Free Internet Press Newsletter - Sunday October 12 2008 - (813)

Sunday October 12 2008 edition
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Pentagon Wants $450 Billion Increase Over Next 5 Years 2008-10-11 11:04:06 Pentagon officials have prepared a new estimate for defense spending that is $450 billion more over the next five years than previously announced figures. The new estimate, which the Pentagon plans to release shortly before President Bush leaves office, would serve as a marker for the new president and is meant to place pressure on him to either drastically increase the size of the defense budget or defend any reluctance to do so, according to several former senior budget officials who are close to the discussions. Experts note that releasing such documents in the twilight of an administration is a well-worn tactic, and that incoming presidents often disregard such guidance in order to pursue their own priorities. And with the nation’s economy caught up in a global financial meltdown, it remains unclear whether either Sen. John McCain, R-Arizona, Sen. Barack Obama, D-Illinois,or a Democratic Congress would support such large increases for defense next year. “This is a political document,” said one former senior budget official, who spoke on the condition of anonymity. “It sets up the new administration immediately to have to make a decision of how to deal with the perception that they are either cutting defense or adding to it.” Read The Full Story Commentary: Justice Dept. Scandal Almost Buried By Financial Crisis 2008-10-11 11:03:37 Intellpuke: This commentary was written by by Marilou Johanek, and appeared in the Toledo (Ohio) Blade edition for Friday, October 10, 2008. At any other time, what happened in the U.S. Justice Department last week would have been big news. At any other time, when internal reports by Justice Department call for more investigation into a case of unethical, if not criminal, conduct on the part of lawmakers and the White House, the administration would have a lot of explaining to do. But the Bush administration got lucky. As its Treasury and Federal Reserve chiefs warned that the sky was falling and the economic crash and continuing tumult on Wall Street made them seem prophetic, the Justice Department released a nearly 400-page scalding indictment of the administration over the controversial firings of several U.S. attorneys in 2006. It was an overlooked bombshell in breaking news cycles preoccupied with financial crisis, rescue plans, presidential politics, and a vice-presidential debate. But what the Justice Department's exhaustive investigation and blistering report concluded about the enormous damage done to the department through improper politicization is far more troubling than even Sarah Palin in disjointed attack mode. Investigators from both the department's Office of Inspector General and Office of Professional Responsibility found that political pressure did indeed drive the dismissal action against at least three of the nine federal prosecutors abruptly fired. At the time, then-Attorney General Alberto Gonzales insisted the individuals were all dismissed for inadequate performance, or failure to implement the President's law enforcement agenda. Read The Full Story Commentary: A Small Nuclear Blunder 2008-10-11 11:03:03 Intellpuke: This commentary was written by H. Bruce Franklin and appeared on Truthout.org's website edition for Friday, October 10, 2008. Some people are making fun of how Sarah Palin pronounces "nuclear." That's a mistake. Instead they should listen to how she used the word - because that displayed a truly terrifying ignorance. "Now, a leader like Ahmadinejad," she said, "is not one whom we can allow to acquire nuclear energy, nuclear weapons." Her mindless merging of nuclear energy with nuclear weapons threatens the entire structure of the 1968 Nuclear Non-proliferation Treaty (NPT), the only legal obstacle to a planet where dozens of nations confront each other with nuclear bombs and missiles. The NPT is also the only legal obstacle to a nuclear-armed Iran. The NPT depends on its assurance that all non-nuclear armed states have an "inalienable right" to develop "nuclear energy for peaceful purposes." The treaty even obligates nuclear-armed states to assist this development. To insure that this nuclear energy is being developed for peaceful purposes, the NPT provides for international inspection. That is the legal basis for the inspection being conducted in Iran. Denying Iran's right to nuclear energy would push it into withdrawing from the NPT, thus ending all inspection and actually legitimizing a nuclear-armed Iran. So was this just a slip by Palin? Or was it just her own ignorance? I'm afraid the answer is much scarier. Palin was attempting (in her garbled way) to express the long-held position of John McCain, which was also the policy that George W. Bush actually implemented, the policy that led to North Korea testing a nuclear bomb in 2006 and moving toward a nuclear arsenal. Back in 1994, President Bill Clinton halted North Korea's development of nuclear weapons (which had begun during President George H. W. Bush's administration) by negotiating what is known as the "Agreed Framework." Under the Agreed Framework, North Korea's secretly produced plutonium was locked up and placed under strict international supervision, with teams of international inspectors sent to live in North Korea, where they maintained continual surveillance of any possible nuclear activities. In return, the United States agreed to help North Korea meet its energy needs by providing an ample supply of fuel oil and two light-water nuclear reactors, just as envisioned in the NPT. Read The Full Story Interview: 'Capitalism Has Degenerated Into A Casino' 2008-10-11 01:22:47 Intellpuke: Spiegel Online interviewed Nobel Peace Prize laureate Muhammad Yunus. In the interview, Mr. Yunus said that greed has destroyed the world's financial system. The interview follows: SPIEGEL ONLINE: Mr. Yunus, for years you have been preaching a more socially conscious way of doing business and have denounced the narrow focus on maximizing profit as harmful. Now, the entire financial system is wobbling ... Yunus: The current turn of events makes me sad. It is certainly not something I am happy about. The collapse has hurt so many people and has suddenly made the entire world unstable. We should now be concentrating on making sure that such a financial crisis does not happen again. SPIEGEL ONLINE: What should be done? Yunus: There are huge holes in the current financial system that need to be plugged. The market is clearly not able to solve these problems itself, and now people are having to run to the governments to ask for emergency assistance. That is not a good sign because it shows that trust in the markets has evaporated. At the moment, there is unfortunately no other option than for government takeovers and government support. That is currently the method being used to combat the crisis - a method kicked off with the $700 billion bailout package passed in the US. In Germany, the government has likewise jumped into the fray. Read The Full Story Interview: 'The United States Has Essentially A One-Party System' 2008-10-11 01:22:08 Intellpuke: Spiegel Online interviewed linguist and public intellectual Noam Chomsky. In the interview, Mr. Chomsky says America essentially has a one-party system. The interview follows: SPIEGEL: Professor Chomsky, cathedrals of capitalism have collapsed, the conservative government is spending its final weeks in office with nationalization plans. How does that make you feel? Chomsky: The times are too difficult and the crisis too severe to indulge in schadenfreude. Looking at it in perspective, the fact that there would be a financial crisis was perfectly predictable, its general nature, if not its magnitude. Markets are always inefficient. SPIEGEL: What exactly did you anticipate? Chomsky: In the financial industry, as in other industries, there are risks that are left out of the calculation. If you sell me a car, we have perhaps made a good bargain for ourselves. But there are effects of this transaction on others, which we do not take into account. There is more pollution, the price of gas goes up, there is more congestion. Those are the external costs of our transaction. In the case of financial institutions, they are huge. SPIEGEL: But isn't it the task of a bank to take risks? Chomsky: Yes, but if it is well managed, like Goldman Sachs, it will cover its own risks and absorb its own losses. But no financial institution can manage systemic risks. Risk is therefore under priced, and there will be more risk taken than would be prudent for the economy. With government deregulation and the triumph of financial liberalization, the dangers of systemic risks, the possibility of a financial tsunami, sharply increased. Read The Full Story Deforestation Costs More Than The Financial Crisis 2008-10-11 01:18:51 It is a steep bill. Our shrinking forest cost us up to $5 trillion a year - far more than the current banking crisis. Environmentalists hope the sobering calculation, made by a European Union-commissioned team, will focus political will on funding conservation. How to put a price tag on nature? That conundrum is at the heart of research by a team headed by Deutsche Bank economist Pavan Sukhdev. They have found a way of calculating a figure for environmental damage and loss of biodiversity in forests. And the price is high: At between $2 trillion and $5 trillion per year it dwarfs the cost of the current financial crisis which economists gauge at about $1.5 trillion. Entitled "The Economics of Ecosystems and Biodiversity," the report was originally published in May but has returned to the spotlight at the World Conservation Congress in Barcelona this week. Conservationists gathered at the event have said it underscores the need to ramp up funding for environmental protection. And when making traditional economic calculations, it is all too easy to overlook natural reserves like food, fibers, fuel, clean water, healthy soil and protection from floods, said the report. "Though our well being is totally dependent upon these 'ecosystem services' they are predominantly public goods with no markets and no prices, so they often are not detected by our current economic compass." In order to pinpoint an accurate price, the researchers added the values of the various services offered by forests, such as absorbing carbon dioxide and providing clean water. Read The Full Story	GM, Chrysler Explore Merger 2008-10-11 11:03:52 General Motors is in preliminary talks about a possible merger with Chrysler, a deal that could drastically remake the landscape of the auto industry by reducing the Big Three of Detroit automakers to the Big Two. The talks between G.M. and Cerberus Capital Management, the private equity firm that owns Chrysler, began more than a month ago, and the negotiations are not certain to produce a deal. Two people close to the process said the chances of a merger were “50-50” as of Friday and would most likely still take weeks to work out. A merger would be a historic event, with two of the most iconic names in American industry coming together to survive in an increasingly difficult environment. Both have roots dating back decades in Detroit and, with Ford, long dominated the auto industry - until Japanese and other foreign car makers began making inroads into the American market. The auto industry is being pummeled from all sides - by high gas prices that have soured consumers on profitable S.U.V.’s, by a softening economy that has scared shoppers away from showrooms, and by tight credit that is making it difficult for willing buyers to obtain loans. Both G.M. and Chrysler have been struggling with product lineups that are out of sync with consumer demand for smaller, more fuel-efficient cars. General Motors’ stock has fallen from more than $43 a share last year to less than $5, and it is burning through its cash hoard at a rapid rate. Chrysler, as a private company, no longer needs to report its finances. Read The Full Story Western Journalists Pulling Out Of Iraq 2008-10-11 11:03:23 The number of foreign journalists in Baghdad is declining sharply, a media withdrawal that reflects Iraq's growing stability and the financial strains faced by some news organizations. In a stark indication of the changing media focus here, the number of journalists traveling with American forces in Iraq has plummeted in the past year. U.S. military officials say they "embedded" journalists 219 times in September 2007. Last month, the number shrank to 39. Of the dozen U.S. newspapers and newspaper chains that maintained full-time bureaus in Baghdad in the early years of the war, only four are still permanently staffed by foreign correspondents. CBS and NBC no longer keep a correspondent in Baghdad year-round. "It remains important and it remains interesting," said Alissa J. Rubin, the New York Times' acting bureau chief in Baghdad. "But what's in front of us now is almost a static situation. There's not a clear narrative line. The stories are more complex." Veteran journalists say stories about Iraq, where roughly 155,000 U.S. troops are deployed and where the United States spends approximately $10 billion a month, have become tougher to get on the air and into print. News coverage that once centered largely on the U.S. military experience is shifting, like the country itself, to a story of Iraqis taking the halting, often mundane steps toward building their own government. More than five years after the U.S.-led invasion, many of the most important stories in Iraq, such as debate over election laws and negotiations over the legal framework that will govern the presence of U.S. troops here after the United Nations mandate expires at the end of the year, are playing out incrementally and often behind closed doors. Read The Full Story G7 Agree On Global Rescue Plan 2008-10-11 01:23:00 A crisis meeting of finance ministers and central bank governors from the west's seven leading economies Friday night agreed to take "urgent and exceptional action" to bail out banks amid fears that a fresh wave of panic had pushed the global financial system to the brink of collapse. The G7 agreed to take "all necessary steps" including adopting Britain's plans to part-nationalize banks in order to kick-start lending in frozen credit markets after Wall Street suffered the worst week in its history. With shares, oil and sterling all plunging at the end of a dramatic week, the G7 pledged to take decisive action and use all tools available to prevent more big western banks going bust. The G7 issued a five-point plan in a short communique after meeting in Washington, D.C., Friday. It pledged to "ensure that our banks and other financial intermediaries, as needed, can raise capital from public as well as private sources in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses". Facing the most severe stockmarket crash since 1929, Henry Paulson, the U.S. treasury secretary, said Friday night the U.S. would use some of the $700 billion, earmarked by Congress to buy up Wall Street's "toxic waste", to buy stakes in U.S. banks. He said the government program to purchase stock in private U.S. financial firms will be open to a broad array of institutions, including banks, in an effort to help them raise money. Read The Full Story Gigantic Swiss Banks Holding Up - For Now 2008-10-11 01:22:25 The Swiss economy is dwarfed by the size of its leading banks, and there are growing worries about their health. The government says everything is fine, but some disagree. They exist also in Zurich: "Masters of the Universe." You can recognize these money-moguls from their swanky rides - their Porsches, their Audis, their BMWs. And yet recently these chariots of high finance have been spotted being sold to auto dealers at fire-sale prices - a sure sign that the bank crisis has arrived here in Switzerland, too. "First and foremost it is the financial center of Switzerland that will bleed," prophecies Beat Bernet, bank expert at the University of St. Gallen. By now people are even contemplating the unthinkable: the collapse of Europe's leading bank, the largest money manager in the world, UBS. The Swiss have been forced once already to wave goodbye to a national icon. Swissair, whose solidity earned it the moniker "the flying bank," shut down in 2001. It was a traumatic crash-landing for the whole country, and Swissair's collapse cost the state over 2 billion Swiss francs (€1.3 billion). The big banks also bore guilt for the failure. As later became public, UBS had refused to extend funding to Swissair for emergency operations. This is how the bank earned its nasty nickname among the populace, "United Bandits of Switzerland." Read The Full Story For First Time, Scientists Predict Arrival Of Asteroid 2008-10-11 01:21:49 The object turned up over Sudan, posing no threat to people. The successful prediction shows that an alert system is working, says Jet Propulsion Lab expert. Scientists for the first time were able predict the arrival of an asteroid before it entered Earth's atmosphere. The asteroid, estimated at 6 to 15 feet in diameter, entered the atmosphere over Sudan on Tuesday morning, providing a brilliant light show in East Africa as it burned up. Scientists said it posed no threat to people on the ground, though some tiny pieces of the object may have reached the Earth's surface. The important thing, scientists said, was not the discovery of the object, but the prediction of its trajectory. Read The Full Story
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