The Ideology That Screwed The World, Part 2

There was no record keeping requirement imposed on participants in the market. There was no reporting. We had no information ~ Brooksley Born, chairperson of the Commodity Futures Trading Commission (8/26/1996 to 6/1/1999) referring to the over the counter derivatives market, as quoted from the 10/20/2009 Frontline Documentary, "The Warning".

In my previous article I examined the Financial Services Modernization Act of 1999, a piece of deregulatory legislation which contributed to the housing bubble, which lead to the collapse of our financial system. That, however was the only the first of two free market anti-regulation bills that we can blame for the crisis.

To recap: The first bill was The Financial Services Modernization Act of 1999 (also known as the Gramm-Leach-Bliley Act or GLBA) repealed the portion of the Glass-Steagall Act which prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and/or an insurance company. Bill Clinton signed GLBA, even though every Senate Democrat (save one) voted against it.

The second piece of anti-regulatory legislation was the Commodity Futures Modernization Act of 2000 (CFMA). It continued an exemption of OTC derivatives from regulation that began with the passage of the Futures Trading Practices Act of 1992 (signed by George H.W. Bush).

Additionally, CFMA settled a 1998-1999 dispute wherein the Commodity Futures Trading Commission (or CFTC; then chaired by Brooksley Born) attempted to regulate the OTC derivatives market - and was thwarted by Alan Greenspan and Robert Rubin (see Frontline's excellent Documentary, "The Warning" for more information regarding the dispute). The act also exempted credit default swaps from regulation.

Initially CFMA passed in the House, but later died in the Senate, which did not vote on the measure. Later, then-Senator Phil Gramm took the bill, cosponsored by Senator Richard Lugar (R-IN) and written with the help of financial industry lobbyists, and slipped it into a $384-billion omnibus spending bill, which passed the Senate and was signed into law by President Clinton on 12/21/2000.

The July/August issue of Mother Jones reveals that "few lawmakers had either the opportunity or inclination to read [Gramm's] version of the bill", and that "nobody in either chamber had any knowledge of what was going on or what was in it".

In addition to exempting them from regulation by the CFTC, CFMA overrode any state legislature from treating OTC derivative transactions as gambling or otherwise illegal, even though they are and should be.

Definition, Derivative: A derivative is a financial instrument that is derived from some other asset, index, event, value or condition (known as the underlying asset). Rather than trade or exchange the underlying asset itself, derivative traders enter into an agreement to exchange cash or assets over time based on the underlying asset.

Definition, Over-the-counter: OTC, or off-exchange trading is to trade financial instruments such as stocks, bonds, commodities or derivatives directly between two parties. It is contrasted with exchange trading, which occurs via facilities constructed for the purpose of trading (i.e., exchanges).

University of Maryland Law School Professor Michael Greenberger explains the role OTC derivatives played in the financial crisis...

MG: ...discipline in the market has disappeared because what banks do with their loans now is they make the loan, and then they sell the loan to third parties. Third parties essentially buy stock in the loan. The loans are bundled into a basket, offered to the world, they buy stock in it. Owning that stock is not a derivative because you're an actual owner of the loan. What happened in our situation, especially when the mortgage lenders wanted to take risks with subprime loans - that is, people who did not have the likelihood to pay them off - is that people were so excited about the possibility of making money off this, that they ran out of the actual mortgages and securities in the mortgages. So what the banks decided to do was to create bets on whether or not the mortgages would be paid off. They were synthetic securities. That is to say, you didn't own anything, but you were betting that the borrower would pay the mortgage off".

(Mr. Greenberg teaches a course at UMD entitled "Futures, Options and Derivatives". This quote is excerpted from a 9 minute You-Tube video which can be viewed here).

If you purchase a Mortgage Backed Security you have a actual asset backing up your investment. The value of the asset may go down and you may end up losing a lot of money, but you won't lose all your money. If, on the other hand, you purchase a "synthetic" security and the mortgage isn't paid off, the security you purchased is worth absolutely nothing (a "toxic asset" valued at zero).

Wall Street was betting big that the subprime mortgage holders would pay off their loans, which they knew was a risky proposition. In order to hedge their bets Goldman Sachs (and the other financial houses that wanted to buy these things) purchased credit default swaps from AIG (and other large insurers).

A credit default swap (CDS) can be thought of as a kind of insurance because it is a "contract in which the buyer of the CDS makes a series of payments to the seller and, in exchange, receives a payoff if the credit instrument (typically a bond or loan) goes into default (fails to pay)". Although, unlike with ordinary insurance, the "buyer of a CDS does not need to own the underlying security or other form of credit exposure".

According to Wikipedia "the modern Credit Default Swaps were invented in 1997 by a team working for JPMorgan Chase", and they "became largely exempt from regulation by the U.S. Securities and Exchange Commission (SEC) with the Commodity Futures Modernization Act of 2000".

AIG agreed to issue the swaps, viewing the proposition as a license to print money. The securities Goldman wanted to "insure" were rated AAA, which means they were as safe as US government bonds (Wikipedia says "In practice, government bonds are treated as risk-free bonds, as governments can raise taxes or print money to repay their domestic currency debt").

Only after the crash did the SEC say something about the conflict of interest which arises when the issuer of the security pays to have it rated (The "issuer pays" model). An 8/27/2009 article from Law.com explains, "rating agencies have a financial interest in generating business from the firms that seek the rating. A low rating might affect future business". I guess that never occurred to AIG. Whether or not it occurred to Goldman Sachs they had succeeded in eliminating most of their risk.

And, because the Mortgage Backed Securities and the derivatives based on those securities paid a return of five to nine percent while Governmental bonds were currently at a worldwide historical low of one percent or less, the banksters decided to purchase as many as they could as fast as possible. Whether the securities were real or synthetic, it didn't matter because all they had to is pay an "insurance premium" and some other dupe assumed all the risk.

Michael Greenberger: It's one thing for us to have an economic problem because people can't pay their mortgages, and money is lost to the lenders or the whole economy for real problems here, but, I believe three times as much money is being lost not because people really lost their mortgages. Because three times the value of the loss of the mortgage is a bet that's been placed by wealthy institutions or wealthy individuals.

In other words, three times as many synthetic securities were created as real asset backed securities. Goldman Sachs didn't see the problem though, it wasn't as if they were operating without a safety net - all their securities were insured! However, when it came time for AIG to pay up - they didn't have the money. AIG's equity at the time of the collapse was 200 billion, but they owed 400 billion! (The quote from the preceding paragraph and this figure are both excerpted from the same YouTube video I linked to earlier.)

Goldman Sachs was not, however, that worried about not getting paid. Because they were "to big to fail", and because their ex CEO (and current Fed chairman) was in position to ensure they were "bailed out". Ben Bernanke let Goldman Sachs competitor Lehman Brothers go under, while he deigned to save AIG who just happened to owe Goldman 14 billion dollars.

Treasury Secretary Timothy Geithner claims that the bailouts weren't designed to to help Goldman Sachs, but I'm not buying it. It was because of Tim Geithner that Goldman Sachs received the full amount they were owed, instead of the 40 cents on the dollar that had been previously negotiated.

I think what this shows is that it wasn't the collapse of the housing market that that crashed the financial sector so much as all the unregulated gambling the banksters were engaging in, made possible by two major pieces of "free market" deregulation legislation. Near the height of the market the value of all the subprime mortgages in the US was estimated to be 1.3 trillion (and obviously not everyone with a subprime mortgage defaulted), so why has our government committed us to forking over 12.2 trillion of our (or our grandchildren's) dollars to the banksters?

The Community Reinvestment Act, which is a federal law designed to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities (by discouraging a discriminatory practice known as "redlining"), played no part in the financial crisis. Conservatives like to point to this act and assign it (and it's Democratic sponsors) some, or even all the blame for the housing bubble, but that is a myth - and exemplifies the blame-the-victim class warfare that the Cons love to engage in.

The crisis was caused by the anti-regulation ideology championed by greedy free market a-holes like Alan Greenspan, Robert Rubin, Lawrence Summers, Congressional Republicans and large financial institutions like Goldman Sachs. Although Bill Clinton signed these acts, they are both Conservative in nature, and completely antithetical to what progressives stand for. Progressives don't subscribe to Ayn Rand's laissez-faire free market tall tale, we believe in rules and regulations that protect "we the people" from the greedy a-holes who only operate in their own self-interest.

Further Reading
[1] Thom talks to Michael Kirk about "The Warning". Will the markets crash again? (Transcript), The Thom Hartman Radio Program 10/19/2009.
[2] Inside The Great American Bubble Machine: How Goldman Sachs has engineered every major market manipulation since the Great Depression by Matt Taibbi. Rolling Stone, 7/2/2009.
[3] The Giant Pool of Money (Transcript), Hosted by Ira Glass. This American Life, 5/9/2008 (download mp3).
[4] Testimony of Brooksley Born, Chairperson Commodity Futures Trading Commission Concerning The Over-The-Counter Derivatives Market Before the US House of Representatives Committee on Banking and Financial Services. 7/24/1998.

9/8/2010 Update: Initially I reported that George W. Bush signed the CFMA into law. I was wrong. President Clinton signed the bill that included the CFMA (the $384-billion omnibus spending bill previously mentioned) on 12/21/2000. I apologize for the error, however, the fact that Clinton, a New Democrat, signed both bills does not change my conclusion - which is that the 2008 financial crisis was caused by the Conservative ideology of deregulation (or "neoliberal fiscal values"... whatever the hell you call them deregulatory economic policies spell economic disaster).

SWTD #37

The Ideology That Screwed The World, Part 1

I am opposed to all forms of control. I am for an absolute laissez-faire, free, unregulated economy. Let me put it briefly - I am for the separation of state and economics ~ Ayn Rand (2/2/1905 to 3/6/1982) a Russian-American novelist, philosopher, playwright, and screenwriter. She is known for her two best-selling novels and for developing a philosophical system she called Objectivism.

Ayn Rand became a stabilizing force in my life. It hadn't taken long for us to have a meeting of the minds - mostly my mind meeting hers ~ Alan Greenspan (DOB 3/6/1926) an American economist who served as Chairman of the Federal Reserve of the United States from 1987 to 2006, quoted from his autobiography, "The Age of Turbulence"

Everyone knows that the recent financial meltdown, which began in 2008, came about as the result of another housing bubble. But what caused this bubble? And whom can we blame? Did McCain lose the election simply due to the fact that the Republicans were in charge at the time? That, plus the fact that he looked incredibly foolish when he suspended his campaign to rush back to Washington to fix the mess, stopping first to be interviewed by Wolf Blitzer in his "Situation Room", and snubbing David Letterman in the process?

Fortunately the American public correctly assigned blame for the financial crisis to John McCain, the Republican Party and deregulation. In the days immediately following McCain suspending his campaign, visiting Wolf's situation room, and apologizing to David Letterman because he "screwed up", McCain was asked (in a "CBS Today" interview) if he regretted championing deregulation in 1999. McCain replied, "I think the deregulation was probably helpful to the growth of our economy" (a definite "no").

And this occurred only shortly after McCain was forced to fire his financial advisor, Phil Gramm, who called the recession "mental", and declared that "America is a nation of whiners". Unsurprisingly, McCain lost the election.

The deregulation McCain championed in 1999, along with his financial advisor Phil Gramm, was the Financial Services Modernization Act of 1999 (also known as the Gramm-Leach-Bliley Act). It repealed part of the Glass-Steagall Act of 1933, which "prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and/or an insurance company". In other words, retail banks and investment banks were required to remain separate entities, so as to discourage speculation (which can also be described as gambling).

Freed from these prohibitions, investment banks purchased retail banks, bundled their customer's mortgages and resold them as "mortgage backed securities". But because the banksters made their money upfront they didn't really care if the mortgage holders defaulted. Certainly there was a strong incentive from them not to care, as their profit margin would be negatively impacted if they did. Naturally this led to a bubble (and bubbles eventually burst). But for the time being there was loads of cash to be made.

Gramm, Leach, and Bliley were Republicans. Conservative economic philosophy calls for deregulation. Ayn Rand believed in it, and so did her acolyte Alan Greenspan, who began his tenure with the Federal Reserve in 1987 when he was appointed its chairman by President Ronald Reagan. Reagan, the President who declared, "Government is not the solution to our problem, government is the problem" (sounds anti-regulation to me).

It is the Democratic Party that is supposed to champion protection of the consumer through strict regulation, yet they got snookered by the Ayn Rand laissez-faire fairy tale! Greenspan kept his Fed chair position for the next 18 years, whether the President was a Republican or a Democrat. According to the Frontline special, The Warning, "by the time Bill Clinton took the White House, the anti-government rhetoric had become so fashionable that even some Democrats embraced it".

In addition to not firing Greenspan as he should have, Clinton brought on board ex-Goldman Sachs employee Robert Rubin to head up the Treasury department. Greenspan and Rubin, along with advisors Lawrence Summers and Timothy Geithner formed a "pro-business anti-regulation support group". The 2/15/1999 edition of Time Magazine dubbed Greenspan, Rubin and Summers, "The Committee to Save the World". I think a more apt honorific would have been "The three horsemen of the coming financial apocalypse".

And so, President Clinton, following the Randian advice of his free market advisors, signed a bill sponsored by three Republicans and championed by a future Republican Presidential contender. That was after Gramm-Leach-Bliley passed the Senate with 53 Republican "yeas", one Democratic "yea", and 44 Democratic "nays" (there was also one "present" and one "absent", but those were Repubicans).

Update 9/26/2014: The vote I reference above was NOT the final vote. After conferencing with the House the bill came up for a vote again and this time it passed with 38 Democratic "yea" votes and only 7 Democratic "nay votes... unfortunately. Also, I've known about this post being wrong for quite some time and did nothing about it.

That is something that I ALWAYS try to avoid (wrong information being presented here). But this was back during my early days of blogging. I think that currently I am doing a much better job in making sure no erroneous information slips through. I apologize for taking so long to correct this post.

Correctly voting "nay" on this terrible piece of legislation in the Senate were Democrats Barbara Boxer (CA 1993-present), Richard Bryan (NV 1989-2001), Byron Dorgan (ND 1992-2011), Russell Feingold (WI 1993-2011), Tom Harkin (IA 1985-present), Barbara Mikulski (MD 1987-present), Paul Wellstone (MN), and Republican Richard Shelby (AL 1987-present).

Final Vote Tallies on S. 900, 106th Congress: Gramm-Leach-Bliley Act (On the Conference Report) 11/4/1999. (Yea/Nay/Not Voting or Present)... Senate Vote #354: Republicans (52/1/2), Democrats (38/7/0). House Vote #570: Republicans (207/5/11), Democrats (154/51/4).

SWTD #36

Supporters of Socialism Agree That Democrats are Horrible Compromisers

Ours is a government of checks and balances. The Mafia and crooked businessmen make out checks, and the politicians and other compromised officials improve their bank balances ~ Steve Allen (12/26/1921 to 10/30/2000) was an American television personality, musician, actor, comedian, and writer.

I turned the TV on a little early today and caught part of the end of Hardball, even though I usually I don't flip on the boob tube until 7pm when Keith Olbermann starts. Chris Matthews was discussing the Congressional Democrat's betrayal of their constituents, a large majority of whom support a government run insurance option. A Democratic Congresswoman (I forget who) defended the ditching of the public option by mentioning, several times, how this was the best they could do, because the Democrats are a large tent party, with progressive, moderate, and conservative corporate Democrats - and that meant that compromise was necessary.

Allowing people 55 years of age to buy into Medicare is a good idea, but I disagree that adding this provision and dropping the public option is an acceptable trade. Not that the public option was anything to get excited about, after they continually watered it down to the point where it would cover less than 2% of the population. Even with all the caveats that were attached, the insurance companies were still threatened. Corporate Democrats and Independent turncoat Democrats (Joe Lieberman), eager for more bribe money, sold out their constituents and helped kill the public option.

Republicans, on the other hand, stood by their constituents (the insurance cartels) and delivered to them the prospect of even more profits by mandating the public purchase their overpriced product and support multi-million dollar salaries for their CEOs. The anti-trust protection, first out, is now back in. Denial of coverage for preexisting conditions will apparently be disallowed, although the cartels will be allowed to charge these people more.

Unfortunately I'm one of those people. Eventually I assume I'll become one of the 45,000 people who die each year due to lack of insurance. That's a hell of a lot of people, so I am hardly in a unique position. As such, this post is not a plea for sympathy or well wishes. I doubt I have to worry about that in any case, as lately my blog, which I thought had a couple of readers, has gone several posts with scant attention paid. In any case, I probably have at least a couple of years before things really start to go downhill. At least the socialists who live with me hope that is the case.

On a positive note, if people 55 to 64 can buy into Medicare there are other members of my family that will benefit from that provision. And, even if there were a public option I'm sure that Tennessee (the state where I live), would opt out. So I guess there is no reason to be depressed about these developments after all!

SWTD #35

Who's Harboring bin Laden Now?

I find it hard to believe that nobody in your government knows where they are and couldn't get them if they really wanted to ~ Hillary Rodham Clinton, 67th US Secretary of State (1/21/2009 to Present), referring to the Pakistan government and the conventional wisdom that bin Laden and al Qaeda are hiding out somewhere in Pakistan's Hindu Kush mountains (10/29/2009).

Personally I think that Osama bin Laden is probably dead (as Benazir Bhutto believed), although for the purposes of this post I'll go along with the belief that he's alive and hiding out in "northwestern Pakistan's impenetrable Hindu Kush mountains... in the Chitral region".

Obviously Hillary Clinton believes it to be the case - that OBL is hiding out in these mountains, or somewhere else in Pakistan - and that the Pakistani government (or elements within the government) know where bin Laden is and aren't doing everything they could be doing to see that he is brought to justice.

Apparently this is the same area he has been hiding out in since December of 2001, after he "escaped" following the battle of Tora Bora. Since then we've sent Pakistan 8.6 Billion (as of 2008) in bribes to fight al Qaeda and hunt down bin Laden. Yet, according to retired Pakistani general Mahmud Durrani, "The army itself got very little. ...The military was financing the war on terror out of its own budget".

Most of the money went toward propping up Pakistan's sagging economy, and toward "support capability against India". It isn't like this information is new either; the US has suspected it for quite some time, but done nothing. I pointed out in my previous post that Afghanistan was invaded because they were "harboring" bin Laden. So if what Secretary Clinton says is true, coupled with the fact that most of the billions we've sent them isn't being used to fight al Qaeda or capture bin Laden, do Pakistan's actions not amount to harboring?

Does anyone else find it odd that the "Authorization for Use of Military Force Against Terrorists" resolution of 2001 gave bush the authority to invade Afghanistan because they were "harboring" bin Laden, but Pakistan, who (it could be argued) has been harboring bin Laden for years, gets billions of dollars to use as they please?

Could it be the reason we're bribing them is because they've got nukes? That is partly the reason, I believe. Also, the bribes allow us to fly drones over their territory, fire missiles, and accidentally kill scores of innocent people without having to answer for the collateral damage negligent homicides? Attacks which Pakistan then officially denies they've approved.

The US Department of Defense defines "collateral damage" as, "unintentional or incidental injury or damage to persons or objects that would not be lawful military targets in the circumstances ruling at the time". And that, "such damage is not unlawful so long as it is not excessive in light of the overall military advantage anticipated from the attack".

I don't agree that killing 687 innocent Pakistani civilians in addition to the 14 wanted al Qaeda leaders you were actually targeting is not excessive (1/14/2006 to 4/8/2009). This is an indictment against the bush administration AND the Obama administration, under whom drone attacks have intensified.

This isn't the point I was trying to make with this post, however. I wanted to highlight the hypocrisy of toppling one government (the Taliban of Afghanistan) when they clearly tried to give us what we wanted, and giving billions in bribes to another while looking the other way when they use that money for purposes other than what we gave it to them for. And this isn't also an indictment of the Obama administration, because that is apparently starting to change. Now military aid will be "contingent on Pakistan's efforts to cut government ties to insurgents". "Government ties to insurgents" sounds like "harboring" to me. I don't know why this wasn't a condition of continued aid before!

Maybe this is why bush traded our nuclear technology for India's mangos? He knew that would force Pakistan to use our billions defending themselves against India and not on fighting al Qaeda and finding bin Laden. The nuke technology we gave India was supposedly for civilian use only, but they are not signatories to the Nuclear Non Proliferation Treaty.

Given Pakistan's "obsession with India [which] has made [their] military resistant, practically up to the present, to reorienting its defense posture to include counterinsurgency capabilities needed to deal with growing internal threats", it's not surprising they are now on the verge of becoming a failed state. If this wasn't intentional, then what the hell was bush thinking? Even if the nuke technology we handed off to India doesn't end up in the hands of their military, I'm sure there are those in the Pakistani government who believe otherwise.

More importantly, why are we again funding (or providing technology to) both sides in a long running conflict? This reminds me of how the Reagan and George HW Bush administrations armed both sides in the Iran-Iraq war. (Yet another example of war crimes committed by Republican Presidents!)

I do not know how much merit there is to what Hillary Clinton said. It is obvious, however, that Pakistan needs to direct more of their attention towards internal threats rather than blowing all our money defending themselves against India; a miscalculation which could end with Pakistan becoming the world's first nuclear armed failed state.

9/26/2014 Update: As we all now know, OBL was not dead and not hiding out in "northwestern Pakistan's impenetrable Hindu Kush mountains. He was ALIVE and living in a compound in Abbotabad... Pakistan. According to Wikipedia, "Bin Laden was reported to have evaded capture by living in a section of the house for at least five years".

A 3/19/2014 NYT article by Carlotta Gall says "members of the ISI, Pakistan's main intelligence service" were responsible for hiding bin Laden.

Shakil Afridi, "a Pakistani physician who helped the CIA run a fake vaccine program in Abbottabad... to confirm Osama bin Laden's presence in the city by obtaining DNA samples" said (in a Fox News interview) that "Pakistan's fight against militancy is bogus. It's just to extract money from America".

The Abbottabad Commission report (a judicial inquiry paper authored and submitted by the Abbottabad Commission, led by Justice Javaid Iqbal, to the Prime Minister of Pakistan on 1/4/2013) blamed "incompetence at every level in the Pakistan's intelligence and security services [but] did not rule out the involvement of rogue elements within the Pakistani intelligence service.

SWTD #34

Why bush Really Invaded Afghanistan

I want justice... there's an old poster out West, I recall, that said, "Wanted, Dead or Alive" ~ George W. Bush, 43rd President of the United States (1/20/2001 to 1/20/2009) referring to the 9/11 attacks "prime suspect" Osama bin Laden on 9/17/2001.

The US military bombed and invaded Afghanistan because that is where Osama bin Laden and Al-Qaeda were located - "guests" of the Taliban Regime which refused to hand him over to the US for prosecution. There isn't much more to the narrative, as far as most people are concerned. Most people will acknowledge that there is some controversy surrounding the decision to invade Iraq, with some calling it a "war of choice" (you can place me firmly in that camp).

However, contrary to the conventional wisdom that Afghanistan was the "good war" (wisdom that our current president agrees with), I believe the evidence strongly suggests that Afghanistan was another "war of choice". If you recall, before the US invaded Afghanistan bush contacted the Taliban and demanded that they turn over bin Laden, implying that the bombing and invasion wouldn't happen if they complied.

The fact is that Taliban did offer to give up bin Laden. Negotiations between the US and the Taliban had been ongoing for 3 years prior to the 9/11/2001 attacks. Unfortunately President Clinton was unable to close the deal. He did, however, put together an "aggressive plan to take the fight to Al-Qaeda".

But bush rejected the Clinton administration's claim that bin Laden and Al-Qaeda were a serious threat. bush said, "I didn't feel a sense of urgency" (as reported by Bob Woodward in his book "Bush at War", 2002). So he tossed the Clinton administration plan and handed off responsibility for formulating a new strategy to VP Cheney. Cheney's counter terrorism task force never met.

Fast forward to the aftermath of the (preventable) attacks of 9/11. With virtually the entire world backing him, bush submitted an ultimatum to the "rulers" of Afghanistan, the country which was "harboring" bin Laden (the words in quotes are in quotes because Afghanistan was not then and is not now actually a country, but rather a collection of independent tribes and villages).

bush demanded, "We know he's guilty, turn him over". The Taliban, not wanting to be bombed or invaded, offered to take bin Laden into custody and send him to a neutral third country for trial. bush "summarily rejected" the offer.

Under the "Authorization for Use of Military Force Against Terrorists" (a joint resolution passed by the United States Congress on 9/18/2001), bush was granted "the authority to use all necessary and appropriate force against those whom he determined planned, authorized, committed or aided the September 11th attacks, or who harbored said persons or groups".

After the Taliban offered to turn over bin Laden they were no longer "harboring" him, and thus the invasion was not necessary or appropriate. It was at this point that, instead of issuing an ultimatum, negotiations should have begun (or been renewed). A deadline could have been attached, but, IMO simply rejecting the offer outright was a violation of the resolution.

It is human nature to be offended when presented with an ultimatum when you're expecting an offer of negotiation. Saving face is important in Muslim culture, and that they responded negatively to bush's demands shouldn't have been a surprise to anyone in the administration. Any idiot could have deduced that they'd be insulted when they were informed that they would not be allowed to save face, but instead were expected to submit to a humiliating and embarrassing capitulation.

This is why, in my opinion, bush refused to listen to the Taliban's offer. He deliberately insulted them to short circuit negotiations, which would allow him to proceed with an invasion. What we heard from the bush administration was "this is not a negotiation", and that the Taliban needed to "act to meet all of the president's demands now". Why give in to your adversary's demands when they've made it clear they're going to attack anyway?, which is what the bush administration signaled they were going to do by rejecting all offers of negotiation.

The logical conclusion is that bush had decided in advance that he was going to invade Afghanistan, and asking for the Taliban to give up bin Laden was a deceptive manipulation designed to make it appear as though his administration hadn't already decided to go to war.

Even though war with Afghanistan was not what bush actually desired. As noted by bush's official biographer, Mickey Herskowitz, bush was "thinking about invading Iraq in 1999", and that, if he had the chance to invade he would not "waste it". But because it was common knowledge that bin Laden was in Afghanistan and not Iraq, the American public wouldn't accept a war with Iraq... initially.

Case in point, Chief counter-terrorism adviser Richard Clarke, thought Secretary of Defense Donald Rumsfeld was joking when "as early as the day after the attacks, Rumsfeld was pushing for retaliatory strikes on Iraq, even though Al-Qaeda was based in Afghanistan".

It was unavoidable; the path to war with Iraq went though Afghanistan. So bush bullied and insulted the Taliban into NOT giving up bin Laden, even though they were desperate to do so (to avoid being bombed). However, a war with Iraq would not be saleable if bin Laden was to actually be captured. So, when US forces came close to catching him at Tora Bora, Rumsfeld sidelined "the vast array of American military power, from sniper teams to the most mobile divisions of the Marine Corps and the Army", and sent "fewer than 100 U.S. commandos, working with Afghan militias" to track down bin Laden. As a result bin Laden and compatriots "walked unmolested out of Tora Bora and disappeared into Pakistan's unregulated tribal area".

This information is from a 11/30/2009 Senate Foreign Relations Committee report, "Tora Bora Revisited: How We Failed to Get Bin Laden and Why It Matters Today". An article from the UK's Guardian, "Rumsfeld Let bin Laden Escape in 2001, says Senate Report" suggests that Rumsfled's "incompetence" is to blame. Even though the article title contains the word "let", implying that it was on purpose. Obviously this is because it's an article about how bin Laden "escaped", not an article accusing Rumsfeld of treason.

The Senate report does, however, conclude "unequivocally that in mid-December 2001, Mr. bin Laden and his deputy, Ayman al-Zawahri, were at the cave complex, where Mr. bin Laden had operated previously during the fight against Soviet forces". It also "suggests that a larger troop commitment to Afghanistan might have resulted in the demise not only of Mr. bin Laden and his deputy but also of Mullah Muhammad Omar, the leader of the Afghan Taliban. Mullah Omar, who also fled to Pakistan in 2001, has overseen the resurgence of the Taliban", but that "fewer than 100 American troops committed to the area were not enough to block his escape".

So we're to believe that Rumsfled's "incompetence" is to blame, even though this was his second term as Defense Secretary (he served under President Gerald Ford from 1975 to 1977)? Rumsfeld has plenty of experience, yet we were supposed to be worried about electing Barack Obama because of his lack of experience? This theory is completely unbelievable.

This explains why Rep. Maurice Hinchey (D-New York), recently told MSNBC host David Shuster that the Bush administration "intentionally let bin Laden get away" in order to justify the Iraq war. When Schuster suggested, "That will strike a lot of people as crazy", Hinchey replied, "I don't think it'll strike a lot of people as crazy. I think it'll strike a lot of people as very accurate".

On 3/13/2002 (87 days after bin Laden "escaped") bush said, "So I don't know where he is. You know, I just don't spend that much time on him. And, again, I don't know where he is. I'll repeat what I said. I truly am not that concerned about him". Why wasn't bush concerned? bush wasn't concerned about bin Laden because he had escaped into Pakistan and was beyond our reach, and thus the possibility no longer existed that he might be captured, dead or alive, and foil bush's plans for invading Iraq.

Afghanistan Timeline
->10/07/2001: Afghanistan Invaded.
->12/16/2001: bin Laden escapes during the Battle of Tora Bora.
->03/13/2002: bush says, "I truly am not that concerned about him (bin Laden)".
->03/20/2003: Iraq Invaded.

Further Reading
[1] Poll: Do you believe that the Bush/Cheney Administration made a conscious decision to let bin Laden get away at Tora Bora? by R. Donald Snyder, Newsvine 11/30/2009.
[2] Rumsfeld Order Allowed bin Laden's Escape by Gabriel Winant, Salon 11/30/2009.

SWTD #33

Petition To Deny Funding For The Afghanistan Escalation

Sending more troops will not make the US safer - it will only build more opposition against us. I urge you on behalf of truth and patriotism to consider carefully and rethink Afghanistan ~ Corporal Rick Reyes (retired) testifying before the Senate Committee on Foreign Relations (4/23/2009)

The following arrived in my email inbox this morning from Matt Holland, the Online Director of True Majority.org...

Last night President Obama announced that he's escalating the war in Afghanistan, bringing the number of U.S. troops in that country to 100,000 or more.

It's the wrong decision, but it's not too late to change things.

To complete the escalation, Congress needs to sign off on the plans and the funding for extra troops and equipment - a staggering $1 trillion or more.

Last night, Congress heard from the president. Today, they need to hear from you. So we're working with friends at Brave New Films and Credo, and you can help: Sign the petition opposing the escalation in Afghanistan. It says:

"President Obama has decided to send more than 30,000 extra troops to Afghanistan, at a cost of more than $100 billion/year. But America cannot afford more war that does not make us safer, and Congress has the power to stop the escalation. Please vote NO on any spending bill that would send more troops to Afghanistan".

Sign the petition at Glenn Greenwald's site "Rethink Afghanistan".

Some pundits are saying there's no need to worry because Obama also promised to begin bringing troops home in 2011. But even if that is true, it would only be the beginning of the end of the war, with no guarantee when everyone will come home or when the war will end.

All this while President Obama's own national security advisor has reported that there are fewer than 100 Al Qaeda operatives in all of Afghanistan, and that they have no ability to launch attacks on either the United States or our allies.

Now Congress must decide if spending $100 billion a year to have 100,000 troops chasing 100 terrorists in the most remote mountains of our planet is worth it.

You know the answer already. Congress can slow down this conflict and eventually end it responsibly. We'll stick with this fight until they do the right thing.

Tell Congress we can't afford any more war. It's time to stop sending troops to Afghanistan and develop a plan to bring everyone home.

My Commentary: Is it not too late to change things? I think it probably is. In any case, I signed the petition because I believe that escalation is a mistake. If you agree I urge you to sign the petition as well. And to check out Glenn Greenwald's documentary "Rethink Afghanistan".

About "Rethink Afghanistan": Rethink Afghanistan is a 2009 documentary created by Robert Greenwald and Brave New Foundation about the ongoing war in Afghanistan. This full-length documentary campaign features experts from Afghanistan, the U.S., and Russia discussing critical issues like military escalation, how escalation will affect Pakistan and the surrounding region, the cost of war, civilian casualties, and the rights of Afghan women. The ultimate goal of this documentary campaign is to raise the level of public discourse, compel people to ask key questions about the war, and urge Congress to hold oversight hearings.

See also: Rethink Afghanistan, The Blog by Derrik Crowe.

SWTD #32