday, Friday and Saturday at 8:00 P.M. through August 15, 2008
fee/admission: $15-$35
Marsh Studio
1074 Valencia St. (at 22nd Street)
San Francisco, CA 94110
(415) 826-5750
(Mission/Bernal Heights)
www.themarsh.org

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SAN FRANCISCO IS A SANCTUARY CITY! STOP THE MIGRA-ICE RAIDS!

Despite calling itself a "sanctuary city", S.F. politicians are permitting the harrassment of undocumented immigrants and allowing the MIGRA-ICE police to enter the jail facilities.

We will picket any store that cooperates with the MIGRA or reports undocumented brothers and sisters. We demand AMNESTY without conditions!

BRIGADES AGAINST THE RAIDS
project of BARRIO UNIDO
(415)431-9925

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"Live your life that the fear of death can never enter your heart. Trouble no one about his religion. Respect others in their views and demand that they respect yours. Love your life, perfect your life, beautify all things in your life. Seek to make your life long and of service to your people. Prepare a noble death song for the day when you go over the great divide.

"Always give a word or sign of salute when meeting or passing a friend, or even a stranger, if in a lonely place. Show respect to all people, but grovel to none. When you rise in the morning, give thanks for the light, for your life, for your strength. Give thanks for your food and for the joy of living. If you see no reason to give thanks, the fault lies in yourself.

"Abuse no one and no thing, for abuse turns the wise ones to fools and robs the spirit of its vision. When your time comes to die, be not like those whose hearts are filled with fear of death, so that when their time comes they weep and pray for a little more time to live their lives over again in a different way. Sing your death song, and die like a hero going home." by: Tecumseh -(1768-1813) Shawnee Chief

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Indicted, Sami Al-Arian Faces Possible Life Imprisonment new
John Halliwell, July 1, 2008
Last March, Sami Al-Arian was given a choice: 1) damned if you do; and 2) damned if you don't; he chose "damned if you don't". Finally, a full three months after making that decision, he was formally charged last Thursday with contempt of court, a crime which has no maximum penalty. In other words, Dr. Al-Arian - a man whose innocence has been grudgingly admitted by even his worst enemies* - is now facing the possibility of life in jail all because he had the guts to stand up for what he believes in--read more at: http://www.freesamialarian.com/home.htm

1. Call Senator Patrick Leahy ((202) 224- 4242) and Congressman John Conyers ((202) 225-5126) - the Judicial Committee chairmen of the Senate and House respectively - and ask them to meet with the Attorney General and have him stop Assistant US Attorney Gordon Kromberg from going forward with this unlawful indictment. Even if you are not their constituent, they are obliged to listen to your opinion since their duties extend to all Americans.

2. Fax a letter to the Office of Professional Responsibility at the US Department of Justice: (202) 514-5050.

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"Canada: Abide by resolution - Let U.S. war resisters stay!"
Dear Canada: Let Them Stay
Urgent action request—In wake of Parliament win, please sign this new letter to Canada.
By Courage to Resist
June 18, 2008
http://www.couragetoresist.org/x/content/view/499/89/

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ARTICLES IN FULL:

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1) While the U.S. Spends Heavily on Health Care, a Study Faults the Quality
By REED ABELSON
July 17, 2008
http://www.nytimes.com/2008/07/17/business/17health.html?ref=business

2) Law School Pays the Price in ‘Don’t Ask’ Rule Protest
By KATIE ZEZIMA
June 29, 2008
http://www.nytimes.com/2008/06/29/education/29vermont.html?ref=education

3) L-ish Economic Prospects
By PAUL KRUGMAN
Op-Ed Columnist
July 18, 2008
http://www.nytimes.com/2008/07/18/opinion/18krugman.html?_r=1&hp&oref=slogin

4) Eulogy for the Ownership Society
Swan Song for Fanny Mae
By MIKE WHITNEY
July 18, 2008
http://www.counterpunch.com/whitney07182008.html

5) Another Day Older and Deeper in Debt
By GRETCHEN MORGENSON
July 20, 2008
http://www.nytimes.com/2008/07/20/business/20debt.html

6) Black Marks for the Red Cross
Editorial
July 19, 2008
http://www.nytimes.com/2008/07/19/opinion/19sat1.html?hp

7) Uncomfortable Answers to Economic Questions
By PETER S. GOODMAN
July 19, 2008
http://www.nytimes.com/2008/07/19/business/economy/19econ.html?hp

8) A Veil Closes France’s Door to Citizenship
By KATRIN BENNHOLD
July 19, 2008
http://www.nytimes.com/2008/07/19/world/europe/19france.html?ref=world

9) Cuba to Grant Private Farmers Access to Land
By MARC LACEY
July 19, 2008
http://www.nytimes.com/2008/07/19/world/americas/19cuba.html?ref=world

10) The Way Through
Editorial
July 20, 2008
http://www.nytimes.com/2008/07/20/opinion/20sun1.html?hp

11) More Civilian Deaths Reported in Afghan Strikes
By CARLOTTA GALL
July 21, 2008
http://www.nytimes.com/2008/07/21/world/asia/21afghan.html?ref=world

12) Immigrant, Pregnant, Is Jailed Under Pact
By JULIA PRESTON
July 20, 2008
http://www.nytimes.com/2008/07/20/us/20immig.html?ref=us

13) On Mustang Range, a Battle on Thinning the Herd
By FELICITY BARRINGER
[What kind of a society wants to kill their wild mustangs?...bw]
July 20, 2008
http://www.nytimes.com/2008/07/20/us/20mustangs.html?ref=us

14) U.S. Perpetuates Mass Killings In Iraq
by Peter Phillips | Dissident Voice, July 19th, 2008
http://www.dissidentvoice.org/2008/07/us-perpetuates-mass-killings-in-iraq/

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1) While the U.S. Spends Heavily on Health Care, a Study Faults the Quality
By REED ABELSON
July 17, 2008
http://www.nytimes.com/2008/07/17/business/17health.html?ref=business

American medical care may be the most expensive in the world, but that does not mean it is worth every penny. A study to be released Thursday highlights the stark contrast between what the United States spends on its health system and the quality of care it delivers, especially when compared with many other industrialized nations.

The report, the second national scorecard from this influential health policy research group, shows that the United States spends more than twice as much on each person for health care as most other industrialized countries. But it has fallen to last place among those countries in preventing deaths through use of timely and effective medical care, according to the report by the Commonwealth Fund, a nonprofit research group in New York.

Access to care in the United States has worsened since the fund’s first report card in 2006 as more people — some 75 million — are believed to lack adequate health insurance or are uninsured altogether. And within the nation, the report found, the cost and quality of care vary drastically.

The findings are likely to provide supporting evidence for the political notion that the nation’s health care system needs to be fixed. Both presumptive presidential nominees, Senator John McCain and Senator Barack Obama, argue that the country needs to get more value for its health care money, even if they do not agree on what changes would be most effective. But few people these days defend the status quo.

“It’s harder to keep deluding yourself or be complacent that we don’t have areas that need improvement,” said Karen Davis, president of the Commonwealth Fund.

The study, which assesses the United States on 37 health care measures, finds little improvement since the last report, as the cost of health care continues to rise steadily and more people — even those with insurance — struggle to pay their medical bills.

“The central finding is that access has deteriorated,” Ms. Davis said.

Even some experts who are quick to point to some of the country’s medical successes, as in reducing the deaths from heart disease or childhood cancers, for example, also acknowledge the need for change.

“We need to generate better value in this country,” said Dr. Denis A. Cortese, the chief executive of the Mayo Clinic.

In some cases, the nation’s progress was overshadowed by improvements in other industrialized countries, which typically have more centralized health systems, which makes it easier to put changes in place.

The United States, for example, has reduced the number of preventable deaths for people under the age of 75 to 110 deaths for every 100,000 people, compared with 115 deaths five years earlier, but other countries have made greater strides. As a result, the United States now ranks last in preventable mortality, just below Ireland and Portugal, according to the Commonwealth Fund’s analysis of World Health Organization data. The leader by that measure is France, followed by Japan and Australia.

Other countries worked hard to improve, according to the Commonwealth Fund researchers. Britain, for example, focused on steps like improving the performance of individual hospitals that had been the least successful in treating heart disease. The success is related to “really making a government priority to get top-quality care,” Ms. Davis said.

The presidential candidates both emphasize the need to shift the country’s health priorities, to provide more medical care that helps prevent people from developing disease and that helps control conditions before they become expensive and hard to treat. And the mounting evidence indicates that such issues are not simply political talking points, said Len Nichols, a health economist at New America Foundation, a nonprofit group in Washington that advocates universal health care coverage.

More hospital executives and doctors understand their performance could be better, Mr. Nichols said.

Dr. James J. Mongan, the chief executive of Partners HealthCare System, a big medical network in Boston, agrees that “there’s substantial room for improvement.” Dr. Mongan is one of several health care leaders who is working with the Commonwealth Fund to develop a model for a better system.

Business leaders also see a pressing need for health care changes, said Helen Darling, the president of the National Business Group on Health, which represents big employers that provide medical benefits to their workers. The report “documents that it’s been as bad as we have been thinking it is,” she said.

But Ms. Darling and others were also heartened because some areas in the report said that the United States had shown marked improvement, including the measurements hospitals use to track how well they treated conditions like heart failure and pneumonia.

“It proves once again if you have quantitative information and metrics and make people pay attention, they change,” Ms. Darling said.

But the report also emphasizes the inefficiencies of the American health care system. The administrative costs of the medical insurance system consume much more of the current health care dollar, about 7.5 percent, than in other countries.

Bringing those administrative costs down to the level of 5 percent or so as in Germany and Switzerland, where private insurers play a significant role, would save an estimated $50 billion a year in the United States, Ms. Davis said.

“It kind of dwarfs everything else you can do,” she said.

Much of the high costs are attributed to the lack of computerized systems that may link pharmacies and doctors’ offices for filling prescriptions, for example, or that may enable insurers to more efficiently pay doctors’ bills.

“An awful lot of the waste in this system is the antiquity of the information technology,” Ms. Darling said.

Karen Ignagni, the chief executive of America’s Health Insurance Plans, an industry trade group, argues that much of the higher administrative costs stem from the additional services provided by United States insurers, like disease management programs, and the burdensome regulatory and compliance costs of doing business in 50 states. A more uniform system could result in savings, she said.

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2) Law School Pays the Price in ‘Don’t Ask’ Rule Protest
By KATIE ZEZIMA
June 29, 2008
http://www.nytimes.com/2008/06/29/education/29vermont.html?ref=education

SOUTH ROYALTON, Vt. — A renewed fight over the military’s “don’t ask, don’t tell” policy is being watched closely here on the campus of the Vermont Law School, a 600-student institution on the banks of the White River.

The Vermont Law School is one of two law schools in the nation that bar military recruiters, as a protest against the 15-year-old rule that prevents openly gay men and lesbians from serving in the military. As a result, the school is denied some federal research money — $300,000 to $500,000 a year by one outside analyst’s estimate.

“Every once in a while an issue comes to a community and, despite a cost, it comes to the conclusion that it has to stand up for its principles,” said Jeff Shields, president and dean of the law school. “It has to do with speaking truth to power, and it’s one of those roles that those of us lucky enough to be trained as lawyers hopefully take from time to time.”

Last week, an advocacy group urging the repeal of the policy released a report saying the Army and Air Force had discharged a disproportionate number of women in 2007 because of the rule. And in May, a California appeals court reinstated a lawsuit challenging the policy, while a federal appeals court in Boston upheld it a month later.

In 2006, the Supreme Court, in a unanimous ruling, upheld a law that withholds some federal money from law schools and universities that do not give military recruiters the same access to campus as other employers.

“If the Department of Defense finds a school is doing this, it notifies other federal agencies and funding gets cut off,” said Lt. Col. Les Melnyk, a department spokesman.

The law, the Solomon Amendment, was challenged by a consortium of law schools and professors.

Here in Vermont, the prospect of losing federal grants mattered to the small, independent law school, which has an endowment of $14 million.

The fact that the school is not affiliated with a university, however, made the decision to forgo the money easier, because other programs are not affected.

At most universities, federal grants help finance dozens of scientific and other research programs.

The William Mitchell College of Law in St. Paul also bars recruiters from its campus. The school is not losing any federal money, however, because its research is not financed out of four spending bills affected by the Solomon Amendment.

“It was a pretty simple application of our nondiscrimination policy,” said Eric S. Janus, president and dean of William Mitchell. “It really arises out of our desire to make sure that all of our students have equal access to all opportunities, including the opportunity to serve in the military.”

Paula C. Johnson, a professor at the Syracuse University College of Law and a co-president of the Society of American Law Teachers, one of the plaintiffs in the Supreme Court case, said the two institutions were keeping alive the issue of “don’t ask, don’t tell” and its impact on law schools.

“They are the only institutions that have taken as dramatic and as principled a stance as they have, so it’s certainly put in the category of profiles in courage,” Professor Johnson said. “They have done things that other schools have not done.”

On campus here, the policy is often a topic of conversation. The college also sends students to Washington each year for lobby day, when they protest “don’t ask, don’t tell.”

Richard Eckley, a former marine and a second-year student, does not agree with the school’s decision to bar military recruiters, saying it is not constructive.

But Kathy Stickel, a student who served in the Army and who is also a lesbian, does not think the school should change its policy.

“There’s great value in doing something right when there’s a cost attached to it,” Ms. Stickel said. “You shouldn’t change because someone is waving money in front of you.”

Alison Share, who graduated this year, said even though the school had not made a big splash with the decision, it had taught her a valuable lesson.

“It’s important to stand up, even when no one is watching,” Ms. Share said.

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3) L-ish Economic Prospects
By PAUL KRUGMAN
Op-Ed Columnist
July 18, 2008
http://www.nytimes.com/2008/07/18/opinion/18krugman.html?_r=1&hp&oref=slogin

Home prices are in free fall. Unemployment is rising. Consumer confidence is plumbing depths not seen since 1980. When will it all end?

The answer is, probably not until 2010 or later. Barack Obama, take notice.

It’s true that some prognosticators still expect a “V-shaped” recovery in which the economy springs back rapidly from its slump. On this view, any day now it will be morning in America.

But if the experience of the last 20 years is any guide, the prospect for the economy isn’t V-shaped, it’s L-ish: rather than springing back, we’ll have a prolonged period of flat or at best slowly improving performance.

Let’s start with housing.

According to the widely used Case-Shiller index, average U.S. home prices fell 17 percent over the past year. Yet we’re in the process of deflating a huge housing bubble, and housing prices probably still have a long way to fall.

Specifically, real home prices, that is, prices adjusted for inflation in the rest of the economy, went up more than 70 percent from 2000 to 2006. Since then they’ve come way down — but they’re still more than 30 percent above the 2000 level.

Should we expect prices to fall all the way back? Well, in the late 1980s, Los Angeles experienced a large localized housing bubble: real home prices rose about 50 percent before the bubble popped. Home prices then proceeded to fall by a quarter, which combined with ongoing inflation brought real housing prices right back to their prebubble level.

And here’s the thing: this process took more than five years — L.A. home prices didn’t bottom out until the mid-1990s. If the current housing slump runs on the same schedule, we won’t be seeing a recovery until 2011 or later.

What about the broader economy? You might be tempted to take comfort from the fact that the last two recessions, in 1990-1991 and 2001, were both quite short. But in each case, the official end of the recession was followed by a long period of sluggish economic growth and rising unemployment that felt to most Americans like a continued recession.

Thus, the 1990 recession officially ended in March 1991, but unemployment kept rising through much of 1992, allowing Bill Clinton to win the election on the basis of the economy, stupid. The next recession officially began in March 2001 and ended in November, but unemployment kept rising until June 2003.

These prolonged recession-like episodes probably reflect the changing nature of the business cycle. Earlier recessions were more or less deliberately engineered by the Federal Reserve, which raised interest rates to control inflation. Modern slumps, by contrast, have been hangovers from bouts of irrational exuberance — the savings and loan free-for-all of the 1980s, the technology bubble of the 1990s and now the housing bubble.

Ending those old-fashioned recessions was easy because all the Fed had to do was relent. Ending modern slumps is much more difficult because the economy needs to find something to replace the burst bubble.

The Fed, in particular, has a hard time getting traction in modern recessions. In 2002, there was a strong sense that the Fed was “pushing on a string”: it kept cutting interest rates, but nobody wanted to borrow until the housing bubble took off. And now it’s happening again. The Onion, as usual, hit the nail on the head with its recent headline: “Recession-plagued nation demands new bubble to invest in.”

But we probably won’t find another bubble — at least not one big enough to fuel a quick recovery. And this has, among other things, important political implications.

Given the state of the economy, it’s hard to see how Barack Obama can lose the 2008 election. An anecdote: This week a passing motorist shouted at a crowd waiting outside a branch of IndyMac, the failed bank, “Bush economics didn’t work! They are right-wing Republican thieves!” The crowd cheered.

But what the economy gives, it can also take away. If the current slump follows the typical modern pattern, the economy will stay depressed well into 2010, if not beyond — plenty of time for the public to start blaming the new incumbent, and punish him in the midterm elections.

To avoid that fate, Mr. Obama — if he is indeed the next president — will have to move quickly and forcefully to address America’s economic discontent. That means another stimulus plan, bigger, better, and more sustained than the one Congress passed earlier this year. It also means passing longer-term measures to reduce economic anxiety — above all, universal health care.

If you ask me, there isn’t much suspense in this year’s election: barring some extraordinary mistakes, Mr. Obama will win. Assuming he wins, the real question is what he’ll make of his victory.

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4) Eulogy for the Ownership Society
Swan Song for Fanny Mae
By MIKE WHITNEY
July 18, 2008
http://www.counterpunch.com/whitney07182008.html

The Fed's emergency rescue plan for the financial markets is hopelessly flawed. It's a scattershot approach that doesn't address the real source of the problem; an unregulated, unsustainable structured finance system that emerged in full-force after 2000 and spawned a shadow banking system that creates trillions of dollars of credit without sufficient capital reserves. This is the heart of the problem and it needs to be debated openly. The present system doesn't work; it's as simple as that. It makes no sense to provide trillions of dollars of taxpayer money to shore up a system that is essentially dysfunctional. It's just throwing money down a rat-hole.

The Federal Reserve and US Treasury want a blank check to prop up Fannie Mae and Freddie Mac, the two war-horses of the mortgage industry, that currently underwrite nearly 80 per cent of all new mortgages in the US. But by any objective standard both of these GSEs are already insolvent. Thus, the taxpayer is being asked to rescue a failed industry that has been used for private gain so that speculators will not have to suffer the losses. Even worse, Fannie and Freddie have written hundreds of billions of dollars worth of mortgages that have not yet defaulted, but will certainly default within the next two years. This is bound to batter the already faltering economy.

The bad paper held by Fannie and Freddie are mortgages that were made to unqualified applicants who are presently losing their homes in record numbers. Their loans were approved because there was no functioning regulatory body to oversee their issuance and because the mortgages were transformed into complex securities that were sold to credulous investors around the world. The ratings were fixed to meet the requirements of their employers, the investment banks, which marketed these exotic bonds to foreign banks, insurance companies and hedge funds. That puts Fannie and Freddie at the center of a system that needs radical surgery to eradicate the bad paper. If this doesn't happen in a timely fashion, then foreign investors will stop purchasing US debt and the dollar will crash. By creating a backstop for Fannie and Freddie, the Fed is linking US sovereign debt with mortgages and derivatives that are already known to be fraudulent. This is a big mistake. According to Merrill Lynch, the US is already facing a long-term "financing crisis" as the weakening US economy and sluggish consumer spending could signal an end to the $700 billion in foreign investment that covers America's current account deficit. By assuming the GSE's enormous debts, the Bush administration is just speeding this process along and inviting disaster.

Treasury Secretary Henry Paulson has been intentionally oblique about the implications of the proposed bailout. On Tuesday, he delivered a statement in front of the massive stone columns of the Department of the Treasury, a towering monolith that arouses feelings of confidence in rock-solid institutions. He made it clear that Fannie Mae and Freddie Mac would have the "explicit" backing of the US government:

"First, as a liquidity backstop, the plan includes a temporary increase in the line of credit the GSEs have with Treasury. Treasury would determine the terms and conditions for accessing the line of credit and the amount to be drawn.

Second, to ensure the GSEs have access to sufficient capital to continue to serve their mission, the plan includes temporary authority for Treasury to purchase equity in either of the two GSEs if needed.

Third, to protect the financial system from systemic risk going forward, the plan strengthens the GSE regulatory reform legislation currently moving through Congress by giving the Federal Reserve a consultative role in the new GSE regulator's process for setting capital requirements and other prudential standards."

It was an impressive performance from a public relations point of view, but it didn't fool anyone on Wall Street. What Wall Street wants is details not blather. Paulson gave no specifics about how much money the government would provide or what the nature of the new relationship would be; conservatorship, recievorship, nationalization? What is it?

The truth is that Paulson was deliberately vague because he and friend Bernanke would like to have it both ways; they'd like to provide a liquidity backstop and an endless line of credit for the two GSE's without formally nationalizing them. That would avoid the further dilution of stock values while keeping the US government from taking another $5 trillion of mortgage debt onto their balance sheet. It is a delicate balancing act, but Paulson seems to think he carried it off. He's wrong, though, and volatility in the stock market proves it. Investors are clearly skittish about the new arrangement. They want to know the facts about the government's commitment. Paulson is discovering that deceiving investors is not as easy as duping the public about fictional WMD or Niger uranium. Sometimes even the dullest person can grasp the most complex matters when it comes to his own money.

Fannie and Freddie have been insolvent for ages, but it hasn't stopped lawmakers from pushing the envelope and loading more debt on their balance sheets. Here's how Barron's summed it up more than six months ago:

"Fannie's balance sheet is larded with soft assets and understated liabilities that would leave the company ill-equipped to weather a serious financial crisis. And spiraling mortgage defaults and falling home prices could bring a tsunami of credit losses over the next two years that will severely test Fannie's solvency.

But, if the truth be known, a considerable portion of Fannie's losses also came from speculative forays into higher-yielding but riskier mortgage products like subprime, Alt-A (a category between subprime and prime in credit quality) and dicey mortgages requiring monthly payments of interest only or less. For example, Fannie's $314 billion of Alt-A -- often called liar loans because borrowers provide little documentation -- accounted for 31.4% of the company's credit losses while making up just 11.9% of its $2.5 trillion single-family-home credit book. Fannie was clearly looking for love -- and market share -- in some of the wrong places."

Rampant speculation, risky investments, and Enron-type accounting; hardly the stuff of solid portfolios. That's why the two mortgage giants are stumbling headlong towards oblivion despite the Treasury's panicky relief operation. By last Friday Fannie's stock had fallen 47 per cent while Freddie was down 50 per cent. The public may still be in the dark about what is going on, but investors have a pretty good grip on the situation; they can see the great birds are already circling overhead and its just a matter of time before they descend on their prey. Paulson's attempts to muddy the water have amounted to nothing. The fact remains that the two biggest mortgage-lenders in the world are busted and last week's stock sell-off was tantamount to a run on the country's largest bank. Paulson's statement was really nothing more than a eulogy for the mortgage industry; a few heartfelt words over the rigid corpse of a close friend.

When the housing market started to tumble and Wall Street's "securitization" model froze-up, Fannie had to take the lion's share of the mortgages to keep the real estate market hobbling along. In a two year period, between the housing peak in 2005 and 2007, Fannie went from roughly 40 per cent of the market to about 80 per cent. The Congress even enlarged the size of the mortgages they could underwrite from $417,000 to over $700,000. The prospect of bankruptcy never diminished congress's generosity.

Fannie and Freddie currently own or underwrite roughly half of the nation’s $12 trillion mortgage market. Basically, every home mortgage lender depends on them for financing. Their shares are owned by individual investors and banks around the world. Foreign investors have always believed that the GSE bonds were as risk-free as US government Treasuries. Now they are beginning to wonder. (Foreign central banks, led by China and Russia, hold at least $925 billion in U.S. agency debt, including bonds sold by Freddie and Fannie, according to official U.S. statistics)

Whatever happens to Fannie, the loss of investor confidence will send long term interest higher as investors demand bigger returns for the risk they're taking on GSE bonds. That'll put a straitjacket on home sales which are already flagging from soaring inventory and falling prices. Higher rates could bring the whole housing market to a standstill.

The Fed's cheap credit policy under Greenspan created an artificial demand for housing which ballooned into the biggest equity bubble in history. Low interest rates are a subsidy which naturally lead to speculation and asset-inflation. At a certain point, however, the endless debt-pyramiding reaches its apex and the whole mechanism switches into reverse. Now the economy has entered deleveraging-hell where everything is primal blackness and the gnashing of teeth, the flip-side of speculative rapture.

By some estimates, Freddie Mac has a negative net-worth of $17 billion. It's basically insolvent, although Paulson would like to see the charade go on a while longer.

Investors purchased another $3 billion of the two GSEs last Monday, but the appetite for failing bonds is diminishing? What's certain is that the collapse of Fannie and Freddie would be a watershed event and a mortal blow to the US financial system. $5 trillion in shaky mortgage-debt can't be easily swept under the rug and ignored. Interest rates on everything would quickly rise; credit would become scarcer, economic growth would shrivel, unemployment would soar, and the dollar will plummet. As the two mortgage giants continue to get whipsawed by higher priced capital and waning investment, US government debt will likely to lose its much-vaunted triple A credit rating. On Friday, credit default swaps on government debt doubled, a sign that investors are losing confidence that the US will be able to manage its twin deficits or pay off its debts. It's the end of the road for Washington's free lunch throng and for a paper dollar that isn't backed by much of anything except music videos, fast food and smart-bombs.

PAULSON'S POWER GRAB

What Paulson is really wants is for congress to allow the Fed to regulate the financial system without congressional oversight. Paulson's so-called blueprint for financial regulation is a blatant power-grab meant to expand the authority of the banking oligarchy giving them unlimited power over the markets. Journalist Barry Grey sums it up like this in his article on "US Bailout of Mortgage Giants: The politics of plutocracy":

"The plan outlined by Treasury Secretary Henry Paulson would give him virtually unlimited and unilateral authority to pump tens of billions of dollars of public funds into the mortgage finance companies. At the same time, the Federal Reserve Board announced that it would allow the companies to directly borrow Fed funds... The Democrats...now march in lockstep with the minority party to rush through laws demanded by Wall Street... The buying of legislators and their votes by corporate interests is carried out openly and shamelessly. Members of Frank’s House Financial Services Committee received over $18 million from financial services, insurance and real estate firms this year. Frank himself raised over $1.2 million, almost half of which came from finance and related industries...Senator Dodd’s top contributor in the 2003-2008 election cycle was Citigroup, followed by SAC Capital Partners. He raised $4.25 million from securities and investment firms.

Senator Schumer’s top contributor was likewise Citigroup. He raised $1.4 million from securities and investment firms, his most lucrative corporate sector."

The smell of political corruption is overpowering, and yet, the plan is moving forward regardless. Even if Paulson's plan worked in the short term, the damage would be enormous. It would place the country's regulatory powers and purse-strings in the hands of the same amoral banksters who created this mess to begin with. It is the fast-track to corporate feudalism on a nationwide scale.

PITFALLS FOR THE GSEs

The biggest problem facing Fannie and Freddie is that wary investors will not roll over the debt of the two companies which will precipitate a collapse. This is where it pays to have people who can be trusted in positions of power. Henry Paulson is the worst thing that ever happened to the US Treasury. Paulson is to finance capitalism what Rumsfeld is to military strategy. To say that Paulson is lacking in credibility is an understatement. Nothing he says can be taken at face-value. When Paulson says "the worst is behind us" or the "subprime crisis is contained" or the Bush administration "supports a strong dollar policy"; most people know it is a fabrication. Besides, Paulson is completely out of his depth in the present crisis. His appearances on TV, with the beads of sweat glistening on his forehead, and his foolish repetition of the same stale mantra is eroding confidence in the financial system and sending waves of panic rippling through Wall Street. Enough is enough. He needs to go.

If the administration was serious about changing direction they would dump Paulson and reinstate Paul Volcker. Whatever one thinks about Volcker, his presence would calm the markets and send a message that the adults were back in charge. But that won't happen. The Bush team still thinks they can finesse their way through the thicket of investor skepticism. That means that catastrophe is inevitable as more and more investors pick up their bets and head for the exits.

TIME IS RUNNING OUT

Whatever the administration decides to do; time is short and they have one chance to get it right. The Treasury needs to find a way to ring-fence the garbage bonds and pray that the investing public won't dump their holdings in a panic run on the market. Either way, it's a gamble and there's no guarantee of success. The Wall Street Journal outlined the doomsday scenario if Paulson's plan fails:

"Falling house prices and nonpaying homeowners cause the value of the trillions of dollars in outstanding debt held by these government-sponsored enterprises (Fannie and Freddie) to plunge. Many banks have balance sheets stuffed full of this paper. They face huge losses, which some can't survive. They and other investors, such as foreign central banks, then dump the GSE paper.

Fannie and Freddie would end up unable to lend, or at least to take up anything like their current 80% share of the U.S. mortgage market, further punishing the reeling housing market. This would add another twist to the spiral of falling prices, credit losses and failing lenders.

What should they do? First, devise a plan -- and fast. There is no time to dither." (Wall Street Journal)

If foreign banks and investors ditch their GSE debt; it will send shockwaves through the global economy. But if the Treasury provides unlimited funding for a sinking operation, it's likely to trigger a sell-off of the dollar. It's a lose-lose situation. For now, bond holders are sitting-tight even though the stock is tanking, but for how long? They've already been taken to the cleaners on hundreds of billions of dollars of mortgage-backed garbage; now there are rumors that the US government won't back agency debt. What kind of shabby shell-game is the US playing anyway?

New York Times:

“If people lose faith in Fannie and Freddie, then the whole system freezes up, and nobody can buy a house, and the entire housing market can crash,” said Paul Miller of the Friedman, Billings, Ramsey Group in Arlington, Va. “There’s a fine line between having faith and losing it, and sometimes it’s unclear when it has disappeared. But when investors cross that line, bad things happen very quickly.”

And it affects more than the housing market, too. The bond and equities markets are handcuffed to real estate and they're already listing from the slowdown in investment. The Fed thought they could keep the whole mess from going sideways by opening up "auction facilities" where the banks could get low interest capital in exchange for their mortgage-backed junk. But the banks have curtailed their lending and there's bigger trouble ahead. Bridgewater Associates issued a warning last week that losses to the banking system would exceed $1.6 trillion, four times original estimates and enough to crash the entire banking system. So far, banks have only written down $450 billion, which means that they are only 25 per cent of the way through the current credit storm. Defaults are liable to skyrocket as hundreds of undercapitalized banks turn to a grossly underfunded FDIC ($52 billion in reserves) to cover the losses of their depositors. The prospect of a humongous taxpayer bailout seems nearly unavoidable.

What's most disturbing is that nothing has been done to restore the markets to a functional model. The Fed's strategy is still to try to keep the relatively new "structured finance" model (with all it's bizarre-named debt instruments and derivatives) in place even though it failed its first stress-test and has demonstrated that it cannot withstand even moderate downward movement in the market. The current model is kaput; there needs to be a Plan B or the Fed is just wasting its time.

Fannie's demise comes at a particularly difficult time for the banking system. According to a report by Paul Kasriel, Chief Economist at Northern Trust:

"The sharpest 13-week contraction in bank credit” since data were first available in 1973. Banks simply don’t have the capital on hand to avail “themselves of the cheap credit the Fed is offering to fund them at.”....This is what it means to be in a “credit crunch.” Banks have suffered hundreds of billions in losses, forcing them to pull credit out of the economy. Every time you read an article about banks cutting credit lines, exiting lending businesses, or eliminating mortgage products it represents more bank credit drying up." (Option Armageddon, "Understanding Bernanke")
Bank credit is drying up because the capital is being destroyed (from foreclosures and downgraded assets) faster than anytime in history. We are just now feeling the first stiff breezes from a Force-5 deflationary hurricane set to touch down in 2009. Fannie and Freddie are teetering towards insolvency while the country is entering the most vicious downward cycle since the Great Depression. Higher interest rates, negative home equity, mounting credit card debt, auto loan debt, commercial real estate debt and tightening lending standards will only curtail consumer spending more putting greater pressure on the dollar.

The Fed will have to be selective; not everything can be saved. Significant parts of the financial system will be reduced to ashes. It would be wiser to clear the brush away from as many of the solvent institutions as possible and prepare for the worst. Otherwise, the whole system is at risk of contagion. Hundreds of local and regional banks are expected to go under. (the average small bank has 67% of its assets in real estate) It can't be avoided. They are holding too much bad paper and no way to make up for the losses. They're following the same path as the 250 mortgage lenders that vaporised in the subprime meltdown. They couldn't be saved either.

The bigger investment banks are in trouble too. That's why the SEC has finally decided to act as a regulator and go after short-sellers:

"The Securities and Exchange Commission announced an emergency action aimed at reducing short-selling aimed at Wall Street brokerage firms, Fannie Mae and Freddie Mac, and will immediately begin considering new rules to extend new requirements to the rest of the market."

The SEC never took an interest in naked shorting of stocks (or commodities speculators) while its fat-cat friends in the big brokerage houses were raking in billions. Now that many of these same institutions, including Fannie Mae and Freddie Mac, are in the crosshairs, SEC chief Christopher Cox is rushing to their rescue. It is utter duplicity, but it illustrates an important point; the system is cannibalizing itself just like Karl Marx predicted over 100 years ago. Unchecked greed is inevitably self-destructive.

A growing number of market analysts are beginning to notice the storm clouds forming on the horizon. The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months. The Bank of international Settlements (BIS) made a similarly ominous warning that the credit crisis could lead world economies into a crash on a scale not seen since the 1930s. The bank suggests that government officials and market analysts have not fully grasped the financial turmoil that could result from the mortgage crisis and its effects of the global economic system. The body points out that the Great Depression was not anticipated because people ignored the implicit danger of "complex credit instruments, a strong appetite for risk, rising levels of household debt and long-term imbalances in the world currency system."

Ron Paul (R-Texas) is one of the few members of congress who has shown that he has a grasp of the impending economic disaster now facing the country if corrective action is not taken swiftly. In a speech he gave last week on the floor of the House, he said:

"There are reasons to believe this coming crisis is different and bigger than the world has ever experienced...The financial crisis, still in its early stages, is apparent to everyone: gasoline prices over $4 a gallon; skyrocketing education and medical-care costs; the collapse of the housing bubble; the bursting of the NASDAQ bubble; stock markets plunging; unemployment rising;, massive underemployment; excessive government debt; and unmanageable personal debt. Little doubt exists as to whether we’ll get stagflation. The question that will soon be asked is: When will the stagflation become an inflationary depression? "

The troubles at Fannie and Freddie are symptomatic of more deeply rooted problems related to abusive lending and the unsustainable expansion of credit. We've now reached our debt limit and the bills must be repaid or written off. The Bush administration is hoping to reflate the bubble by (stealthily) recapitalizing the GSEs, but it won't be easy. As one blogger put it, we have reached "peak credit" and have nowhere to go except down.

Economist Michael Hudson summed it up like this:

"The reality is that Fannie, Freddie and the FHA gave a patina of confidence to irresponsible lending and outright fraud. This confidence game led them to guarantee some $5.3 trillion of mortgages, and to keep $1.6 trillion more on their own books to back the bonds they issued to institutional investors."

It was a scam of Biblical proportions and now it is all starting to unravel. Bush's "ownership society" was a cheap parlor trick engineered by the Fed's low interest rates to trigger massive speculation and shift wealth from one class to another. Now, the housing bubble has crashed and the excruciating reality of insolvency is beginning to sink in.

Michael Hudson, again:

"All one hears is a barrage of claims that the government must preserve the financial fictions of Fanny Mae and Freddie Mac in order to 'save the market.' The usual hypocrisy is being brought to bear claiming that all this is necessary to 'save the middle class,' even as what is being saved are its debts, not its assets...The “way of life” that is being saved is not that of home ownership, but debt peonage to support the concentration of wealth at the top of the economic pyramid.

Mortgages are the major debts of most American families. In this role, real estate debt has become the basis for the commercial banking system, and hence the basis for the wealthiest 10 percent of the population who hold the bottom 90 percent in debt. That is what Fannie Mae, Freddie Mac and “the market” are all about." (Michael Hudson; "Why the Bail Out of Fannie Mae and Freddie Mac is Bad Economic Policy", counterpunch.org)

The housing boom never had anything to do with Bush's Utopian-sounding "ownership society". It was always just a swindle to enrich the banking establishment and divert middle class wealth to ruling class elites.

Mike Whitney lives in Washington state and can be reached at fergiewhitney@msn.com

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5) Another Day Older and Deeper in Debt
By GRETCHEN MORGENSON
July 20, 2008
http://www.nytimes.com/2008/07/20/business/20debt.html

The collection agencies call at least 20 times a day. For a little quiet, Diane McLeod stashes her phone in the dishwasher.

But right up until she hit the wall financially, Ms. McLeod was a dream customer for lenders. She juggled not one but two mortgages, both with interest rates that rose over time, and a car loan and high-cost credit card debt. Separated and living with her 20-year-old son, she worked two jobs so she could afford her small, two-bedroom ranch house in suburban Philadelphia, the Kia she drove to work, and the handbags and knickknacks she liked.

Then last year, back-to-back medical emergencies helped push her over the edge. She could no longer afford either her home payments or her credit card bills. Then she lost her job. Now her home is in foreclosure and her credit profile in ruins.

Ms. McLeod, who is 47, readily admits her money problems are largely of her own making. But as surely as it takes two to tango, she had partners in her financial demise. In recent years, those partners, including the financial giants Citigroup, Capital One and GE Capital, were collecting interest payments totaling more than 40 percent of her pretax income and thousands more in fees.

Years of spending more than they earn have left a record number of Americans like Ms. McLeod standing at the financial precipice. They have amassed a mountain of debt that grows ever bigger because of high interest rates and fees.

While the circumstances surrounding these downfalls vary, one element is identical: the lucrative lending practices of America’s merchants of debt have led millions of Americans — young and old, native and immigrant, affluent and poor — to the brink. More and more, Americans can identify with late 19th and early 20th century miners in debt to the company store, with little chance of paying up.

It is not just individuals but the entire economy that is now suffering. Practices that produced record profits for many banks have shaken the nation’s financial system to its foundation. As a growing number of Americans default, banks are recording hundreds of billions in losses, devastating their shareholders.

To reduce the risk of a domino effect, the Bush administration fashioned an emergency rescue plan last week to shore up Fannie Mae and Freddie Mac, the nation’s two largest mortgage finance companies, if necessary.

To be sure, the increased availability of credit has contributed mightily to the American economy and has allowed consumers to make big-ticket purchases like homes, cars and college educations.

But behind the big increase in consumer debt is a major shift in the way lenders approach their business. In earlier years, actually being repaid by borrowers was crucial to lenders. Now, because so much consumer debt is packaged into securities and sold to investors, repayment of the loans takes on less importance to those lenders than the fees and charges generated when loans are made.

Lenders have found new ways to squeeze more profit from borrowers. Though prevailing interest rates have fallen to the low single digits in recent years, for example, the rates that credit card issuers routinely charge even borrowers with good credit records have risen, to 19.1 percent last year from 17.7 percent in 2005 — a difference that adds billions of dollars in interest charges annually to credit card bills.

Average late fees rose to $35 in 2007 from less than $13 in 1994, and fees charged when customers exceed their credit limits more than doubled to $26 a month from $11, according to CardWeb, an online publisher of information on payment and credit cards.

Mortgage lenders similarly added or raised fees associated with borrowing to buy a home — like $75 e-mail charges, $100 document preparation costs and $70 courier fees — bringing the average to $700 a mortgage, according to the Department of Housing and Urban Development. These “junk fees” have risen 50 percent in recent years, said Michael A. Kratzer, president of Feedisclosure.com, a Web site intended to help consumers reduce fees on mortgages.

“Today the focus for lenders is not so much on consumer loans being repaid, but on the loan as a perpetual earning asset,” said Julie L. Williams, chief counsel of the Comptroller of the Currency, in a March 2005 speech that received little notice at the time.

Lenders have been eager to expand their reach. They have honed sophisticated marketing tactics, gathering personal financial data to tailor their pitches. They have spent hundreds of millions of dollars on advertising campaigns that make debt sound desirable and risk-free. The ads are aimed at people who urgently need loans to pay for health care and other necessities.

It is not just financial conglomerates that are profiting on consumer debt loads. Some manufacturers and retailers can generate more income from internal financing arms that lend to their customers than from their primary businesses.

Tallying what the lenders have made off Ms. McLeod over the years is revealing. In 2007, when she earned $48,000 before taxes, she was charged more than $20,000 in interest on her various loans.

Her first mortgage, originated by the EquiFirst Corporation, charged her $14,136 a year, and her second, held by CitiFinancial, added $4,000. Capital One, a credit card company that charged her 28 percent interest on her balances, billed $1,400 in annual interest. GE Money Bank levied 27 percent on the $1,500 or so that Ms. McLeod owed on an account she had with a local jewelry store, adding more than $400.

Olde City Mortgage, the company that arranged one of Ms. McLeod’s loans, made $6,000 on a single refinancing, and EquiFirst received $890 in a loan origination fee.

Such fees and interest rates are a growing burden on Americans, especially those who rely on credit cards to make ends meet.

And recent changes in the bankruptcy laws, supported by financial services firms, make it all the harder for consumers, especially those with modest incomes, to get out from under their debt by filing for bankruptcy.

But with so many borrowers in trouble, some bankruptcy experts and regulators are beginning to focus on the responsibilities of lenders, like requiring them to make loans only if they are suitable to the borrowers applying for them.

The Federal Reserve Board, for instance, recently put into effect rules barring a lender from making a loan without regard to the borrower’s ability to repay it.

Henry E. Hildebrand III, a Bankruptcy Court trustee in Nashville since 1982 and one of the nation’s busiest, has seen at first hand what happens when lenders do not take some responsibility for loans that go bad.

“I look across the table at people who are right out of school and have more debt than they can handle, and they are starting out life in a bankruptcy,” he said.

Ms. McLeod used debt to keep going until she was fired from her job in March for writing inappropriate e-mail messages. Since then, she has been selling her coveted handbags and other items on eBay to raise money while waiting to be evicted from her home.

“I think a lot of people in this country have a lot more debt than they let the outside world know,” Ms. McLeod said. “I worked in retail for five years. And men, women would open up their wallets to pay and the credit cards that were in some of the wallets just amazed me.”

Borrowing to Shop

For decades, America’s shift from thrift could be summed up in this familiar phrase: When the going gets tough, the tough go shopping. Whether for a car, home, vacation or college degree, the nation’s lenders stood ready to assist.

Companies offered first and second mortgages and home equity lines, marketed credit cards for teenagers and helped students to amass upward of $100,000 in debt upon graduation from college.

Every age group up to the elderly was the target of sophisticated ad campaigns and direct mail programs. “Live Richly” was a Citibank message. “Life Takes Visa,” proclaims the nation’s largest credit card issuer.

Eliminating negative feelings about indebtedness was the idea behind MasterCard’s “Priceless” campaign, the work of McCann-Erickson Worldwide Advertising, which came out in 1997.

“One of the tricks in the credit card business is that people have an inherent guilt with spending,” Jonathan B. Cranin, executive vice president and deputy creative director at the agency, said when the commercials began. “What you want is to have people feel good about their purchases.”

Mortgage lenders took to cold-calling homeowners to persuade them to refinance. Done to reduce borrowers’ monthly payments, serial refinancings allowed lenders to charge thousands of dollars in loan processing fees, including appraisals, credit checks, title searches and document preparation fees.

Not surprisingly, such practices generated dazzling profits for the nation’s financial companies. And since 2005, when the bankruptcy law was changed, the credit card industry has increased its earnings 25 percent, according to a new study by Michael Simkovic, a former James M. Olin fellow in Law and Economics at Harvard Law School.

The “2005 bankruptcy reform benefited credit card companies and hurt their customers.” Mr. Simkovic noted in his study. He said that even though sponsors of the bankruptcy bill promised that consumers would benefit from lower borrowing costs as delinquent borrowers were held more accountable, the cost of borrowing from credit card companies has actually increased anywhere from 5 percent to 17 percent.

Among the most profitable companies were Ms. McLeod’s creditors.

Capital One, for example, which charges her 28 percent interest on her credit card, saw net interest income, after provisions for loan losses, rise a compounded 25 percent a year since 2002.

GE Money Bank, which levied a 27 percent rate on Ms. McLeod’s debt and is part of the GE Capital Corporation, generated profits of $4.3 billion in 2007, more than double the $2.1 billion it earned in 2003.

Because many of these large institutions pool the loans they make and sell them to investors, they are not as vulnerable when the borrowers default. At the end of 2007, for example, one-third of Capital One’s $151 billion in managed loans had been sold as securities.

Officials at General Electric declined to comment. Capital One did not return phone calls.

As the profits in this indebtedness grew, financial companies moved aggressively to protect them, spending millions of dollars to lobby against any moves lawmakers might take to rein in questionable lending.

But consumers are voicing anger over lending practices. A recent proposal by the Federal Reserve Board to limit some abusive practices has drawn more than 11,000 letters since May. Most are from irate borrowers.

A Rising Tide of Bills

Just two generations ago, America was a nation of mostly thrifty people living within their means, even setting money aside for unforeseen expenses.

Today, Americans carry $2.56 trillion in consumer debt, up 22 percent since 2000 alone, according to the Federal Reserve Board. The average household’s credit card debt is $8,565, up almost 15 percent from 2000.

College debt has more than doubled since 1995. The average student emerges from college carrying $20,000 in educational debt.

Household debt, including mortgages and credit cards, represents 19 percent of household assets, according to the Fed, compared with 13 percent in 1980.

Even as this debt was mounting, incomes stagnated for many Americans. As a result, the percentage of disposable income that consumers must set aside to service their debt — a figure that includes monthly credit card payments, car loans, mortgage interest and principal — has risen to 14.5 percent from 11 percent just 15 years ago.

By contrast, the nation’s savings rate, which exceeded 8 percent of disposable income in 1968, stood at 0.4 percent at the end of the first quarter of this year, according to the Bureau of Economic Analysis.

More ominous, as Americans have dug themselves deeper into debt, the value of their assets has started to fall. Mortgage debt stood at $10.5 trillion at the end of last year, more than double the $4.8 trillion just seven years earlier, but home prices that were rising to support increasing levels of debt, like home equity lines of credit, are now dropping.

The combination of increased debt, falling asset prices and stagnant incomes does not threaten just imprudent borrowers. The entire economy has become vulnerable to the spending slowdown that results when consumers like Ms. McLeod hit the wall.

That First Credit Card

Growing up in Philadelphia, Diane McLeod never knew financial hardship, she said. Her father owned six pizza shops and her mother was a homemaker.

“There was always money for everything, whether it was bills or food shopping or a spur-of-the-moment vacation,” Ms. McLeod recalled. “If they worried about money, they never let us know.”

Hers was a pay-as-you-go family, she said. Although money was not discussed much around the dinner table, credit card debt was not a part of her parents’ financial plan, and sometimes personal purchases were put off.

When Ms. McLeod married at 18, she and her husband carried no credit cards. She stayed at home after her son was born, but when she was 27 her husband died.

She remarried a few years later and continued as a homemaker until her son turned 13. Between her husband’s job laying carpets and her own, money was not exactly tight.

In the mid-’90s, Ms. McLeod got several credit cards. When the marriage began to founder, she said, she shopped to make herself feel better.

Earning a livable wage at Verizon Yellow Pages, Ms. McLeod finally decided to leave her marriage and buy a home of her own in February 2003. The cost was $135,000, and her mortgage required no down payment because her credit history was good.

“I was very proud of myself when I bought the house,” Ms. McLeod explained. “I thought I would live here till I died.” Adding to her burden, however, was about $25,000 in credit card debt she had brought from her marriage. Because her husband did not have a regular salary, all the cards were in her name.

After she had been in the house for a year, a friend who was a mortgage broker suggested she consolidate her debts into a new home loan. The property had appreciated by about $30,000, and once again she put no money down for the loan. “It was amazing how easy it was,” she recalled. “But that’s a trap, and I didn’t know it then.”

Naturally, the refinance had costs. There was an $8,000 penalty to pay off the previous mortgage early as well as roughly $1,500 in closing costs on the new loan.

To cover these fees, Ms. McLeod dipped into her retirement account. Only later did she realize that she had to pay an early-withdrawal penalty of $3,000 to the Internal Revenue Service. Short on cash, she put it on a credit card.

Soon she had racked up another $19,000 in credit card debt. But because her home had appreciated, she once again refinanced her mortgage. Although she was making $50,000 a year working two jobs, her income was not enough to support the new $165,000 loan. She asked her son to join her on the loan application; with his income, the numbers worked.

“Boy, would I regret that,” she said. The decision would drive a wedge between mother and son and damage his credit profile as well.

Almost immediately after she refinanced, in late 2005, the department store where she worked her second job, as a jewelry salesperson at night and on weekends, cut back her hours. She quit altogether, and her son moved out of the house, where he had been helping with the rent, to live with a girlfriend. Ms. McLeod was on her own and paying $1,500 a month on her mortgage.

Because the house had been recently appraised at $228,000, she said, she felt sure she could refinance again if she needed to pay off her credit card. “You felt like you had a way out,” she said.

But as happens with many debt-laden Americans, an unexpected illness helped push Ms. McLeod over the edge. In January 2006, her doctor told her she needed a hysterectomy. She had health care coverage, but she could no longer work at a second job.

She made matters worse during her recovery, while watching home shopping channels. “Eight weeks in bed by yourself is very dangerous when you have a TV and credit card,” Ms. McLeod said. “QVC was my friend.”

Later that year, Ms. McLeod realized she was in trouble, squeezed by her mortgage and credit card payments, her $350 monthly car bill, rising energy prices and a stagnant salary. She started to sell knickknacks, handbags, clothing and other items on eBay to help cover her heating and food bills. She stopped paying her credit cards so that she could afford her mortgage.

A year ago she was back in the hospital, this time with a burst appendix. Her condition worsened, and she lost the use of one kidney. She spent 19 days in the hospital and six weeks recuperating. Her prescription-drug costs added to her expenses, and by September she could no longer pay her mortgage.

When her father died in early January, she was devastated. About a month later, on Feb. 14, Ms. McLeod was suspended and soon afterward fired from Verizon.

Toting up her financial obligations, Ms. McLeod said she owed $237,000 on her home mortgage. Of that, sheriff’s costs are $4,350, and “other” fees related to the foreclosure come to $3,000. A house of similar size down the street from Ms. McLeod sold for $153,000 in January.

Her credit card debt totals around $34,000, she said. Each month the late fees and over-limit penalties add to her debt. Ms. McLeod said she will probably file for bankruptcy.

Patricia A. Hasson, president of the Credit Counseling Service of Delaware Valley, said Ms. McLeod would probably wind up having to repay 40 percent to 60 percent of her credit card debt. The owner of her mortgages could come after her for the difference between what she owes on her loan and what her house ultimately sells for. The first mortgage was sold to investors; Citigroup declined to say whether it held onto the second mortgage or sold it to investors.

A sheriff’s auction of her home on June 12 received no bidders, Ms. McLeod said. The bank will soon evict her.

“Oh, I definitely have regrets,” Ms. McLeod said. “I regret not dealing with my emotions instead of just shopping. And I regret involving my son in all this because that has affected him and his finances and his self-esteem.”

Ms. McLeod says she hopes to be living in an apartment she can afford soon and to get back to paying her bills on time.

She does not want another credit card, she said. But even though her credit profile is ruined, she still receives come-ons.

Recently an envelope arrived offering a “pre-qualified” Salute Visa Gold card issued by Urban Bank Trust. “We think you deserve more credit!” it said in bold type.

A spokeswoman at Urban Bank said the Salute Visa is part of a program “designed to provide access to credit for folks who would not otherwise qualify for credit.”

The Salute Visa offered Ms. McLeod a $300 credit line. But a closer look at the fine print showed that $150 of that would go, as annual fees, to Urban Bank.

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6) Black Marks for the Red Cross
Editorial
July 19, 2008
http://www.nytimes.com/2008/07/19/opinion/19sat1.html?hp

One thing Americans do not want to hear when they are injured or facing surgery is that blood from the American Red Cross may actually harm them. So it was unnerving, to put it mildly, to learn that the Red Cross, which collects and distributes some 43 percent of blood given to patients in this country, has failed to follow quality-control measures ordered by a federal court 15 years ago.

The organization’s sloppy procedures and its lethargy in investigating possible harm have put untold numbers of Americans at risk. These failures have been identified in reports and investigations by the Food and Drug Administration, which regulates the safety of the American blood supply, and summarized in The Times on Thursday by Stephanie Strom.

The F.D.A. found shortcomings in the way the Red Cross screens donors for possible exposure to infectious diseases, failures to swab arms properly before inserting needles, failures to test for syphilis and failures to discard potentially risky blood, among other deficiencies.

There is little or no evidence that recipients of the blood have been harmed; the skimpy record doesn’t allow an assessment. Regulators say the Red Cross no longer routinely releases unsuitable blood, as it did in the late-1980s and early-1990s. Blood supplied by the Red Cross is generally considered among the safest in the world, and the organization is praised for doing a good job of testing for the AIDS virus and hepatitis B, two of the most feared infections.

What should shame the Red Cross is its repeated failure to investigate potential harm. In 2001, when a patient died of hepatitis that may have been contracted from a Red Cross blood product, the F.D.A. concluded that the organization had failed to perform a thorough investigation. All told, the Red Cross failed to investigate more than 130 cases of suspected post-transfusion hepatitis between 2000 and mid-2002.

Often the problem is bureaucratic. Just this week, the F.D.A. chided the Red Cross for distributing more than 200 blood products that the organization itself had identified as problematic but failed to intercept before distribution. Other times the failure is deliberate. A blood facility in Philadelphia, with approval from a senior national executive, decided not to recall some 600 units of blood that had been collected using improper methods.

What can be done to turn things around is not clear. The Red Cross has already reorganized its blood operations, deployed electronic monitors to improve arm swabbing and invested heavily in a centralized database that should, if it ever gets up and running, make it easier to track down flawed blood products. The organization says that under new leadership it has put in place an aggressive plan to comply fully with F.D.A. regulations.

Some critics believe the Red Cross should sell off its blood banking services and stick to disaster relief, but that might present financial difficulties. The disaster relief activities are said to be heavily subsidized by blood banking revenues, although the organization’s financial systems are so antiquated that even its own top executives do not know for sure.

At a minimum, Congress should explore ways to strengthen regulatory oversight and force the Red Cross to meet the highest safety standards.

In January, a frustrated commissioner of food and drugs warned Red Cross board members that they could face criminal charges for continued failure to bring their organization into compliance with safety mandates.

They need to get cracking.

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7) Uncomfortable Answers to Economic Questions
By PETER S. GOODMAN
July 19, 2008
http://www.nytimes.com/2008/07/19/business/economy/19econ.html?hp

You have heard that Fannie and Freddie, their gentle names notwithstanding, may cripple the financial system without a large infusion of taxpayer money. You have gleaned that jobs are disappearing, housing prices are plummeting, and paychecks are effectively shrinking as food and energy prices soar. You have noted the disturbing talk of crisis hovering over Wall Street.

Something has clearly gone wrong with the economy. But how bad are things, really? And how bad might they get before better days return? Even to many economists who recently thought the gloom was overblown, the situation looks grim. The economy is in the midst of a very rough patch. The worst is probably still ahead.

Job losses will probably accelerate through this year and into 2009, and the job market will probably stay weak even longer. Home prices will probably keep falling, shrinking household wealth and eroding spending power.

“The open question is whether we’re in for a bad couple of years, or a bad decade,” said Kenneth S. Rogoff, a former chief economist at the International Monetary Fund, now a professor at Harvard.

Is this a recession?

Officially, no. The economy is not in recession until a panel at a private institution called the National Bureau of Economic Research says so. Unofficially, many economists think a recession started six or seven months ago, even as the economy has continued to expand — albeit at a tepid pace.

Many assume that if the economy expands at all, then it isn’t a recession, but that’s not true. The bureau defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months.” If enough people lose their jobs, factories stop making things, stores stop selling things, and less money lands in people’s pockets, it is probably a recession.

Whatever it is called, it is a painful time for tens of millions of people. Indeed, this may turn out to be the most wrenching downturn since the two recessions in the early 1980s; almost surely worse than the recession that ended the technology bubble at the beginning of this decade; perhaps worse than the downturn of the early 1990s that followed the last dip in real estate prices.

But, despite what some doomsayers now proclaim, this is not the Great Depression, when unemployment spiked to 25 percent and millions of previously working people woke up in shantytowns. Not by any measure, even as your neighbors make cryptic remarks above dusting off lessons passed down from grandparents about how to turn a can of beans into a family meal.

How bad is housing?

Bad in many markets, awful in some, and still O.K. in a few.

The downturn has its roots in the real estate frenzy that turned lonely Nevada ranches into suburban ranch homes and swampland in Florida into condominiums. Speculators drove home prices beyond any historical connection to incomes. Gravity did the rest. After roughly doubling in value from 2000 to 2005, home prices have fallen about 17 percent — and more like 25 percent in inflation-adjusted terms — according to the widely watched Case-Shiller index.

Even so, most economists think house prices must fall an additional 10 to 15 percent to get back to reality. One useful measure is the relationship between the costs of buying and renting a home. From 1985 to 2002, the average American home sold for about 14 times the annual rent for a similar home, according to Moody’s Economy.com. By early 2006, home prices ballooned to 25 times rental prices. Since then, the ratio has dipped back to about 20 — still far above the historical norm.

With mortgages now hard to obtain and speculation no longer attractive, arithmetic has replaced momentum as the guiding force for housing prices. The fundamental equation points down: Even as construction grinds down, there are still many more houses on the market than there are people to buy them, and more on the way as more homeowners slip into foreclosure.

By the reckoning of Economy.com, enough houses are on the market to satisfy demand for the next two-and-a-half years without building a single new one.

The time it takes to sell a newly completed house has expanded from an average of four months in 2005 to about nine months, according to analysis by Dean Baker, co-director of the Center for Economic and Policy Research.

And many sales are falling through — more than 30 percent in some parts of California and Florida — as buyers fail to secure financing, exacerbating the glut of homes, Mr. Baker said.

No wonder that in Los Angeles, San Francisco, Phoenix and Las Vegas, house prices have in recent months declined at annual rates of more than 33 percent.

When will banks revive?

So far, they have written off more than $300 billion in loans. Many experts now predict the toll will rise to $1 trillion or more — a staggering sum that could cripple many institutions for years.

Back when home prices were multiplying, banks poured oceans of borrowed money into real estate loans. Unlike the dot-com companies at the heart of the last speculative investment bubble, the new gold rush was centered on something that seemed unimpeachably solid — the American home.

But the whole thing worked only as long as housing prices rose. Falling prices landed like a bomb. Homeowners fell behind on their loans and could not qualify for new ones: There was no value left in their house to borrow against. As millions of people defaulted, the banks confronted enormous losses in a bloody period of reckoning.

In March, the Federal Reserve helped engineer a deal for JPMorgan Chase to buy troubled investment bank Bear Stearns. Many assumed the worst was over. But, this month, the open distress of Fannie Mae and Freddie Mac — two huge, government sponsored institutions that together own or guarantee nearly half of the nation’s $12 trillion in outstanding mortgages — sent a signal that more ugly surprises may lie in wait.

To calm markets, the government last weekend hurriedly put together a rescue package for Fannie and Freddie that, if used, could cost as much as $300 billion. The urgent need for a rescue — together with another round of billion-dollar write-offs on Wall Street — has unnerved economists and investors.

“I was a relative optimist, but I’ve certainly become more pessimistic,” said Alan S. Blinder, an economist at Princeton, and a former vice chairman of the board of governors at the Federal Reserve. “The financial system looks substantially worse now than it did a month ago. If the Freddie and Fannie bailout were to fail, it could get a hell of a lot worse. If we get more bank failures, we have the possibility of seeing more of these pictures of people standing in line to pull their money out. That could really scare consumers.”

In one respect, Mr. Blinder added, this is like the Great Depression. “We haven’t seen this kind of travail in the financial markets since the 1930s,” he said.

More than two years ago, Nouriel Roubini, an economist at the Stern School of Business at New York University, said that the housing bubble would give way to a financial crisis and a recession. He was widely dismissed as an attention-seeking Chicken Little. Now, Mr. Roubini says the worst is yet to come, because the account-squaring has so far been confined mostly to bad mortgages, leaving other areas remaining — credit cards, auto loans, corporate and municipal debt.

Mr. Roubini says the cost of the financial system’s losses could reach $2 trillion. Even if it’s closer to $1 trillion, he adds, “we’re not even a third of the way there.”

Where will the banks raise the huge sums needed to replenish the capital they have apparently lost? And what will happen if they cannot?

The answers to these questions are unknown, an unsettling void that holds much of the economy at a standstill.

“We’re in a dangerous spot,” said Andrew Tilton, an economist at Goldman Sachs. “The big threat is more capital losses.”

Banks are a crucial piece of the economy’s arterial system, steering capital where it is needed to fuel spending and power growth. Now, they are holding tight to their dollars, starving businesses of loans they might use to expand, and depriving families of money they might use to buy houses and fill them with furniture and appliances.

From last June to this June, commercial bank lending declined more than 9 percent, according to an analysis of Federal Reserve data by Goldman Sachs.

“You have another wave of anxiety, another tightening of credit,” said Robert Barbera, chief economist at the research and trading firm ITG. “The idea that we’ll have a second half of the year recovery has gone by the boards.”

Is my job safe?

Economic slowdowns always mean job losses. Unemployment already has risen, and almost certainly will increase more.

The first signs of distress emerged in housing. Construction companies, real estate agencies, mortgage brokers and banks began laying people off. Next, jobs started being cut at factories making products linked to housing, from carpets and furniture to lighting and flooring.

But as the real estate bust spilled over into the broader economy, depleting household wealth, the impacts rippled out to retailers, beauty parlors, law offices and trucking companies, inflicting cutbacks throughout the economy, save for health care, farming and energy. Over the last six months, the economy has shed 485,000 private sector jobs, according to the Labor Department. Many people have seen hours reduced.

The unemployment rate still remains low by historical standards, at 5.5 percent. And so far, the job losses — about 65,000 a month this year — do not approach the magnitude of those seen in past downturns, particularly the twin recessions at the beginning of the 1980s, when the economy shed upward of 140,000 jobs a month and the unemployment rate exceeded 10 percent.

But Goldman Sachs assumes unemployment will reach 6.5 percent by the end of 2009, which translates into several hundred thousand more Americans out of work.

These losses are landing on top of what was, for most Americans, a remarkably weak period of expansion. From 1992 to 2000 — as the technology boom catalyzed spending and hiring — the economy added more than 22 million private sector jobs. Over the last eight years, only 5 million new jobs have been added.

The loss of work is hitting Americans along with an assortment of troubles — gasoline prices in excess of $4 a gallon, over all inflation of about 5 percent, and declining wages.

“In every dimension, people are worse off than they were,” said Mr. Roubini, the New York University economist.

Are consumers done?

That is a major worry.

The fate of the economy now rests on the shoulders of the American consumer, whose spending amounts to 70 percent of all economic activity.

When people go to the mall and buy televisions and eat out, their money circulates through the economy. When they tighten their belts, austerity ripples out and chokes growth.

Through the years of the housing boom, many Americans came to treat their homes like automated teller machines that never required a deposit. They harvested cash through sales, second mortgages and home equity lines of credit — an artery of finance that reached $840 billion a year from 2004 to 2006, according to work by the economists James Kennedy and Alan Greenspan, the former Federal Reserve chairman. That allowed Americans to live far in excess of what they brought home from work.

But by the first three months of this year, that flow had constricted to an annual rate of about $200 billion.

Average household debt has swelled to 120 percent of annual income, up from 60 percent in 1984, according to the Federal Reserve.

And now the banks are turning off the credit taps.

“Credit is going to remain tight for a time potentially measured in years,” said Mr. Tilton, the Goldman Sachs economist.

This is the landscape that has so many economists convinced that consumer spending must dip, putting the squeeze on the economy for several years.

“The question is, will it get as bad as the 1970s?” asked Mr. Rogoff, recalling an era of spiking gas prices and double-digit inflation.

Long term, Americans may have no choice but to spend less, save more and reduce debts — in short, to live within their means.

“We’re getting a lot of the adjustment and it hurts,” said Kristin Forbes, a former member of the Council of Economic Advisers under President George W. Bush, and now a scholar at M.I.T.’s Sloan School of Management. “But it’s an adjustment we’re going to have to make.”

Who’s to blame?

There is plenty to go around.

In the estimation of many economists, it starts with the Federal Reserve. The central bank lowered interest rates following the calamitous end of the technology bubble in 2000, lowered them more after the terrorist attacks of Sept. 11, 2001, and then kept them low, even as speculators began to trade homes like dot-com stocks.

Meanwhile, the Fed sat back and watched as Wall Street’s financial wizards engineered diabolically complicated investments linked to mortgages, generating huge amounts of speculative capital that turned real estate into a conflagration.

“At the end of this movie, it’s clear that the Fed will have to care about excesses,” Mr. Barbera said.

Prices multiplied as many homeowners took on more property than they could afford, lured by low introductory interest rates that eventually reset higher, sending many people into foreclosure.

Mortgage brokers netted commissions as they lent almost indiscriminately, offering exotically lenient terms — no money down, no income or job required. Wall Street banks earned billions selling risky mortgage-linked securities around the world, aided by ratings agencies that branded them solid.

Through it all, a lot of ordinary Americans borrowed a lot more money then they could afford to pay back, running up enormous credit card bills and borrowing against the value of their homes. Now comes the day of reckoning.

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8) A Veil Closes France’s Door to Citizenship
By KATRIN BENNHOLD
July 19, 2008
http://www.nytimes.com/2008/07/19/world/europe/19france.html?ref=world

LA VERRIÈRE, France — When Faiza Silmi applied for French citizenship, she worried that her French was not quite good enough or that her Moroccan upbringing would pose a problem.

“I would never have imagined that they would turn me down because of what I choose to wear,” Ms. Silmi said, her hazel eyes looking out of the narrow slit in her niqab, an Islamic facial veil that is among three flowing layers of turquoise, blue and black that cover her body from head to toe.

But last month, France’s highest administrative court upheld a decision to deny citizenship to Ms. Silmi, 32, on the ground that her “radical” practice of Islam was incompatible with French values like equality of the sexes.

It was the first time that a French court had judged someone’s capacity to be assimilated into France based on private religious practice, taking laïcité — the country’s strict concept of secularism — from the public sphere into the home.

The case has sharpened the focus on the delicate balance between the tradition of Republican secularism and the freedom of religion guaranteed under the French Constitution, and how that balance may be shifting. Four years ago, a law banned religious clothing in public schools. Earlier this year, a court in Lille annulled a marriage on request of a Muslim husband whose wife had lied about being a virgin. (The government later demanded a review of the court decision.)

So far, citizenship has been denied on religious grounds in France only when applicants were believed to be close to fundamentalist groups.

The ruling on Ms. Silmi has received almost unequivocal support across the political spectrum, including among many Muslims. Fadela Amara, the French minister for urban affairs, called Ms. Silmi’s niqab “a prison” and a “straitjacket.”

“It is not a religious insignia but the insignia of a totalitarian political project that promotes inequality between the sexes and is totally lacking in democracy,” Ms. Amara, herself a practicing Muslim of Algerian descent, told the newspaper Le Parisien in an interview published Wednesday.

François Hollande, the leader of the opposition Socialist Party, called the ruling “a good application of the law,” while Jacques Myard, a conservative lawmaker elected in the district where Ms. Silmi lives, demanded that face-covering veils be outlawed.

In an interview at her home in a public housing complex southwest of Paris, the first she has given since her citizenship was denied, Ms. Silmi told of her shock and embarrassment when she found herself unexpectedly in the public eye. Since July 12, when Le Monde first reported the court decision, her story has been endlessly dissected on newspaper front pages and in late-night television talk shows.

“They say I am under my husband’s command and that I am a recluse,” Ms. Silmi said during an hourlong conversation in her apartment in La Verrière, a small town 30 minutes by train from Paris. At home, when no men are present, she lifts her facial veil and exposes a smiling, heart-shaped face.

“They say I wear the niqab because my husband told me so,” she said. “I want to tell them: It is my choice. I take care of my children, and I leave the house when I please. I have my own car. I do the shopping on my own. Yes, I am a practicing Muslim, I am orthodox. But is that not my right?”

Ms. Silmi declined to have her photograph taken, saying that she and her husband were uncomfortable with the idea.

Eight years ago, Ms. Silmi married Karim, a French national of Moroccan descent, and moved to France with him. Their four children, three boys and a girl, ages 2 to 7, were born in France. In 2004, Ms. Silmi applied for French citizenship, she said, “because I wanted to have the same nationality as my husband and my children.” But her request was denied a year later because of “insufficient assimilation” into France.

She appealed, invoking the right to religious freedom. But in late June, the Council of State, the judicial institution with final say on disputes between individuals and the public administration, upheld the ruling.

“She has adopted a radical practice of her religion, incompatible with essential values of the French community, particularly the principle of equality of the sexes,” the ruling said.

Ms. Silmi, who resides in France as a legal immigrant, will not lose her right to stay. She has given herself until September to decide whether to make another attempt to acquire citizenship.

Emmanuelle Prada-Bordenave, the government commissioner who reported to the Council of State, said Ms. Silmi’s interviews with social services revealed that “She lives in total submission to her male relatives. She seems to find this normal, and the idea of challenging it has never crossed her mind.”

The unease with a very small but growing number of Muslim women wearing face veils is not unique to France. In Denmark, the government barred judges from wearing religious garments and symbols after a rightist political party whose support it needs campaigned for such a ban. Its campaign featured posters showing a judge in a niqab. In Britain last year, a schoolteacher wearing a niqab was told to go home. Several Belgian cities have enacted outright bans on burqas.

M’hammed Henniche, of the Union of Muslim Associations in the Seine-St.-Denis district north of Paris, says he fears that the French ruling may open the door to what he considers ever more arbitrary interpretations of what constitutes “radical” Islam.

“What is it going to be tomorrow?” he asked. “The annual pilgrimage to Mecca? The daily prayer?

“This sets a dangerous precedent,” he said. “Religion, so far as it is personal, should be kept out of these decisions.”

In a sign of the nature of some of the criteria used to evaluate Ms. Silmi’s fitness to become French, the government commissioner approvingly noted in her report that she was treated by a male gynecologist during her pregnancies.

The Silmis say they live by a literalist interpretation of the Koran. They do not like the term Salafism, although they say literally it means following the way of the Prophet Muhammad and his companions.

“But today ‘Salafist’ has come to mean political Islam; people who don’t like the government and who approve of violence call themselves Salafists,” said her husband, a soft-spoken man who bears two physical signs of devotion in Islam: a beard and a light bruising on his forehead caused by bows in prayer. “We have nothing to do with them.”

His wife said that in 2000 she decided to wear the niqab, which is usually worn on the Arabian Peninsula, because in her eyes her traditional Moroccan djelaba — a long flowing garment with a head scarf — was not modest enough. “I don’t like to draw men’s looks,” she said. “I want to belong to my husband and my husband only.”

France is home to about five million Muslims, three out of five of them French citizens, experts estimate. Criteria for granting French citizenship include “assimilation,” which focuses on how well the candidate speaks French. Ms. Silmi’s French is fluent.

Lately, though, President Nicolas Sarkozy has stressed the importance of “integration” into French life. Part of his tougher immigration policy is new legislation to require foreigners who want to join their families to take an exam on French values as well as the French language before leaving their countries.

Ms. Silmi’s husband, a former bus driver who says he is finding it hard to get work because of his beard, dreams of moving his family to Morocco or Saudi Arabia. “We don’t feel welcome here,” he said. “I am French, but I can’t really say that I am proud of it right now.”

Dutch Court Rules for Immigrant

AMSTERDAM (AP) — A Dutch court punched a hole in toughened immigration restrictions on Friday, ruling that an illiterate Moroccan woman cannot be required to pass a Dutch language test in order to join her husband in the Netherlands.

The order dismayed politicians who have sought to curb immigration from non-Western countries, and they vowed to fix the law to cover the loophole exposed by the Amsterdam District Court.

On the other side, the ruling was applauded by rights activists who say the government should scrap the requirement entirely, which they say is discriminatory and violates international law.

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9) Cuba to Grant Private Farmers Access to Land
By MARC LACEY
July 19, 2008
http://www.nytimes.com/2008/07/19/world/americas/19cuba.html?ref=world

MEXICO CITY — President Raúl Castro continued his rollout of changes in Cuba on Friday with the start of a plan to boost the island’s sluggish food production by granting private farmers access to up to 99 acres of unused government land.

Cuba seized land from most large-scale farmers after the 1959 revolution; the latest announcement in the Communist Party newspaper Granma stopped well short of a return to pre-revolution private enterprise.

Under the new system, private farmers, who have continued to exist under Cuba’s socialist system, would have access to the plots for up to a decade, with leases renewable if conditions were met and taxes paid. Cooperatives and state farms would also qualify for more land, for up to 25 years. But the fields would stay in the hands of the government, which controls an estimated 90 percent of the island’s economy.

The new plan, mentioned several months ago but formally announced Friday, is intended to jump-start food production at a time when Cuba is feeling the effects of the global rise in food prices. Last year, Cuba spent nearly $1.5 billion for food imports, much of that from producers in the United States that were granted a special exemption from Washington’s trade embargo on Cuba. This year, the island’s bill for food imports is expected to rise by another $1 billion, officials have said, calling the issue one of national security.

Cuba’s government released statistics last month showing that fallow or underused agricultural land had increased to 55 percent in 2007, up from 46 percent five years earlier, The Associated Press reported.

The announcement on Friday acknowledged the struggle that the country was facing in feeding itself. “For various reasons, there is a considerable percentage of state land sitting vacant, so it must be handed over to individuals or groups as owners or users in an effort to increase production of food and reduce imports,” the government decree said.

The plan appeared partly designed to prompt more Cubans, who are drawn to the cities for more opportunity, to give agriculture a try. Those who do not currently farm any land would be given access to up to 33 acres for farming, the government said.

Mr. Castro took over provisionally for his ailing brother, Fidel, in July 2006. But he has begun putting his own stamp on the country only since February, when he formally became the second president of Cuba in the last half century. In recent months, he has allowed Cubans with enough money to buy cellphones and computers, which had previously been restricted. He has allowed them to rent cars and visit tourist hotels and opened up the possibility of private taxis. And he has taken the limits off state salaries, allowing for productivity bonuses.

Where he has stood firm is on political dissent, continuing his brother’s insistence that overt criticism of the system and government amounted to disloyalty.

Many Cubans relished the changes even as they complained bitterly that giving them access to consumer items did little to boost their state salaries.

In a speech at the close of the National Assembly earlier this month, the president made clear that he was remaking some aspects of the country. The ideal of everyone, a doctor or a laborer, earning the same amount, with no regard to productivity, seems to be fading. “Socialism means social justice and equality, but equality of rights, of opportunities, not of income,” he said. “Equality is not egalitarianism.”

In the speech, Mr. Castro prepared Cubans for tough times ahead. “It’s my duty to speak frankly, because it would be unethical to create false expectations,” he said. “To tell you otherwise would be misleading.”

He went on to exhort Cubans to make the island more self-sufficient. “We must go back to the land,” he said.

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10) The Way Through
Editorial
July 20, 2008
http://www.nytimes.com/2008/07/20/opinion/20sun1.html?hp

Recent postcards from the financial edge: A bleary-eyed Treasury secretary announcing on a Sunday evening that the government would bail out Fannie Mae and Freddie Mac if need be. The next day, in Southern California, long lines of depositors waiting to withdraw their money from a failed savings and loan.

Secretary Henry Paulson’s appearance last Sunday marked the second time this year that top federal officials scrambled through the weekend to avert a feared Monday morning meltdown in the financial markets. In March, the Federal Reserve used its emergency powers — and tens of billions of dollars in taxpayer-backed guarantees — to prevent the bankruptcy of Bear Stearns and to shore up other major Wall Street firms.

The Fed’s first intervention calmed the markets for a while, and it appears that Treasury’s intervention on behalf of Fannie and Freddie, the mortgage giants, may do the same. The cold reality, however, is that the financial system will be crisis prone and the economy will be weak until house prices stop falling and the mortgage losses are all accounted for. That will not happen soon.

In the meantime, a crisis could derail the markets and the economy. The worst would be a disorderly decline in the dollar, which would cause prices and interest rates to spike, and could result from a loss of investor faith in policy makers to rectify — or even muddle through — the current problems. At best, the deteriorating condition of the financial system will constrain lending and hamstring the economy for a long time.

And that brings to mind the other image of depositors queuing up outside IndyMac Bank branches throughout Southern California. IndyMac, one of the nation’s largest savings and loans, had been seized by federal regulators the week before, the biggest such failure in more than two decades. It was one of just a handful of seizures so far this year, but surely not the last.

As real estate loans continue to sour and as rising unemployment and rising prices provoke defaults across an array of other loans, analysts expect up to 150 banks to fail in the next year or so. That, in turn, could force the Federal Deposit Insurance Corporation to raise more money from surviving banks to replenish its $53 billion reimbursement fund; the IndyMac failure alone could take up to 15 percent of the F.D.I.C.’s fund. The potential need to raise money does not call into question the soundness of that safety net, but it is indicative of the challenges that confront both banks and policy makers.

In the short run, Congress should grant the Treasury the authority it seeks to bail out Fannie and Freddie if necessary, by including the proposed measures in the pending foreclosure relief bill. That bill is an essential attempt to stop spiraling house price declines.

Lawmakers are correct to question the Treasury’s plan; it would represent a hasty extension of government powers and could put taxpayers at risk. But they need to resolve their worries, by suggesting alternatives or compromises, rather than wasting time with election-year chest thumping over the evils of bailouts. No one ever wants a bailout. The question is whether there is a better idea than the Treasury plan to prevent the even greater harm that would result from the failure of Fannie or Freddie. Doing nothing is not an option.

It is not enough, either, to focus only on the short run. Today’s financial crises were years in the making, as Americans, awash in tax cuts and easy money, lived beyond their means to an unprecedented degree, and the Bush administration, while cutting taxes, pursued wars and vast new spending. The next president must level with the people, explaining that bolstered savings, by individuals and by government, will involve sacrifice — delayed gratification of consumption in order to build a better foundation for the future.

The message is complicated. The economy, in the near term, needs stimulus, interventions and perhaps bailouts. But at the same time, the nation must prepare for slow, steady and painful changes to get the economy back on track for the long haul. That means tax increases and government spending cuts, as soon as a break in the economic clouds indicate it is safe to enact them — not only to restore fiscal health, but to channel resources toward neglected areas, like universal health care and infrastructure repair.

What the candidates say about fixing the immediate problems is largely theoretical. But it is not theoretical for them to talk about what they would do, over four to eight years in office, to restore true economic stability.

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11) More Civilian Deaths Reported in Afghan Strikes
By CARLOTTA GALL
July 21, 2008
http://www.nytimes.com/2008/07/21/world/asia/21afghan.html?ref=world

KABUL, Afghanistan, July 20 — United States and NATO missile strikes continued to exact a heavy toll over the weekend, with at least 13 Afghans killed in two episodes that Afghan officials said were mistakes.

One NATO soldier was also killed in the eastern province of Khost. Although NATO did not give the nationality of the soldier, United States forces are deployed in Khost.

Nine Afghan policemen were killed and five others were wounded in western Afghanistan when a joint convoy of Afghan and United States forces called in airstrikes on a group they thought were militants. A presidential spokesman, Homayun Hamidzada, said the strikes were a case of friendly fire

In the other strike, at least four people were killed when two mortars fired by the NATO-led force in Afghanistan went astray.

The United States military announced it was mounting an investigation into the first episode. The joint Afghan and United States force came under attack in the province of Farah from an unknown force while conducting nighttime operations in Ana Dara district, a statement issued from Bagram airbase said. Coalition forces returned fire and then called in airstrikes on the group firing at them.

Among those badly wounded was the police chief of the district, the deputy provincial governor said, according to Agence France-Press.

A NATO statement said that at least four civilians were accidentally killed, and four other civilians wounded, in mortar strikes by the NATO-led force, ISAF, in the eastern province of Paktika. The deaths of another three have not been confirmed, it said. The strikes took place on Saturday night at Barmal, on the border with Pakistan in an area where militants frequently cross from Pakistan’s tribal regions.

The wounded civilians were brought to a NATO base and were evacuated by helicopter to a medical facility, the statement said. “ISAF deeply regrets this accident, and an investigation as to the exact circumstances of this tragic event is now under way,” the statement said.

The latest casualties came as Senator Barak Obama was on his first visit to Afghanistan with a congressional delegation.

The British humanitarian organization, Oxfam, used the opportunity to warn against the growing human cost of the war in Afghanistan in a statement Sunday.

“The security situation in Afghanistan has deteriorated, with an alarming increase in civilian casualties,” Oxfam said. “All parties to the conflict must do everything possible to avoid causing harm to civilians.”

The statement also said that “unless the next American president, whether it is Senator Obama or Senator McCain, builds on the existing commitments to help lift the Afghan people out of extreme poverty and protect civilians, it will be impossible for the country to achieve lasting peace.” .

The organization also urged the United States government to stop spending assistance funds on expensive foreign contractors and instead find more creative and sustainable ways to assist the people directly, especially in rural development.

Afghan governors and ministers who met Mr. Obama for dinner on Saturday night asked that funding be funneled through the government so it could build up its own institutions, the governor of Khost, Arsala Jamal, said. When Mr. Obama asked what he most needed for his province, the governor said he needed roads since the entire border region is without paved roads.

American lawyers in Kabul to work on cases of Afghans detained in the United States base at Bagram, meanwhile, called on the United States government to end the legal “black hole” in which hundreds of detainees are held by American forces in Afghanistan.

The lawyers from the International Justice Network raised the case of Jawed Ahmad, an Afghan journalist detained for nearly nine months at Bagram along with some 650 other Afghan detainees. None of the detainees have been charged and none are allowed lawyers, according to the lawyers, Tina Foster, the director of the organization, and Barbara Olshansky, a human rights professor from Stanford University.

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12) Immigrant, Pregnant, Is Jailed Under Pact
By JULIA PRESTON
July 20, 2008
http://www.nytimes.com/2008/07/20/us/20immig.html?ref=us

It started when Juana Villegas, an illegal immigrant from Mexico who was nine months pregnant, was pulled over by a police officer in a Nashville suburb for a routine traffic violation.

By the time Mrs. Villegas was released from the county jail six days later, she had gone through labor with a sheriff’s officer standing guard in her hospital room, where one of her feet was cuffed to the bed most of the time. County officers barred her from seeing or speaking with her husband.

After she was discharged from the hospital, Mrs. Villegas was separated from her nursing infant for two days and barred from taking a breast pump into the jail, her lawyer and a doctor familiar with the case said. Her breasts became infected, and the newborn boy developed jaundice, they said.

Mrs. Villegas’s arrest has focused new attention on a cooperation agreement signed in April 2007 between federal immigration authorities and Davidson County, which shares a consolidated government with Nashville, that gave immigration enforcement powers to county officers. It is one of 57 agreements, known formally as 287G, that the federal Immigration and Customs Enforcement agency has signed in the last two years with county and local police departments across the country under a rapidly expanding program.

Nashville officials have praised the agreement as a successful partnership between local and federal government.

“We are able to identify and report individuals who are here illegally and have been charged with a criminal offense, while at the same time remaining a friendly and open city to our new legal residents,” Karl Dean, the mayor of Nashville, said in a statement on Friday.

Lawyers and immigrant advocates say Mrs. Villegas’s case shows how local police can exceed their authority when they seek to act on immigration laws they are not fully trained to enforce.

“Had it not been for the 287G program, she would not have been taken down to jail,” said A. Gregory Ramos, a lawyer who is a former president of the Nashville Bar Association. “It was sold as something to make the community safer by taking dangerous criminals off the streets. But it has been operated so broadly that we are getting pregnant women arrested for simple driving offenses, and we’re not getting rid of the robbers and gang members.”

Mrs. Villegas, who is 33, has lived in the United States since 1996, and has three other children besides the newborn who are American citizens because they were born here.

She was stopped on July 3 in her husband’s pickup truck by a police officer from Berry Hill, a Nashville suburb, initially for “careless driving.” After Mrs. Villegas told the officer she did not have a license, he did not issue a ticket but arrested her instead. Elliott Ozment, Mrs. Villegas’s lawyer, said driving without a license is a misdemeanor in Tennessee that police officers generally handle with a citation, not an arrest.

After Mrs. Villegas was taken to the Davidson County jail, a federal immigration agent working there as part of the cooperation agreement conducted a background check. It showed that Mrs. Villegas was an illegal immigrant who had been deported once from the United States in March 1996, Karla Weikal, a spokeswoman for the county sheriff, said. She had no other criminal record.

As a result, immigration agents issued an order to take charge of Mrs. Villegas once she was released by the local authorities. Based on that order, county officers designated her a medium-security inmate in the jail, Ms. Weikal said.

So when Mrs. Villegas went into labor on the night of July 5, she was handcuffed and accompanied by a deputy as she was taken by ambulance to Nashville General Hospital at Meharry. Cuffs chaining her foot to the hospital bed were opened when she reached the final stages of labor, Mrs. Villegas said.

“I felt like they were treating me like a criminal person,” Mrs. Villegas said, speaking in Spanish in a telephone interview. The phone in her room was turned off, and she was not permitted to speak with her husband when he came to retrieve their newborn son from the hospital on July 7 as she returned to jail, she said.

As Mrs. Villegas left the hospital, a nurse offered her a breast pump but a sheriff’s deputy said she could not take it into the jail, Mrs. Villegas said.

Mr. Ozment, the lawyer, said Mrs. Villegas would never have been detained without the 287G cooperation agreement.

“Whether this lady was documented or undocumented should not affect how she was treated in her late pregnant condition and as she was going through labor and bonding with her new baby,” Mr. Ozment said.

On July 8, Mrs. Villegas was taken to court, where she pleaded guilty to driving without a license and was sentenced to time served. Immigration agents immediately released her while a deportation case proceeds, following a policy adopted last year by the Immigration and Customs Enforcement to avoid separating babies from nursing mothers.

Ms. Weikal said Mrs. Villegas’s jail stay was prolonged by the Independence Day holiday weekend, when the courts were closed.

“There is a perception that she was treated different from other inmates, and it just is not true,” Ms. Weikal said. “Unfortunately the business of corrections is that families are separated. It’s not pretty, it’s not understandable to a lot of people.”

She said that it was standard procedure to bar medical equipment like a breast pump from the jail.

More than 60,000 illegal immigrants have been identified for deportation since 2006 through 287G cooperation programs, said Richard Rocha, a spokesman for the federal immigration agency. Most of the agreements are aimed at increasing the screening of immigrant convicts serving sentences in local jails, in order to speed their deportation. Some, like Nashville’s, provide for immigration screening right after any foreign-born person is arrested.

Arrests of immigrants have increased rapidly in Tennessee since early 2006, when the state stopped allowing illegal immigrants to obtain driver’s licenses, after five years when they had been able to drive legally.

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13) On Mustang Range, a Battle on Thinning the Herd
By FELICITY BARRINGER
[What kind of a society wants to kill their wild mustangs?...bw]
July 20, 2008
http://www.nytimes.com/2008/07/20/us/20mustangs.html?ref=us

GERLACH, Nev. — Five mustangs pounded across the high desert recently, their dark manes and tails giving shape to the wind. Pursued by a helicopter, they ran into a corral — and into the center of the emotional debate over whether euthanasia should be used to thin a captive herd that already numbers 30,000.

The champions of wild mustangs have long portrayed them as the victims of ranchers who preferred cattle on the range, middlemen who wanted to make a buck selling them for horsemeat and misfits who shot them for sport. But the wild horse today is no longer automatically considered deserving of extensive protections.

Some environmentalists and scientists have come to see the mustangs, which run wild from Montana to California, as top-of-the-food-chain bullies, invaders whose hooves and teeth disturb the habitats of endangered tortoises and desert birds.

Even the language has shifted. In a 2006 article in Audubon magazine, wild horses lost their poetry and were reduced to “feral equids.”

“There’s not just horses out there, there’s other critters, from the desert turtle in the south to the bighorn sheep in the north,” said Paula Morin, the author of the book “Honest Horses.”

“We’ve come a long way in our awareness of the web of life and maintaining the whole ecology,” Ms. Morin said, adding, “We do the horses a disservice when we set them apart.”

Environmentalists’ attitudes toward the horses have evolved so far that some are willing to say what was heresy a few years ago: that euthanasia is acceptable if the alternatives are boarding the mustangs for life at taxpayers’ expense or leaving them to overpopulate, damage the range and die of hunger or thirst.

The federal Bureau of Land Management, the legal custodian of the wild horses and burros, recently proposed euthanization. For years, the bureau has been running the Adopt-A-Horse program, selling mustangs from the range to those who would care for them. But 30,000 once-wild horses were never adopted and are being boarded by the agency at facilities in Kansas and Oklahoma (another 33,000 run wild). As feed and gas grow more expensive, the rate of adoptions plummets.

Boarding costs ran to $21 million last year and are expected to reach $26 million this year, out of a $37 million budget for the bureau’s Wild Horse and Burro Program, which is intended to protect the animals. And drought lingers here in northern Nevada, where the mustangs were rounded up on a recent weekend morning to prevent them from starving.

The bureau “can’t do a good job of taking care of horses on the range if they have to take care of all the horses off the range,” said Nathaniel Messer, a professor of veterinary science at the University of Missouri and a former member of the federal Wild Horse and Burro Advisory Committee.

Steven L. Davis, an emeritus professor of animal science at Oregon State University, said: “Many of the wild horse supporters claim that the horses have a right to be there. I reject that argument.” He added: “They damage the water holes. They damage the grasses, the shrubs, the bushes, causing negative consequences for all the other plants and critters that live out there.”

For groups formed to protect the horses, the specter of euthanasia as a solution remains anathema. “It’s not acceptable to the American public,” said Virginie L. Parant, a lawyer who is the director of the American Wild Horse Preservation Campaign.

The mustang, Ms. Parant said, “is part of the American myth. People want to know that they can come to the American West and know that they can see herds of wild horses roaming. It’s part of the imagery.”

As mustangs increasingly competed with cattle in the 1940s and 50s, many were rounded up and slaughtered. They found a champion in Velma Johnston, better known as Wild Horse Annie, who pushed Congress to act. In 1971, Congress gave the federal bureau the job of caring for them.

Shelley Sawhook, the president of the American Horse Defense Fund, argues, along with other horse defenders, that the federal government “mismanaged the program from the very beginning.” She added that “their proposal to euthanize is a stopgap measure” to cover what she believes is an overly aggressive policy of removing horses from the range for the benefit of cattle interests.

Accusations of mismanagement have dogged the bureau across Democratic and Republican administrations; a decade ago The Associated Press found that a few agency employees were adopting mustangs themselves and selling them to slaughterhouses. In the wake of lawsuits by the Fund for Animals and other groups, the bureau required anyone adopting a mustang to sign a binding pledge not to send it to a slaughterhouse. In 2001, the Earth Liberation Front took credit for the firebombing of an agency hay barn on the Nevada-California border.

Today, the fundamental rift between the bureau and its critics involves two judgment calls: how many horses can a range of 29 million acres support, and how should that level be maintained?

Arlan Hiner, an assistant field manager for the bureau in Nevada, said, “We’re supposed to be managing for ecological balance.” Over all, the bureau wants to cut the wild herd by about 6,000 horses. Ted Williams, the author of the Audubon article, argued that without euthanasia such a balance would be impossible.

Mr. Williams’s article infuriated the mustang advocates even more than the agency’s proposal to resume euthanasia. Ms. Parant laughs at the idea of attributing the range destruction to horses when cattle greatly outnumber them.

Jay F. Kirkpatrick, a scientist who is the director of the Science and Conservation Center in Billings, Mont., wrote in a rebuttal to the Audubon article that Mr. Williams had not given sufficient weight to birth control options, which could make “serious inroads” on horse populations.

“The issue is not that the technology doesn’t exist, but that the B.L.M. is not investing in it,” Professor Kirkpatrick wrote.

Herd sizes, the bureau says, double every four years. And the agency is working with a contraceptive that is largely effective for two years in mares. Alan Shepherd, the official who helps run the contraceptive program, said that it showed promise but had limitations.

“The ultimate thing is you can’t catch them all,” Mr. Shepherd said.

The horses that came rushing into the corral ahead of the helicopter were taken to a holding facility and will eventually find their way into the Adopt-A-Horse program.

The bureau said it would be premature to discuss the criteria for culling horses or the means of euthanasia. Longtime observers believe that older, unadoptable horses would be the focus of such a program. And in past mustang-thinning operations at holding facilities, marksmen shot the horses, said Dr. Messer of Missouri.

After Representative Nick J. Rahall II, Democrat of West Virginia and chairman of the House Natural Resources Committee, raised questions this month about the euthanasia proposal, the bureau agreed to make no decision until after completion of a Congressional audit of the program, which is due in September.

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14) U.S. Perpetuates Mass Killings In Iraq
by Peter Phillips | Dissident Voice, July 19th, 2008
http://www.dissidentvoice.org/2008/07/us-perpetuates-mass-killings-in-iraq/

The United States is directly responsible for over one million Iraqi
deaths since the invasion five and half years ago. In a January 2008
report, a British polling group Opinion Research Business (ORB)
reports that, "survey work confirms our earlier estimate that over
1,000,000 Iraqi citizens have died as a result of the conflict which
started in 2003…. We now estimate that the death toll between March
2003 and August 2007 is likely to have been of the order of 1,033,000.
If one takes into account the margin of error associated with survey
data of this nature then the estimated range is between 946,000 and
1,120,000".

The ORB report comes on the heels of two earlier studies conducted by
Johns Hopkins University published in the Lancet medical journal that
confirmed the continuing numbers of mass deaths in Iraq. A study done
by Dr. Les Roberts from January 1, 2002 to March 18 2003 put the
civilian deaths at that time at over 100,000. A second study published
in the Lancet in October 2006 documented over 650,000 civilian deaths
in Iraq since the start of the US invasion. The 2006 study confirms
that US aerial bombing in civilian neighborhoods caused over a third
of these deaths and that over half the deaths are directly
attributable to US forces.

The now estimated 1.2 million dead, as of July 2008, includes
children, parents, grandparents, great-grandparents, cab drivers,
clerics, schoolteachers, factory workers, policemen, poets, healthcare
workers, day care providers, construction workers, babysitters,
musicians, bakers, restaurant workers and many more. All manner of
ordinary people in Iraq have died because the United States decided to
invade their country. These are deaths in excess of the normal
civilian death rate under the prior government.

The magnitude of these deaths is undeniable. The continuing occupation
by US forces guarantees a mass death rate in excess of 10,000 people
per month with half that number dying at the hands of US forces — a
carnage so severe and so concentrated at to equate it with the most
heinous mass killings in world history. This act has not gone
unnoticed.

Recently, Dennis Kucinich introduced a single impeachment article
against George W. Bush for lying to Congress and the American people
about the reasons for invading Iraq. On July 15, the House forwarded
the resolution to the Judiciary Committee with a 238 to 180 vote. That
Bush lied about weapons of mass destruction and Iraq's threat to the
US is now beyond doubt. Former US federal prosecutor Elizabeth De La
Vega documents the lies most thoroughly in her book U.S. v. Bush, and
numerous other researchers have verified Bush's untrue statements.

The American people are faced with a serious moral dilemma. Murder and
war crimes have been conducted in our name. We have allowed the
war/occupation to continue in Iraq and offered ourselves little choice
within the top two presidential candidates for immediate cessation of
the mass killings. McCain would undoubtedly accept the deaths of
another million Iraqi civilians in order to save face for America, and
Obama's 18-month timetable for withdrawal would likely result in
another 250,000 civilian deaths or more.

We owe our children and ourselves a future without the shame of mass
murder on our collective conscience. The only resolution of this
dilemma is the immediate withdrawal of all US troops in Iraq and the
prosecution and imprisonment of those responsible. Anything less
creates a permanent original sin on the soul of the nation for that we
will forever suffer.

Peter Phillips is a Professor of Sociology at Sonoma State University,
and Director of Project Censored, a media research organization. Read
other articles by Peter, or visit Peter's website.

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LINKS AND VERY SHORT STORIES

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North Carolina: Charges in G.I.’s Death
[What the title doesn't say is that the GI, a woman, was killed by a Marine who happened to be her husband...]
By THE ASSOCIATED PRESS
National Briefing | South
The husband of an Army nurse at Fort Bragg’s hospital was charged with murder in her death, a day after her body was discovered by the authorities. Cpl. John Wimunc of the Marines, 23, was also charged with first-degree arson and conspiracy to commit arson in the death of his wife, Second Lt. Holley Wimunc, of Dubuque, Iowa. Her body was found Sunday, three days after a suspicious fire at her Fayetteville apartment. The authorities also charged Lance Cpl. Kyle Alden, 22, with first-degree arson, conspiracy to commit arson and accessory after the fact to first-degree murder.
July 15, 2008
http://www.nytimes.com/2008/07/15/us/15brfs-CHARGESINGIS_BRF.html?ref=us

Louisiana: Case of Ex-Black Panther [The Angola Three]
By THE ASSOCIATED PRESS
National Briefing | South
The conviction of a former Black Panther in the killing of a prison guard in 1972 should be overturned because his former lawyer should have objected to testimony from witnesses who had died after his original trial, a federal magistrate found. The lawyer’s omission denied a fair second trial for the man, Albert Woodfox, in 1998, the magistrate, Christine Nolan, wrote Tuesday in a recommendation to the federal judge who will rule later. Mr. Woodfox, 61, and Herman Wallace, 66, were convicted in the stabbing death of the guard, Brent Miller, on April 17, 1972. Mr. Wallace has been appealing his conviction based on arguments similar to Mr. Woodfox’s. Mr. Woodfox and Mr. Wallace, with another former Black Panther, became known as the Angola Three because they were held in isolation for about three decades at the Louisiana State Penitentiary in Angola.
June 12, 2008
http://www.nytimes.com/2008/06/12/us/12brfs-CASEOFEXBLAC_BRF.html?ref=us

Texas: Killer Is Executed
By REUTERS
National Briefing | Southwest
A convicted killer, Karl E. Chamberlain, was put to death by lethal injection in Texas, becoming the first prisoner executed in the state since the Supreme Court lifted an unofficial moratorium on the death penalty in April. Texas, the country’s busiest death penalty state, is the fifth state to resume executions since the court rejected a legal challenge to the three-drug cocktail used in most executions for the past 30 years. Mr. Chamberlain, 37, was convicted of the 1991 murder of a 30-year-old Dallas woman who lived in the same apartment complex. Mr. Chamberlain was the 406th inmate executed in Texas since 1982 and the first this year.
June 12, 2008
http://www.nytimes.com/2008/06/12/us/12brfs-KILLERISEXEC_BRF.html?ref=us

Tennessee: State to Retry Inmate
By THE ASSOCIATED PRESS
National Briefing | South
The Union County district attorney said the county would meet a federal judge’s deadline for a new trial in the case of a death row inmate whose trial was questioned by the United States Supreme Court. The state is facing a June 17 deadline to retry or free the inmate, Paul House, who has been in limbo since June 2006, when the Supreme Court concluded that reasonable jurors would not have convicted him had they seen the results of DNA tests from the 1990s. The district attorney, Paul Phillips, said he would not seek the death penalty. Mr. House, 46, who has multiple sclerosis and must use a wheelchair, was sentenced in the 1985 killing of Carolyn Muncey. He has been in a state prison since 1986 and continues to maintain his innocence.
May 29, 2008
http://www.nytimes.com/2008/05/29/us/29brfs-STATETORETRY_BRF.html?ref=us

Israel: Carter Offers Details on Nuclear Arsenal
By REUTERS
World Briefing | Middle East
Former President Jimmy Carter said Israel held at least 150 nuclear weapons, the first time a current or former American president had publicly acknowledged the Jewish state’s nuclear arsenal. Asked at a news conference in Wales on Sunday how a future president should deal with the Iranian nuclear threat, he sought to put the risk in context by listing atomic weapons held globally. “The U.S. has more than 12,000 nuclear weapons, the Soviet Union has about the same, Great Britain and France have several hundred, and Israel has 150 or more,” he said, according to a transcript. The existence of Israeli nuclear arms is widely assumed, but Israel has never admitted their existence and American officials have stuck to that line in public for years.
May 27, 2008
http://www.nytimes.com/2008/05/27/world/middleeast/27briefs-CARTEROFFERS_BRF.html?ref=world

Iowa: Lawsuit Filed Over Raid
By THE ASSOCIATED PRESS
National Briefing | Midwest
The nation’s largest single immigration raid, in which nearly 400 workers at an Agriprocessors Inc. meat processing plant in Postville were detained on Monday, violated the constitutional rights of workers at a meatpacking plant, a lawsuit contends. The suit accuses the government of arbitrary and indefinite detention. A spokesman for the United States attorney’s office said he could not comment on the suit, which was filed Thursday on behalf of about 147 of the workers. Prosecutors said they filed criminal charges against 306 of the detained workers. The charges include accusations of aggravated identity theft, falsely using a Social Security number, illegally re-entering the United States after being deported and fraudulently using an alien registration card.
May 17, 2008
http://www.nytimes.com/2008/05/17/us/17brfs-LAWSUITFILED_BRF.html?ref=us

Senate Revises Drug Maker Gift Bill
By REUTERS
National Breifing | Washington
A revised Senate bill would require drug makers and medical device makers to publicly report gifts over $500 a year to doctors, watering down the standard set in a previous version. The new language was endorsed by the drug maker Eli Lilly & Company. Lawmakers said they hoped the support would prompt other companies to back the bill, which had previously required all gifts valued over $25 be reported. The industry says the gifts are part of its doctor education, but critics say such lavish gestures influence prescribing habits.
May 14, 2008
http://www.nytimes.com/2008/05/14/washington/14brfs-SENATEREVISE_BRF.html?ref=us

Texas: Sect Mother Is Not a Minor
By THE ASSOCIATED PRESS
National Briefing | Southwest
Child welfare officials conceded to a judge that a newborn’s mother, held in foster care as a minor after being removed from a polygamous sect’s ranch, is an adult. The woman, who gave birth on April 29, had been held along with more than 400 children taken last month from a ranch run by the Fundamentalist Church of Jesus Christ of Latter-day Saints. She was one of two pregnant sect members who officials had said were minors. The other member, who gave birth on Monday, may also be an adult, state officials said.
May 14, 2008
http://www.nytimes.com/2008/05/14/us/14brfs-SECTMOTHERIS_BRF.html?ref=us

Four Military Branches Hit Recruiting Goals
By THE ASSOCIATED PRESS
National Briefing | Washington
The Marine Corps far surpassed its recruiting goal last month, enlisting 2,233 people, which was 142 percent of its goal, the Pentagon said. The Army recruited 5,681 people, 101 percent of its goal. The Navy and Air Force also met their goals, 2,905 sailors and 2,435 airmen. A Defense Department spokesman, Bryan Whitman, said that if the Marine Corps continued its recruiting success, it could reach its goal of growing to 202,000 people by the end of 2009, more than a year early.
May 13, 2008
http://www.nytimes.com/2008/05/13/us/13brfs-FOURMILITARY_BRF.html?ref=us

Texas: Prison Settlement Approved
By THE ASSOCIATED PRESS
National Briefing | Southwest
A federal judge has approved a settlement between the Texas Youth Commission and the Justice Department over inmate safety at the state’s juvenile prison in Edinburg. The judge, Ricardo Hinojosa of Federal District Court, signed the settlement Monday, and it was announced by the commission Wednesday. Judge Hinojosa had previously rejected a settlement on grounds that it lacked a specific timeline. Federal prosecutors began investigating the prison, the Evins Regional Juvenile Center, in 2006. The settlement establishes parameters for safe conditions and staffing levels, restricts use of youth restraints and guards against retaliation for reporting abuse and misconduct.
May 8, 2008
http://www.nytimes.com/2008/05/08/us/08brfs-PRISONSETTLE_BRF.html?ref=us

Michigan: Insurance Ruling
By THE ASSOCIATED PRESS
National Briefing | Midwest
Local governments and state universities cannot offer health insurance to the partners of gay workers, the State Supreme Court ruled. The court ruled 5 to 2 that Michigan’s 2004 ban against same-sex marriage also blocks domestic-partner policies affecting gay employees at the University of Michigan and other public-sector employers. The decision affirms a February 2007 appeals court ruling. Up to 20 public universities, community colleges, school districts and local governments in Michigan have benefit policies covering at least 375 gay couples.
May 8, 2008
http://www.nytimes.com/2008/05/08/us/08brfs-INSURANCERUL_BRF.html?ref=us

Halliburton Profit Rises
By THE ASSOCIATED PRESS
HOUSTON (AP) — Increasing its global presence is paying off for the oil field services provider Halliburton, whose first-quarter income rose nearly 6 percent on growing business in the Middle East, Asia and Latin America, the company said Monday.
Business in the first three months of 2008 also was better than expected in North America, where higher costs and lower pricing squeezed results at the end of 2007.
Halliburton shares closed up 3 cents, at $47.46, on the New York Stock Exchange.
Halliburton said it earned $584 million, or 64 cents a share, in the three months that ended March 31, compared with a year-earlier profit of $552 million, or 54 cents a share. Revenue rose to $4.03 billion, from $3.42 billion a year earlier.
April 22, 2008
http://www.nytimes.com/2008/04/22/business/worldbusiness/22halliburton.html?ref=business

Illegal Immigrants Who Were Arrested at Poultry Plant in Arkansas to Be Deported
By THE ASSOCIATED PRESS
Eighteen illegal immigrants arrested at a poultry plant in Batesville will be processed for deportation, but will not serve any jail time for using fake Social Security numbers and state identification cards, federal judges ruled. Magistrate Judge Beth Deere and Judge James Moody of Federal District Court accepted guilty pleas from 17 of those arrested last week at the Pilgrim’s Pride plant. Federal prosecutors dismissed the misdemeanor charges against one man, but said they planned to ask Immigration and Customs Enforcement to begin deportation proceedings against him. The guilty pleas will give the 17 people criminal records, which will allow prosecutors to pursue tougher penalties if they illegally return to the United States. They had faced up to up to two years in prison and $205,000 in fines. Jane Duke, a United States attorney, said her office had no interest in seeing those arrested serve jail time, as they were “otherwise law-abiding citizens.”
National Briefing | South
April 22, 2008
http://www.nytimes.com/2008/04/22/us/22brfs-002.html?ref=us

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GENERAL ANNOUNCEMENTS AND INFORMATION

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Torture
On the Waterboard
How does it feel to be “aggressively interrogated”? Christopher Hitchens found out for himself, submitting to a brutal waterboarding session in an effort to understand the human cost of America’s use of harsh tactics at Guantánamo and elsewhere. VF.com has the footage. Related: “Believe Me, It’s Torture,” from the August 2008 issue.
http://www.vanityfair.com/politics/features/video/2008/hitchens_video200808

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Alison Bodine defense Committee
Lift the Two-year Ban
http://alisonbodine.blogspot.com/

Watch the Sept 28 Video on Alison's Case!
http://alisonbodine.blogspot.com/2007/10/blog-post.html

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The Girl Who Silenced the World at the UN!
Born and raised in Vancouver, Severn Suzuki has been working on environmental and social justice issues since kindergarten. At age 9, she and some friends started the Environmental Children's Organization (ECO), a small group of children committed to learning and teaching other kids about environmental issues. They traveled to 1992's UN Earth Summit, where 12 year-old Severn gave this powerful speech that deeply affected (and silenced) some of the most prominent world leaders. The speech had such an impact that she has become a frequent invitee to many U.N. conferences.
[Note: the text of her speech is also available at this site...bw]
http://www.karmatube.org/videos.php?id=433

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MINIATURE EARTH
http://www.miniature-earth.com/me_english.htm

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"Dear Canada: Let U.S. war resisters stay!"
http://www.couragetoresist.org/x/content/view/499/89/

Russell Means Speaking at the Transform Columbus Day Rally
"If voting could do anything it would be illegal!"
http://www.youtube.com/watch?v=_8Lri1-6aoY

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Stop the Termination or the Cherokee Nation
http://groups.msn.com/BayAreaIndianCalendar/activismissues.msnw?action=get_message&mview=1&ID_Message=5580

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We Didn't Start the Fire
http://yeli.us/Flash/Fire.html

I Can't Take it No More
http://lefti.blogspot.com/2007_11_01_archive.html#9214483115237950361

The Art of Mental Warfare
http://artofmentalwarfare.com/pog/artofmentalwarfarecom-the-warning/

MONEY AS DEBT
http://video. google.com/ videoplay? docid=-905047436 2583451279
http://www.moneyasd ebt.net/

UNCONSTITUTIONAL
http://video.google.com/videoplay?docid=6582099850410121223&pr=goog-sl

IRAQ FOR SALE
http://video.google.com/videoplay?docid=-6621486727392146155

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Port of Olympia Anti-Militarization Action Nov. 2007
http://www.youtube.com/watch?v=SOkn2Fg7R8w

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"They have a new gimmick every year. They're going to take one of their boys, black boys, and put him in the cabinet so he can walk around Washington with a cigar. Fire on one end and fool on the other end. And because his immediate personal problem will have been solved he will be the one to tell our people: 'Look how much progress we're making. I'm in Washington, D.C., I can have tea in the White House. I'm your spokesman, I'm your leader.' While our people are still living in Harlem in the slums. Still receiving the worst form of education.

"But how many sitting here right now feel that they could [laughs] truly identify with a struggle that was designed to eliminate the basic causes that create the conditions that exist? Not very many. They can jive, but when it comes to identifying yourself with a struggle that is not endorsed by the power structure, that is not acceptable, that the ground rules are not laid down by the society in which you live, in which you are struggling against, you can't identify with that, you step back.

"It's easy to become a satellite today without even realizing it. This country can seduce God. Yes, it has that seductive power of economic dollarism. You can cut out colonialism, imperialism and all other kind of ism, but it's hard for you to cut that dollarism. When they drop those dollars on you, you'll fold though."

—MALCOLM X, 1965
http://www.accuracy.org/newsrelease.php?articleId=987

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A little gem:
Michael Moore Faces Off With Stephen Colbert [VIDEO]
http://www.alternet.org/blogs/video/57492/

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LAPD vs. Immigrants (Video)
http://www.sfgate.com/cgi-bin/qws/ff/qr?term=lapd&Submit=S&Go.x=0&Go.y=0&Go=Search&st=s

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Dr. Julia Hare at the SOBA 2007
http://mysite.verizon.net/vzeo9ewi/proudtobeblack2/

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"We are far from that stage today in our era of the absolute
lie; the complete and totalitarian lie, spread by the
monopolies of press and radio to imprison social
consciousness." December 1936, "In 'Socialist' Norway,"
by Leon Trotsky: “Leon Trotsky in Norway” was transcribed
for the Internet by Per I. Matheson [References from
original translation removed]
http://www.marxists.org/archive/trotsky/1936/12/nor.htm

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Wealth Inequality Charts
http://www.faireconomy.org/research/wealth_charts.html

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MALCOLM X: Oxford University Debate
http://www.youtube.com/watch?v=Dmzaaf-9aHQ

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"There comes a times when silence is betrayal."
--Martin Luther King

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YouTube clip of Che before the UN in 1964
http://www.youtube.com/watch?v=CtATT8GXkWg&mode=related&search

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The Wealthiest Americans Ever
NYT Interactive chart
JULY 15, 2007
http://www.nytimes.com/ref/business/20070715_GILDED_GRAPHIC.html

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New Orleans After the Flood -- A Photo Gallery
http://www.dissentmagazine.org/article/?article=795
This email was sent to you as a service, by Roland Sheppard.
Visit my website at: http://web.mac.com/rolandgarret

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[For some levity...Hans Groiner plays Monk
http://www.youtube.com/watch?v=51bsCRv6kI0
...bw]

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Which country should we invade next?
http://www.youtube.com/watch?v=q3g_zqz3VjY

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My Favorite Mutiny, The Coup
http://www.myspace.com/thecoupmusic

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Michael Moore- The Awful Truth
http://www.youtube.com/watch?v=xeOaTpYl8mE

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Morse v. Frederick Supreme Court arguments
http://www.youtube.com/watch?v=n_LsGoDWC0o

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Free Speech 4 Students Rally - Media Montage
http://www.youtube.com/watch?v=RfCjfod8yuw

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'My son lived a worthwhile life'
In April 2003, 21-year old Tom Hurndall was shot in the head
in Gaza by an Israeli soldier as he tried to save the lives of three
small children. Nine months later, he died, having never
recovered consciousness. Emine Saner talks to his mother
Jocelyn about her grief, her fight to make the Israeli army
accountable for his death and the book she has written
in his memory.
Monday March 26, 2007
The Guardian
http://www.guardian.co.uk/israel/Story/0,,2042968,00.html

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Introducing...................the Apple iRack
http://www.youtube.com/watch?v=o-KWYYIY4jQ

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"A War Budget Leaves Every Child Behind."
[A T-shirt worn by some teachers at Roosevelt High School
in L.A. as part of their campaign to rid the school of military
recruiters and JROTC--see Article in Full item number 4, below...bw]

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"200 million children in the world sleep in the streets today.
Not one of them is Cuban."
(A sign in Havana)
Venceremos
View sign at bottom of page at:
http://www.cubasolidarity.net/index.html
[Thanks to Norma Harrison for sending this...bw]

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FIGHTBACK! A Collection of Socialist Essays
By Sylvia Weinstein
http://www.walterlippmann.com/sylvia-weinstein-fightback-intro.html

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[The Scab
"After God had finished the rattlesnake, the toad,
and the vampire, he had some awful substance left with
which he made a scab."
"A scab is a two-legged animal with a corkscrew soul,
a water brain, a combination backbone of jelly and glue.
Where others have hearts, he carries a tumor of rotten
principles." "When a scab comes down the street,
men turn their backs and angels weep in heaven, and
the devil shuts the gates of hell to keep him out."
"No man (or woman) has a right to scab so long as there
is a pool of water to drown his carcass in,
or a rope long enough to hang his body with.
Judas was a gentleman compared with a scab.
For betraying his master, he had character enough
to hang himself." A scab has not.
"Esau sold his birthright for a mess of pottage.
Judas sold his Savior for thirty pieces of silver.
Benedict Arnold sold his country for a promise of
a commision in the british army."
The scab sells his birthright, country, his wife,
his children and his fellowmen for an unfulfilled
promise from his employer.
Esau was a traitor to himself; Judas was a traitor
to his God; Benedict Arnold was a traitor to his country;
a scab is a traitor to his God, his country,
his family and his class."
Author --- Jack London (1876-1916)...Roland Sheppard
http://web.mac.com/rolandgarret]

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FOR IMMEDIATE RELEASE

"Award-Winning Writer/Filmmaker Donald L. Vasicek Launches New Sand
Creek Massacre Website"

May 21, 2008 -- CENTENNIAL, CO -- Award-winning filmmaker, Donald L.
Vasicek, has launched a new Sand Creek Massacre website. Titled,
"The Sand Creek Massacre", the site contains in depth witness
accounts of the massacre, the award-winning Sand Creek Massacre
trailer for viewing, the award-winning Sand Creek Massacre
documentary short for viewing, the story of the Sand Creek Massacre,
and a Shop to purchase Sand Creek Massacre DVD's and lesson
plans including the award-winning documentary film/educational DVD.

Vasicek, a board member of The American Indian Genocide Museum
(www.aigenom.com)in Houston, Texas, said, "The website was launched
to inform, to educate, and to provide educators, historians, students
and all others the accessibility to the Sand Creek Massacre story."

The link/URL to the website is sandcreekmassacre.net.
###

Contact:
Donald L. Vasicek
Olympus Films+, LLC
http://www.donvasicek.com
dvasicek@earthlink.net

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