Saturday, December 27, 2008




Silent Vigil at Feinstein's Office
5PM Monday Dec. 29th - Montgomery and Market
Bring candles, posters, and banners; wear black.
Rain or Shine

Co-Sponsored by Direct Action to Stop the War; the Middle East
Children's Alliance; Queers Undermining Israeli Terrorism; SF Women in Black

We condemn the missile strikes that have killed hundreds of Palestinians
in the Gaza strip as a brutal and murderous form of collective punishment.
The strikes in heavily populated areas display a reckless disregard for
the civilians of Gaza and are part of an ongoing war by Israel not against
Hamas or terrorism, but against the Palestinian people. The following
text is from a BBC eyewitness report in Gaza City:

"Doctors say the operating rooms are full and the morgues are full and
they have no place to put the dead bodies. They are asking for every
doctor who is not working today to come and help. We have seen in the
streets of Gaza today and this evening many funerals . . . It's a very bad
situation... There were Israeli aeroplanes everywhere, hitting everywhere.
You could see smoke from north to south, from west to east. The people are
really in a panic. The main object for the people now is to find a secure
place to secure their family. Gaza has no shelters, it has no safe
places. The Hamas security compounds are in the middle of the city - it's
not the kind of place where you see compounds outside the cities."

This recent offensive against people in Gaza is only the latest in the
Israeli government's continued occupation and ethnic cleansing of
Palestinians. With the siege of Gaza Israel has shown a consistent
disregard for the human rights of Palestinians leading to an unprecedented
humanitarian crisis in Gaza. Malnutrition in the Strip rivals that found
in sub-Saharan Africa, as Gazans cannot receive necessary food, fuel and
medical supplies. The effects of the siege will greatly impact the
hundreds of civilians injured by the missile strike.

We recognize that the US Government is complicit in these crimes against
the people of Palestine. We call on the US government to end its support
of the Israeli occupation, to stop the billions of dollars in military aid
sent to Israeli, and to end Israel's criminal raids and siege on the
people of Gaza. We gather outside Senator Feinstein's office to send this
message. We stand in solidarity and sympathy with the innocent civilians
being bombed in Gaza.

If your group wishes to co-sponsor email


Stop the siege and blockade of Gaza!
Demonstrate San Francisco
Tuesday, December 30
5:00 pm
Israeli Consulate:456 Montgomery St.
Contact: 415-821-6545,

Send a letter to Bush and Congress: End U.S. Aid to Israel!

Israeli Gaza Strike Kills More Than 200 (See article no. 18 in full below)
December 28, 2008

The humanitarian crisis facing the Palestinian people in Gaza has reached an especially grave level. The deprivation of food and water is the deliberate purpose of the U.S.-backed Israeli government's decision to close border crossings into Gaza.

All crossings for goods coming into the Gaza Strip, home to 1.5 million Palestinians, are closed. The Palestinians are completed blockaded. A United Nations report issued today states that the blockade and siege of Gaza, which began 18 months ago after the democratic election of the Hamas government, has now resulted in a 49% unemployment rate for the citizens of Gaza. Gaza City residents are without electricity for up to 16 hours a day and half the city's residents receive water only once a week for a few hours. The UN report added that 80% of Palestinians living in Gaza are obliged to drink polluted water.

The United National Relief and Works Agency (UNRWA) has been forced to suspend food distribution for both emergency and regular programs. The Agency has run out of flour and has now suspended food deliveries to 750,000 Palestinians in Gaza.

The Israeli Occupation Forces have escalated their military attacks on the people in Gaza. Civilians have been killed and Palestinian houses and other civilian premises have been targeted for destruction. This is a deliberate policy to starve and strangle a whole people by depriving them of food, water, fuel and medical supplies.

The U.S. government is bankrolling the Israeli government and its criminal actions. Israel receives $15 million dollars a day and is the largest recipient of U.S. foreign aid in the world. The U.S. Military Industrial Complex and the leadership of both the Republican and Democratic parties support Israel because they view the Israeli government as a extension of U.S. power in the Middle East. The Palestinian people deserve the support and solidarity of people around the world. They deserve our support not only in the face of the humanitarian crisis in Gaza, but in their struggle for self-determination including the right to return to their homes from which they were evicted by the forces of colonial occupation.

Join with people around the country and around the world who are demanding an end to U.S. aid to Israel. This is an urgent situation and we must all act now. You can send a letter with our easy click and send system demanding an end to U.S. aid to Israel. Without U.S. aid, the Israeli siege and blockade of Gaza could not be continued. Click this link now to send a letter to the State Department and elected officials in Congress.


U.S. resisters' solidarity with Israeli "shministim" refusers
Courage to Resist

Statement signed by over two dozen U.S. military war resisters. Reprinted by AlterNet, Democracy Now, The Progressive, Common Dreams, Indymedia, and Daily Kos.

We are U.S. military servicemembers and veterans who have refused or are currently refusing to fight in Iraq and Afghanistan.

We stand in solidarity with the Israeli Shministim (Hebrew for "12th graders") who are also resisting military service. About 100 Israeli high school students have signed an open letter declaring their refusal to serve in the Israeli army and their opposition to "Israeli occupation and oppression policy in the occupied territories and the territories of Israel." In Israel, military service is mandatory for all graduating high school seniors, and resisters face the possibility of years in prison.
Read more at:


To Celebrate The 50th Anniversary Of The Cuban Revolution And For Hurricane Relief For Cuba
And: Important Update On The Cuban Five's Struggle For Freedom
Featuring Renowned Dj Carlito Rovira
Wednesday, December 31, 9 pm to 1 am
Centro del Pueblo, 474 Valencia St., San Francisco

For 50 years Cuba's revolution has provided for its people, and at the
same time, extended international solidarity the world over with
doctors, teachers and so much more. Cuba needs our solidarity today!
More than 500,000 homes have been damaged, 65,000 destroyed, crops wiped out from three hurricanes this year.

Come celebrate Cuba's Revolution, bring a generous donation, and have fun!

Sponsored by ANSWER Coalition, National Committee to Free the Cuban Five, Compañeros del Barrio, the FMLN-SF.

Requested donation at the door: $10 to $20.
Refreshments provided.
For information: 415-821-6545
Download the flyer:


For a United Antiwar Movement

Dear all,

At its recent National Assembly, United for Peace and Justice voted not to endorse the March 21 March on the Pentagon. Conference delegates had to choose between the March 21 action already planned and endorsed by hundreds of organizations across the country and their own, April 4, March on Wall Street. They could not vote to support both.

We feel it is important for the movement to support both actions! And we especially feel that we can not let another year of "Shock and Awe" go by without demonstrating massively on March 21, and standing solidly behind the demands:

--End the Wars on Iraq and Afghanistan Now!

--Bring all U.S. Troops and Contractors Home NOW!

--End All U.S. Aid to Israel Now!

--End All U.S. Intervention Worldwide!

--Fund Peoples' Needs Not Militarism and Bank Bailouts!

--End the war threats and economic sanctions against Iran!

--End the illegal U.S. program of detention and torture!

We feel the connection between the financial crisis and the tremendous costs of maintaining the U.S. war budget--larger than all the world's war budgets put together--has never been clearer! And our opposition to it should be massive, peaceful, independently and democratically organized and, most importantly, united in solidarity!

All Out March 21 and April 4! Money for human needs not for endless war. Together we do have the power!

In solidarity,

Bay Area United Against War


March on the Pentagon! March 21, 2009

The National Assembly to End the Iraq and Afghanistan Wars and Occupations is joining with other coalitions, organizations, and networks in a united MARCH 21 NATIONAL COALITION to organize the broadest mobilization of people across the United States to take part in a March on the Pentagon on the sixth year of the military invasion and occupation of the Iraq War: Saturday, March 21.

Demonstrations will also be held on that date in San Francisco, Los Angeles, and other cities across the U.S.

These actions will remind the nation that all U.S. military forces must be brought home from Afghanistan and Iraq, and that the U.S. antiwar movement - marching behind a banner demanding "Out Now!' - will intensify its struggle to make it happen.

The actions are needed to assure the people of Iraq, Afghanistan, and other countries threatened by Washington's expansionist policies that tens of millions of people in this country support their right to settle their own destinies without U.S. interventions, occupations and murderous wars. International law recognizes - and we demand - that the U.S. respect the right to self-determination. We reject any notion that the U.S. is the world's self-appointed cop.

The March 21 united mass actions are also needed at this time of economic meltdown to demand jobs for all; a moratorium on foreclosures; rebuilding the crumbling infrastructure; guaranteed, quality health care for all; an end to the ICE raids and deportations; and funding for sorely needed social programs. So long as trillions of dollars continue to be spent on wars, occupations, and bailouts to the banks and corporate elite, the domestic needs of the people of the U.S. can never be met.

The So-called Status of Forces Agreement

As for Iraq, the so-called "Status of Forces Agreement" offers proof positive that far from ending the U.S. occupation, the plan is to extend it indefinitely. Tens of thousands of U.S. troops and mercenary soldiers will be maintained to carry out a number of stated missions, but in reality their aim is to carry out the one mission that is not stated: Ensure the U.S. subjugation of Iraq to exploit its oil resources and dominate the Middle East.

Any doubt about Washington's intentions should be dispelled by the statement by Gen. Raymond Odierno who said on December 13, 2008 that U.S. forces would remain indefinitely in dozens of bases in Iraq cities, despite the language in the Status of Forces Agreement that appears to require a withdrawal from urban areas by next summer. (Wall Street Journal 12/15/08)

As for Afghanistan, it is not the "good war" claimed by the Obama administration and the power structure, which plans to increase the number of U.S. troops in that country by 20,000. Afghanistan will prove to be another U.S. Vietnam. The Soviet Union's intervention in Afghanistan resulted in a million Afghanis being killed, along with 15,000 Soviet troops. The U.S. war will only result in a continuation of the slaughter that has been the hallmark of all previous occupations by foreign powers.

The daily U.S. bombing and killing of Afghanis attending weddings, classes, funerals, or simply trying to survive shows how cruel and deadly this war is. It is directed against the same forces that the U.S. armed, financed, and helped bring to power.

Why is the U.S. at war against Afghanistan? To gain control of a pipeline across that country. (See the 1998 statement submitted to Congress by the Union Oil Company of California, which later merged with Chevron, stressing the need to build a natural gas pipeline across Afghanistan. And note Dick Cheney's 1998 statement made when he was chief executive of a major oil services company: "I cannot think of a time when we have had a region emerge suddenly to become as strategically significant as the Caspian," which led the Guardian newspaper to remark "But the oil and gas there is worthless until it is moved. The only route that would make both political and economic sense is through Afghanistan.")

The March 21 demonstration will also highlight the dangers of expanding Washington's two wars to Iran and Pakistan. It will also condemn U.S. support for the continued occupation of Palestine.

The National Assembly

From its inception, the National Assembly to End the Iraq and Afghanistan Wars and Occupations has called for united antiwar demonstrations this spring. We urge the entire movement to unite now around March 21. We will do everything possible to make this unity a reality.

Think of the civil rights, union, anti-Vietnam War, women's liberation and gay rights movements. They would not have achieved victories without having built truly massive movements that were able to organize repeated and powerful independent mobilizations in the streets.

Why the demonstration in Washington? Because it is the seat of power, where foreign and domestic policies are decided, where money for war is allocated, and bailouts of the banking industry and corporate rich are given away.

Join us in mobilizing the largest possible outpouring of antiwar opposition built by a united movement on March 21. Let's march and continue to march until all U.S. forces come home, U.S. bases are dismantled, and the sovereign people of the world have the right to control their own resources and determine their own futures.

To endorse the March 21 March on the Pentagon, please click here.

To send a contribution to support the National Assembly's work, please click here.

For more information, please visit the National Assembly's website at or write or call 216-736-4704.




The ANSWER Coalition is joining with other coalitions, organizations, and networks in a March 21 National Coalition to bring people from all walks of life and from all cities across the United States to take part in a March on the Pentagon on the sixth anniversary of the Iraq war: Saturday, March 21.

The Iraqi journalist Muntather Al-Zaidi spoke for millions of Iraqis and outraged people everywhere when he threw his shoes at George Bush during Bush's publicity stunt "victory lap" in Baghdad yesterday. As he threw his shoes, Muntather said, "This is a gift from the Iraqis; this is the farewell kiss, you dog! This is from the widows, the orphans and those who were killed in Iraq!"

Tragically, the criminal occupation of Iraq will not be over even by the sixth anniversary of the start of the war in March 2009. People around the world will be marching together on the sixth anniversary in the strongest possible solidarity with the people of Iraq demanding an end to the occupation of their country.

Marking the sixth anniversary of the criminal invasion of Iraq, on March 21, 2009, thousands will March on the Pentagon to say, "Bring the Troops Home NOW!" We will also demand "End Colonial Occupation in Iraq, Afghanistan, Palestine and Everywhere" and "Fund Peoples' Needs Not Militarism and Bank Bailouts." We will insist on an end to the war threats and economic sanctions against Iran. We will say no to the illegal U.S. program of detention and torture.

To endorse the March 21 March on the Pentagon, click here. To sign up to be a Transportation Organizing Center, click here.

While millions of families are losing their homes, jobs and healthcare, the real military budget next year will top one trillion dollars--that's $1,000,000,000,000. If used to meet people's needs, that amount could create 10 million new jobs at $60,000 per year, provide healthcare for everyone who does not have it now, rebuild New Orleans, and repair much of the damage done in Iraq and Afghanistan. The cost for the occupation of Iraq alone is $400 million each day, or about $12 billion each month.

The war in Iraq has killed, wounded or displaced nearly one third of Iraq's 26 million people. Thousands of U.S. soldiers have been killed, and hundreds of thousands more have suffered severe physical and psychological wounds. The U.S. leaders who have initiated and conducted this criminal war should be tried and jailed for war crimes.

The idea that the U.S. is in the process of ending the criminal occupation of Iraq is a myth. Washington and its dependent Iraqi government signed a "Status of Forces" agreement, supposedly calling for the U.S. military to leave Iraqi cities by July 1, 2009, and all of Iraq by 2012. But even this outrageous extension of an illegal occupation is just one more piece of deception, as was soon made clear by top U.S. and Iraqi officials.

The ink was hardly dry on the agreement when, on December 12, official Iraq government spokesman Ali al Dabbagh dismissed the idea that U.S. troops would leave by 2012: "We do understand that the Iraqi military is not going to get built out in the three years. We do need many more years. It might be 10 years."

The next day, General Raymond Odierno, commander of "coalition (U.S.) forces" in Iraq, stated that thousands of U.S. troops could remain inside Iraqi cities after July 1, 2009, as part of "training and mentoring teams."

Government propaganda aside, the reality remains that only the people can end the war and occupation in Iraq. To sign up to be a Transportation Organizing Center, click here.

The war in Afghanistan is expanding. The incoming administration and Congressional leaders have promised to send in more troops.

Federal bailouts and loan guarantees for the biggest banks and investors, many of whom have also made billions in profits from militarism, are already up to an astounding $7.2 trillion this year. None of that money is earmarked for keeping millions of foreclosed and evicted families in their homes.

Coming just two months after the inauguration of the next president, the March 21, 2009, March on the Pentagon will be a critical opportunity to let the new administration in Washington hear the voice of the people demanding an immediate end to war and occupation, and demanding economic justice. Joint actions will take place on the West Coat in San Francisco, Los Angeles and Seattle.

Brian Becker
National Coordinator of the ANSWER Coalition

P.S. You can make a difference. Please continue to support the ANSWER Coalition's crucial anti-war work by making your end-of-the-year tax-deductible donation online using our secure server by clicking here, where you can also find information on how to donate by check.

A.N.S.W.E.R. Coalition
National Office in Washington DC: 202-544-3389
New York City: 212-694-8720
Los Angeles: 213-251-1025
San Francisco: 415-821-6545
Chicago: 773-463-0311


MARCH 21, 2009

The National Assembly to End the Iraq and Afghanistan Wars and Occupations:
Call for Unity

We hope that you and your organization agree that unified national March actions are sorely needed in these times of military and economic crises. We ask that you:

1. Sign the Open Letter to the U.S. Antiwar Movement.

2. Urge all local and national organizations and coalitions to join in building the mobilizations in D.C. in March and the mass actions on March 21.

3. Support the formation of a broad, united, ad hoc national coalition to bring massive forces out on March 21, 2009.

You can sign the Open Letter by writing [if you are a group or individual. (Individual endorsers please include something about yourselves.)] or through the National Assembly website at [if you are a group endorsement only]. For more information, please email us at the above address or call 216-736-4704. We greatly appreciate all donations to help in our unity efforts. Checks should be made payable to National Assembly and mailed to P.O. Box 21008 , Cleveland , OH 44121 .

In peace and solidarity,

Greg Coleridge, Coordinator, Northeast Ohio Anti-War Coalition (NOAC); Economic Justice and Empowerment Program Director, Northeast Ohio American Friends Service Committee (AFSC); Member, Administrative Body, National Assembly

Marilyn Levin, Coordinating Committee, Greater Boston United for Justice with Peace; New England United; Member, Administrative Body, National Assembly

On behalf of the National Assembly to End the Iraq and Afghanistan Wars and Occupations

For more information please contact: or call 216-736-4704


Bring the Anti-War Movement to Inauguration Day in D.C.
January 20, 2009: Join thousands to demand "Bring the troops home now!"
A.N.S.W.E.R. Coalition
National Office in Washington DC: 202-544-3389
New York City: 212-694-8720
Los Angeles: 213-251-1025
San Francisco: 415-821-6545
Chicago: 773-463-0311




1) The Madoff Economy
Op-Ed Columnist
December 19, 2008

2) You Mean That Bernie Madoff?
December 19, 2008

3) Something New to Worry About: Deflation
By The Editorial Board
December 19, 2008, 6:21 pm

4) NYC
People Behaving Poorly May Be the Ones to Save the State From the Poorhouse
[Who woulda thunk that getting kids to drink more Coke could save the economy? Maybe government should lower the alcoholic and smoking age to, what do you think? Three, six, twelve years old? Just think of the boon to the economy then!]
December 19, 2008

5) Pentagon Memo
Redefining the Role of the U.S. Military in Iraq
December 22, 2008

6) The Printing Press Cure
December 22, 2008

7) Missiles Are Said to Kill 8 in Northwest Pakistan
Filed at 10:18 a.m. ET
December 22, 2008

8) More Companies Are Cutting Labor Costs Without Layoffs
December 22, 2008

9) Horrific: 12-Year Old Girl Beaten By Police for 'Resisting Arrest'
Posted by Jill Filipovic, Feministe
December 21, 2008.

10) The Evidence Gap
Drug Rehabilitation or Revolving Door?
December 23, 2008

11) Reeling South Carolina City Is a Snapshot of Economic Woes
December 22, 2008

12) Budget Office Sees Hurdles in Financing Health Plans
December 19, 2008

13) $1.6 billion went to bailed-out bank execs
Records show bonuses, chauffeurs, health club benefits, financial planning
updated 10:09 a.m. PT, Mon., Dec. 22, 2008

14) Ariz. police say they are prepared as War College warns military must prep for unrest; IMF warns of economic riots
Phoenix Business Journal - by Mike Sunnucks
Wednesday, December 17, 2008

15) Home Sales in November Fell at Faster Pace Than Expected
December 24, 2008

16) A Race to the Bottom
Op-Ed Columnist
December 23, 2008

17) The 10 Greediest People of 2008
By Sam Pizzigati, Too Much: A Commentary on Excess and Inequality
Posted on December 23, 2008, Printed on December 23, 2008

18) Israeli Gaza Strike Kills More Than 200
December 28, 2008

19) Leaning on Jail, City of Immigrants Fills Cells With Its Own
December 27, 2008

20) Afghanistan: Protests Over Raid
World Briefing | Asia
December 27, 2008

21) No Sweets When Striking the Cookie Factory
Kingsbridge Journal
December 27, 2008


1) The Madoff Economy
Op-Ed Columnist
December 19, 2008

The revelation that Bernard Madoff - brilliant investor (or so almost everyone thought), philanthropist, pillar of the community - was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehend.

Yet surely I'm not the only person to ask the obvious question: How different, really, is Mr. Madoff's tale from the story of the investment industry as a whole?

The financial services industry has claimed an ever-growing share of the nation's income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it's not just a matter of money: the vast riches achieved by those who managed other people's money have had a corrupting effect on our society as a whole.

Let's start with those paychecks. Last year, the average salary of employees in "securities, commodity contracts, and investments" was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated; high pay on Wall Street was a major cause of that divergence.

But surely those financial superstars must have been earning their millions, right? No, not necessarily. The pay system on Wall Street lavishly rewards the appearance of profit, even if that appearance later turns out to have been an illusion.

Consider the hypothetical example of a money manager who leverages up his clients' money with lots of debt, then invests the bulked-up total in high-yielding but risky assets, such as dubious mortgage-backed securities. For a while - say, as long as a housing bubble continues to inflate - he (it's almost always a he) will make big profits and receive big bonuses. Then, when the bubble bursts and his investments turn into toxic waste, his investors will lose big - but he'll keep those bonuses.

O.K., maybe my example wasn't hypothetical after all.

So, how different is what Wall Street in general did from the Madoff affair? Well, Mr. Madoff allegedly skipped a few steps, simply stealing his clients' money rather than collecting big fees while exposing investors to risks they didn't understand. And while Mr. Madoff was apparently a self-conscious fraud, many people on Wall Street believed their own hype. Still, the end result was the same (except for the house arrest): the money managers got rich; the investors saw their money disappear.

We're talking about a lot of money here. In recent years the finance sector accounted for 8 percent of America's G.D.P., up from less than 5 percent a generation earlier. If that extra 3 percent was money for nothing - and it probably was - we're talking about $400 billion a year in waste, fraud and abuse.

But the costs of America's Ponzi era surely went beyond the direct waste of dollars and cents.

At the crudest level, Wall Street's ill-gotten gains corrupted and continue to corrupt politics, in a nicely bipartisan way. From Bush administration officials like Christopher Cox, chairman of the Securities and Exchange Commission, who looked the other way as evidence of financial fraud mounted, to Democrats who still haven't closed the outrageous tax loophole that benefits executives at hedge funds and private equity firms (hello, Senator Schumer), politicians have walked when money talked.

Meanwhile, how much has our nation's future been damaged by the magnetic pull of quick personal wealth, which for years has drawn many of our best and brightest young people into investment banking, at the expense of science, public service and just about everything else?

Most of all, the vast riches being earned - or maybe that should be "earned" - in our bloated financial industry undermined our sense of reality and degraded our judgment.

Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that "the financial system as a whole has become more resilient" - thanks to derivatives, no less? The answer, I believe, is that there's an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they're doing.

After all, that's why so many people trusted Mr. Madoff.

Now, as we survey the wreckage and try to understand how things can have gone so wrong, so fast, the answer is actually quite simple: What we're looking at now are the consequences of a world gone Madoff.


2) You Mean That Bernie Madoff?
December 19, 2008

Warren Buffett once noted that "you only find out who is swimming naked when the tide goes out." The collapse of what prosecutors say was the biggest Ponzi scheme in history, orchestrated by the New York money manager Bernard Madoff, has left a large number of powerful and smart people shivering on that beach.

Mr. Madoff's suspected multibillion-dollar fraud, discovered as falling markets exposed the fiction of its 10 percent annual profits, provided a stark reminder of how greed impairs judgment, duping some of the world's supposedly savviest investors for decades. It raises once more a fundamental question of these times: Where were the regulators when all of this was happening?

Christopher Cox, the chairman of the Securities and Exchange Commission, acknowledged this week that the agency had received "credible and specific" allegations about the scheme at least a decade ago. He promised an internal inquiry to figure out why the agency did not thoroughly investigate. Two years ago, the commission's enforcement arm in New York opened an investigation into whether Mr. Madoff's business was a Ponzi scheme but closed it after finding only mild violations that "were not so serious as to warrant an enforcement action."

The S.E.C.'s failings go much further than missing this one outrageous scheme. The agency urgently needs new leadership, more resources and high-level political backing to recover its role as Wall Street's top cop.

Though many details remain unknown, Mr. Madoff's activities should have set off plenty of alarms. His firm posted improbably constant returns, regardless of market volatility. It claimed to employ strategies that at such a large scale should have produced highly visible movements in options markets, yet passed undetected. Its auditor was a tiny, unknown outfit.

While it is particularly embarrassing to have overlooked what appears to be a low-tech fraud invented 100 years ago, the S.E.C.'s failure to pursue the case aggressively exemplifies its lackadaisical approach to enforcing the law on Wall Street. That has gotten much worse during the Bush administration.

Like other agencies, the S.E.C. has suffered from this administration's fierce aversion to government regulation. Under Mr. Cox, the enforcement division has been hampered by budget cuts and rule changes that have made it more difficult to impose penalties on companies found guilty of wrongdoing.

In a series of recent reports, the office of the S.E.C.'s inspector general, H. David Kotz, detailed the commission's repeated failure to pursue investigations. It criticized the agency for not exercising any oversight over Bear Stearns in the months preceding its collapse, among other criticisms.

The S.E.C.'s inability, or unwillingness, to catch Mr. Madoff is extremely troubling. Mary Schapiro, the head of the Financial Services Regulatory Authority and President-elect Barack Obama's choice to be chairwoman of the commission, has a reputation for diligence. The S.E.C. will need that, as well as financing and strong political backing. All of us, not just Mr. Madoff's clients, are paying the price for the regulators' failure to do their job.


3) Something New to Worry About: Deflation
By The Editorial Board
December 19, 2008, 6:21 pm

Hundreds of thousands of people are being laid off. The nation's leading banks and carmakers need bailouts. The stock market has had an ugly 2008.

Well, here's something else to worry about: deflation. This week, the government announced that prices fell in November for the second month in a row.

It might seem hard to understand what the problem is with falling prices. If all they mean is that we can buy our Christmas presents for less this month than we could have a month ago, maybe we can get the decked out Mac after all. What's there to worry about?

A lot. If prices persist in their decline, they could be devastating to the economy - not primarily because of their impact on consumers' spending habits but because of their impact on consumers' ability to service their debts.

Think of it this way: Say you earn $50,000 a year, and have a $200,000 mortgage. If there is heavy deflation, prices and salaries fall. Your salary might go down to $40,000, but your mortgage would remain the same. Suddenly, making those mortgage payments has gotten a lot tougher.

American businesses need to service about $11 trillion in debts, according to the Federal Reserve, a task that will become more difficult as falling prices eat into their meager profits. Households owe $14 trillion - which will become a more onerous burden if businesses cut salaries to bring costs in line with falling revenues or - far more likely - fire more workers.

In 1933, the American economist Irving Fisher argued that depressions are caused by a chain of events from over-indebtedness to deflation that goes somewhat like this:

Banks concerned about their corporate customers' indebtedness demand debt liquidation, which forces firms to sell off assets at fire-sale prices to pay them back.

Money in circulation declines as banks hoard the dollars, which causes spending to drop and prices to fall, depressing businesses' net worth and profits and throwing many into bankruptcy.

Production is cut; workers are laid off. This deepens pessimism and leads to more hoarding of money.

This chain of events looks strikingly similar to our current predicament. Banks aren't lending, businesses are failing, jobs are being lost and - since November - prices are falling.

What to do?

Ben Bernanke, the Federal Reserve chairman, got the nickname "Helicopter Ben" after a 2002 speech in which he argued that the federal government could defeat a deflationary cycle by flooding the economy with money - even if it meant taking up Milton Friedman's suggestion from four decades ago that the government simply drop cash from helicopters.

(You can read the 2002 speech here.)

The Fed has begun doing that - in a way. Its committee that decides these matters has agreed to start pumping more money into the economy.

If deflation gets worse, who knows? Maybe Mr. Bernanke will be manning his helicopter.


4) NYC
People Behaving Poorly May Be the Ones to Save the State From the Poorhouse
December 19, 2008

Here they go again, the politicians, looking to capitalize on human frailty.

With his tax proposals this week, Gov. David A. Paterson joined a long line of New York leaders who have counted on self-wounding, even self-destructive, behavior to help them dig out of budget holes. Mr. Paterson called for a huge tax, 18 percent, on sugary sodas and juice drinks. It's a public health measure, his lieutenants said - you know, to counter the obesity epidemic.

Sure. The $404 million tax haul that the governor expects next year is merely incidental, right? State budget planners are so confident that New Yorkers will keep guzzling sugar-laden soda that they figure the tax will pull in even more money, $539 million, the following year.

"If the governor is really insistent that we're levying this tax because of a public health concern about obesity, that leads me to ask: O.K., where's the fast-food restaurant tax?" said James Parrott, the chief economist and deputy director of the Fiscal Policy Institute, a liberal research group.

Although the institute has taken no official position on the sugar tax, Mr. Parrott said an argument could be made that "there's a public health cost associated with the consumption of sugary drinks." So weaning people from Coke or Pepsi or whatever could save taxpayers money in the long run. (Of course, in the long run we're all dead.)

Still, "if we're going to levy a sugary soda tax, why aren't we levying it on doughnuts and all sorts of other things?" Mr. Parrott said. "There's a question about consistency in that regard."

The same might be said about other taxes that government imposes and activities that it encourages. Many are based on human weakness.

Smoking is bad for you. But if no one smoked, the city and the state would be out a few hundred million dollars every year.

Drinking alcohol more than a bit can be harmful. But government profits from that, too. Mr. Paterson wants to make even more money, an estimated $105 million, by expanding the opportunities for New Yorkers to imbibe. He recommended this week that grocery stores and drugstores be allowed to sell wine - after they pay for licenses to do so.

Gambling is a losing proposition for anyone who plays; the deck is stacked in the house's favor. Gambling addiction is a scourge. Yet the state happily runs a numbers racket. It's called the lottery. Now, Mr. Paterson proposes raking in still more money by expanding the number of Quick Draw outlets and installing hundreds of video slot machines at Belmont Park racetrack.

Make no mistake, the last thing that government wants is for everyone, right this minute, to stop smoking, boozing, gambling and downing those nutritionally empty supersweet sodas. Too much money is at stake. Heavy taxes on cigarettes are a case in point, said Edmund J. McMahon, director of the conservative Empire Center for New York State Policy. The goal is not necessarily to make a bad habit disappear, he said.

"If your program succeeds," Mr. McMahon said, "you not only directly affect your tax revenue, you contribute to the day when the major tobacco companies, whose revenues are underwriting the tobacco bonds you floated a few years ago, go out of business. And then the taxpayers have to underwrite their bonds."

Even Mayor Michael R. Bloomberg - though he is "the truest true believer" on the evil of smoking, in Mr. McMahon's words - likes the money to be made. Three months ago, his administration filed a federal lawsuit to stop stores on nearby Indian reservations from selling cigarettes in bulk to bootleggers. It's all about the bucks. The city is losing about $195 million a year in tax revenue, the mayor said.

By absolutely no coincidence, the New Yorkers who pay these particular taxes tend to be those who can afford them the least. Poor people spend disproportionately on smokes, booze and unhealthy soft drinks, not to mention on the prayer that God will drop everything else and shower lottery millions on them.

These are "habits that are more common among those who have the least amount of political power," said Andrea Batista Schlesinger, executive director of the Drum Major Institute for Public Policy, a liberal but nonpartisan research center in New York. "To do something in the most politically efficient way is to tax or hike the fees of those who have the least power," she said.

Somehow, this brings to mind "Everybody Knows," by the poet-songwriter Leonard Cohen. It goes in part: "Everybody knows the fight was fixed/The poor stay poor, and the rich get rich/That's how it goes/Everybody knows." If you have an iPod, you probably can download it. But remember, if the governor has his way, you'll pay a new tax to do it. That, too, is how it goes.



5) Pentagon Memo
Redefining the Role of the U.S. Military in Iraq
December 22, 2008

WASHINGTON — It is one of the most troublesome questions right now at the Pentagon, and it has started a semantic dance: What is the definition of a combat soldier? More important, when will all American combat troops withdraw from the major cities of Iraq?

The short answers are that combat troops, defined by the military as those whose primary mission is to engage the enemy with lethal force, will have to be out of Iraqi cities by June 30, 2009, the deadline under a recently approved status-of-forces agreement between the United States and Iraq.

The long answers open up some complicated, sleight-of-hand responses to military and political problems facing President-elect Barack Obama.

Even though the agreement with the Iraqi government calls for all American combat troops to be out of the cities by the end of June, military planners are now quietly acknowledging that many will stay behind as renamed “trainers” and “advisers” in what are effectively combat roles. In other words, they will still be engaged in combat, just called something else.

“Trainers sometimes do get shot at, and they do sometimes have to shoot back,” said John A. Nagl, a retired lieutenant colonel who is one of the authors of the Army’s new counterinsurgency field manual.

The issue is a difficult one for Mr. Obama, whose campaign pledge to “end the war” ignited his supporters and helped catapult him into the White House. But as Mr. Obama has begun meeting with his new military advisers — the top two, Defense Secretary Robert M. Gates and Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, are holdovers from the Bush administration — it has become clear that his definition of ending the war means leaving behind many thousands of American troops.

One reason is that Mr. Obama is facing rapidly approaching, and overlapping, withdrawal deadlines, some set by the Bush administration and the Iraqis, and some set by him.

After June 2009 looms May 2010, 16 months after Mr. Obama’s inauguration, the month he set during the campaign to have American combat forces out of Iraq entirely. Next comes December 2011, the deadline in the status-of-forces agreement to have all American troops out of Iraq.

To try to meet those deadlines without risking Iraq’s fragile and relative stability, military planners say they will reassign some combat troops to training and support of the Iraqis, even though the troops would still be armed and go on combat patrols with their Iraqi counterparts. So although their role would be redefined, the dangers would not.

“If you’re in combat, it doesn’t make any difference whether you’re an adviser: you’re risking your life,” said Andrew Krepinevich, a military expert at the Center for Strategic and Budgetary Assessments, a research group. “The bullets don’t have ‘adviser’ stenciled on some and ‘combat unit’ on another.”

There are 146,000 American troops in Iraq, including service and support personnel. Gen. Ray Odierno, the top commander in Iraq, declined to tell reporters this month how many troops might remain in cities after the June 2009 deadline, and said the exact number still had to be negotiated with the Iraqis.

But some experts, like Michael E. O’Hanlon, a senior fellow in at the Brookings Institution, argue that roughly 10,000 American troops should remain in Baghdad after next June, with thousands more in other cities around the country.

For his part, General Odierno made clear that the Iraqis still needed help — and that the United States would hardly disappear. “What I would say is, we’ll still maintain our very close partnership with the Iraqi security forces throughout Iraq, even after the summer,” he told reporters.

Military officials say they can accomplish that by “repurposing” whatever combat troops remain. Officially, a combat soldier is anyone trained in what are called combat-coded military occupation specialties — among them infantry, artillery and Special Forces — to engage the enemy. But combat troops can be given different missions. From the military’s point of view, a combat soldier is not so much what he is called but what he does.

For example, in an area south of Baghdad that was once called the “triangle of death” because of the Sunni insurgents there, a combat brigade of 4,000 to 5,000 soldiers of the 101st Airborne Division has been replaced with what the Army calls a transition task force of 800 to 1,200 troops with the mission of training and advising the Iraqi Army.

“It’s no longer Americans providing the muscle,” Colonel Nagl said. “Now it’s Iraqi patrols with a small group of American advisers tucked inside.”

Either way, no one expects the American presence to end soon, clearly not Defense Secretary Gates. When asked by Charlie Rose in a PBS interview last week how big the American “residual” force would be in Iraq after 2011, Mr. Gates replied that although the mission would change, “my guess is that you’re looking at perhaps several tens of thousands of American troops.”


6) The Printing Press Cure
December 22, 2008

The Federal Reserve as much as admitted last week that lowering the benchmark interest rate — even to zero — would not be powerful enough medicine to revive today’s ailing economy. And so it has opted for the printing-press cure, pledging for the foreseeable future to pump vast sums into banks, other financial firms, businesses and households.

Economic history — of the Great Depression of the 1930s and Japan’s lost decade in the 1990s — suggests that the Fed is doing the right thing. Confronted then, as now, with the twin scourges of deepening recession and incipient deflation, governments did more damage with too little intervention than they would have done with too much.

But that doesn’t make such intervention “good.” It’s a big and unfortunate risk in itself.

Flooding the economy with freshly printed money may prevent a self-reinforcing downward spiral. But it may cause trouble long after the present danger has passed. One reason is that it could cause inflation later. In a worst-case scenario, inflation, or the fear of inflation, could dissuade foreign investors, who finance the United States’ debt, from buying and holding dollars. That, in turn, could provoke a disorderly decline in the currency, sending prices and interest rates sharply higher.

For the Fed, engineering the new rescue programs is a technical challenge. It will have to be remarkably deft in draining the system of excess dollars in a timely way. It will also need to be vigilant for signs that the dollar is being unduly pressured, and be prepared to react.

For Barack Obama, the challenge is one of leadership. As president, Mr. Obama will have to convey optimism without overpromising. He will have to inspire confidence, even in the absence of a dramatic turnaround — which is simply not in the cards. To his credit, Mr. Obama has already warned the American people that conditions will get worse before they get better.

In the attempt to make them better, the Obama administration will first face the question of the size of the stimulus. The latest numbers are in the $700 billion range. The economy certainly needs the help, but Obama officials will have to be mindful of the possible long-term negative effects of their outsized borrowing. They must also ensure that the money is not misused to benefit high-income constituents. To jump-start the economy requires getting money to those who will spend it fast and in full. That includes unemployed workers, low- and middle-income families, and state and local governments.

The stimulus package must also be accompanied by a foreclosure prevention measure. In the campaign, Mr. Obama favored amending the law so that bankrupt homeowners could have their mortgages reworked under court protection. That would let many people keep their homes without burdening taxpayers with the cost of the loan modifications. But Mr. Obama has not yet given details about his next moves. If bankruptcy reform is not an immediate plan, he should target the next $350 billion installment of the $700 billion bailout fund on foreclosure prevention.

While Mr. Obama must continue to level with the American people — the economy is unlikely to turn up until 2010 at the earliest, and even then will probably rebound slowly — his near-term moves will go a long way toward making the burdens yet to come more bearable.


7) Missiles Are Said to Kill 8 in Northwest Pakistan
Filed at 10:18 a.m. ET
December 22, 2008

DERA ISMAIL KHAN, Pakistan (AP) -- Suspected U.S. missile strikes killed eight people Monday in northwest Pakistan, where al-Qaida and Taliban leaders are believed hiding, officials and witnesses said.

The identities of those killed in the two attacks -- the latest in a stepped up American campaign in the lawless region close to the Afghan border -- were not immediately known.

Meanwhile, the government said an al-Qaida-linked terror group was suspected of helping carry out the September suicide attack on the Marriott Hotel in Islamabad.

Interior Ministry chief Rehman Malik's charge against Lashkar-e-Jhangvi was the first time Pakistan has blamed a specific group for the bombing, which killed more than 50 people.

Monday's missiles struck about 5 miles (8 kilometers) apart just south of Wana, the main town in the South Waziristan tribal area, said local security official Bakht Janan. A house and a vehicle were destroyed in the attacks, which killed four people in each location, he said.

Witnesses told The Associated Press that an anti-aircraft gun mounted on a vehicle fired on one of the drones before it launched a missile.

The U.S. has carried out more than 30 missile strikes since August in Pakistan's lawless, semiautonomous tribal areas, targeting al-Qaida and Taliban militants blamed for attacks in Afghanistan.

While the missile strikes have killed scores of militants, Pakistan has criticized them as an infringement of its sovereignty and say it undermines its own battle against extremism.

Most of the missiles are believed launched from unmanned spy planes that take off from Afghanistan. Washington rarely confirms or denies the attacks and has pushed Islamabad to crack down on militants in the tribal areas.

The U.S. Embassy in Islamabad said Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, was in Pakistan Monday to meet with senior government officials.

Mullen arrived from Afghanistan, where he said the U.S. would send up to 30,000 additional troops to the country by summer to fight the resurgent Taliban.

Pakistan has arrested three people in the Sept. 20 Marriott truck bombing, but no one has been formally charged.

Malik told lawmakers that assailants packed explosives into the truck in Jhang town in Punjab province, south of Islamabad. He said the plot was ''assisted'' by Lashkar-e-Jhangvi, but gave no more details on its involvement.

Lashkar-e-Jhangvi is a Sunni Muslim militant group accused of killing hundreds of minority Shiites across Pakistan. Experts say in recent years it has formed links with al-Qaida. The group has been accused of attacks again Westerners in Karachi and two assassination attempts against former Pakistani President Pervez Musharraf in 2003.

Also Monday, Interior Ministry spokesman Shahidullah Baig said an investigation was launched into the theft of a large cache of weapons seized after last year's army assault on the Red Mosque, which left scores of occupying militants dead. The mosque was historically used as a jumping off point for militants en route to the fight in Kashmir.

Shahidullah Baig said 10 police officials, including the head of the Aapbara police station where the weapons were stored, had been arrested.

''The weapons have gone missing from the store, and it was learned recently that it has been happening in phases,'' Baig said.

He would not specify what was missing, but police seized assault rifles, pistols, hand grenades, rockets, rocket launchers and machine guns after the mosque assault in July 2007, a watershed moment in the country's struggle against militancy.


8) More Companies Are Cutting Labor Costs Without Layoffs
December 22, 2008

Even as layoffs are reaching historic levels, some employers have found an alternative to slashing their work force. They’re nipping and tucking it instead.

A growing number of employers, hoping to avoid or limit layoffs, are introducing four-day workweeks, unpaid vacations and voluntary or enforced furloughs, along with wage freezes, pension cuts and flexible work schedules. These employers are still cutting labor costs, but hanging onto the labor.

And in some cases, workers are even buying in. Witness the unusual suggestion made in early December by the chairman of the faculty senate at Brandeis University, who proposed that the school’s 300 professors and instructors give up 1 percent of their pay.

“What we are doing is a symbolic gesture that has real consequences — it can save a few jobs,” said William Flesch, the senate chairman and an English professor.

He says more than 30 percent have volunteered for the pay cut, which could save at least $100,000 and prevent layoffs for at least several employees. “It’s not painless, but it is relatively painless and it could help some people,” he said.

Some of these cooperative cost-cutting tactics are not entirely unique to this downturn. But the reasons behind the steps — and the rationale for the sharp growth in their popularity in just the last month — reflect the peculiarities of this recession, its sudden deepening and the changing dynamics of the global economy.

Companies taking nips and tucks to their work force say this economy plunged so quickly in October that they do not want to prune too much should it just as suddenly roar back. They also say they have been so careful about hiring and spending in recent years — particularly in the last 12 months when nearly everyone sensed the country was in a recession — that highly productive workers, not slackers, remain on the payroll.

At some companies, employees are supporting the indirect wage cuts — at least for now. The downturn hit so hard, with its toll felt so widely through hits on pensions and 401(k) retirement plans and with the future so murky, that employers and even some employees say it is better to accept minor cuts than risk more draconian steps.

The rolls of companies nipping at labor costs with measures less drastic than wholesale layoffs include Dell (extended unpaid holiday), Cisco (four-day year-end shutdown), Motorola (salary cuts), Nevada casinos (four-day workweek), Honda (voluntary unpaid vacation time) and The Seattle Times (plans to save $1 million with a week of unpaid furlough for 500 workers). There are also many midsize and small companies trying such tactics.

To be sure, these efforts are far less widespread than layoffs, and outright pay cuts still appear to be rare. Over all, the average hourly pay of rank-and-file workers — who make up about four-fifths of the work force — rose 3.7 percent from November 2007 to last month, according to the latest Labor Department data.

Watson Wyatt, a consulting firm that tracks compensation trends, published survey data last week that found that 23 percent of companies planned layoffs in the next year, down from 26 percent that said they planned to do so in October. Companies say they are considering other cost cuts, like mandatory holiday shutdowns, salary freezes or cuts, four-day workweeks and reductions of contributions to retirement and health care plans.

Companies seem particularly determined to find alternatives to layoffs in this recession, said Jennifer Chatman, a professor at the Haas School of Business at the University of California, Berkeley. “Organizations are trying to cut costs in the name of avoiding layoffs,” she said. “It’s not just that organizations are saying ‘we’re cutting costs,’ they’re saying: ‘we’re doing this to keep from losing people.’ ”

She said the tactic builds long-term loyalty among workers who are not laid off and spares the company having to compete again to hire and train anew.

That was part of the thinking at Global Tungsten & Powders, a metal plant in Towanda, Pa., whose business has dropped 25 percent from a year ago. The company has already cut overtime and travel, as well as purchases of office supplies and equipment. It is now allowing and indeed encouraging its 1,000 workers to take unpaid furloughs to stave off more drastic cuts.

“We have a very skilled and competent work force and the last thing we want to do is lose them when we’re assuming this economy is going to come back,” said Craig Reider, the company’s director of human resources. Workers, he said, are buying in to the concept.

“In this holiday season, many employees want to support our efforts here to minimize costs,” he said.

In San Francisco, a Web design firm called Hot Studio laid off a handful of workers when the dot-com bubble burst in 2000. But the company’s owner, Maria Guidice, said the tactic was painful, and she did not want to repeat it. This time, her first step is to take away bonuses — for the first time in the company’s 12-year history — and instead give people paid time off over the holidays.

“In 2000, it was like ‘cut the heads,’ ” she said of the ethos of the era. This time, she says, it feels different. “Our No. 1 priority is to keep people employed and to do that we’re going to bank the money and keep it for when we need it,” she said, adding, “I know some people are super bummed, but they understand we’re trying to keep the work force intact.”

Several employees at Hot Studio said they did not mind the policy, particularly as they have heard of layoffs elsewhere in the economy. “People feel they’d much rather have a job in six months than get a bonus right now,” said Jon Littell, a Web designer.

The magnanimous feeling will probably pass, said Truman Bewley, an economics professor at Yale University who has studied what happens to wages during a recession. If the sacrifices look as though they are going to continue for many months, he said, some workers will grow frustrated, want their full compensation back and may well prefer a layoff that creates a new permanence.

“These are feel-good, temporary measures,” he said.

But John Challenger, chief executive of Challenger, Gray & Christmas, a company that tracks layoffs, said employers were being driven now not by compassion but by hard calculations based on data they have never had before. More than ever, he said, companies have used technology to track employee performance and productivity, and in many cases they know that the workers they would cut are productive ones.

“People are measured and ‘metricked’ to a much greater degree,” he said. “So companies know that when they’re cutting an already taut organization, they’re leaving big gaps in the work force.”

At the Pretech Corporation, a concrete manufacturer in Kansas City, Kan., that has not had a layoff in 15 years, part of the rationale is pride. To keep the perfect track record, the company has cut overtime, traded a $5,000 holiday party for an employee-only barbecue lunch, and trimmed its pipe-making operation to four days from five, which allows it to save substantially on heating and electrical costs.

Business is down sharply in some of the company’s divisions, but Pretech is also transforming to take on more work making concrete for infrastructure jobs, like the kind the government might support through stimulus efforts, the company’s co-owner, Bob Bundschuh, said. He said employees seemed to embrace the changes, knowing that a small sacrifice in overtime pay could preserve their job and the health insurance benefits that go with it.

“We’re optimistic about the future,” he said, adding that he thought things could turn around in six months. If so, “We want our guys to stay around because they’re good guys and they work hard.”

David Leonhardt contributed reporting.


9) Horrific: 12-Year Old Girl Beaten By Police for 'Resisting Arrest'
Posted by Jill Filipovic, Feministe
December 21, 2008.

The girl was innocent and did not even fit the description of the alleged criminal the police were looking for.
This is horrific.

It was a little before 8 at night when the breaker went out at Emily Milburn's home in Galveston. She was busy preparing her children for school the next day, so she asked her 12-year-old daughter, Dymond, to pop outside and turn the switch back on.

As Dymond headed toward the breaker, a blue van drove up and three men jumped out rushing toward her. One of them grabbed her saying, "You're a prostitute. You're coming with me."

Dymond grabbed onto a tree and started screaming, "Daddy, Daddy, Daddy." One of the men covered her mouth. Two of the men beat her about the face and throat.

As it turned out, the three men were plain-clothed Galveston police officers who had been called to the area regarding three white prostitutes soliciting a white man and a black drug dealer.

All this is according to a lawsuit filed in Galveston federal court by Milburn against the officers. The lawsuit alleges that the officers thought Dymond, an African-American, was a hooker due to the "tight shorts" she was wearing, despite not fitting the racial description of any of the female suspects. The police went to the wrong house, two blocks away from the area of the reported illegal activity, Milburn's attorney, Anthony Griffin, tells Hair Balls.

After the incident, Dymond was hospitalized and suffered black eyes as well as throat and ear drum injuries.

Three weeks later, according to the lawsuit, police went to Dymond's school, where she was an honor student, and arrested her for assaulting a public servant. Griffin says the allegations stem from when Dymond fought back against the three men who were trying to take her from her home. The case went to trial, but the judge declared it a mistrial on the first day, says Griffin. The new trial is set for February.

"I think we'll be okay," says Griffin. "I don't think a jury will find a 12-year-old girl guilty who's just sitting outside her house. Any 12-year-old attacked by three men and told that she's a prostitute is going to scream and yell for Daddy and hit back and do whatever she can. She's scared to death."

Since the incident more than two years ago, Dymond regularly suffers nightmares in which police officers are raping and beating her and cutting off her fingers, according to the lawsuit.
Griffin says he expects to enter mediation with the officers in early 2009 to resolve the lawsuit.

So plain-clothed police officers beat up a little girl who they were wrongly arresting, and now the girl and her father are the ones in trouble for trying to defend her?

Dymond and her father did exactly what most people would do in that situation -- if anything, Dymond was exceptionally brave in fighting back and yelling for help. The fact that she's being criminalized for it is beyond comprehension.

Apparently the Milburns have filed a lawsuit against the police department. Hopefully they're successful.

This case is especially compelling because it involves an innocent 12-year-old girl who did not fit the description of the alleged criminal the police were looking for, and instead was targeted because she happened to have the bad luck of opening her own front door while wearing shorts and being black. But if the allegations against the police are true, it's troubling on an even deeper level -- because it's an illustration of what sex workers face every day, but are rarely able to fight back against.

Police officers and other people in positions of power can victimize and abuse sex workers with almost no fear of retribution or legal consequence. The police beat up a 12-year-old girl because they thought she was a prostitute, and, if the news report is accurate, have said as much. Had she actually been a prostitute, that treatment would have apparently been acceptable.

The whole story is disgusting. I haven't read anything about the officers being suspended or fired, but I sure hope they're out on their asses for this.

Galveston Chief of Police, Charles Wiley, can be reached by phone at 409-765-3790, or by email at

Tagged as: crime, police, pain, sex work, cops, assholes, brutality, 12-year old girl

Jill Filipovic is a New York-based freelance writer and a law student at NYU. More of her writing is available online at her blog, Feministe.


10) The Evidence Gap
Drug Rehabilitation or Revolving Door?
December 23, 2008

ROSEBURG, Ore. — Their first love might be the rum or vodka or gin and juice that is going around the bonfire. Or maybe the smoke, the potent marijuana that grows in the misted hills here like moss on a wet stone.

But it hardly matters. Here as elsewhere in the country, some users start early, fall fast and in their reckless prime can swallow, snort, inject or smoke anything available, from crystal meth to prescription pills to heroin and ecstasy. And treatment, if they get it at all, can seem like a joke.

“After the first couple of times I went through, they basically told me that there was nothing they could do,” said Angella, a 17-year-old from the central Oregon city of Bend, who by freshman year in high school was drinking hard liquor every day, smoking pot and sampling a variety of harder drugs. “They were like, ‘Uh, I don’t think so.’ ”

She tried residential programs twice, living away from home for three months each time. In those, she learned how dangerous her habit was, how much pain it was causing others in her life. She worked on strengthening her relationship with her grandparents, with whom she lived. For two months or so afterward she stayed clean.

“Then I went right back,” Angella said in an interview. “After a while, you know, you just start missing your friends.”

Every year, state and federal governments spend more than $15 billion, and insurers $5 billion more, on substance-abuse treatment services for some four million people. That amount may soon increase sharply: last year, Congress passed the mental health parity law, which for the first time includes addiction treatment under a federal law requiring that insurers cover mental and physical ailments at equal levels.

Many clinics across the county have waiting lists, and researchers estimate that some 20 million Americans who could benefit from treatment do not get it.

Yet very few rehabilitation programs have the evidence to show that they are effective. The resort-and-spa private clinics generally do not allow outside researchers to verify their published success rates. The publicly supported programs spend their scarce resources on patient care, not costly studies.

And the field has no standard guidelines. Each program has its own philosophy; so, for that matter, do individual counselors. No one knows which approach is best for which patient, because these programs rarely if ever track clients closely after they graduate. Even Alcoholics Anonymous, the best known of all the substance-abuse programs, does not publish data on its participants’ success rate.

“What we have in this country is a washing-machine model of addiction treatment,” said A. Thomas McClellan, chief executive of the nonprofit Treatment Research Institute, based in Philadelphia. “You go to Shady Acres for 30 days, or to some clinic for 60 visits or 60 doses, whatever it is. And then you’re discharged and everyone’s crying and hugging and feeling proud — and you’re supposed to be cured.”

He added: “It doesn’t really matter if you’re a movie star going to some resort by the sea or a homeless person: The system doesn’t work well for what for many people is a chronic, recurring problem.”

In recent years state governments, who cover most of the bill for addiction services, have become increasingly concerned, and some, including Delaware, North Carolina, and Oregon, have sought ways to make the programs more accountable. The experience of Oregon — which has taken the most direct and aggressive action — illustrates both the promise and perils of trying to inject science into addiction treatment.

Evidence-Based Treatments

In 2003 the Oregon Legislature mandated that rehabilitation programs receiving state funds use evidence-based practices — techniques that have proved effective in studies. The law, phased in over several years, was aimed at improving services so that addicts like Angella would not be doomed to a lifetime of rehab, repeating the same kinds of counseling that had failed them in the past — or landing in worse trouble.

“You can get through a lot of programs just by faking it,” said Jennifer Hatton, 25, of Myrtle Creek, Ore., a longtime drinker and drug user who quit two years ago, but only after going to jail and facing the prospect of losing her children. “That’s what did it for me — my kids — and I wish it didn’t have to come to that.”

When practiced faithfully, evidence-based therapies give users their best chance to break a habit. Among the therapies are prescription drugs like naltrexone, for alcohol dependence, and buprenorphine, for addiction to narcotics, which studies find can help people kick their habits.

Another is called the motivational interview, a method intended to harden clients’ commitment upon entering treatment. In M.I., as it is known, the counselor, through skilled questioning, has the addict explain why he or she has a problem, and why it is important to quit, and set goals. Studies find that when clients mark their path in this way — instead of hearing the lecture from a counselor, as in many traditional programs — they stay in treatment longer.

Psychotherapy techniques in which people learn to expect and tolerate restless or low moods are also on the list. So is cognitive behavior therapy, in which addicts learn to question assumptions that reinforce their habits (like “I’ll never make friends who don’t do drugs”) and to engage their nondrug activities and creative interests.

For Angella, this kind of counseling made a difference. She spent several months in a program run by Adapt, an addiction treatment center here in Roseburg, a small city about 175 miles south of Portland.

In treatment, she said, she learned how to “just be with, and feel” bad moods without turning to drink or drugs; and to throw herself into creative projects like collage and painting. The program has helped her reconnect with her father and to enroll in college beginning in January.

“I want to be a teacher, and someone at the program is advising me on that,” she said in an interview. “That’s the plan, to just move out and away from my old life.”

A friend of hers in the program, Alex, a 16-year-old from Roseburg, said that the therapy that helped him monitor his own emotional ups and downs, without being swept away by them. The counselors “are always asking about our stress level, our anger, so you become more aware and have a better idea what to do with it,” he said.

Almost 54 percent of Oregon’s $94 millionbudget for addiction treatment services now goes to programs that deploy evidence-based techniques, according to a state report completed last month. The estimated rate before the mandate was 25 to 30 percent. The state has not yet analyzed the impact of this change on clients.

“Before the mandate, most programs had some evidence-based practices, and since then there has been a lot more interest and awareness of them,” said Traci Rieckmann, a public health researcher at Oregon Health and Science University, who is following the policy implementation with support from the Robert Wood Johnson Foundation and the National Institutes of Health.

Culture Clash

Yet interest and awareness may not translate into good practice, and Dr. Rieckmann says it is not at all clear how many rehabilitation programs claiming to use evidence-based techniques actually do so faithfully. About 400 programs receive state money, and most of them are small, rural outfits that are already stretched to provide counseling, to say nothing of paying for extensive training.

“You’re talking about therapies, like cognitive behavior therapy, that take time to learn,” said John Gardin, the behavioral health and research director at Adapt in Roseburg, who travels the country to teach the skills. “Most places don’t have a person like me to do that training, so they’re getting two to three days of training, if that; and that’s just not enough time to get it.”

In studies looking at hundreds of programs nationwide, researchers have found a similar gap between what programs may want to do, and what they’re able to do. “For instance, most programs don’t have an M.D. on staff,” said Aaron Johnson, a sociologist at the University of Georgia who has led many of the studies. “Without that, of course, you can’t prescribe any medications.”

Tim Hartnett, the executive director of a Portland treatment program called CODA Inc., which does its own research on patient outcomes, said that the mandate had raised the level of conversation statewide, but that true reform would mean “an integrated system that tracks clients as they move from residential to out-patient treatment, and that defines clear targets” for what a person should expect from each kind of program.

“Our goal at CODA is to create a system of care that uses evidence based practices at just the right does as just the right time,” Mr. Hartnett said. “As with many chronic diseases, figuring out dosage and timing are critical.”

For some addicts, a standard program may not help at all, according to Anne Fletcher, who for her book, “Sober For Good,” interviewed 222 men and women who’d been clean for at least five years. “A lot of these people overcame an alcohol problem on their own, or with the help of an individual therapist,” Ms. Fletcher said.

To complicate matters in Oregon, the state mandate has stirred a kind of culture clash between those who want reform — academic researchers, state officials — and veteran counselors working in the trenches, many of whom have beaten addictions of their own and do notappreciate outsiders telling them how to do their jobs.

“I’m a counselor, and I’d be defensive, too: ‘What do you mean, all this stuff I’ve been doing my entire life is wrong?’ ” said Brian Serna, director of outpatient services at Adapt, who has traveled the state to monitor the use of scientific practices. “So the challenge is to build a bridge between what the science says is effective and what people are already doing.”

One way to do that, some experts now believe, is to combine evidence-based practice with “practice-based evidence” — the results that programs and counselors themselves can document, based on their own work. In 2001 the Delaware Division of Substance Abuse and Mental Health began giving treatment programs incentives, or bonuses, if they met certain benchmarks. The clinics could earn a bonus of up to 5 percent, for instance, if they kept a high percentage of addicts coming in at least weekly and insured that those clients met their own goals, as measured both by clean urine tests and how well they functioned in everyday life, in school, at work, at home.

By 2006, the state’s rehabilitation programs were operating at 95 percent capacity, up from 50 percent in 2001; and 70 percent of patients were attending regular treatment sessions, up from 53 percent, according to analysis of the policy published last summer in the journal Health Policy.

“We basically gave them a list of evidence-based practices and told them to pick the ones they wanted to use,” said Jack Kemp, former director of substance abuse services for Delaware, in an interview. “It was up to them to decide what to use.”

For those who are trying not to use, it doesn’t much matter how rehab services are improved — only that it happens in time. “Honestly you just don’t care how or why something works for you,” said Ms. Hatton, the 25-year-old from Myrtle Creek, Ore. “Just that it does.”


11) Reeling South Carolina City Is a Snapshot of Economic Woes
December 22, 2008

COLUMBIA, S.C. — Even before the job fair opens, the line snakes into the parking lot of the state fairground, a muted parade of lives derailed by layoffs.

“It kills me, it eats me up inside,” said Raymond Vaughn, who has been out of work for seven months, since he lost his job as a window installer. His fiancée now pays the bills. “I go into this fantasy world where I’m like, I’m in the wrong life and I’m actually a millionaire. It really bothers me I can’t do the things I’d like for her. Sometimes you get where you feel less than a man.”

As the American economy sinks deeper into one of the more punishing recessions since the Depression, frustration and fear color the national conversation.

This city in the center of South Carolina is an ideal listening post. According to a range of indicators assembled by Moody’s — from job growth to change in household worth — this metropolitan area came closer than any other to being a microcosm of the nation over the last decade.

This is now an unfortunate distinction. Some 533,000 jobs disappeared from the economy in November, the worst month since 1974. In South Carolina, a government panel is predicting that the state’s unemployment rate could reach 14 percent by the middle of next year.

No speculative real estate bubble can explain what is happening in this metropolitan area of roughly 700,000 people. Neither the brick Georgian homes in the city’s core nor the ranch-style houses on the suburban fringes rose or fell much in value. The financial wizards of Wall Street seem far from the palmetto-dotted campus of the University of South Carolina and the domed state capitol downtown.

Yet as the toll continues to mount from an era of financial recklessness — as banks cut credit from households and businesses, reinforcing austerity — the damage has spread here, choking economic activity at places ranging from shopping malls to factories.

“This was not of our doing,” said Doug Woodward, an economist at the University of South Carolina. “We just got swept up in the crisis of confidence.”

The Carolinas may conjure thoughts of textile mills and tobacco fields, but Columbia has a diverse economy. The state is a major employer. So is the university, along with hospitals and banks. The Fort Jackson Army base employs 9,200 people. United Parcel Service has a regional hub here. Michelin operates a tire factory next door in Lexington County. The Computer Science Corporation develops software north of the city.

Early in the year, layoffs were concentrated among factory and warehouse workers. “Now, they run the gamut,” said Jessica Horsely, a case manager at the local employment office. “You see a heightened sense of desperation. People are just grasping for anything.”

President-elect Barack Obama has pledged to spend as much as $775 billion on his economic plan, including infrastructure projects like bridges, roads and classrooms, to put people back to work.

Columbia’s mayor, Bob Coble, is consumed with capturing some of those dollars for his city. He has assembled a list of ready-to-go projects totaling $140 million that he said could generate construction jobs and propel further economic development.

Mr. Coble, a Democrat who has been mayor for 18 years, has in mind the redevelopment of North Main Street, a bedraggled corridor of hard-luck retailers that lacks sidewalks in many spots, with exposed power lines dipping down to cracked pavement. That project is already under way, putting down sidewalks and burying power lines in a $19 million first phase. An additional $54 million could complete it.

Similar projects have restored shine to Columbia’s downtown, which was in a similar state of decay a decade ago, and nurtured the Vista neighborhood, a collection of brick warehouses transformed into trendy eateries.

The mayor has also been focused on expanding the so-called Innovista project, a campus developed by the university centered on research in areas like hydrogen-powered fuel cells and biotechnology. The aim is to cluster research labs, private companies and condominiums.

“This will be a once in a generation opportunity to transform a city with projects that have been on the books,” the mayor said over breakfast at a newly opened downtown Sheraton hotel set in an old bank whose original vault has become a cozy martini bar. “These are not bridges to nowhere.”

Yet questions confront the notion of putting people to work through federal largess. South Carolina’s governor, Mark Sanford, a Republican, has been an ardent opponent of federal aid for states, branding it pork barrel spending. If the money is delivered to state agencies like the Department of Transportation, which has its own list of priorities, Columbia might be disappointed.

Despite the attractiveness of Main Street, new sidewalks have drawn few retailers. North Main Street runs through a largely poor area, making it even less likely that improvements will attract business.

Meanwhile, the recession intensifies.

At the state fairgrounds, Lori Harris, 47, waited for the job fair to open. A year has passed since she graduated from college with an associate degree in medical assisting, yet she has been unable to find a decent job.

Ms. Harris previously ran her own house-painting company, but opted for a more stable career in a growing field. She saw an ad for the degree program on television: “Come become a medical assistant!”

Now, such talk seems farcical. She is paying $95 a month toward $23,000 in student loan debt. She is living with her boyfriend, who is supporting her, not always cheerfully. She has no health insurance and cannot see a specialist for a torn rotator cuff and recently applied for food stamps.

“I tried to better myself,” she said, “and I’m getting nowhere.”

She was offered one job, as a medical technician dispensing pills to patients. The pay was $7.50 an hour.

“Forget it,” she said. “I was like, ‘Is it worth going to college? Did I waste my time?’”

She wondered if her age explains the rejections. Or her Boston accent. Or the smell of her cigarette smoking.

“It’s getting really discouraging,” she said.

As the doors opened, people filed in quietly, entering a dark warehouselike space with concrete floors.

“You want a job that makes you smile,” proclaimed a placard at a booth for Wendy’s, the fast food chain. Another sign advertised the benefits for counter workers, among them: “free uniforms.”

A Border Patrol officer stood in his olive green uniform, his laptop running video footage of Latinos running frantically through garbage strewn patches of desert, chased by helicopters and jeeps. Raymond Vaughn stopped and inquired about a job.

“You will have to relocate to the southwest border,” said the recruiter, Michael Day.

The entry level pay was $36,000 a year. But the Border Patrol was looking for people no older than 40. Mr. Vaughn was 43.

At the window install job, Mr. Vaughn made $11.50 an hour. Since his layoff, he has been living on an unemployment check of $221 a week, and on the wages his fiancée brings home from her job as a hospital receptionist. He has applied for more jobs than he can recall. “They always say they’ll call me,” he said. “They never do.”

A former high school track star, Mr. Vaughn carried himself with pride. Yet as the months passed and his car deteriorated without any cash for repairs, as his loose-handled cooking pots went unreplaced, he was sinking. Among African-Americans, the national unemployment rate is above 11 percent, with Mr. Vaughn now part of that number.

“Inside of me, I always felt like I was going to be greater than I am now,” he said.

The job fair brought more disappointment. Only one job seemed possible, a technician position at an air-conditioning company. The starting salaries were less than $10 an hour.

“Even if I work for this, I’m taking a cut in pay,” he said. “But something’s better than nothing.”

At a booth for Amcol, a collection service that specializes in overdue medical bills, a recruiter made an aggressive pitch.

“The more you do in collections,” he said, “the more you make.”

Mary Bamou waited in line, holding copies of her résumé. She has been out of work for three months, ever since she was briefly hospitalized, ending her minimum wage job as a food service worker at the university. Now, she is getting by on an unemployment check of less than $100 a week.

Ms. Bamou, 50, has experience in medical billing, a skill she figured may translate to medical collections.

“Calling people up in these times is not going to be an easy task,” she said. “It’s a job. Worst thing they can do to me after cussing me out is to hang up.”

Frank Kelly, 52, surveyed the booths and wondered how much further this slide would go.

In the 1990s, he wrote computer manuals for I.B.M. in upstate New York, earning $65,000 a year. After he lost that job, he spent a dozen years supervising a lab that tested raw materials at a brake pad factory in nearby Orangeburg, S.C., where he made more than $55,000 a year. In October, amid the rapid deterioration of the Detroit automakers, Mr. Kelly was laid off.

At the job fair, he was standing in line in a suit and tie, waiting to apply for a position at a pet food processor.

He and his wife have been living off her income as an accountant for a food distributor. One of her duties is to check the creditworthiness of customers, which gives her an uncomfortable view.

“She gets to see everybody going downhill,” Mr. Kelly said.


12) Budget Office Sees Hurdles in Financing Health Plans
December 19, 2008

WASHINGTON — The Congressional Budget Office said Thursday that many of the health care proposals championed by President-elect Barack Obama and other Democrats would carry a high price tag and would generate only modest savings.

The budget office, an influential voice in the work of Congress, analyzed 115 options, including proposals to expand coverage and slow the growth of health spending.

Some of the options, including proposals to increase taxes on cigarettes and nondiet soft drinks, are sure to meet stiff political opposition.

One bright spot in a generally bleak picture was the estimate of potential savings from a requirement for doctors and hospitals to use health information technology, including electronic medical records, as a condition of participating in Medicare.

Such a requirement could save the federal government $7 billion in the first five years and a total of $34 billion over 10 years, by reducing medical errors and avoiding unnecessary tests and procedures, the budget office said. It “would also lower health insurance premiums in the private sector,” the report said.

Without action by Congress, the report said, health costs will continue to soar, the number of people without insurance will rise by nearly one million a year, to a total of 54 million in 2019, and spending on health care will increase to 25 percent of the gross domestic product in 2025, up from 16 percent in 2007.

In keeping with its duty to provide objective, impartial analysis, the budget office did not endorse any options, but it fleshed out many ideas circulating on Capitol Hill.

Democrats and many Republicans say they will make a serious effort to overhaul the health care system in 2009. Those changes are essential for economic recovery, they say.

But Mr. Obama and other Democrats have not been precise about the cost of their proposals, nor have they said in detail how they would pay for them. One of the Democrats’ favorite proposals, rolling back tax cuts for high-income people, is already scheduled to occur in 2011, so, under the bookkeeping rules used by Congress, it would not produce a windfall of new revenue.

Lawmakers from both parties said they would pay close attention to the cost of new federal subsidies for health coverage because these subsidies — unlike the one-time bailouts for banks and other financial institutions — would be recurring federal obligations for years to come.

Requiring employers to provide health insurance to their employees or pay a fee to the federal government would bring in $47 billion of new federal revenue in the next 10 years, the report said.

A proposal to establish a national insurance pool for people who cannot obtain coverage on their own in the individual market would cost $16 billion in the next decade, it said.

Mr. Obama and many other Democrats want the government to negotiate with drug manufacturers to get lower prices for Medicare beneficiaries.

The Congressional Budget Office said such negotiations “would produce small if any savings” because the government would not have enough leverage to secure significant discounts beyond those already obtained by private insurance companies that manage the Medicare drug benefit.

But the budget office said Medicare could save $110 billion in the next 10 years if Congress simply imposed a form of price controls, requiring drug makers to provide the government with a 15 percent rebate, or discount, on brand-name drugs covered by the new Part D of Medicare.

Eliminating a notorious gap in Medicare coverage of prescription drugs, known as a doughnut hole, would cost more than $130 billion over 10 years, the report said.

Research to compare the effectiveness of different drugs and treatments might help doctors and patients make better decisions.

But it would not save the government much — $1.3 billion in the next decade — and it would reduce total spending on health care in those years by less than one-tenth of 1 percent, the budget office said.

The federal government could save $12 billion in the next decade if it established a procedure for approval of generic versions of expensive biotechnology drugs, the report said. It did not estimate the additional savings for consumers and employers, which could be substantial.

The report sets forth an elaborate proposal that would allow doctors and hospitals to share in the savings if they improve the quality and reduce the cost of care for people on Medicare.

Under the proposal, Medicare would pay bonuses to groups of doctors who met certain performance measures.

In response to such financial incentives, the report said, doctors would become more efficient and would reduce “the volume and intensity of services provided to their patients,” saving $5 billion for Medicare in the next decade.

In one particularly sobering chapter, the report notes that, under existing law, Medicare will cut fees paid to doctors by 21 percent in 2010 and by about 5 percent in each of the next few years.

To avoid such cuts and freeze payment rates at their 2009 levels would cost the government $318 billion over the next decade, the report said.


13) $1.6 billion went to bailed-out bank execs
Records show bonuses, chauffeurs, health club benefits, financial planning
updated 10:09 a.m. PT, Mon., Dec. 22, 2008

Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.

Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.

The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.

Rep. Barney Frank, chairman of the House Financial Services committee and a long-standing critic of executive largesse, said the bonuses tallied by the AP review amount to a bribe "to get them to do the jobs for which they are well paid in the first place.

"Most of us sign on to do jobs and we do them best we can," said Frank, a Massachusetts Democrat. "We're told that some of the most highly paid people in executive positions are different. They need extra money to be motivated!"

The AP compiled total compensation based on annual reports that the banks file with the Securities and Exchange Commission. The 116 banks have so far received $188 billion in taxpayer help. Among the findings:

The average paid to each of the banks' top executives was $2.6 million in salary, bonuses and benefits.
Lloyd Blankfein, president and chief executive officer of Goldman Sachs, took home nearly $54 million in compensation last year. The company's top five executives received a total of $242 million.
This year, Goldman will forgo cash and stock bonuses for its seven top-paid executives. They will work for their base salaries of $600,000, the company said. Facing increasing concern by its own shareholders on executive payments, the company described its pay plan last spring as essential to retain and motivate executives "whose efforts and judgments are vital to our continued success, by setting their compensation at appropriate and competitive levels." Goldman spokesman Ed Canaday declined to comment beyond that written report.

The New York-based company on Dec. 16 reported its first quarterly loss since it went public in 1999. It received $10 billion in taxpayer money on Oct. 28.

Even where banks cut back on pay, some executives were left with seven- or eight-figure compensation that most people can only dream about. Richard D. Fairbank, the chairman of Capital One Financial Corp., took a $1 million hit in compensation after his company had a disappointing year, but still got $17 million in stock options. The McLean, Va.-based company received $3.56 billion in bailout money on Nov. 14.
John A. Thain, chief executive officer of Merrill Lynch, topped all corporate bank bosses with $83 million in earnings last year. Thain, a former chief operating officer for Goldman Sachs, took the reins of the company in December 2007, avoiding the blame for a year in which Merrill lost $7.8 billion. Since he began work late in the year, he earned $57,692 in salary, a $15 million signing bonus and an additional $68 million in stock options. Like Goldman, Merrill got $10 billion from taxpayers on Oct. 28.
The AP review comes amid sharp questions about the banks' commitment to the goals of the Troubled Assets Relief Program (TARP), a law designed to buy bad mortgages and other troubled assets. Last month, the Bush administration changed the program's goals, instructing the Treasury Department to pump tax dollars directly into banks in a bid to prevent wholesale economic collapse.

The program set restrictions on some executive compensation for participating banks, but did not limit salaries and bonuses unless they had the effect of encouraging excessive risk to the institution. Banks were barred from giving golden parachutes to departing executives and deducting some executive pay for tax purposes.

Banks that got bailout funds also paid out millions for home security systems, private chauffeured cars, and club dues. Some banks even paid for financial advisers. Wells Fargo of San Francisco, which took $25 billion in taxpayer bailout money, gave its top executives up to $20,000 each to pay personal financial planners.

At Bank of New York Mellon Corp., chief executive Robert P. Kelly's stipend for financial planning services came to $66,748, on top of his $975,000 salary and $7.5 million bonus. His car and driver cost $178,879. Kelly also received $846,000 in relocation expenses, including help selling his home in Pittsburgh and purchasing one in Manhattan, the company said.

Goldman Sachs' tab for leased cars and drivers ran as high as $233,000 per executive. The firm told its shareholders this year that financial counseling and chauffeurs are important in giving executives more time to focus on their jobs.

JPMorgan Chase chairman James Dimon ran up a $211,182 private jet travel tab last year when his family lived in Chicago and he was commuting to New York. The company got $25 billion in bailout funds.

Banks cite security to justify personal use of company aircraft for some executives. But Rep. Brad Sherman, D-Calif., questioned that rationale, saying executives visit many locations more vulnerable than the nation's security-conscious commercial air terminals.

Sherman, a member of the House Financial Services Committee, said pay excesses undermine development of good bank economic policies and promote an escalating pay spiral among competing financial institutions — something particularly hard to take when banks then ask for rescue money.

He wants them to come before Congress, like the automakers did, and spell out their spending plans for bailout funds.

"The tougher we are on the executives that come to Washington, the fewer will come for a bailout," he said.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


14) Ariz. police say they are prepared as War College warns military must prep for unrest; IMF warns of economic riots
Phoenix Business Journal - by Mike Sunnucks
Wednesday, December 17, 2008

A new report by the U.S. Army War College talks about the possibility of Pentagon resources and troops being used should the economic crisis lead to civil unrest, such as protests against businesses and government or runs on beleaguered banks.

“Widespread civil violence inside the United States would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security,” said the War College report.

The study says economic collapse, terrorism and loss of legal order are among possible domestic shocks that might require military action within the U.S.

International Monetary Fund Managing Director Dominique Strauss-Kahn warned Wednesday of economy-related riots and unrest in various global markets if the financial crisis is not addressed and lower-income households are hurt by credit constraints and rising unemployment.

U.S. Sen. James Inhofe, R-Okla., and U.S. Rep. Brad Sherman, D-Calif., both said U.S. Treasury Secretary Henry Paulson brought up a worst-case scenario as he pushed for the Wall Street bailout in September. Paulson, former Goldman Sachs CEO, said that might even require a declaration of martial law, the two noted.

State and local police in Arizona say they have broad plans to deal with social unrest, including trouble resulting from economic distress. The security and police agencies declined to give specifics, but said they would employ existing and generalized emergency responses to civil unrest that arises for any reason.

“The Phoenix Police Department is not expecting any civil unrest at this time, but we always train to prepare for any civil unrest issue. We have a Tactical Response Unit that trains continually and has deployed on many occasions for any potential civil unrest issue,” said Phoenix Police spokesman Andy Hill.

“We have well established plans in place for such civil unrest,” said Scottsdale Police spokesman Mark Clark.

Clark, Hill and other local police officials said the region did plenty of planning and emergency management training for the Super Bowl in February in Glendale.

“We’re prepared,” said Maricopa County Sheriff Deputy Chief Dave Trombi citing his office’s past dealings with immigration marches and major events.

Super Bowl security efforts included personnel and resources from the U.S. Department of Homeland Security and U.S. military’s Northern Command, which coordinated with Arizona officials. The Northern Command was created after 9/11 to have troops and Defense Department resources ready to respond to security problems, terrorism and natural disasters.

Northern Command spokesman Michael Kucharek and Arizona Army National Guard Major. Paul Aguirre said they are not aware of any new planning for domestic situations related to the economy.

Nick Dranias, director of constitutional government at the libertarian Goldwater Institute, said a declaration of marital law would be an extraordinary event and give military control over civilian authorities and institutions. Dranias said the Posse Comitatus Act restricts the U.S. military’s role in domestic law enforcement. But he points to a 1994 U.S. Defense Department Directive (DODD 3025) he says allows military commanders to take emergency actions in domestic situations to save lives, prevent suffering or mitigate great property damage.

Dranias said such an emergency declaration could worsen the economic situation and doubts extreme measures will been taken. “I don’t think it’s likely. But it’s not impossible,” he said.

The economy is in recession. Consumer spending is down, foreclosures are up and a host of businesses are laying off workers and struggling with tight credit and the troubled housing and financial markets. The U.S. Federal Reserve Bank and U.S. Treasury Department have pumped more than $8.5 trillion into the economy via equity purchases of bank stocks, liquidity infusions, Wall Street and bank bailouts and taxpayer rebates. U.S. automakers are seeking more than $14 billion in federal loans with fears they could fall into bankruptcy without a bailout. The U.S. housing and subprime lending-induced recession also has hit economies in Europe, Japan and China.

Gov. Janet Napolitano’s office declined comment on emergency planning and possible civil unrest. Napolitano is president-elect Barack Obama’s pick for secretary of Homeland Security, an agency that oversees airport security, disaster response, border security, customs and anti-terrorism efforts.

As governor, Napolitano sent National Guard troops to Palo Verde Nuclear Generating Station in 2003 in response to terrorism threats.

Glendale Police spokesman Jim Toomey said the West Valley suburb developed new emergency plans with the approach of Y2K computer changeovers leading up to the year 2000 and police have updated those plans several times including after 9/11. Toomey said strategies to deal with public unrest usually involve deploying personnel and equipment to deal with specific incidents while still providing usual services.


15) Home Sales in November Fell at Faster Pace Than Expected
December 24, 2008

Home sales declined dramatically last month and housing prices posted their sharpest decline in four decades as a rapidly slowing economy discouraged many potential buyers from tip-toeing into the market.

Sales of existing homes declined 8.6 percent last month, to a seasonally adjusted rate of 4.49 million, according to the National Association of Realtors, a trade association. The median price of a home fell 13 percent in November , to $181,300 from $208,000 a year ago. That was the lowest price since February 2004.

“They’re about as god-awful as they can get,” said Robert Barbera, chief economist at ITG. “This is pretty breathtaking stuff.”

The troubles plaguing the housing market, which is at the heart of America’s financial crisis, are only multiplying as the broader economy deteriorates. Even though mortgage rates dropped after the Federal Reserve slashed interest rates to record lows near zero percent, economists said that housing would continue to lag as unemployment increases and the spiral of slumping consumer spending and waning industrial growth continues.

The economy was shrinking in the summer and corporate profits were falling even before the financial crisis struck with full force. On Tuesday, the Commerce Department reported that the gross domestic product, the broadest measure of the economy, declined at an annual rate of 0.5 percent in the third quarter as corporate profit fell 1.2 percent.

Analysts are forecasting that those declines will be followed by much larger decreases this quarter as the longest recession in a quarter century gains intensity.

The pool of unsold homes grew slightly to 4.2 million last month. At the current sales rate, it would take 11 months to burn off the excess inventory, which is up from a 10.3-month supply in October.

The Commerce Department also reported that new home sales dropped to a seasonally adjusted annual rate of 407,000 in November, from a downwardly revised rate of 419,000 in October.

Housing values have plummeted since the peak of the market in July 2006, when the median home price was $230,200. But the housing bubble burst, sales declined, credit dried up and a flood of foreclosed homes hit the market, a toxic combination of events that pulled median prices down 21 percent to their November levels.

Still, some economists said that home prices will fall even farther before they dip low enough to entice potential home buyers. Joshua Shapiro, chief United States economist at MFR, said that some parts of the country may only be halfway through such a retrenchment.

“You need to have a correction, you need to have an adjustment,” Mr. Shapiro said. “The faster it happens, the better.”

Lawrence Yun, chief economist of the National Association of Realtors, said that 45 percent of all home sales were so-called “distressed sales,” meaning that the sellers faced foreclosure, or they were forced to sell their home for less than the value of the mortgage. That was slightly higher than the previous month.

“It’s probably the largest price drop since the Great Depression,” Mr. Yun said. “There needs to be some measure to counter this pessimism. Without housing market stabilization, it’ll be very difficult for the economy to recover.”

That trend is especially pronounced in regions of the country hit hardest by housing’s boom and bust. In parts of Southern California, more than half of all houses sold in November had gone through foreclosure at some point in the last 12 months, according to MDA DataQuick, a real-estate research firm.

“Outside of distressed properties, the market is nonexistent almost,” said Frederick Cannon, an analyst at Keefe, Bruyette & Woods. “You don’t want to sell into it. Most people are saying, ‘I’ll just stay in this house.’ ”

The Commerce Department said that the median price of a new home sold in November was $220,400, down 11.5 percent from the period a year ago. It was the biggest year-over-year price decline since a 12.7 percent drop in March.


16) A Race to the Bottom
Op-Ed Columnist
December 23, 2008

Toward the end of an important speech in Washington last month, the president of the American Federation of Teachers, Randi Weingarten, said to her audience:

“Think of a teacher who is staying up past midnight to prepare her lesson plan... Think of a teacher who is paying for equipment out of his own pocket so his students can conduct science experiments that they otherwise couldn’t do... Think of a teacher who takes her students to a ‘We, the People’ debating competition over the weekend, instead of spending time with her own family.”

Ms. Weingarten was raising a cry against the demonizing of teachers and the widespread, uninformed tendency to cast wholesale blame on teachers for the myriad problems with American public schools. It reminded me of the way autoworkers have been vilified and blamed by so many for the problems plaguing the Big Three automakers.

But Ms. Weingarten’s defense of her members was not the most important part of the speech. The key point was her assertion that with schools in trouble and the economy in a state of near-collapse, she was willing to consider reforms that until now have been anathema to the union, including the way in which tenure is awarded, the manner in which teachers are assigned and merit pay.

It’s time we refocused our lens on American workers and tried to see them in a fairer, more appreciative light.

Working men and women are not getting the credit they deserve for the jobs they do without squawking every day, for the hardships they are enduring in this downturn and for the collective effort they are willing to make to get through the worst economic crisis in the U.S. in decades.

In testimony before the U.S. Senate this month, the president of the United Auto Workers, Ron Gettelfinger, listed some of the sacrifices his members have already made to try and keep the American auto industry viable.

Last year, before the economy went into free fall and before any talk of a government rescue, the autoworkers agreed to a 50 percent cut in wages for new workers at the Big Three, reducing starting pay to a little more than $14 an hour.

That is a development that the society should mourn. The U.A.W. had traditionally been a union through which workers could march into the middle class. Now the march is in the other direction.

Mr. Gettelfinger noted that his members “have not received any base wage increase since 2005 at G.M. and Ford, and since 2006 at Chrysler.”

Some 150,000 jobs at General Motors, Ford and Chrysler have vanished outright through downsizing over the past five years. And like the members of Ms. Weingarten’s union (and other workers across the country, whether unionized or not), the autoworkers are prepared to make further sacrifices as required, as long as they are reasonably fair and part of a shared effort with other sectors of the society.

We need some perspective here. It is becoming an article of faith in the discussions over an auto industry rescue, that unionized autoworkers should be taken off of their high horses and shoved into a deal in which they would not make significantly more in wages and benefits than comparable workers at Japanese carmakers like Toyota.

That’s fine if it’s agreed to by the autoworkers themselves in the context of an industry bailout at a time when the country is in the midst of a financial emergency. But it stinks to high heaven as something we should be aspiring to.

The economic downturn, however severe, should not be used as an excuse to send American workers on a race to the bottom, where previously middle-class occupations take a sweatshop’s approach to pay and benefits.

The U.A.W. has been criticized because its retired workers have had generous pensions and health coverage. There’s a horror! I suppose it would have been better if, after 30 or 35 years on the assembly line, those retirees had been considerate enough to die prematurely in poverty, unable to pay for the medical services that could have saved them.

Randi Weingarten and Ron Gettelfinger know the country is going through a terrible period. Their workers, like most Americans, are already getting clobbered and worse is to come.

But there is no downturn so treacherous that it is worth sacrificing the long-term interests — or, equally important — the dignity of their members.

Teachers and autoworkers are two very different cornerstones of American society, but they are cornerstones nonetheless. Our attitudes toward them are a reflection of our attitudes toward working people in general. If we see teachers and autoworkers as our enemies, we are in serious need of an attitude adjustment.


17) The 10 Greediest People of 2008
By Sam Pizzigati, Too Much: A Commentary on Excess and Inequality
Posted on December 23, 2008, Printed on December 23, 2008

This time of year always seems to bring a never-ending barrage of "top ten" lists. The year's top ten movies, the top ten books, the top ten news stories, and on and on. Here at Too Much we've decided to join in on the action -- with our very own list of America's top ten greediest.

We probably couldn't have picked a better year than 2008 to so "honor" our most avaricious. This year's stunning economic meltdown has fixed the attention of our entire nation -- and world -- on the grasping antics of those who yearn for ever more than they could rationally ever need.

But this year also presents enormous challenges for anyone bold enough to rank the greedy. With so much greed out there, how could we possibly limit our list to a mere ten?

The latest greed explosion to hit the headlines -- the $50 billion Bernie Madoff Ponzi scheme -- illustrates just how difficult a task ranking the greedy can be.

To whom in this scandal should we award the most greed points? Bernie Madoff himself, the 70-year-old who scammed his wealthy friends and charities to keep up his credentials as a Wall Street investing "genius" -- and maintain a $6 million pad in Manhattan, a waterfront mansion in Palm Beach, and a weekend getaway on Long Island?

Or should those greed points go instead to the ever-so-sophisticated hedge fund "middlemen" like Walter Noel, who built a five-manse fortune by steering clients to Madoff and charging them tens of millions in "due diligence" fees for the steering.

Or should the greed points go to Madoff's investors themselves, the swells who pay $250,000 a year for the privilege of belonging to a swanky country club?

So many choices! How about James Cayne, the Bear Stearns CEO who rode toxic securities into billionairedom? Or Angelo Mozilo, who took the same ride at Countrywide Financial, spreading suffering to subprimed families all along the way?

In the end, we came to realize, the size of the fortune alone doesn't determine greed. It's the thought that counts. In that holiday spirit, we hope you find our top ten greedy list of some interest -- and greed-busting inspiration.

10: Dwight Schar

Any list of 2009's greediest has to start, of course, with the power-suits who pumped up -- and profited ever so lavishly from -- the now-burst housing bubble. In November, Wall Street Journal researchers scoured the records of firms that build and finance housing and found 15 top executives who have pocketed, "in cash compensation and proceeds from stock sales," at least $100 million over the past five years.

Among the fortunate 15: Dwight Schar, the chair of homebuilding giant NVR Inc. The 66-year-old Schar has cleared $625 million since 2002. In 2004, he spent a good chunk of that buying an ocean-facing mansion in Florida's Palm Beach for $70 million, the highest price up to then ever paid for a U.S. residential property. The seven-bedroom home came with a walk-in humidor for cigars.

Schar's legal residence, a gated estate just north of Washington, D.C., sits on 10 acres overlooking the Potomac. NVR stock has dropped over 60 percent since its housing bubble peak, but neither of Schar's two main residences figures to foreclose anytime soon.

9: Patrick Soon-Shiong

Why does health care in the United States cost so much? Maybe somebody should ask Patrick Soon-Shiong, the Los Angeles drug developer who this September saw his personal fortune -- $3 billion last year -- take a giant first step toward more than doubling.

Soon-Shiong came into 2008 as the chief executive of APP Pharmaceuticals. He stepped down as CEO in the spring, but the former surgeon still held 83 percent of the company's shares. In July, he agreed to sell APP to a German firm. The sale finalized two months later for an initial $3.7 billion cash payment.

What made APP so attractive? The company is minting money. In 2007, notes the Los Angeles Business Journal, APP scored $253 million in adjusted earnings on just $647 million of sales. The firm started this year off on an equally profitable tear when a contamination scare in China left APP the only U.S. source of a widely used blood-thinner. That drug quickly doubled in price.

8: Richard Baker

This hasn't been a great year for the hedge fund industry. The funds -- largely unregulated investment vehicles open only to deep-pocket investors -- are suffering their worst year ever, down 19 percent through November. But the industry has certainly been sweet this year to at least one lucky fellow, former Congressman Richard Baker from Louisiana.

Back in February, Baker gave up his House seat -- and his $169,300 House salary -- to become the president and CEO of the Managed Funds Association, the hedge fund industry's trade association.

What led the 60-year-old Baker, a lawmaker since the age of 23, to give up his life of public service? Maybe the private gain. As the hedge fund trade group chief, the New Orleans Times-Picayune reported earlier this year, Baker would be taking home a $1 million annual salary and benefits package.

What made Baker so attractive to America's hedge fund billionaires? As the chair of the House Financial Services Subcommittee on Capital Markets, the Center for Responsible Politics notes, Baker had been overseeing the very industry he would, as the hedge fund top gun, be representing.

7: James Mulva

Back last spring, with motorists turning purple with rage every time they pulled in for a fill-up, one Big Oil CEO tried to assure Americans he shared their pain. Declared ConocoPhillips chief exec Mulva: "High oil prices have not been our friend" -- because, as he explained later to reporters, higher per-barrel prices for crude have resource-rich countries demanding more control over their own oil.

On the other hand, the run-up in crude oil prices over recent years hasn't exactly left Big Oil broken-hearted. The industry's profits, the Consumer Federation of America noted this fall, have soared over 600 percent since 2002.

Few have enjoyed more rewards for that success than the 62-year-old Mulva. He reaped a $50.5 million personal payoff in 2007, according to federal Securities and Exchange Commission figures. He'll be collecting, when he retires, at least a $2.6 million annual pension.

6: Ralph Roberts

On January 1, 2008, the Comcast cable TV empire put into effect the ultimate in executive incentive pay plans: a new deal that guaranteed the company's founder and executive committee chair, Ralph Roberts, $1.85 million in basic annual salary for five years after he dies, with the after-death payout going to whoever Roberts names as his beneficiary.

In 2007, Roberts, now 88, actually pocketed $24.7 million in total compensation. His son, current Comcast CEO Brian Roberts, collected $20.8 million.

Some shareholders, in early 2008, took a bit of umbrage to all this largesse. Some even began demanding Brian's resignation. In February, under fire, the Roberts clan backed down. They agreed to ax Ralph's death benefit and drop his annual salary to $1 a year. But Comcast will continue to pay Ralph's various benefits, including his life insurance. In 2006, the premiums ran $10.5 million.

Meanwhile, in November, news reports revealed that federal and state cable TV regulators fear that Comcast, amid the consumer confusion over the transition to all-digital over-the-air broadcasts, is pushing low-income cable TV subscribers into more expensive monthly cable packages.

5: Steve Jobs

In 2008, once again, the most notable executive in America's $1-a-year CEO club remained Steve Jobs, the chief exec at Apple Computer. Jobs has been collecting a mere $1 in annual salary ever since 1997. He has, to be sure, been collecting a few other rewards as well. He entered 2008 with about 5.5 million shares of Apple stock and a net worth not too far south of $6 billion.

This past March, to gain some input into any future rewards that might come their CEO's way, Apple shareholders passed a resolution that gives them an advisory "Say on Pay" vote on executive compensation. Joked Jobs in response: "I hope 'Say on Pay' will help me with my $1 a year salary."

Apple corporate directors aren't waiting for any shareholder help. In the company's 2008 proxy statement, they noted that they're already "considering additional compensation arrangements" for Jobs, given the "critical" importance of his "continued leadership."

Jobs himself told shareholders at this year's Apple annual meeting that he "feels confident" that any number of the company's top execs "could take his place." Even so, he's probably eager to see what sort of "additional compensation" Apple's imaginative board might have in mind.

In 1999, the board gave Jobs a $90 million Gulfstream V jet -- and agreed to pay Jobs for the cost of operating it. In 2007, that cost came to $776,000.

4: Robert Stevens

Peace on earth and good will toward everybody. But not too soon. That may be the motto this holiday season for Lockheed Martin, the world's biggest military contractor. Under CEO Robert Stevens, the company's profit margins have nearly doubled, thanks in no small part to a 72 percent hike in U.S. defense outlays, after inflation, since the year 2000.

And the future looks equally bright, even with the war in Iraq winding down. Lockheed Martin, the 57-year-old Stevens noted last month, sees nothing but "continuous expansion" in its military hardware sales overseas. These sales can deliver sky-high returns, industry analysts point out, because U.S. taxpayers have already footed the bill for the hardware's R&D.

Still, Stevens isn't putting all his eggs in one basket. Lockheed Martin, he said last week, remains totally "unconstrained" by the credit crisis and is now investigating making corporate acquisitions in other fields -- like health care.

The CEO's personal financial health remains quite robust. Stevens pulled in $26 million last year. The most highly decorated general in the U.S. armed services would have to work over 130 years to make that much.

3: Larry Ellison

No state may be suffering from the bursting of the housing bubble more than California -- and no Californian may be benefiting from that bursting more than billionaire Larry Ellison, the Oracle business software chief exec who currently occupies the three-spot on the latest Forbes list of America's 400 richest.

Ellison spent nine years and $200 million building a lavish Northern California residential estate -- in the flamboyant style of a 16th century Japanese emperor. In 2005, San Mateo County officials assessed the 23-acre property at $166.3 million. Ellison balked. A more accurate appraisal, his lawyers claimed, would run about $100 million less.

Early this spring, the San Mateo assessment appeals board came down on the side of Ellison's lawyers. That decision handed Ellison a $3 million tax refund.

Local public schools are now bearing about half the burden that refund has generated. In future years, Ellison's tax discount will cost Portola Valley schools an annual $250,000 or so, the cost of hiring and supplying three teachers.

Ellison, as Oracle's top executive, takes home about that much every hour. This August, just before school started, Oracle pay filings revealed that Ellison collected $84.6 million in fiscal 2008 for his CEO labors. He also cleared another $544 million cashing in on a stash of his Oracle stock options.

2: John Thain

In high-finance circles, they called John Thain "Mr. Fix-It." In 2004, the New York Stock Exchange hired Thain, a rising star at Goldman Sachs, to clean up the mess after NYSE CEO Dick Grasso departed with a scandalous $140 million retirement package. Then, in October 2007, Merrill Lynch asked Thain to pick up the pieces after Merrill's board gave the heave-ho to CEO Stanley O'Neal, who left with $160 million.

Merrill paid fairly dearly to gain Thain's services. Mr. Fix-It came on board with a $15 million signing bonus and a bundle of lush incentives that "would be considered excessive for any industry anywhere," observed CEO pay expert Graef Crystal, "except on that tiny slice of Manhattan called Wall Street."

With subprime-spooked financial giants starting to melt down all around him, Thain went to work wheeling and dealing -- and assuring bystanders that all would be well. In July, he told investors he "felt comfortable with Merrill's capital levels." In August, Thain labeled his firm "well-positioned for the coming years."

Well, maybe not that well-positioned. In September, as Reuters later reported, Merrill would come within moments of "total extinction" -- only to be rescued, an hour before Lehman Brothers declared bankruptcy, when Bank of America agreed to swallow Merrill whole.

Merrill Lynch, Thain apparently believed, had been fixed, and, early this December, he let it be known that he expected up to $10 million in new bonus for his efforts -- despite Merrill's $12 billion in 2008 losses and a pending layoff of as much as a fifth of the firm's workforce. On top of all that, Merrill's new sugardaddy, Bank of America, was taking $25 billion in taxpayer bailout dollars.

Thain's bonus request quickly became a public relations disaster. By mid-December, Merrill and Thain, under increasing pressure, would unrequest the bonus millions. The good news for Mr. Fix-It? He still may get a $5.2 million "change-of-control payment" for selling Merrill -- and he still has a job.

Unlike average families who lost everything when Merrill's subprime mortgage securities went sour, Thain still has a house, too. A nice one, a 14-bedroom palace north of Manhattan complete with tennis courts, swimming pools, and a fish-filled private lake.

1: Richard Gilman

The CEO of a small factory on Chicago's North Side, by Fortune 500 standards, rates as distinctly small-time. But this particular CEO, Richard Gilman, helped make headlines -- and history -- in 2008. He fully deserves this year's premier place in America's top ten greediest.

Gilman started running Republic Windows and Doors, a modest, four-decade-old plant, in 2006. Layoffs soon followed, and, eventually, only about 240 workers remained from a unionized labor force once over 500 strong.

Those workers, earlier this fall, realized something even more ominous was coming at them. Equipment at the Chicago plant had started vanishing. What the workers didn't know: Republic's "deciders" had set up a new company and bought a nonunion window and door plant in Iowa.

Two days into December, Republic gave workers the bad news. The plant would shut down three days later. The workers would lose their earned vacation time and their health insurance -- and not see any of the severance legally due them.

Just another typical assault on workers with a precarious foothold in the middle class. Or so things seemed. But the workers then did something extraordinary. Reviving memories of the Great Depression-era "sit-down" strikes, they occupied the plant -- and captured America's imagination.

The sit-down forced Gilman and his money pot, the Bank of America, to the bargaining table where a settlement soon took shape. But Gilman suddenly threw a monkey-wrench into the works -- and gained a slot for himself in this year's top ten greediest.

Gilman demanded that "any new bank loan to help the employees also cover" the lease of his Mercedes and BMW and eight weeks of his $225,000 salary.

The workers would have none of that. Gilman would drop his demand. The bank funding would come through. The workers had won. Greed had lost.

That hasn't much over the last three decades. Maybe the greedy have finally gone too far. We may have reached the end of an era. America's generation-long Great Greed Grab may soon be no more.

Sam Pizzigati is the editor of the online weekly Too Much, and an associate fellow at the Institute for Policy Studies.
© 2008 Too Much: A Commentary on Excess and Inequality All rights reserved.
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18) Israeli Gaza Strike Kills More Than 200
December 28, 2008

GAZA — Waves of Israeli aircraft swooped over the Gaza Strip on Saturday, firing missiles at Hamas’s security headquarters and killing more than 200 people, bringing the highest death toll in Gaza in years in a crushing response to rocket fire by Hamas against Israeli towns.

After the initial airstrikes, which also wounded about 600 Palestinians, dozens of rockets struck southern Israel. Thousands of Israelis hurried into bomb shelters amid the hail of rockets, including some longer-range models that reached farther north than ever before. One Israeli man was killed in the town of Netivot and four were wounded, one seriously.

A military operation against Hamas, the militant group that controls Gaza, had been forecast and demanded by Israeli officials for weeks, ever since a rocky cease-fire between Israel and Hamas broke down completely in early November and rocket attacks began in large numbers against Israel. Still, there was a shocking quality to Saturday’s attacks, in broad daylight on about 100 sites, as police cadets were graduating, women were shopping at the outdoor market and children were emerging from school.

The center of Gaza City instantly became a scene of chaotic horror, with rubble everywhere, sirens wailing, and women shrieking as dozens of mutilated bodies were laid out on the pavement and in the lobby of Shifa Hospital so that family members could identify them. The vast majority of those killed were Hamas police officers and security men, including two senior commanders, but the dead included several construction workers and at least two children in school uniforms.

By afternoon, shops were shuttered, funerals began and mourning tents were visible on nearly every major street of this densely populated city.

“Hamas was warned a few times in a variety of ways, but I can’t elaborate on the warnings,” said Maj. Avital Leibovich, a spokeswoman for the Israeli military. “Anything associated with Hamas is for us a legitimate target, including an apartment in which the basement is a weapons storehouse. This operation is not finished yet, but for now it involves only aircraft.”

Israeli airstrikes continued after dark, striking a metal foundry and other targets in southern Gaza, Palestinian officials said. Calls on both Israel and Hamas to refrain from further attacks were issued by Russia, Egypt and numerous governments in Western Europe, as well as the United Nations. The Bush administration urged Hamas to stop firing rockets, but called on Israel only to avoid hitting civilians as it attacked Hamas.

Ehud Barak, the Israeli defense minister and chairman of the Labor Party, said the military operation would expand and deepen as necessary, adding, “There is a time for calm and a time for fighting, and this is the time for fighting.” He said he was withdrawing from active campaigning for Israel’s February elections to focus on the operation.

Hamas officials went underground, but their spokesmen called on militants to seek revenge and fight to the last drop of blood. Several compared what was happening to the 2006 war between Israel and the Lebanese militia Hezbollah, when Israel reacted to the capture and killing of several soldiers along its northern border by air raids, followed by ground troops. Hezbollah is widely viewed as having withstood that assault and emerged much stronger politically.

The Arab League called an emergency meeting for Sunday in Cairo of all member foreign ministers.

Governments that dislike Hamas, like Egypt’s, Jordan’s and the Palestinian Authority in the West Bank, are in a delicate position. They blame Hamas for having taken over Gaza by force 18 months ago and oppose its rocket fire on Israeli towns and communities. But the sight of scores of Palestinians killed by Israeli warplanes outraged their publics, and anti-Israel demonstrations broke out across the region. Egypt, worried about possible efforts by Palestinians to enter the country, has set up machine guns along the Gaza border.

In the West Bank, Palestinians threw stones at Israeli police officers, causing some injuries.

Hamas is committed to Israel’s destruction, and when it won Palestinian legislative elections in 2006 and then took over Gaza forcibly in 2007 it said it would not recognize Israel, honor previous Palestinian Authority commitments to it or end its violence against the Jewish state.

Israel, backed by the United States, Europe, Egypt and the Palestinian Authority, has sought to isolate Hamas by squeezing Gaza economically, a policy that human rights groups condemn as collective punishment. Israel and Egypt, which control routes into and out of Gaza, have blocked nearly all but humanitarian aid from going in.

The result has been the near death of the Gazan economy. While enough food has gone in to avoid starvation, the level of suffering by ordinary people is very high and getting worse each week, especially in recent weeks as Israel closed the routes entirely for around 10 days in reaction to daily rocket fire.

Opening the routes to commerce was Hamas’s main goal in its cease-fire with Israel, just as ending the rocket fire was Israel’s central aim. But while rocket fire did go down drastically in the fall to around 15 to 20 per month from hundreds per month, Israel said it would not permit trade to go back up until the rockets actually stopped, and because Hamas continued to smuggle weapons through desert tunnels from Egypt. Hamas said this was a violation of the agreement, a sign of Israel’s real intention and cause for further rocket fire.

On Wednesday, some 70 rockets hit Israel over 24 hours, in a distinct upsurge of intensity.

The rockets that flew into southern Israel on Saturday left the streets of cities like Netivot, a hardscrabble town of immigrants, nearly deserted. Inside a public shelter, parents worked to keep restless children occupied. The man killed by a rocket was hit by shrapnel as he stood in the entrance to his building, next door to where the rocket hit.

Taghreed el-Khodary reported from Gaza, and Ethan Bronner from Jerusalem. Isabel Kershner contributed reporting from Netivot, Israel.


19) Leaning on Jail, City of Immigrants Fills Cells With Its Own
December 27, 2008

CENTRAL FALLS, R.I. — Few in this threadbare little mill town gave much thought to the Donald W. Wyatt Detention Facility, the maximum-security jail beside the public ball fields at the edge of town. Even when it expanded and added barbed wire, Wyatt was just the backdrop for Little League games, its name stitched on the caps of the team it sponsored.

Then people began to disappear: the leader of a prayer group at St. Matthew’s Roman Catholic Church; the father of a second grader at the public charter school; a woman who mopped floors in a Providence courthouse.

After days of searching, their families found them locked up inside Wyatt — only blocks from home, but in a separate world.

In this mostly Latino city, hardly anyone had realized that in addition to detaining the accused drug dealers and mobsters everyone heard about, the jail held hundreds of people charged with no crime — people caught in the nation’s crackdown on illegal immigration. Fewer still knew that Wyatt was a portal into an expanding network of other jails, bigger and more remote, all propelling detainees toward deportation with little chance to protest.

If anything, the people of Central Falls saw Wyatt as the economic engine that city fathers had promised, a steady source of jobs and federal money to pay for services like police and fire protection. Even that, it turns out, was an illusion.

Wyatt offers a rare look into the fastest-growing, least-examined type of incarceration in America, an industry that detains half a million people a year, up from a few thousand just 15 years ago. The system operates without the rules that protect criminal suspects, and has grown up with little oversight, often in the backyards of communities desperate for any source of money and work.

Last spring, The New York Times set out to examine this small city of 19,000 and its big detention center as a microcosm of the nation’s new relationship with immigration detention, which is now sweeping up not just recent border-jumpers and convicted felons but foreign-born residents with strong ties to places like Central Falls. Wyatt, nationally accredited, clean and modern, seemed like one of the better jails in the system, a patchwork of county lockups, private prisons and federal detention centers where government investigations and the news media have recently documented substandard, sometimes lethal, conditions.

But last summer, a detainee died in Wyatt’s custody. Immigration authorities investigating the death removed all immigration detainees this month — along with the $101.76 a day the federal government paid the jail for each one. In Central Falls, where many families have members without papers, a state campaign against illegal immigrants spread fear that also took a toll: People went into hiding and businesses lost Latino customers in droves. Slowly, the city awoke to its role in the detention system, and to the pitfalls of the bargain it had struck.

In a sinking economy, immigration detention is a rare growth industry. Congress has doubled annual spending on it in the last four years, to $2.4 billion approved in October as part of $5.9 billion allotted for immigration enforcement through next September — even more than the Bush administration had requested.

Seeking a slice of that bounty, communities like Farmville, Va., and Pahrump, Nev., are signing up with developers of new detention centers. Jails from New England to New Mexico have already made the crackdown pay off — for the private companies that dominate the industry, for some investors and, at least in theory, for places like Central Falls, a city so strapped that the state pays for its schools.

Here, a specially created municipal corporation built the jail in the early 1990s to hold federal inmates, and last year more than doubled its size. As the City Council president, William Benson Jr., put it, “The more inmates they have, the more money we get.”

Yet in a community whose 1.3 square miles are said to be too small for secrets — “If you sneeze on Washington Street, someone on Pine Street says, ‘Gesundheit,’ ” Mr. Benson said — city officials, overwhelmingly non-Latino, seemed uninformed about who those inmates were. “Nobody knows exactly who’s down there,” he said. “I hear some are Arab terrorists.”

The mystery is in some ways understandable. Though immigration detainees made up one-third of the daily population and a majority of the 4,200 men and women who moved through Wyatt’s 722 beds in a year, most were from other states, and those from Rhode Island did not remain long: Immigration and Customs Enforcement typically transferred them within a week.

Some were legal immigrants who had served time for serious crimes. But increasingly they were the kind of people who in the past would not have been arrested — people without papers, similar to some of the people who play, cheer and live in Wyatt’s shadow. Sometimes the same people.

Anthony Ventetuolo Jr., one of Wyatt’s developers and now the jail’s chief executive, said that who the inmates were made no difference to the jail, which was run like a business, under strict standards. “I’m not interested in getting involved in the politics of immigration,” he said. “All we do is detain people that our clients tell us to detain.”

Swallowed by the System

Over 10 years, Maynor Canté, 26, hardly glanced at the jail he passed as he hurried between home, two jobs and St. Matthew’s Church, where he led a prayer group.

He was 15 when he left Guatemala in 1997, sneaking across the Mexican border to join seven older siblings, legal residents who had spent years scraping new lives out of the industrial ruins of Rhode Island’s Blackstone Valley. Caught in Texas, the teenager was quickly let go pending a hearing, like so many arrested under the “catch and release” policy that prevailed while the nation’s boom times demanded cheap immigrant labor. When he failed to show up in court, a deportation order was issued.

A decade later, Mr. Canté spoke near-fluent English, and had spent thousands of dollars trying to legalize his status. Mornings, he cleaned a factory for $8 an hour. Evenings, he worked at his nephew’s new clothing shop on Dexter Street, one of several Latino businesses that had revived a bleak stretch of vacant storefronts.

Then, early one morning in October 2007 when he headed out the door for his cleaning job, five immigration agents hustled him into a van. That night, as frightened relatives tried to find him, he was delivered to Wyatt in chains.

Inside, a plaque declares that the detention center’s mission is “to protect the public from people who pose a threat to society.” One corridor, waxed to an immaculate shine, leads to a darkened control room where correction officers watch a dozen video monitors fed by 200 cameras. A guard can scan an entire unit housing 72 detainees in two- to four-man cells; zooming in on a card game, he can see that one player is holding hearts.

The jail was built for inmates awaiting trial on federal charges — drug possession, child pornography, political corruption. But to help pay off $106 million borrowed for its recent expansion and refinancing, Wyatt was now counting on prisoners like Mr. Canté: administrative detainees not charged with a crime, but held while the government tries to deport them.

Now he found himself slated for deportation without a hearing — or even any way to make a phone call.

“I was scared,” he said, recalling how he prayed the rosary and stared out the tiny window of his cell to watch a freight train pass at 6 a.m.

Outside, his sister Emma, 33, was distraught. Since their mother’s death in 2006, she had felt more responsible for protecting Mr. Canté, a big-shouldered man who was still her little brother. “Three days passed and we didn’t know where he was,” she said.

On the fourth day, after calls to many jails, a high school friend located Mr. Canté, and members of his prayer circle flocked to Wyatt. His priest, the Rev. Otoniel J. Gomez, had never visited the jail in the eight years since he was sent to Central Falls from Colombia. He spoke to his weeping parishioner through a thick plexiglass barrier.

“I thought, ‘This is like a horror movie, talking with a criminal,’ ” he said.

Yet the priest soon realized that Mr. Canté was lucky. “Most of these people didn’t have any relatives or friends near them,” Father Gomez said, “not even a lawyer.”

The official list of free legal help was largely a dead end. Wyatt’s expensive inmate telephone service was often useless, because it took days to set up an account, and it could not be used to call cellphones. Desperate, other detainees passed Mr. Canté phone numbers on scraps of paper, begging him to ask his visitors to call and tell where they were.

Out of Sight, Out of Reach

Plucked from communities from Maine to New York, some had already been transferred through several jails; many would soon be moved again, as the federal immigration agency improvised to make space for detainees from new roundups.

“It’s like having a room with five bathtubs and water coming in and out of each one to maintain an equilibrium,” explained Todd Thurlow, acting deputy director of the Boston field office of Immigration and Customs Enforcement, which contracts for about 1,000 beds in dozens of jails across New England.

Wyatt had a reputation as one of the most professionally run. But for newcomers without help, it could be rough.

One complaint, echoed by former jail employees, was that detainees in pain from illness or injury often went without adequate treatment. Other detainees spoke of going hungry, like Edgar Bocce, 25, a Guatemalan cleaner who said two muscular inmates took away his first dinner tray — rice, beans and spaghetti — while guards did nothing. Spartan meals could be supplemented with food from the jail’s commissary, but only if relatives sent money, or detainees stayed long enough to earn some; on the cleaning crew that kept the jail so spotless, starting pay was 40 cents a day.

Though officials said detainees were housed according to their history of violence, only one unit was dedicated to immigration detainees, and the rest were mixed in with criminal suspects and convicts.

Perhaps the greatest frustration, inmates said, was their inability to make sense of what was happening to them.

“Why am I here in jail?” asked one, a Central Falls mechanic who had been seized at immigration headquarters in Providence when he went to check why his green card application was taking so long. Wyatt guards had no answers. “They tell me, ‘Sorry, guys, but we’re not Immigration.’ ”

Mr. Canté’s sisters borrowed money and hired him a lawyer. But a day after the lawyer’s first visit, their brother was gone — transferred to a Boston jail. That week, he was shackled and bused with 60 other men to detention in York, Pa., then put on a government plane with 300 chained immigrants.

He ended up one of 2,000 detainees packed into a windowless tent city that had sprung up only a year earlier in Raymondville, Tex. — the nation’s largest immigration prison camp, run for profit and still growing.

For weeks after his lawyer reopened his case for a hearing in Boston, she could not locate him. He was on the verge of deportation by the time she managed to persuade the government to fly him back from Texas, two days before last Christmas.

Mr. Canté finally appeared before an immigration judge on Jan. 2, after three months in the detention maze. Because his case fell under the more lenient laws in force before 1997, he not only was released on bond, but allowed to work until his immigration hearing in December 2009. He is now trying to pay back thousands of dollars in loans and legal fees.

A Market for Inmates

Mr. Canté, whose time in detention cost federal taxpayers about $10,000, was part of what many call an “immigrant gold rush” that turned the private prison industry from bust to boom.

Across the country, starting in Texas in the 1980s, prison companies built jail cells on speculation as they rushed to cash in on the war on drugs. They overbuilt; abuse scandals and escapes soured many states on private prisons, and by the late 1990s, as competition for inmates increased, the companies’ stock was suffering.

Yet given the lure of easy financing and big fees for constructing deals, developers of prison space did not hold back on growth. Instead, big companies like the Corrections Corporation of America, the GEO Group (formerly Wackenhut) and the Cornell Companies added more beds and lobbied harder at the source of the most lucrative inmates, the federal government.

The payoff came after 9/11 in an accelerating stream of new detainees: foreigners swept up by the nation’s rising furor over illegal immigration.

Central Falls was similar, in its poverty, to more remote communities that had hitched their hopes to jails. Set in the river valley where America’s industrial revolution was born, its textile mills had hired large immigrant families — French Canadians and Poles, followed by Syrians and Portuguese — and squeezed them into triple-decker tenements. Even after the work moved away, the mills’ cheap housing continued to draw immigrants, mostly from Latin America.

The city was nearly bankrupt in 1990 when developers made a proposition: Build a profit-making jail for two or three hundred nonviolent federal detainees, and guarantee a steady stream of money and jobs for Central Falls.

But the deal that emerged, like many elsewhere, proved better at paying private investors than generating public revenue. The municipal corporation borrowed $30 million through a state bond issue to build Wyatt, and hired the Cornell company to run it. Six years later, the municipal body borrowed $38 million to refinance, buying back most of the bonds at a premium that gave the original bondholders a lump-sum return of 28.5 percent on their investment in addition to 9 percent annual interest.

And from its opening party in November 1993, Wyatt ran into the same problem as its competitors: finding enough inmates. For a time it imported murderers and rapists by the busload from North Carolina’s crowded prisons. When city residents objected, they learned that Central Falls had no control over who was housed at Wyatt and would get no money unless it was full.

At best, Wyatt paid Central Falls $2 to $3 a day for each detainee — less than $400,000 in the good years — to offset its use of city services. At times when the flow of inmates faltered, payments slowed to a trickle. Yet, following the strange logic of prison growth, Cornell and Wyatt officials were soon pushing to refinance yet again and expand.

Thomas Lazieh, the mayor who had championed the deal that built Wyatt, defended it as the best the city could get. His successor, Lee Matthews, took a darker view and sued to stop the expansion. “The city was sold a bill of goods,” he said.

Wyatt doubled in size anyway, with the backing of the current mayor, Charles D. Moreau. Convinced that it could wrest more revenue from the jail as immigration enforcement boomed, the municipal corporation took full control in August 2007. The budget it approved late that year included $6,000 a month for a Washington lobbyist to seek more detainees at higher rates.

A Recession, and Raids

By then, as in many parts of the country, people in Rhode Island were looking at Latino immigrants as prime suspects in a dismal economy. A polarizing immigration debate had converged with a huge state budget deficit and high unemployment. As this year began, resentment flared.

The catalyst was an ordinary New Year’s feature in The Providence Journal about the first baby born in Rhode Island in 2008. Mother and newborn were still in the hospital when federal agents, spurred by the publicity, raided their apartment in Providence and took away the father on immigration violations. Afterward, the police said, the mother discovered that a roommate from Guatemala had hanged himself behind his locked bedroom door, apparently during the raid.

The baby’s father, initially held in secret at Wyatt, was eventually deported. A Guatemalan landscaper with two misdemeanor convictions, he had been ordered to leave the country in August 2007, but stayed, his lawyer said, because his fiancée, a United States citizen, was pregnant with their second child.

To some, the case illustrated how illegal immigrants, who make up less than 4 percent of Rhode Island’s population, drained public services.

“Rhode Island taxpayers are the real victims!” declared Alice Losasso of West Warwick, in a letter to The Journal. “I’m tired of paying for interpreters so that immigrants can take their driver’s test in whatever language they speak. I’m tired of finding that their girlfriends and children are on welfare.”

Her words echoed a major theme of the governor, Donald L. Carcieri, a Republican. In March, he issued an executive order directing the State Police to help federal authorities round up illegal immigrants, saying that they depressed wages and strained services.

Public approval for that order reached 75 percent in one poll after an illegal immigrant from Guatemala was charged with carjacking and raping a woman outside a mall. He had been arrested twice before by the Providence police, and already had an outstanding order of deportation. The governor appeared on the Bill O’Reilly program to accuse the Providence mayor of sheltering criminals.

In Central Falls, the crackdown sowed panic. At the public charter school two blocks from Wyatt, parents, already afraid to be photographed at school events, were now reluctant to drive to meetings, said Sarah Friedman, a founder of the school.

An 8-year-old girl, one of the school’s high-scoring students, stopped speaking in class when her father disappeared into detention, the girl’s mother said. Without his income, mother and daughter, United States citizens, were almost evicted from their apartment.

At Central Falls High School, some students stopped coming to class because their families had gone into hiding, said Margie Cruz, a school-home liaison: “The child was born here, the child is legal. But the family has to hide because the father will be deported.

“I’ve seen students stopped for a traffic violation and the whole family got deported,” she added. “Children that were here for years. I watched them grow up.”

One longtime Little League mother said she used to worry that child molesters could be watching from the jail windows. Now, she said, she worried that her sister’s children would end up inside — the niece who had just graduated from high school with no path to legal status; the nephew who had been taught that local Quakers hid fugitive slaves, and asked his aunt to hide him if his parents were detained.

They were part of a generation of Central Falls teenagers born abroad who were coming of age as outlaws in their own town. Some had already lost relatives, like the 14-year-old whose older brother had made a left turn on red and ended up in a detention odyssey that led to deportation.

“My mother’s afraid the same thing that happened to my brother could happen to me, because I play soccer, I’m out there,” he said.

A few blocks from Wyatt, Police Chief Joseph P. Moran III praised the jail as “a great neighbor — it keeps things under control.” But he went on to tell about the difficulty of investigating the killing of a Dominican cabdriver, because witnesses had not come forward for fear of deportation. He talked of the blurring line between police work and immigration enforcement.

One domestic violence call by a husband illustrated the new reality. After a routine computer check, both he and his wife were taken into police custody, and her 8-month-old baby was handed to a friend. The man had an outstanding bench warrant; his wife had a deportation warrant issued by immigration authorities — something not included in the police database a few years ago.

“We work hand in hand with ICE,” Chief Moran said. At the same time, he added: “I have friends from Honduras, Ecuador. My kids went to school here. It makes it very, very difficult.”

Profit and Loss

For defenders of the jail, the bottom line has always been the bottom line: Wyatt’s growth meant more federal money for the city.

“They’re going to detain them somewhere,” said the manager of Mr. Williams True Styles Barbershop, on the struggling Dexter Street commercial strip. “It’s a billion-dollar business. Unless we’re going to free them, what difference does it make?”

But at least in Central Falls, the incarceration economy was not delivering on its promise.

In late June, Mayor Moreau, a big man with a florid face and a police siren in his car, offered up a budget that laid off firefighters — and told angry city employees to get used to it.

“We’re at the end of the financial rope for Central Falls,” he told the City Council, citing more than 200 boarded-up homes, foreclosures at the rate of 25 a week, and cuts in state and federal aid that required a 4 percent property tax increase and an 8 percent spending cut in the new $17.4 million budget.

Outside, past the defunct factory where Hasbro once made G. I. Joe, beyond the rusty hulk of the downsized Sylvania plant, the summer twilight gleamed on Wyatt’s new facade.

What had happened to the windfall of money and jobs it had offered?

The jail’s annual revenue had almost doubled in a year, to $21 million, mainly from increasing immigration detention. But the city budget projected revenue of only $525,000 from Wyatt, which is exempt from taxes.

That was not even enough to cover its share of city services, according to an estimate by the city’s finance department. It was certainly nothing like the $2 million a year that Mr. Benson, the City Council president, had mentioned to a reporter in April. The mayor, he said, predicted the city would get that much in profits formerly reaped by the Cornell Companies, now that the local board had taken over. Neither the mayor nor the board members, unpaid mayoral appointees, would talk about Wyatt.

As for jobs, only 10 of about 200 Wyatt employees lived in Central Falls. The jail’s board was even declining to make the $1,500 donations to local groups it once supported, like a scholarship fund and youth football.

Mr. Ventetuolo, the Wyatt chief executive, would not say how much had been saved by dispensing with Cornell’s for-profit services, maintaining that it had all gone toward keeping prices low for the federal government. Wyatt was still in transition, he said, striving to fill new beds to meet soaring payments to bondholders, now up to $8.4 million yearly from $2.7 million under the terms of the latest refinancing.

Yet Mr. Ventetuolo’s consulting company had won a raise, to $230,000 from $156,000. And as the number of detainees increased, so did revenue from surcharges on their collect calls to relatives, under a contract with Global Tel Link that gave Wyatt a cut of about $564,000 a year. That arrangement had survived a state ban on phone surcharges at prisons, thanks to lobbying that gave Wyatt a loophole.

Other large fees went to lawyers and financiers, as Mr. Matthews, the former mayor, pointed out. “There just happens to be a lot of money made by folks other than the people of the City of Central Falls,” he said.

Out in the Open

City officials in Central Falls — mostly descendants of earlier immigrants — were mindful that they presided over a community at least 60 percent Latino, where fear of the immigration crackdown was widespread.

At the same time, the city had built its hopes for economic stability on a jail that was helping to make that crackdown possible. The combination created a local immigration politics that sometimes verged on denial.

But last summer, Wyatt itself was suddenly caught in the glare of the state’s crackdown.

On the evening of July 15, a dozen State Police officers and 50 immigration agents swept into six courthouses across the state. They arrested 31 cleaners on suspicion of immigration violations, people paid $7.40 an hour to vacuum floors and scrub toilets in Rhode Island’s halls of justice. All worked for two large state contractors, one owned by the brother of a state legislator allied with Governor Carcieri.

In the uproar that followed, experiences that had been private in cases like Mr. Canté’s were put on public display: the difficulty of locating those in custody; the distress of relatives, many of them legal residents or citizens; the absence of basic legal protections familiar to anyone who watches “Law & Order.” Advocates eventually located most of the cleaners. Four were at Wyatt, including a 29-year-old single mother detained in its new women’s unit.

Two days after the raids, as city officials raised the Colombian flag over City Hall to honor that nation’s Independence Day, Mayor Moreau criticized the roundup, and chided Governor Carcieri for spending law enforcement resources on it.

“We have better things to do,” he said, “than chasing the lady that cleans the attorney general’s office.”

A reporter asked how he squared that criticism with Wyatt’s role in holding illegal immigrants, including the cleaning woman locked up there.

“One has nothing to do with the other,” he retorted. “It has nothing to do with the City of Central Falls.”

Soon, a case that drew national attention made that distinction harder to maintain.

On Aug. 6, Hiu Lui Ng, 34, a Chinese computer engineer from New York who had overstayed a visa, died in Wyatt’s custody after a year in various detention centers and months in pain.

The Times reported a week later that despite his repeated pleas for help, his fractured spine and extensive cancer had gone undiagnosed until shortly before his death. Officials at Wyatt, where he spent his last month, said he had received plenty of medical attention, and immigration authorities started an internal investigation. But local pastors and Latino advocacy groups gathered outside Wyatt on Aug. 15 to demand an independent inquiry.

A guard who watched the demonstration, who asked that his name not be published for fear of losing his job, voiced the ambivalence toward Wyatt that seems to shape the attitudes of many in Central Falls.

He spoke with sympathy of “good, hard-working people” detained there, and with distaste of the rookie guards — a result of low pay and high turnover — “who talk to people with no respect, like they’re dogs.”

But he added: “Immigration and all that, that has nothing to do with us. We’re just the prison.”

Even in the Latino population, the new awareness of Wyatt stirred little resistance.

“If the Spanish were all registered to vote they could take the city in one election,” observed Councilman Benson. “A lot of them don’t vote because they don’t trust the government, and a lot of them are illegal, so they can’t.”

In contrast, Mr. Canté, who finally had proper papers, said he felt like part of Central Falls for the first time.

“In all these years I’ve been here illegally, everywhere I went, everything I used to do, I used to feel like a reject,” he said. “Now I feel like I’ve been accepted for the community. I don’t feel afraid anymore. I feel, like, free.”

Just how closely Central Falls was entwined in the business of locking up people like Mr. Canté became more obvious this month, when Immigration and Customs Enforcement officials, citing their continuing investigation into Mr. Ng’s death, abruptly removed all immigration detainees from Wyatt, scattering them to other jails in New England, Texas and Louisiana.

With Wyatt’s solvency, if not its survival, uncertain, the mayor lobbied the state’s Congressional delegation to get back a share of the growing market in immigration detainees. Meanwhile, jail officials hunted for deals like the one they narrowly lost last spring, to house 80 Vermont inmates judged criminally insane for crimes like murder and rape.

Mr. Lazieh, the former mayor who first championed Wyatt, called the government’s immigration policies immoral, arguing that “the system has gone overboard — we’ve turned to criminalizing all immigrants.”

But he had no regrets about his city’s part. “If it’s not in Central Falls,” he said, “then this facility would be someplace else.”


20) Afghanistan: Protests Over Raid
World Briefing | Asia
December 27, 2008

For the second time in a little over a week, a deadly United States military raid on an Afghan house has incited protests and produced conflicting reports over who was killed. The Americans said they killed 11 armed Taliban militants, part of a bomb-making cell in the Maiwand District west of Kandahar, on Thursday. The Americans said they found dozens of land mines, grenades and bomb-making materials. But local government leaders said eight militants and four civilians were killed. Outraged Afghans protested by blocking the highway between Kandahar and Herat with burning tires.


21) No Sweets When Striking the Cookie Factory
Kingsbridge Journal
December 27, 2008

There were no Christmas cookies for Alonso Gomez this year. Instead, he was back outside the cookie factory where he has worked for 20 years, striking with 134 of his colleagues.

Mr. Gomez has been going to the same corner every day for more than four months, protesting what he said were efforts by the owners of the Stella D’Oro Biscuit Factory to cut wages, pensions and holiday and vacation time.

This week, under the rumbling of the elevated No. 1 train at 238th Street and Broadway, they repeated the refrain they have been chanting since they walked out on Aug. 13: “No contract, no cookies.”

On bitterly cold days, the workers dance or take turns warming up in an idling car. For the holidays, they sang Christmas songs and hanged a wreath on a fence on the sidewalk.

As replacement workers came and went on Tuesday, about a dozen strikers shouted “Scab!”

Behind them, the green, white and red company flag flew above the factory, at 184 West 237th Street in the Kingsbridge section of the Bronx.

Well before the Magnolia Bakery drew crowds of high-heeled young women to Bleecker Street in Greenwich Village, Stella D’Oro cookies were a significant part of New York baking.

The company was born in 1932 when Joseph Kresivich, a native of Trieste, Italy, began using Italian baking methods to make cookies, biscuits, biscotti and breadsticks.

For years, the company was family owned, as was a restaurant next door, which eventually closed.

In 1992, Nabisco acquired the company, and in 2000, Nabisco was bought by Kraft.

While Italian baking inspired the cookies, the brand also has a devoted following among Jews because its Swiss fudge cookies are made without milk or butter, making them an acceptable dessert for those who follow Jewish dietary guidelines.

When Kraft moved to change the recipe to use a milk-infused chocolate in 2002, sales suffered, and the company quickly returned to the original recipe.

The problem for the workers began in 2006 when Kraft sold Stella D’Oro to a private investing firm, Brynwood Partners.

The workers, members of the Bakery, Confectionery, Tobacco Workers, and Grain Millers International Union, say there has been no effort to negotiate in good faith. They accuse Brynwood of having a plan to force them out of their jobs, noting that replacement workers were lined up before they even went on strike.

“Never before Brynwood’s ownership has the local and its membership been attacked in this way,” they contend in fliers.

“The financiers and speculators have brought the American economy to its knees,” they wrote. “The financiers at Brynwood Partners are trying to bring 135 workers to their knees, hiring scabs to do their work. The Stella D’Oro workers are taking a stand against the wrecking of our economy.”

The management at the factory did not respond to repeated requests for comment.

Hendrik J. Hartong Jr., who is listed as the head of Brynwood Partners on the company’s Web site, also did not respond to requests for a comment.

“They want us to put our money into a 401(k),” said Mr. Gomez, 54, the shop steward. Having already lost $30,000 in his 401(k) because of the stock market decline, he said he would not have time to work to regain the losses.

“I have no choice,” he said. “I get old.”

Another striker, Anabel Garita, 26, said she usually worked on the packing table, grabbing cookies as they passed and packing them in boxes. She was making $18 an hour, but she said the company wanted to cut her wages.

“I work the night shift, so I can go to school,” she said, adding that the company’s new rules would make it impossible for her to study for her G.E.D.

The workers say they are determined to stay on strike until the dispute is resolved.

In the meantime, Mr. Gomez said, they will continue to stand outside the factory from 6 a.m. to 10 p.m., six days a week.

As Christmas Eve drew near, passing drivers honked and shouted encouragement. People stopped by and offered words of support and warm coffee.

“This place was like a home for many of these people,” Mr. Gomez said of the workers and their supporters. “But investors only care about their money. They don’t care about families.”