Friday, October 12, 2007

 

The Rich Get Richer. When The Revolution Comes, I've Got A List of My Favorite Marie Antoinettes.

Income-Inequality Gap Widens
Boom in Financial Markets
Parallels Rise in Share
For Wealthiest Americans
By GREG IP
October 12, 2007; Page A2

The richest Americans' share of national income has hit a postwar record, surpassing the highs reached in the 1990s bull market, and underlining the divergence of economic fortunes blamed for fueling anxiety among American workers.

The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19% in 2004, and surpasses the previous high of 20.8% set in 2000, at the peak of the previous bull market in stocks.

Widening Gap: The wealthiest Americans' share of national income has hit a postwar record, surpassing the highs reached in the 1990s bull market, and highlighting the divergence of economic fortunes blamed for fueling anxiety among American workers.
Behind the Numbers: Scholars attribute rising inequality to several factors, including technological change that favors those with more skills, and globalization and advances in communications that enlarge the rewards available to "superstar" performers whether in business, sports or entertainment.
Political Fallout: The data pose a potential challenge for President Bush and the Republican presidential field. They have sought to play up the strength of the economy and low unemployment, and the role of Mr. Bush's tax cuts in both. Democrats may use the data to exploit middle-class angst about stagnant wages.
See related IRS data.

The bottom 50% earned 12.8% of all income, down from 13.4% in 2004 and a bit less than their 13% share in 2000.

The IRS data, based on a large sample of tax returns, are for "adjusted gross income," which is income after some deductions, such as for alimony and contributions to individual retirement accounts. While dated, many scholars prefer it to timelier data from other agencies because it provides details of the very richest -- for example, the top 0.1% and the top 1%, not just the top 10% -- and includes capital gains, an important, though volatile, source of income for the affluent.

The IRS data go back only to 1986, but academic research suggests the rich last had this high a share of total income in the 1920s.

Scholars attribute rising inequality to several factors, including technological change that favors those with more skills, and globalization and advances in communications that enlarge the rewards available to "superstar" performers whether in business, sports or entertainment.

[Unequal]

In an interview yesterday with The Wall Street Journal, President Bush said, "First of all, our society has had income inequality for a long time. Secondly, skills gaps yield income gaps. And what needs to be done about the inequality of income is to make sure people have got good education, starting with young kids. That's why No Child Left Behind is such an important component of making sure that America is competitive in the 21st century." (See article.)

Jason Furman, a scholar at the Brookings Institution and an adviser to Democratic politicians, said: "We've had a 30-year trend of increasing inequality. There was an artificial reduction in that trend following the bursting of the stock-market bubble in 2000."

The IRS data don't identify the source of increased income for the affluent, but the boom on Wall Street has likely played a part, just as the last stock boom fueled the late-1990s surge. Until this summer, soaring stock prices and buoyant credit markets had produced spectacular payouts for private-equity and hedge-fund managers, and investment bankers.

One study by University of Chicago academics Steven Kaplan and Joshua Rauh concludes that in 2004 there were more than twice as many such Wall Street professionals in the top 0.5% of all earners as there are executives from nonfinancial companies.

Mr. Rauh said "it's hard to escape the notion" that the rising share of income going to the very richest is, in part, "a Wall Street, financial industry-based story." The study shows that the highest-earning hedge-fund manager earned double in 2005 what the top earner made in 2003, and top 25 hedge-fund managers earned more in 2004 than the chief executives of all the companies in the Standard & Poor's 500-stock index, combined. It also shows profits per equity partner at the top 100 law firms doubling between 1994 and 2004, to over $1 million in 2004 dollars.

The data highlight the political challenge facing Mr. Bush and the Republican contenders for president. They have sought to play up the strength of the economy since 2003 and low unemployment, and the role of Mr. Bush's tax cuts in both. But many Americans think the economy is in or near a recession. The IRS data show that the median tax filer's income -- half earn less than the median, half earn more -- fell 2% between 2000 and 2005 when adjusted for inflation, to $30,881. At the same time, the income level for the tax filer just inside the top 1% grew 3%, to $364,657.

Democrats, on the other hand, have sought to exploit angst about stagnant middle-class wages and eroding benefits in showdowns with Mr. Bush over issues such as health insurance and trade.


 

Why Does Senate Minority Leader Mitch McConnell (R-KY) Hate Children?

E-mail Reveals That McConnell Staffer Propagated Smear Campaign Against Graeme Frost

mcconnelltwo.jpgYesterday, ThinkProgress reported that there was mounting evidence that a staffer for Senate Minority Leader Mitch McConnell (R-KY) may have been involved in the right-wing campaign to smear Graeme Frost and his family.

ABC News reported earlier in the week that an e-mail sent to reporters by “a Senate Republican leadership aide” in McConnell’s office suggested that “GOP aides were complicit in spreading disparaging information about the Frosts.” A McConnell spokesman refused to deny the office’s involvement in the affair.

ThinkProgress has obtained an email that congressional sources tell us was sent to reporters by Sen. McConnell’s communications director Don Stewart.

On Monday morning, Don Stewart sent an email with the following text to reporters:

Seen the latest blogswarm? Apparently, there’s more to the story on the kid (Graeme Frost) that did the Dems’ radio response on SCHIP. Bloggers have done a little digging and turned up that the Dad owns his own business (and the building it’s in), seems to have some commercial rental income and Graeme and a sister go to a private school that, according to its website, costs about $20k a year ‹for each kid‹ despite the news profiles reporting a family income of only $45k for the Frosts. Could the Dems really have done that bad of a job vetting this family?

In the email, Stewart attacks Democrats for allegedly doing a bad job “vetting this family.” That effort to blame Democrats for the smear campaign seems to have swayed some reporters, as CNN this morning claimed that the real story is that “the Democrats didn’t do as much of a vetting as they could have done.”

The New York Times reported yesterday that “an aide” to Sen. McConnell “expressed relief that his office had not issued a press release criticizing the Frosts.” No, what the McConnell staffer did was worse — he used the power and privilege of the Senate office to secretly propagate a baseless smear campaign against a 12-year old boy and his family simply because they disagreed on policy.

UPDATE: Yesterday, right-wing pundit Michelle Malkin took us to task for suggesting McConnell’s office was involved:

Snort-worthy conspiracy theory of the day…The tinfoil hatters at ThinkProgress actually believes conservative bloggers were in cahoots with Mitch McConnell, whom I lambasted below. The unreality-based community really does live in a different galaxy.

We await her response.

UPDATE II: Malkin responds. Unsurprisingly, the McConnell staffer doesn’t meet Malkin’s standard of being “involved” in the campaign.


 

Ann Coulter: The Mahmoud Ahmadinejad of the Republican Party.














"The skirmishes in the occupied land are part of a war of destiny. The outcome of hundreds of years of war will be defined in Palestinian land. As the Imam said, Israel must be wiped off the map." - Iranian President Mahmoud Ahmadinejad

"We should all be Christians. We just want Jews Perfected. - Ann Coulter.

"I was going to have a few comments on the other Democratic presidential candidate John Edwards, but it turns out you have to go into rehab if you use the word "faggot", so I — so kind of an impasse, can't really talk about Edwards." "In Iran we don't have homosexuals like in your country."

- Mahmoud Ahmadinejad

On resettling the Jews from Israel to Canada or Alaska:
"...you cannot tolerate the presence of Zionists in Europe but want to inflict them on the people of our region? You have so much land in your possession. This vast land of Canada and Alaska can be used to resettle the Jews. Save yourselves."

Mahmoud Ahmadinejad (Al-Quds Day speech)

Canadians] better hope the United States does not roll over one night and crush them. They are lucky we allow them to exist on the same continent.

"Are they human beings?... They (Zionists) are a group of blood-thirsty savages putting all other criminals to shame."

- Mahmoud Ahmadinejad (as quoted by Iranian TV)

When we were fighting communism, OK, they had mass murderers and gulags, but they were white men and they were sane. Now we're up against absolutely insane savages.

We are confident that the Islamic logic, culture, and discourse can prove their superiority in all fields over all schools of thought and theories.

- Mahmoud Ahmadinejad

Liberals creation myth is Charles Darwin's theory of evolution, which is about one notch above Scientology in scientific rigor. It's a make-believe story, based on a theory that is a tautology, with no proof in the scientist's laboratory or the fossil record - and that's after 150 years of very determined looking. We wouldn't still be talking about it but for the fact that liberals think evolution disproves God.

– Ann Coulter

Western media only intensified the climate of fear and insecurity.

- Mahmoud Ahmadinejad

Would that it were so! ... That the American military were targeting journalists.

We thank God that our enemies are idiots. (6 February 2006) [14]

- Mahmoud Ahmadinejad

If liberals are not traitors, their only fallback argument at this point is that they’re really stupid.”

– Ann Coulter


Thursday, October 11, 2007

 

Sweet Jesus. Rush Limbaugh Listeners Send Hate Mail To Combat Veterans.

Rush’s listeners flood VoteVets with hate mail.

In the past two weeks, as the controversy over Rush Limbaugh’s “phony soldiers” comments unfolded, VoteVets.org has been at the forefront of pushing to hold Limbaugh accountable for disparaging pro-withdrawal soldiers. On MSNBC’s Countdown last Friday, VoteVets.org Vice President Brandon Friedman read aloud some of the hate mail the organization has received from Limbaugh’s listeners:

- “Do us all a favor and shoot yourself. You are a waste of human flesh.”

- “Tell the truth about Rush. You phony piece of [expletive].”

- “You traitorous bunch of [expletive] cowards.”

- “Rush Limbaugh is a great American, and you are a phony.”

Watch it:

Friedman has posted more hate mail from Rush’s listeners here.

 

The Frosts Demonstrate Why We Need Single Payer Health Care

Hale "Bonddad" Stewart
Posted October 11, 2007

From Time:

It turns out, however, that not everything about the Frosts' life pops up on a Google search. While Graeme does attend a private school, he does so on scholarship. Halsey Frost is a self-employed woodworker; he and his wife say they earn between $45,000 and $50,000 a year to provide for their family of six. Their 1936 rowhouse was purchased in 1990 for $55,000. It was vacant and in a run-down neighborhood that has improved since then, in part because of people like themselves who took a chance. It is now assessed at $263,140, though under state law the value of that asset is not taken into account in determining their eligibility for SCHIP. And while they are still uninsured, they claim it is most certainly not by choice. Bonnie Frost says the last time she priced health coverage, she learned it would cost them $1,200 a month.

The above snippet from Time perfectly illustrate why single-payer health care is really the answer to the health care problem in the US.

1.) Notice the Frost's already priced insurance. At $1200/month, the Frosts would be looking at $14,000/year in payments. That's 32% of their income. That assumes those are all the medical costs the Frosts would pay which simply isn't true. My guess is the $1200/month policy would have some type of deductible, co-pay structure etc.... Considering the Frosts overall situation of two children needing expensive medical care, medical costs could easily become 40%-50% of their annual expenses.

2.) Malkin has argued that assets should be included in the eligibility computation for SCHIP. This is a really stupid idea. According to the article, the Frost's home is $263,000. According to Malkini's argument, the Frosts should either take out a home loan (home equity loan) or sell their home. If the Frost's sell their home, they will take out their equity (assuming they have some). But they'll eventually spend that. In addition, this assumes the Frosts can sell their home right now -- in the worst housing market in the last 20 years. In other words, this argument makes a lot of assumptions that probably won't play out in reality. When they're done spending the loan proceeds, they'll be poorer. In taking out a home equity loan, the Frost's are simply delaying he inevitable -- bankruptcy. The Frosts would then have a note which would provide a drain on their finances until the loan proceeds ran out. At that time, the Frosts would have an additional payment in their monthly nut in addition to medical costs. I'm not sure if Malkin realizes the debt issue in America, but it is pretty severe. For example, foreclosures doubled this month.

Here's the basic problem. The Frosts aren't rich and they have children. That means medical expenses are their biggest problem. Under the Malkin theory, either poor people shouldn't have children because insurance is too expensive, or the poor should go into debt to pay for insurance which under the new bankruptcy laws is tantamount to indentured servitude.

Anyway -- now that I've weighed in on the Frost debate, I want to bring back the central arguments I have always made (and will continue to make) about single-payer health care.

While I will almost always advocate for a market based economic approach to allocating resources, health care is not an area where the profit motive should dominate decision making. Simply put, the end product is a patient's health. Private health insurance has a conflict of interest between the insurance company and the insured which will be resolved in favor of the insurance company a majority of the time.

Let me paint a hypothetical picture to illustrate this point. Insured makes a claim with the insurance company, which is a publicly traded company. Because the insurance company is publicly traded they must turn a profit and increase their profits to maintain their share price. In order to make a profit they have every incentive to either

1. Deny the insured's claim, or
2. Delay payment to increase the possibility the insured will drop his claim

There are numerous stories about an insured making a routine claim only to be inundated with paperwork, or being told the policy doesn't cover that procedure, or being told the insurance company has to look into the claim to see if the insurance company can make a payment. In any of these situations the central idea of insurance -- to provide some safety for the insured at a specific cost -- is compromised.

In addition, insurance companies will seek to minimize the amount of money they would have to pay to the insured. Again, remember the product here is the patient's health. Supposed the insured has a disease where the cure is expensive but a cheaper alternative exists. However, the cheaper alternative would moderately or seriously compromise the insured's quality of life. Because the insurance company is profit-driven, it will probably opt for the cheaper treatment that compromises the insured's quality of life.


Here is what the Frost's ran into in the private health care market:

In a telephone interview, the Frosts said they had recently been rejected by three private insurance companies because of pre-existing medical conditions. "We stood up in the first place because S-chip really helped our family and we wanted to help other families," Mrs. Frost said.

The profit motive worked to the Frost's extreme disadvantage. Because covering the Frost's was expensive, the insurance companies simply denied them coverage.

Secondly, private health care is more expensive the public health care. Here are three charts compiled from the Organization for Economic Cooperation and Development. The figures are from 2004.

First, the US spends the least amount of public money on health care.

However, the US spends the most on health care as a percentage of GDP

and on a per capita basis.

Notice the partially inverse relationship between public expenditures and total amount spent on health care. In short, publicly available health care is cheaper.

Finally there is the issue of competitiveness. I'll let General Motors of Canada make the argument for me.

"The Canadian plan has been a significant advantage for investing in Canada," says GM Canada spokesman David Patterson, noting that in the United States, GM spends $1,400 per car on health benefits. Indeed, with the provinces sharing 75 percent of the cost of Canadian healthcare, it's no surprise that GM, Ford and Chrysler have all been shifting car production across the border at such a rate that the name "Motor City" should belong to Windsor, not Detroit.

Just two years ago, GM Canada's CEO Michael Grimaldi sent a letter co-signed by Canadian Autoworkers Union president Buzz Hargrave to a Crown Commission considering reforms of Canada's 35-year-old national health program that said, "The public healthcare system significantly reduces total labour costs for automobile manufacturing firms, compared to their cost of equivalent private insurance services purchased by U.S.-based automakers." That letter also said it was "vitally important that the publicly funded healthcare system be preserved and renewed, on the existing principles of universality, accessibility, portability, comprehensiveness and public administration," and went on to call not just for preservation but for an "updated range of services." CEOs of the Canadian units of Ford and DaimlerChrysler wrote similar encomiums endorsing the national health system.

Health care costs are killing American business. Our international competitors don't have to deal with these costs. As a result, private health care is making US business less competitive.

So, public health eliminates a conflict of interest that compromises individual health, is cheaper and makes the US more competitive. And we don't have a public health system because?

Digby makes the point far more eloquently than I:

Setting aside the total dishonesty of that --- surely Steyn has been informed by now that the Frost kids go to private school on scholarship and the house was bought for 55,000 in 1990 --- what has become crystal clear in this debate is one that I think needs to be discussed. The Republicans believe that people should be completely destitute, living in a one room shack and working two jobs before they "deserve" subsidized health insurance. The middle class who are one car accident or one cancer diagnosis away from losing their jobs, being unable to afford either the cadillac COBRA plans from their employers (my last one here in California was $1700.00 a month and I'm healthy) must not be allowed to keep ANY assets.They must be, as Steyn's pal wrote, "dying on the streets with sores on their bodies" before they qualify for aid.

.....

If the free-wheeling capitalists of the right wing believe that you can keep an economy dynamic, growing and flexible in a twisted system like this, they are even more blindly ideological than I thought. This is not just a moral crisis, it's an economic crisis and if these people are determined to continue down this path then I suggest the rest of us start buying land in Costa Rica because this country is going to fail. Hugely. The numbers do not add up.

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"It's the mother of all con jobs... free market rhetoric is being used as the cover story for crony capitalism."

John Cusack
Posted October 10, 2007
The Real Blackwater Scandal: Build a Frontier, You Get Cowboys, Part II

Read Part I of this conversation here.

For the past couple of weeks, I've been posting pieces of my ongoing conversation with Naomi Klein, about her new book, The Shock Doctrine: The Rise of Disaster Capitalism. You can watch our first encounter here, and read our earlier conversations here and here. You can also learn more about the book and read excerpts here.

Yesterday we talked about the Blackwater scandal, setting it in the larger context of what Naomi calls the new economy of the Disaster Capitalism Complex. We also talked about cowboys, frontiers and the perennial power of John Wayne. Here's the rest of that discussion:


Cusack: So apart from getting obscenely rich, what are these private security and other contractor companies doing with this tsunami of public money that is being thrown at them?

Klein: Well, unlike the government, which has allowed the public infrastructure to erode so that we now have collapsing bridges and levees, these guys are making serious and sturdy capital investments. They're planning for the future, building infrastructure -- in Blackwater's case, paramilitary infrastructure. Founded in 1996, the company has used the steady stream of contracts during the Bush years to build up a private army of twenty thousand on-call mercenary soldiers and a massive military base in North Carolina worth between $40 and $50 million. They have armored vehicles, helicopter gunships, manmade lakes, a Boeing 767, a Zeppelin.

Cusack: Like the Hindenburg -- Eric Prince has a lot of toys. The Zeppelin -- that one had to be the fulfillment of a boyhood dream.

Klein: You hear people complain about how Hezbollah is a "state-within-a-state" in Lebanon -- what about Blackwater in the USA? And that's just one company of hundreds, and a relatively small player compared to Lockheed and GE and Booz Allen. But once again, we can't keep being surprised by this shadow world -- it is an inevitable consequence of Rumsfeld's vision of an outsourced and contracted-out state. A right-wing journal in the U.S. called Blackwater "al Qaeda for the good guys" and it's a striking analogy. Wherever the disaster capitalism complex has landed, it has produced a proliferation of armed groupings outside the state. No surprise, really -- when countries are rebuilt by people who don't believe in government, the states they build are invariably weak, creating a market for alternative security forces, whether Hezbollah, Blackwater, the Mahdi Army or the gang down the street in New Orleans.

Cusack: You've written a lot about what you call "the moveable green zone", which has extended the reach of these companies way beyond the war...

Klein: Well the first place where we all saw this happen was in New Orleans after the flood. Within weeks, the Gulf Coast became a domestic laboratory for the same kind of government-run-by-contractors that was pioneered in Iraq. And the whole Green Zone gang was there: Halliburton, Blackwater, Parsons, Fluor, Shaw, Bechtel, CH2M Hill.

But again, this is way more than just a story about shoddy work by contractors. These private companies were actually taking over state functions instead of rebuilding the public sphere. And in New Orleans, the supreme irony was that it was the very frail public sphere that caused the disaster in the first place when the levees broke and the public transit system couldn't handle the evacuation and FEMA was nowhere to be found.

This is the opposite of the New Deal, when public works created good jobs and strengthened society. In today's disasters, public money floods into corporate coffers and those corporations replace the public sphere. Look at New Orleans today: public schools have been converted into charter schools, public housing remains boarded up as condo developers circle, the levee system remains inadequate, and the city's largest public hospital -- Charity Hospital -- is still closed. Meanwhile, contractors are driving down wages and working conditions, with African-Americans virtually locked out of reconstruction jobs, and migrant Latino workers locked in, telling horror stories of modern day indentured servitude. This is what I mean when I say that disasters are dress rehearsals for a sci-fi vision of corporate rule -- it's not just that disaster response is being privatized, it's that in places like Baghdad and New Orleans, the public sphere is disappearing completely and there is no plan to bring it back. This is the warfare state you send up so brilliantly in War Inc [see the trailer here and a preview clip here] -- with the same company selling the bombs and the prosthetic limbs for the victims of those bombs. It's crazy, but we are really not that far off from your twisted imagination!

Cusack: Some things are so vicious, you have to look at them through a different lens or you could never get out of bed. It's hard, even in absurdist satire, to stay one step ahead of this crew. Of course, the business will keep coming for these companies. Even if a momentary peace breaks out, natural disasters will ensure that the market will expand for the Disaster Capitalism Complex as a whole. They'll just diversify. A perfect flexibility built into the design.

Klein: Put it this way: after the recent earthquake in Peru, a private U.S. company called Aramark got a contract to manage evacuee camps and they had mini-McDonald's franchises in them.

That was a first -- McRelief.

Cusack: It fills one with pride.

Klein: It's time to face the fact that climate change has created a major new market. And I'm not talking about a new market for sustainable energy, which would be positive, but a market to profit from the disasters caused in large part by our fossil fuel addiction. Responding to the increasing numbers of emergencies is seen as simply too hot an emerging market to be left to the non-profits -- why should UNICEF rebuild schools when Bechtel can do it? Why put displaced people from Mississippi in subsidized empty apartments when they can be housed on Carnival cruise ships? Why deploy a major international peacekeeping force to Darfur when Blackwater has been lobbying for months to go in and get the job done? Why let the CIA read our email when there are hundreds of security "start ups" that want the gig?

This is a transformation of profound consequence. Eisenhower warned of the military-industrial complex, but it was economically insignificant compared to today's disaster capitalism complex. Before 2001, wars and disasters only provided opportunities for a narrow sector of the economy -- the makers of fighter jets, for instance, or the construction companies that rebuilt bombed-out bridges. The primary economic role of wars was as a means to open new markets that had been sealed off and to generate postwar peacetime booms. Now wars and disaster responses are so fully privatized that they are themselves the new market; there is no need to wait until after the war for the boom -- the medium is the message.

And the scariest part of it is the disappearance of any line whatsoever between these private players and the government, as we discussed earlier.

Cusack: Right, you have a quote in the book: "It's impossible to tell where the government ends and Lockheed begins." And the most unbelievable thing about it besides the carnage and the hubris and the insanity of it all is how blatantly they lie about their dedication to strict economic Darwinist rules. It's the mother of all con jobs -- free market rhetoric is being used as the cover story for crony capitalism... They are the biggest welfare freaks on the planet.

On Democracy Now recently, you recited Alan Greenspan's definition of crony capitalism to his face and asked him if the U.S. fits the bill:

"When a government's leaders or businesses routinely seek out private-sector individuals or businesses, and, in exchange for political support, bestow favors on them, the society is said to be in the grip of 'crony capitalism'. The favors generally take the form of monopoly access to certain markets, preferred access to sales of government assets, and special access to those in power."

He dodged the question, of course, but that seems to be a precise description of the Bush administration and its relationship to its favorite corporations. Not exactly the free-market propaganda they've been selling around the world, is it?

Klein: No, and it's most outrageous in Iraq. When I was in Baghdad, it was clear that this was one of the things that most enraged Iraqis -- watching the non-stop conveyor belt of corporate welfare going to western companies while having to listen to patronizing lectures about the free market. My favorite was from Michael Fleischer -- former White House press secretary Ari Fleischer's brother. In the kind of nepotism rampant in the Green Zone, Michael was put in charge of Iraq's "private sector development" during the first year of the occupation. At one point he told a group of Iraqi business leaders that they would have to lose all their subsidies and trade protections because "protected businesses never, never become competitive."

Cusack: He said this with a straight face?

Klein: Yes -- he seemed entirely unconcerned by the irony that Halliburton, Bechtel, Parsons, KPMG, Blackwater et al were in Iraq, madly gorging off this vast protectionist racket in which the U.S. government had created their markets with war, barred their competitors from even entering the race (remember, French companies weren't invited...), then paid them to do the work on "cost-plus" contracts, which guaranteed them profits -- all at taxpayer expense.

In fact, the Disaster Capitalism industry has been built almost exclusively with public resources: 90 percent of Blackwater's revenues come from state contracts and virtually its entire staff is made up of former soldiers, which means that the training also came at public expense. Yet this vast infrastructure is all privately owned and controlled. The citizens who have funded it have absolutely no claim to this shadow state or its resources.

So I've become quite cynical about the claim that the architects of this new system are free-market ideologues. They are in fact corporate supremacists. The proof is that they will betray their supposed libertarian beliefs at the slightest opportunity if that betrayal will turn a profit for a crony company. You see the hypocrisy most shamelessly in the mega-contracts handed out so private companies can help the Bush administration read our emails and data-mine our lives. It's a kind of triple whammy of hypocrisy: these are people who purportedly believe in restrained government spending, individual liberties, and getting government off our backs, yet without hesitation they will expand the reach of the state, gobble up public money, and violate individual privacy, so long as there is profit in it. Calling the Bush gang "ideologues" gives them way too much credit.

Cusack: You've said that in the future the ultimate luxury will be your own survival...do you really think this is where we're headed?

Klein: Well, the disaster bubble is going to burst, like all bubbles do. And when it does, firms like Bechtel, Fluor and Blackwater are going to lose much of their primary revenue stream. They will still have all the high-tech gear and equipment bought at taxpayer expense, but they will need to find a new business model, a new way to cover their high costs. The next phase of the disaster capitalism complex is staring us in the face: with the state in decay, the parallel corporate state will rent back its disaster infrastructure to whoever can afford it, at whatever price the market will bear.

So imagine that after the next hurricane, Blackwater might not just be working for FEMA, as it was after Katrina -- it could sell its security and evacuation capacity to other corporations, or directly to the public, the very same public that funded its entire start-up phase. Want a helicopter ride off a roof? A bed in a shelter? Bottled water? We'll bill you later. Meanwhile, everyone who can't pay will be out of luck, since evacuation is no longer a "core competency" of the state, and besides, the state shouldn't interfere with the free market. The people who can't pay will either be abandoned -- like the people left on their roofs in New Orleans -- or sucked into the privatized prison surveillance apparatus, to be profited from in another way.

Companies like Blackwater and Halliburton are already roaming the world looking for new markets in other frail states - new governments to guard, new war zones to privatize.

Cusack: Here's what I'm thinking. If these people want to create their own privatized countries, they should practice what they preach, and "take their chances on the open market." Secede from the union and stop bankrolling the whole thing with our tax dollars. I'd love to hear someone make a legal argument that the constitution allows for corporations to build private armies at taxpayer expense. I mean, publicly funded mercenaries are totally outside the boundaries of any conceivably acceptable legal version of the constitutional checks and balances we all learned in civics class. But Blackwater is a symptom of a larger problem which is also more terrifying: basically what the Bush administration has done is use its time in office to fund and create a dangerous counter-power to the very government it is leading.


Klein: That's exactly right. And once you understand this - that a parallel, privatized state has been built for the elites with public money -- it makes Bush's so-called bungling look a lot more sinister. Maybe the construction of this parallel state, and the starving of the public one, is the real "mission accomplished." When the Blackwaters and the Halliburtons and the Lockheeds are looked at as a whole, what you see is a fully articulated state-within-a-state that is as muscular and capable as the actual state is frail and feeble. And of course, as creatures of the new economy, these companies are weightless and stateless. If Blackwater wanted to make like Halliburton and move to Dubai, there would be nothing to stop it.

We need to understand that what we glimpse in these contractor scandals goes well beyond corruption. It's another model of government. War and disasters are being used to advance a radical agenda of corporate rule where the idea of universally accessible public services goes extinct. That's why I wrote The Shock Doctrine -- this thing is way bigger than Bush. Bush isn't an aberration, he's the natural culmination of a 25-year campaign to hollow out and privatize the state. He is the perfect mascot of this movement: if government is unnecessary as anything other than an ATM, who better than Bush to lead it? What is more fitting than having a hollow president to head a hollowed-out state?

Cusack: Yeah -- he's the perfect president to have opened this latest frontier for modern pillage. And we sat by while this lawless corporate frontier was opened up. Maybe because we are still in the cultural thrall of the frontiersman/cowboy -- the far right sample John Wayne on a daily basis. And this has been a huge part of Bush's success. He has been consciously drawing on the Wayne iconography for his whole career; it's what allows him to barrel ahead despite his plummeting popularity. Like Wayne's cowboy, they define themselves through the prism of their will. We make our own way through this Darwinist world. The benevolence and altruism of their spirit and will is a given, a reality not to be debated by facts...

The push back on Eric Prince will fall safely inside the aesthetic...he's just a religious libertarian, etc etc... and so we ride on... This iconography may be the ultimate enabler of the disaster economy. We all know the drill.

We've had Poppa Wayne (Reagan) and Baby Wayne (Bush). Ronald Reagan was the old John Wayne...when kindness comes. But the key to the old Wayne is that he was once a killer; you can see it in his eyes... beneath the kindness lingers that hard truth: he was once a killer. He tames the natural world, but he does it with a veneer of benevolence.

Bush is the young John Wayne -- Ethan from The Searchers. Obsessive. Merciless. Ethan is a deranged person. He will fight the battle no one has the guts to fight...do whatever it takes...kill whoever violates the natural law of the frontier (jungle). This cowboy is the great righter of wrongs. He is wrath incarnate. Part of the mythology is that he's wrong a lot and pig headed and stubborn, it's part of the package. But he is a force of nature and you can argue about it all you want, but you must respect a force of nature.

The protector, the son of anger is coming, with god on his side, to protect the ones he has chosen to love. In Bush's case you can substitute the damsel being raped by natives with the US corporation denied 100 percent ownership of a privatized state company.

Klein: This is actually scarily true. Remember that the occupation took its bloodiest turn when U.S. forces laid siege to Fallujah for the first time, in April 2004. An estimated 900 people were killed, many of them civilians, and the country has been spiraling and disintegrating and surging ever since. That siege was in direct retaliation for the killing of the four Blackwater mercenaries who were strung up on that bridge in Fallujah. One of the code names for the siege was "Operation Angry Ghost". The U.S. army played the role of avenging angel for Blackwater... John Wayne in the desert.

Cusack: This mythology always provides cover for the ideology. The Disaster Capitalism complex was built in the realm of archetype, that frontier realm of the Wild West. Bush, being a terrific political operative knows all this is actual political currency in the modern world.

Now I fear we've entered the kamikaze cowboy phase. Though Bush is effectively already heading into the sunset, like Wayne's great Ethan he will see his battle through to the end no matter what. So maybe he will bomb Iran...


I believe that all the players and people involved in these scandals, armed robberies, murders and corruption should go to prison. But that's not going to happen, and even if it did, the ideology behind them would still be in place. As Milton Friedman said, "our basic function is to keep them [ideas] alive and available until the politically impossible becomes politically inevitable." And it's the ideology that is inherently unjust, corrupt and in general a global menace. We need an opposition movement willing and ready to stand on principal. And someone, a leader -- strong and committed, who will leave them choking on their own bile.

We need people to acknowledge and discuss this new Disaster Capitalism economy, Black water being a striking example of its mission. We need Democrats, Republicans, Independents, Libertarians, Greens and anyone else with a shred of meaningful patriotism in their bones band together to expose and disgrace and disengage from this apocalyptic ideology.

Klein: And we really don't need any more shocks to wake us up. In Iraq, New Orleans and the other disaster zones, we are getting a crystal clear vision of the world that will be created if they continue to get their way. It's a world of cowboys and robber barons. They showed their hand with Blackwater, now it's time for the rest of us to put forward a different vision of the world -- and we can't do it timidly or apologetically.

Cusack: Jimmy Breslin calls media enablers the "Pekingese of the press." I always thought that apt as you watch the latest PR rollout for Iran go unquestioned by mainstream media.

And the Democrats just pretend to take action on civil liberties. After extending the domestic surveillance program, they complain in public about it, pretending to be, I guess, unaware that they extended a program that is defined as a federal crime under the laws that the Senate passed. I mean, these are not particularly subtle facts. Following the pattern, they are objecting to the latest secret memos supporting torture without mentioning that their own so-called torture bill approved tactics like water boarding.

In the meantime, the president keeps repeating the same mantra that "we don't torture" without mentioning that he defines torture as excluding anything short of death.

John Wayne was a towering figure -- a great film star. But the era of his exploitation has to end. The Democrats can't stand up to his iconography -- the Shadow Wayne that has been so co-opted. We need a new paradigm. How about Atticus Finch? Watch Jim Webb -- I think he may be able to lead us into an era of post-Wayne politics.

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Wednesday, October 10, 2007

 

Convenient Laundering?


By: Christy Hardin Smith

What’s with the non-denial from Sen. Mitch McConnell’s office? Is one of his aides indeed coordinating with wingnuttia for the attacks on a 12-year-old boy and his sister and their family? From ABC News, via Digby:

“This is a perverse distraction from the issue at hand,” said Jim Manley, a spokesman for Reid, D-Nev. “Instead of debating the merits of providing health care to children, some in GOP leadership and their right-wing friends would rather attack a 12-year-old boy and his sister who were in a horrific car accident.”

Manley cited an e-mail sent to reporters by a Senate Republican leadership aide, summing up recent blog traffic about the boy’s family. A spokesman for Senate Minority Leader Mitch McConnell, R-Ky., declined to comment on Manley’s charge that GOP aides were complicit in spreading disparaging information about Frosts. (emphasis mine)

In my experience, if you are not participating in something, you deny it outright to kill the story.

Mitch McConnell is the Republican Minority Leader in the Senate and sponsor of the Orwellian-named “Families First” legislation which would actually decrease the number of kids covered for benefits. Classy. Is someone in his office coordinating a dirty tricks PR advance against a 12 year old child? Have they been helping the story along, doing oppo on this child and his family and feeding it out through the wurlitzer to their corporate media buddies so their hands appear publicly clean while the wingnuts launder their slime tactics for them? As Digby asks, has the Senate Republican Minority leaders office frequently been used as a laundering point of contact for wayward freepers and random wingnuttery at large? Yes or no.

The NYTimes parses the disgusting all-out spitefest against this family, and coughs up another quote from a “an aide to Sen. Mitch McConnell” — gee, they sure do get around, don’t they?

Ms. Pelosi on Tuesday said, “I think it’s really a sad statement about how bankrupt some of these people are in their arguments against S-chip that they would attack a 12-year-old boy.”…

Republicans on Capitol Hill, who were gearing up to use Graeme as evidence that Democrats have overexpanded the health program to include families wealthy enough to afford private insurance, have backed off, glad to let bloggers take the heat for attacking a family with injured children.

An aide to Senator Mitch McConnell of Kentucky, the Republican leader, expressed relief that his office had not issued a press release criticizing the Frosts.

But Michelle Malkin, one of the bloggers who have strongly criticized the Frosts, insisted Republicans should hold their ground and not pull punches. (emphasis mine)

Smells like a political bait and switch maneuver to me, with the GOP leadership leaving the skeezy tactical bag holding to the more than happy to hold it foaming at the mouth wingnuttia denizens. News flash to Sen. McConnell: if you had anything to do with this, the slime stops at your door as well. Attacking minor children for political gain is craven and wrong. Period. Was this coordination on attacks against a 12 year old done with Sen. McConnell’s approval — or is his control over his staff so lax that he had no idea this was being done? And, either way, how does this qualify as “leadership?”

Is anyone in the media going to actually dig into this and find out how involved the McConnell oppo shop has been in all of this? Because I would love to hear a yes or no answer on any of the above questions.

UPDATE: The Baltimore Sun has a piece on how all of this nastiness is impacting the Frost family. (H/T to Marie Roget for the link.) This from a RedState commenter is particularly appalling:

“Hang ‘em. Publically,” the contributor wrote. “Let ‘em twist in the wind and be eaten by ravens. Then maybe the bunch of socialist patsies will think twice.”

They left this up in their public comments section?!? Vile.

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I'm Want To Punch Michelle Malkin in the Taint.

Seriously.

I'm sick of this bitch. Sick to fucking death of the politics these people represent. Malkin, Limbaugh, Coulter, O'Reilly, the whole whiney bunch of millionaire mouthpieces of hate.

They are the Brittany Spears of Politics. They'll do and say anything to stay in the spotlight.

I'm sick of them. I'm sick of "journalists" pandering to them and I'm sick of corporate radio stations and newspapers carrying them.

Malkin's current crusade is just another in a long line of attention-grabbing fact-free-spin say-whatever-you-need-to-draw-attention-to-yourself-and-sell-books kind of bullshit that has come to represent "debate" from the right wing.

The right has degenerated into a snarling pit of hate lead by people like Coulter, Malkin, Limbaugh, O'Reilly, Savage, Beck, Horowitz and the entire band of vicious selfish slobs they represent.

I'm sick of them. Seriously.

Hugs and Kisses,

The Punisher

 
Posted by Vyan in General Discussion: Politics
Wed Oct 10th 2007, 02:50 PM
Crossposted on Truth2Power

Today the New York Times has a report out over the furor over 12-year-old Greame Frost, the young boy who gave the Democratic Radio address two weeks ago over S-CHIP.

Right wing sites have savagely assailed the use of such a young person to deliver a political message, and then attacked his family for being "too rich" to be eligible for such "lavish" benefits.

But now, that blather has been totally debunked.

As it turns out, the Frosts say, Graeme attends the private school on scholarship. The business that the critics said Mr. Frost owned was dissolved in 1999. The family’s home, in the modest Butchers Hill neighborhood of Baltimore, was bought for $55,000 in 1990 and is now worth about $260,000, according to public records.

So has that stopped the right wing from slandering a 12-year-old and his family? Not even a little.

As I outlined in detail yesterday the wingnuts have shown just how much they care about "poor children" with initial attacks against the Frost's which went this way.

The critics accused Graeme’s father, Halsey, a self-employed woodworker, of choosing not to provide insurance for his family of six, even though he owned his own business. They pointed out that Graeme attends an expensive private school. And they asserted that the family’s home had undergone extensive remodeling, and that its market value could exceed $400,000.

One critic, in an e-mail message to Graeme’s mother, Bonnie, warned: "Lie down with dogs, and expect to get fleas."

Contrary to some critics I found on DU who wished to point the finger back at Democrats and the DNC for using the Frost's in their radio address and not backing them up... the fact is that they have backed them up.

Democrats, including the House speaker, Nancy Pelosi, have risen to the Frosts’ defense, saying they earn about $45,000 a year and are precisely the type of working-poor Americans that the program was intended to help.

Ms. Pelosi on Tuesday said, "I think it’s really a sad statement about how bankrupt some of these people are in their arguments against S-chip that they would attack a 12-year-old boy."

Now that it's been published that the Frost's total household income is only $45,000 - which easily meets the state cutoff of $55,220 for a family of six - capital Hill Republicans who had been planning to make considerable hay out of these "welfare scoff-laws" have decided to cool their jets.

Republicans on Capitol Hill, who were gearing up to use Graeme as evidence that Democrats have overexpanded the health program to include families wealthy enough to afford private insurance, have backed off.

An aide to Senator Mitch McConnell of Kentucky, the Republican leader, expressed relief that his office had not issued a press release criticizing the Frosts.

But cutting and running away from the issue - which Mitch McConnel's office apparently fed to the winger blogs in the first place - when you happen to be completely totally wrong doesn't seem to be Michelle Malkin's style. Instead, she's upped the attack.

A word for all the faux outraged leftists accusing conservative bloggers of waging a "smear campaign:" Asking questions and subjecting political anecdotes to scrutiny are what journalists should be doing.

When a family and Democrat political leaders drag a child down to Washington at 6 in the morning to read a script written by Senate Democrat staffers on a crusade to overturn a presidential veto, someone might have questions about the family’s claims. The newspapers don’t want to do their jobs. The vacuum is being filled.

If you don’t want questions, don’t foist these children onto the public stage.

Fight your battles like adults and stop hiding behind youngsters dragging around red wagons filled with your talking points."

Apparently Malkin never considered that "real" journalists might have already asked these questions and found there was no "there" there. (How long would it have taken to ask and discover this is a family of six living on just $45,000 a year?)

Oh well, not that such a thing as a complete lack of facts would ever stop Malkin.

But Michelle Malkin, one of the bloggers who have strongly criticized the Frosts, insisted Republicans should hold their ground and not pull punches.

"The bottom line here is that this family has considerable assets," Ms. Malkin wrote in an e-mail message. "Maryland’s S-chip program does not means-test. The refusal to do assets tests on federal health insurance programs is why federal entitlements are exploding and government keeps expanding. If Republicans don’t have the guts to hold the line, they deserve to lose their seats."

As for accusations that bloggers were unfairly attacking a 12-year-old, Ms. Malkin wrote on her blog, "If you don’t want questions, don’t foist these children onto the public stage."

Ok, so let me get this straight - Malkin is saying that because the Frost's home has appreciated over the last sixteen years, that when the Frost's applied for S-CHIP after their children suffered traumatic brain injuries in a car crash, that the state should make them appraised their home and if it's worth "too much" they should be denied care and be forced to sell it (which might have netted between $350,000-$400,000 in a depressed housing market) before providing for their children's healthcare?

So instead of receiving S-Chip they should live on the street, or even worse yet Rent - while trying to pay for private health care out of the house money once it finally clears escrow?

Pardon my clear precise English, but are you FUCKING SHITTING ME!?

So the Republican solution for the 47 Million people without heath care many of whom had to go into bankruptcy to pay medical bills is - sell your house and go into bankruptcy?

But then of course, there's always the Mystical Magical Fairy Tax Cuts that Malkin endorsed in her original attack on the Frosts.

So executive vice-presidents’ families are now the new new poor? I support lower taxes for the Frosts, increased child credits for the Frosts, an end to the "death tax" and other encroachments on transgenerational wealth transfer, and even severe catastrophic medical-emergency aid of one form or other. But there is no reason to put more and more middle-class families on the government teat, and doing so is deeply corrosive of liberty.

Yes, there is a reason - they have no other viable option.

At only $45,000 a year you could cut their taxes to zero and still wouldn't help much with family medical expenses which could easily be above $20,000. Subtract from that private school tuition of another $40,000 and were deep into the negative figures. (Graeme and his sister are attending the schools on state sponsored scholarships which currently costs the family $500/year) Also the Frost's aren't eligible for the "Death Tax" unless you want to go completely Oliver Twist and make the Frosts children into Orphans.

That's mighty nice work for a so-called "Party of Life."

Then again, the right-wing does seem have this odd fascination with Street Urchins. I'm sure we could just ask Mark Foley for the 4-1-1 on that.

Another major problem with Malkin's plan, and the reason the Frosts haven't decided to simply sell everything they own and buy private insurance is the fact that Private Insurance Won't Have Them!

In a telephone interview, the Frosts said they had recently been rejected by three private insurance companies because of pre-existing medical conditions. "We stood up in the first place because S-chip really helped our family and we wanted to help other families," Mrs. Frost said.

The dust has begun to fly so fast on this issue that Ezra Klein has challenged Malkin to a Duel Debate on the issue.

Let’s have a good faith argument. I will debate Michelle Malkin anytime, anywhere, in any forum (save HotAir TV, which she controls), on the particulars of S-CHIP. We can set the debate at a think tank, on BloggingHeads, over IM. Hell, we can set up the podiums in the shrubbery outside my house, since that seems to be the sort of venue she naturally seeks out. And then if Malkin wants an argument, she can have one. We’ll talk S-CHIP and nothing but — nothing of the Frosts, or Congress, or her blog.

I'm expecting Malkin will be cutting and running from this challenge any second now - almost as quickly as the sprinted away from Max Blumenthal's questions about her support for internment camps at CPAC.

And isn't that such a courageous tendency for someone who took it upon herself to Publish the Frost's Home Address, so that all her wingnutty fans could give them the same stalkeratzi treatment that Vote Vets and Brian McGough have been receiving?

Classy people these aren't.

Programs like S-CHIP actually provide help to people who genuinely need it. Rather than helping the helpless through the tough times (that Repubs created) to get back on their feet, the right-wing would rather slam on it's "Right to Life" pulpit and attack Democrats for trying to help while they deny care to anyone who can't afford to pay through the nose a Right to Living.

Vyan


 

More on the Right Wing Smear Campaign of a 12 Year Old.

Posted by Vyan in General Discussion: Politics
Tue Oct 09th 2007, 05:29 PM

Well, we've all known for sometime that hardcore Republicans have absolutely no shame. Not after Terri Schiavo. Not after the infamous Sylvia's incident. Not after Mark Foley or Jeff Gannon/Guckert.

But yesterday Rush Limbaugh actually managed to pull out a backhoe and discover a brand new low point. It wasn't bad enough that he implied that any soldier who disagree with him was a "phony" or a some kind of "suicide smear-bomber" or somehow incapable of thinking for himself. Now he's attacked a 12-year-old SCHIP recipient, whose sister has suffered traumatic brain injuries claiming that he's been sent out by the left with a bag of lies.

They filled this kid’s head with lies just as they have some of these soldiers about me.

Did they] Someone around here has a head full of lies, but I don't think it was this particular 12-year-old.

The boy in question is 12-year-old Graeme Frost, who delivered the Democratic radio address a couple weeks ago just prior to the President's veto of S-CHIP.

If it weren’t for SCHIP, I might not be here today. ... We got the help we needed because we had health insurance for us through the CHIP program. But there are millions of kids out there who don’t have CHIP, and they wouldn’t get the care that my sister and I did if they got hurt. ... I just hope the President will listen to my story and help other kids to be as lucky as me.

Republicans were incensed that Democrats would use a child in such a way. How could anyone ever use a child for crass political purposes?





Anywho - Graeme himself has returned to the Winger gunsights after a Freeper (literally a Free Republic poster named "icwhatudo") claimed that ...

Graeme and his sister Gemma attend wealthy schools that cost "nearly $40,000 per year for tuition" and live in a well-off home.

So now not only did the Democrats commit the sin of sending a child out to do their "dirty work" of saying that taking Health Care away from children is generally a bad idea (so bad it makes "Compassionate" Neo-Cons like Bill Kristol giddy) - now they've supposedly done so with a little health-fare queen]

So far this his prompted attacks on the Frost family from The National Review

The Democrats sign up a sick kid to read their Saturday morning radio address. As Paul Krugman has observed, Bill Kristol, Rush Limbaugh and the rest of us heartless bastards on the right were no doubt too busy laughing to pay attention.

Mr Frost, the "woodworker", owns his own design company and the commercial property it operates from, part of which space he also rents out; they have a 3,000-sq-ft home on a street where a 2,000-sq-ft home recently sold for half a million dollars; he was able to afford to send two children simultaneously to a $20,000-a-year private school; his father and grandfather were successful New York designers and architects; etc.

Bad things happen to good people, and they cause financial problems and tough choices. But, if this is the face of the "needy" in America, then no-one is not needy.

From Michelle Malkin

The Democrats chose to outsource their airtime to a Seventh Grader. If a political party is desperate enough to send a boy to do a man’s job, then the boy is fair game. As it is, the Dems do enough cynical and opportunist hiding behind biography and identity, and it’s incredibly tedious. And anytime I send my seven-year-old out to argue policy you’re welcome to clobber him, too. The alternative is a world in which genuine debate is ended and, as happened with Master Frost, politics dwindles down to professional staffers writing scripts to be mouthed by Equity moppets...

...So executive vice-presidents’ families are now the new new poor] I support lower taxes for the Frosts, increased child credits for the Frosts, an end to the "death tax" and other encroachments on transgenerational wealth transfer, and even severe catastrophic medical-emergency aid of one form or other. But there is no reason to put more and more middle-class families on the government teat, and doing so is deeply corrosive of liberty.

And from Whizbang.

First, Mr. Halsey Frost, Graeme's father, owns his own woodworking design studio, Frostworks, so his claim that he can't get health insurance through work is shockingly deceptive. He chooses not to get health care for his family. Second, Graeme and his sister Gemma attend the very exclusive Park School, which has a tuition of $20,000 a year, per child. Third, they live in a 3,000+ square foot home in a neighborhood with smaller homes that are selling for at least $400,000.

Graeme and his family have also been attacked by Powerline, and the Weekly Standard blog for their partisipation in this gross charade.

I never knew that Republicans hated the "rich" this deeply. It's practically stunning that they would came after one of "their own" so strongly considering how much they love to give tax cuts to the rich. "It's good for the economy" and all that.

There's just one little problem with this outrage parade over the Frost family and their rampant "fleecing of the state."

It's not True.

1) Graeme has a scholarship to a private school. The school costs $15K a year, but the family only pays $500 a year.

2) His sister Gemma attends another private school to help her with the brain injuries that occurred due to her accident. The school costs $23,000 a year, but the state pays the entire cost.

3) They bought their "lavish house" sixteen years ago for $55,000 at a time when the neighborhood was less than safe.

4) Last year, the Frosts made $45,000 combined. Over the past few years they have made no more than $50,000 combined.

5) The state of Maryland has found them eligible to participate in the CHIP program.

So now following in the wake of all this comes Rush Limbaugh playing his favorite tune. "pity the poor Republican victims of the vicious Left-Wing Lies" Yes, that's right those damn dirty liberals have strapped lies onto our solders, and now strapped them onto the poor tiny chidren that the Wingers just want to "save." (By doing the the "compasionate thing" of cutting off their healthcare!)

Boo hoo hooo. Sniff

So the bottom line for me is: They can’t rely on truth to make their case for their cause. They have to lie. Be it about me, be it about their own voters (such as the Frosts) be it about President Bush, they must lie — and anybody who stands in the way of their succeeding with that lie becomes an enemy, becomes a target. That’s where I and my buddies in talk radio come in. We are a thorn in their side because we represent the truth they are trying to hide, the truth that they are lying about, and they have to do something about it — and they have to do that by lying. (...)

They send the kid out to lie. They filled this kid’s head with lies just as they have some of these soldiers about me. Put lies in the kid’s head or put it on the script that he’s reading. He goes out and reads it. He’s 12-years-old! They will use anybody! They’ll corrupt anybody, to get where they’re headed. That’s who they are, folks.

OH Poor Rush, poor poor Rush. He's so maligned and misunderstood. And those libruls are just so EEEEEVil!!!

How could they]

That's right, we lefties will do just about anything to stop the right wing - even tell the fracking truth everyone once in a while if that what it takes.

You should try it Rush, it might ease your poor tortured soul.

Yeah, yeah I know - "fat chance" of that ever happening...

Vyan


 

Bands of Flying Monkeys

The wingnutosphere's politics of hate laid bare

More reaction from around the web to the assholes who think stalking a 12-year-old and his brain-damaged sister is what "politics" is all about:

John Cole, now a former Republican thanks to this incident:

If you look through this family’s dossier, it appears they are doing everything Republicans say they should be doing- hell, their story is almost what you would consider a checklist for good, red-blooded American Republican voters: they own their own business, they pay their taxes, they are still in a committed relationship and are raising their kids, they eschewed public education and are doing what they have to do to get them into Private schools, they are part of the American dream of home ownership that Republicans have been pointing to in the past two administrations as proof of the health of the economy, and so on.

In short, they are a white, lower-middle-class, committed family, who is doing EVERYTHING the GOP Kultur Kops would have you believe people should be doing. They aren’t gay. They aren’t divorced. They didn’t abort their children. They aren’t drug addicts or welfare queens. They are property owners, entrepeneurs, taxpayers, and hard-working Americans. I bet nine times out of ten in past elections, if you handed this resume to a pollster, they would think you were discussing the prototypical Republican voter. Hell, the only thing missing from this equation is membership to a church and an irrational fear of Muslims and you HAVE the prototypical Bush voter [...]

I simply can not believe this is what the Republican party has become. I just can’t. It just makes me sick to think all those years of supporting this party, and this is what it has become. Even if you don’t like the S-Chip expansion, it is hard to deny what Republicans are- a bunch of bitter, nasty, petty, snarling, sneering, vicious thugs, peering through people’s windows so they can make fun of their misfortune.

I’m registering Independent tomorrow.

More John Cole:

You know, it has barely been a month since the Malkin/Limbaugh/Wingnuttosphere freak-out over the MoveOn ad, but I think it is worth noting the clear message:

Questioning a political General is treason, bullying a 12 year old is patriotic.

Ezra:

This is the politics of hate. Screaming, sobbing, inchoate, hate. It would never, not in a million years, occur to me to drive to the home of a Republican small business owner to see if he "really" needed that tax cut. It would never, not in a million years, occur to me to call his family and demand their personal information. It would never occur to me to interrogate his neighbors. It would never occur to me to his smear his children.

The shrieking, atavistic ritual of personal destruction the right roars into every few weeks is something different than politics. It is beyond politics [...]

This is not politics. This is, in symbolism and emotion, a violent group ritual. It is savages tearing at the body of a captured enemy. It is the group reminding itself that the Other is always disingenuous, always evil, always lying, always pitiful and pathetic and grotesque. It is a bonding experience -- the collaborative nature of these hateful orgies proves that much -- in which the enemy is exposed as base and vile and then ripped apart by the community. In that way, it sustains itself, each attack preemptively justifying the next vicious assault, justifying the whole hateful edifice on which their politics rest.

Jim Henley:

What we’re seeing here is the same tactics of personal destruction Movement Republicanism previously justified as necessary to winning The Greatest War Ever, now normalized as appropriate to handling a budget dispute. They wanted to get Jamil Hussein arrested or killed. They wanted Scott Beauchamp ruined or even fragged. They clearly want to destroy the Frost family. That’s why you just show up at someone’s workplace implying to their bosses and co-workers that they are liars, that they are trouble. To ruin them.

They wanted a war. Now they want everything to be a war. Any war.

Our own Hunter:

I seem to recall spending a whole evening watching for and purging Malkin's home address from comments, the last time the righties pulled something like this, so that she wouldn't get the exact kind of stalking that the righties are now celebrating gleefully, again... but from their end, it's all good. That kid had the audacity to express a political agenda, and so he, his parents and his family must be destroyed. It's as simple as that.

I actually remember that day, when I and the contributing editors immediately decided with no dissent that we wouldn't allow people to post Malkin's address on the site, and tasked Hunter with policing that decision. I still don't regret that decision, and would enforce it again. Too bad the other side doesn't feel the same way.

David Neiwert:

What she and her torch-bearing cohorts are tapping into, of course, is the right's innate eagerness to form ugly eliminationist mobs bent on purging anyone who opposes their agenda. Indeed, the ease with which they form bands of flying monkeys -- even when the story isn't just false but an embarrassing mistake -- has also been duly noted [...]

This isn't simple wingnuttery, though, which while noxious enough in its own right is at least a little laughable. This goes beyond wingnuttia.

For once, the smear-meisters' efforts are backfiring, as traditional media outlets start examining this despicable effort. And the more they look, the more they see that the bloggers' smear efforts aren't the isolated insanity of a few fringe party elements, but that they have the full support of the GOP apparatus.

“This is a perverse distraction from the issue at hand,” said Jim Manley, a spokesman for Reid, D-Nev. “Instead of debating the merits of providing health care to children, some in GOP leadership and their right-wing friends would rather attack a 12-year-old boy and his sister who were in a horrific car accident.”

Manley cited an e-mail sent to reporters by a Senate Republican leadership aide, summing up recent blog traffic about the boy’s family. A spokesman for Senate Minority Leader Mitch McConnell, R-Ky., declined to comment on Manley’s charge that GOP aides were complicit in spreading disparaging information about Frosts.

And:

Republicans on Capitol Hill, who were gearing up to use Graeme as evidence that Democrats have overexpanded the health program to include families wealthy enough to afford private insurance, have backed off, glad to let bloggers take the heat for attacking a family with injured children.

An aide to Senator Mitch McConnell of Kentucky, the Republican leader, expressed relief that his office had not issued a press release criticizing the Frosts.

What a spectacular flameout. The GOP was damaged enough by Bush's veto of the hyper-popular SCHIP program. They've now compounded that damage many times over.

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While Right Wing NeoCons Turn the American Government Into An ATM Machine for Corporations....

"Douchebags Like Michelle "I Love Internment" Malkin attack 12 year olds and Working Families for Seeking Assistance with Medical Bills. Jesus these people's priorities are fucked." - The Punisher

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Capitol Feud: A 12-Year-Old Is the Fodder
Doug Mills/The New York Times

Graeme Frost, 12, with the Senate majority leader, Harry Reid, on Capitol Hill last month.


Published: October 10, 2007

WASHINGTON, Oct. 9 — There have been moments when the fight between Congressional Democrats and President Bush over the State Children’s Health Insurance Program seemed to devolve into a shouting match about who loves children more.

So when Democrats enlisted 12-year-old Graeme Frost, who along with a younger sister relied on the program for treatment of severe brain injuries suffered in a car crash, to give the response to Mr. Bush’s weekly radio address on Sept. 29, Republican opponents quickly accused them of exploiting the boy to score political points.

Then, they wasted little time in going after him to score their own.

In recent days, Graeme and his family have been attacked by conservative bloggers and other critics of the Democrats’ plan to expand the insurance program, known as S-chip. They scrutinized the family’s income and assets — even alleged the counters in their kitchen to be granite — and declared that the Frosts did not seem needy enough for government benefits.

But what on the surface appears to be yet another partisan feud, all the nastier because a child is at the center of it, actually cuts to the most substantive debate around S-chip. Democrats say it is crucially needed to help the working poor — Medicaid already helps the impoverished — but many Republicans say it now helps too many people with the means to help themselves.

The feud also illustrates what can happen when politicians showcase real people to make a point, a popular but often perilous technique. And in this case, the discourse has been anything but polite.

The critics accused Graeme’s father, Halsey, a self-employed woodworker, of choosing not to provide insurance for his family of six, even though he owned his own business. They pointed out that Graeme attends an expensive private school. And they asserted that the family’s home had undergone extensive remodeling, and that its market value could exceed $400,000.

One critic, in an e-mail message to Graeme’s mother, Bonnie, warned: “Lie down with dogs, and expect to get fleas.” As it turns out, the Frosts say, Graeme attends the private school on scholarship. The business that the critics said Mr. Frost owned was dissolved in 1999. The family’s home, in the modest Butchers Hill neighborhood of Baltimore, was bought for $55,000 in 1990 and is now worth about $260,000, according to public records. And, for the record, the Frosts say, their kitchen counters are concrete.

Certainly the Frosts are not destitute. They also own a commercial property, valued at about $160,000, that provides rental income. Mr. Frost works intermittently in woodworking and as a welder, while Mrs. Frost has a part-time job at a firm that provides services to publishers of medical journals. Her job does not provide health coverage.

Under the Maryland child health program, a family of six must earn less than $55,220 a year for children to qualify. The program does not require applicants to list their assets, which do not affect eligibility.

In a telephone interview, the Frosts said they had recently been rejected by three private insurance companies because of pre-existing medical conditions. “We stood up in the first place because S-chip really helped our family and we wanted to help other families,” Mrs. Frost said.

“We work hard, we’re honest, we pay our taxes,” Mr. Frost said, adding, “There are hard-working families that really need affordable health insurance.”

Democrats, including the House speaker, Nancy Pelosi, have risen to the Frosts’ defense, saying they earn about $45,000 a year and are precisely the type of working-poor Americans that the program was intended to help.

Ms. Pelosi on Tuesday said, “I think it’s really a sad statement about how bankrupt some of these people are in their arguments against S-chip that they would attack a 12-year-old boy.”

The House and Senate approved legislation to expand the child health program by $35 billion over five years. President Bush, who proposed a lower increase, vetoed the bill last week. Mr. Bush said the Democrats’ plan was fiscally unsound and would raise taxes; the Democrats say he is willing to spend billions on the Iraq war but not on health care for American children.

Mr. Bush’s plan could force states to tighten eligibility limits, but it seemed likely that the Frost children would still be covered.

Republicans on Capitol Hill, who were gearing up to use Graeme as evidence that Democrats have overexpanded the health program to include families wealthy enough to afford private insurance, have backed off.

An aide to Senator Mitch McConnell of Kentucky, the Republican leader, expressed relief that his office had not issued a press release criticizing the Frosts.

But Michelle Malkin, one of the bloggers who have strongly criticized the Frosts, insisted Republicans should hold their ground and not pull punches.

“The bottom line here is that this family has considerable assets,” Ms. Malkin wrote in an e-mail message. “Maryland’s S-chip program does not means-test. The refusal to do assets tests on federal health insurance programs is why federal entitlements are exploding and government keeps expanding. If Republicans don’t have the guts to hold the line, they deserve to lose their seats.”

As for accusations that bloggers were unfairly attacking a 12-year-old, Ms. Malkin wrote on her blog, “If you don’t want questions, don’t foist these children onto the public stage.”

Mr. and Mrs. Frost said they were bothered by the assertion that they lacked health coverage by their own choice.

“That is not true at all,” Mrs. Frost said. “Basically all these naysayers need to lay the facts out on the page, and say, ‘How could a family be able to do this?’ S-chip is a stopgap.”

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Must Read: John Cusack and Naomi Klien Break Down the Clusterfuck that is Iraq and the new American Corporate Republic.

John Cusack
The Real Blackwater Scandal: Build a Frontier, You Get Cowboys
Posted October 9, 2007

Two weeks ago, I talked with Naomi Klein about her new book, The Shock Doctrine: The Rise of Disaster Capitalism. If you missed the original video, you can watch it here, and the longer transcript is here. You can also learn more about the book and read excerpts here.

At that point, the Blackwater scandal over the massacre in Baghdad's Nisoor Square was just breaking. Since then, the story has blown wide open, with more mind-boggling details coming to light every day. It turns out the US occupation is so dependent on this one private mercenary company that it can't even function without Blackwater on the roads, providing the kind of protection that levels everything in its path... including the lives of Iraqi civilians.

Now we find out that the original report exonerating Blackwater, issued on U.S. diplomatic letterhead, was actually written by a Blackwater guy. As we are gripped by the unfolding scandal, it's easy -- and dangerous -- to see this as a story about a single rogue outfit, just another accountability scandal in the epic and tragic reality of this war.

What Naomi does so well is put the corruption scandals into a broader context, unveiling and meticulously documenting how the scandals of the Bush regime -- from the invasion of Iraq to the inability of FEMA to locate the Superdome for days after Katrina hit -- are actually part of a new emerging economy, what she calls the Disaster Capitalism Complex, which itself is the culmination of a 35 year ideological campaign of radical privatization and de-regulation. It is not a conspiracy in any sense, but a very open, fundamentalist ideological war against the New Deal in America and Keynesian economics around the globe. Francis Fukuyama called the supposed peak of this movement "the End of History." But what may actually be ending is the illusion that this campaign has done anything but great damage to people around the globe. Blackwater is a perfect case in point.

Here's more from our ongoing conversation:

Cusack: The Blackwater scandal broke just as you hit the US on your book tour. What do you make of the coverage?

Klein: It definitely feels like a watershed moment. There is this collective understanding that this wasn't an accident, it was inevitable: give a bunch of pumped-up guys guns, and send them to a place where they're above the law, and they'll act like cowboys. But what's missing from too much of the analysis is the obvious next point: this is true of the entire occupation.

Give a bunch of contractors billions of dollars with no accountability, while simultaneously eviscerating the Iraqi state (de-Baathification, laying off the army, flinging open the economy with no regulation) and they'll gorge. Give a bunch of Heritage Foundation interns control of an economy with no oversight and they'll try to privatize everything in sight. The entire disaster in Iraq was utterly predictable. But what I argue in the book is that not only was this predictable, it was the plan. The plan wasn't to destroy Iraq; it was to create a market frontier. And the reason you build a frontier is always the same: nothing is more profitable. Adam Smith wrote about it in The Wealth of Nations: on the colonial frontier, land can be grabbed, taxes are few, and capitalism can exist in its purest, most profitable form. That's why the Wall Street Journal has been comparing Iraq to a "gold rush" from the very first reconstruction conferences in 2003 -- any frontier is a gold rush.

So what frustrates me about the current Blackwater scandal is the attitude of surprise in the media and congress -- surprise that these companies are acting like "cowboys" in a "wild west." Of course they are -- the occupation was built to be the Wild West. For four years the White House systematically fought every attempt at oversight of the contractors, specifically granted them immunity under Iraqi law and made no serious attempt to monitor their activities. And it's not just Blackwater -- think of all the tens of billions of public dollars allocated to reconstructing Iraq. The money has all been given away to contractors while Iraq is in worse shape than ever -- those contractors are cowboys too. And that's not even including the roughly $9 billion of Iraq's own oil money that has gone missing.

And what's even worse than the feigned astonishment we are seeing is this insistence on framing everything as an individual "corruption" scandal. Companies are built to profit from opportunity -- to do everything they can get away with to make as much money as possible. It's their legal duty. So the scandal isn't Blackwater or Halliburton or Exxon; it's the vision of politics we have been living with since Reagan that holds that the central role of government is to be the executive chef for this corporate feeding frenzy. In the eighties and nineties, that meant chopping of major limbs of the state -- water, electricity, the airwaves -- and feeding them to corporations. Today the process has moved into the very core of the state: armies, interrogation, evacuations. But rampant corruption has always been part of these neo-colonial privatization frenzies -- think of the instant billionaires in Latin America's privatization wave, when Carlos Slim, now the third richest man in the world, made his fortune, or the lawless rise of the Russian oligarchs during "shock therapy."

What I argue in The Shock Doctrine is that privatization is the post-modern frontier. Essentially, what shock therapy means is selling off as much as possible before the law catches up, just as an earlier era of conquistadors grabbed land and minerals and signed treaties after the fact. The same goes for today: after each one of these feeding frenzies, the same policy makers who opened up the neo-frontier turn around and act surprised and scandalized that the corporations who they themselves have liberated are caught scamming wildly. It's only then that we hear the pious lectures about the need for oversight and rules and regulations. My question is this: how does the capacity for corporate greed keep coming as a surprise? The politicians who designed this war are all supposed to be adherents to a philosophy that holds that there is nothing more powerful in the world than greed -- that it should be the governing force in as many human interactions as possible. Isn't that what Milton Friedman wanted? Iraq's occupation was organized by the Bush Administration to unleash that instinct with absolutely no restraint.

Either greed belongs in a war zone, or it doesn't. You can't unleash it in the name of sparking an economic boom and then be shocked when Halliburton overcharges for everything from towels to gas, when Parsons' sub, sub, sub-contractor builds a police academy where the pipes drip raw sewage on the heads of army cadets and where Blackwater investigates itself and finds it acted honorably. That's just corporations doing what they do and Iraq is a privatized war zone so that's what you get. Build a frontier, you get cowboys and robber barons.

Cusack: This notion of the frontier seems important to understanding the occupation. It reminds me of what Garry Wills said in his great book by the same name: it's John Wayne's America. And it seems that exploiting the frontier mythology has been key to selling what you call the Shock Doctrine to the public -- drawing on its whole aesthetic, so central to the American identity. Ideas of rugged individualism, tribal but not collective loyalties, the freedom archetype -- the cowboy as symbolized by Wayne, who is still seen as the greatest of American icons some 30 years after his death. He's a killer, a tamer of lands -- principled and ruthless, but ultimately benevolent and kind. First and foremost, of course, he is a law unto himself. Which is exactly how the occupation has been sold -- as you say, an attempt to build a model state in someone else's land. And rugged cowboy idealism was the packaging for the whole murderous and lawless project.

So let's talk about Paul Bremer, who single-handedly imposed many of the laws that are still on the books in Iraq, including the one giving Blackwater and other private contractors immunity from prosecution -- in effect putting them above the law. He set the tone, as well as the legal structure for what's happening now, yes?

Klein: He did -- but with the full support of Rumsfeld, from whom he was getting his orders directly, and from Bush. Blaming Bremer is kind of an easy out, which is probably why some of the war's architects have taken to scapegoating him for everything that has gone wrong. Richard Perle said in late 2006 that "the seminal mistake" was "bringing Bremer in." David Frum now says that they should have had "any kind of an Iraqi face" on the remaking of Iraq right away.

Of course none of these guys complained about it publicly during that whole first year of the occupation, when there was just Paul Bremer, holed up in Saddam's turquoise-domed Republican Palace, receiving trade and investment laws by email from the Department of Defense -- usually drafted by private companies like KPMG's Bearing Point, which had the contract to rewrite much of Iraq's economic architecture. According to his own memoirs, Bremer would print out the laws, sign them and impose them by fiat on the Iraqi people -- less the king of Iraq than the CEO of Iraq Inc. And he was completely in-your-face about it, criss-crossing the country in a Blackhawk helicopter, flanked by his ubiquitous Blackwater guards and always in his perfectly pressed Brooks Brothers suits and army boots -- the uniform of the disaster capitalism complex.

Cusack: It's a good look. Why did Bremer go with Blackwater in the first place, why not be protected by U.S. Marines?

Klein: Apparently he thought he would be safer with a private company, and he may well have been right. Because unlike soldiers, Blackwater has never had to worry about a broader mission of securing Iraq. The company's job with Bremer was just to bodyguard the CEO -- which has a brutal simplicity to it.

And Bremer and Blackwater made the perfect match. Blackwater's mission was to protect Paul Bremer at all costs -- "protect the principal." Bremer was protecting a principal too, his principal was the disastrous and ultimately failed project of forcibly transforming Iraq into a "model free-market," which was code for a wild-west utopia for western multinationals.

Cusack: But Bremer wasn't just a rogue, or an errand boy. That would be too convenient, as you say. He played a more significant historical role than that, trying to implement the broader vision of privatized government, pioneered by Milton Friedman and taken to its apotheosis by his acolyte Donald Rumsfeld... with the full approval and blessings of the entire Bush administration and the other intellectual architects of this disastrous war. Even within that context, however, Rumsfeld was quite the visionary.

Klein: Yeah, in the sixties, Rumsfeld used to attend seminars at the University of Chicago, and he described Milton Friedman and his colleagues as "a cluster of geniuses," while he and other "young pups" would "come in and learn at their feet." I think Rumsfeld's pedigree as a corporatist ideologue has really been lost in the focus on his military failures. Especially because even if he was a flop as a military strategist, from a business perspective, he was remarkably successful -- he oversaw the creation of a booming new economy in disaster.

We forget that he was very open about this goal when he took office, Fortune magazine ran an article at the time titled "Mr. CEO Goes to Washington" all about how he was going to bring a corporate-style downsizing and outsourcing revolution to the Pentagon. And of course Rumsfeld himself is a quintessential disaster capitalist -- he was chair of the board of Gilead Sciences, a drug company that owns the patent on Tamiflu, which is the treatment for Avian Flu. With every pandemic scare, Gilead's stock rises. So Rumsfeld, who held on to his Gilead stocks throughout his term in office -- watching their value soar as he recused himself from every meeting about drug supplies for flu pandemics -- knows all about this booming market.

More importantly, Rumsfeld was coming out of the private sector at a time when it was very trendy for corporations to unburden themselves of factories and full-time workers and focus exclusively on marketing and design -- the so-called Nike model. And that's pretty much what he did when he took over at the Pentagon: he downsized the full-time troops to the bare minimum and outsourced and contracted-out everything in sight. That freed his hand to focus on the military equivalent of marketing -- the shock and awe projection of U.S. power to the world.

And the outsourcing orgy he sparked keeps blowing up in the face of the administration: in Iraq and Afghanistan, companies like Blackwater and Halliburton perform ever more central functions of war fighting, while at home, Rumsfeld and Cheney oversaw the creation of the privatized homeland security state. The first stage was to give themselves special powers to detain, spy and authorize torture; the second stage was to outsource the performing of these functions to private companies. We only catch glimpses of this through scandal -- like the private contractors exposed during the Abu Ghraib controversy. Or remember the debacle about the conditions at Walter Reed? That was because the hospital's management was in the midst of being outsourced.

The stats on this new disaster economy are incredible: Counterintelligence Field Activity, a new intelligence agency created under Rumsfeld that is independent of the CIA, outsources 70 percent of its budget to private contractors. In 2003, the U.S. government handed out 3,512 contracts to companies to perform security functions; in the twenty-two-month period ending in August 2006, the Department of Homeland Security had issued more than 115,000 such contracts. The global "homeland security industry" -- economically insignificant before 2001 -- is now a $200 billion sector, bigger than Hollywood or the music industry. And the private companies performing these functions are a kind of shadow state, with extraordinary power and very little oversight, since the details of most of these contracts are completely obscured under the blanket of "classified" intelligence. In other words, extraordinarily sensitive state functions are being privatized -- but we can't know about it because they are too sensitive.

Cusack: That's always the Catch-22. On Blackwater, I would make the case that these privatized modern-day Hessians are illegal, and in every way an affront to the very idea of this country -- operating completely outside the checks and balances of the constitutional structure of the Republic. I mean, if privatizing homeland security and letting mercenaries go totally unregulated in Iraq is ok -- with no possible chance of the hired guns being prosecuted by state, federal or international law aren't we sanctioning roving corporate armies? Where does it end? This is really deeply down the rabbit hole. And the sickest part, in a weird way, is that this privatization revolution is not even a free market, it's entirely corporate welfare ­ corporations are taking our tax dollars to fund their private illegal armies.

Klein: Most people, when they learn about it, completely agree that what is going on is insane and surreal. Where this fits in with the thesis of my book is that the Disaster Capitalism Complex was launched without public debate -- the startup phase was after the extraordinary shock and disorientation of 9/11, and it was taken to market under the cover of crisis management in Iraq. It's why I am obsessed with disasters. They enable these leaps forward for corporate rule, precisely because debate is supposedly impossible during a state of emergency. So Rumsfeld's radical corporate downsizing and outsourcing of the military was never openly discussed while it was happening. Instead, we heard a lot about troop levels for the war and occupation -- it was basically reported as a numbers game, and as a power struggle between Rumsfeld and the generals or Rumsfeld and Powell, when something much more profound was going on: the birth of a new economy.

In retrospect we can see that Rumsfeld's "mistakes" were extremely profitable for a small group of crony capitalists, and continue to be. It began when Rumsfeld rejected all solutions that required increasing the size of the army in Iraq. That meant the military had to find other ways to get more soldiers into combat roles. So private security companies flooded into Iraq to perform functions that had previously been done by soldiers -- security for diplomats and other officials, guarding bases, escorting other contractors. Once they were there, their roles expanded further in response to the chaos. As Jeremy Scahill argues in his excellent book, Blackwater: The Rise of the World's Most Powerful Mercenary Army, the company's original contract in Iraq was to provide private security for Bremer, but a year into the occupation, it was engaging in all-out street combat. During the April 2004 uprising of Moqtada al-Sadr's movement in Najaf, Blackwater actually assumed command over active-duty U.S. marines in a daylong battle with the Mahdi Army, during which dozens of Iraqis were killed.

In the book, I call this "corporate mission creep" and the numbers tell the story. At the start of the occupation of Iraq, there was one contractor for every ten soldiers -- already far more than during the first Gulf War. Today, private contractors outnumber U.S. soldiers, making this the most privatized war in modern history. Once again, a sea change that was never debated -- it just happened. The worse things get in Iraq, the more the market in private warfare expands into new territory.

These days, everyone is beating up on Blackwater. But at the time this new economy was being built, the press treated the corporate mission creep as absolutely normal, unworthy of serious examination except in extreme cases when a contractor was caught stealing. The financial press, of course, was raving about the so-called "Baghdad boom" in private security, urging investors to get a piece of the action.

Before the current scandal, Blackwater had been working incredibly hard to present itself as a kind of friendly, McMercenary company, with nothing to be ashamed of, just patriotic soldiers out to fight terrorism. They have hired aggressive Washington lobbyists to erase the word "mercenary" from the public vocabulary, launched a line of Blackwater fashions, and Erik Prince likes to compare what he is doing to the military to what FedEx did to the post office.

Cusack: See now that's not a joke -- the man actually said that. The man actually compared running a for-profit occupation to delivering the mail. And there is no function of the state that they don't want to turn into a business, is there?

Klein: I think the short answer is no. Not once you've already opened up prisoner interrogation, wiretapping, and border patrol -- what's left? As you know, in the book I talk about how evacuation from disasters is a burgeoning industry. A company in Florida called HelpJet is urging people to turn "a hurricane evacuation into a jet-setter vacation." Even military recruiting, which has always been seen as the job of soldiers, has become a for-profit business. A new generation of soldiers is being recruited by private headhunting firms like Serco, or the weapons giant L-3 Communications. The private recruiters are paid bonuses every time they sign up a soldier, so one company spokesperson bragged, "If you want to eat steak, you have to put people in the army." It's like Amway with sidearms.

All of this is ripe for corruption, for the most obvious of reasons. If recruitment is on commission, quantity will outweigh quality. If "intelligence" is a service provided to the government by a private contractor, then the customer is always right. And that's pretty scary when the customer is Dick Cheney. Want to prove Iraq has WMDs? Right away, sir. Anything else I can do for you, sir?

The other thing that happens when the working philosophy of the country's leaders is that private is always better is that the public sector is left to erode and atrophy -- in-house equipment falls out of date, the best people leave, the skills are no longer there. The CIA has lost so many staffers to the privatized spy sector that it has barred contractors from recruiting in the agency dining room.

The end result is that you have Blackwater being asked to investigate its own alleged massacre in Baghdad, or CH2M Hill given a contract in Iraq to oversee other contractors. And remember that when Katrina hit, FEMA had to hire a contractor to award contracts to contractors. My favorite example is that when it came time to update the Army manual on the rules for dealing with contractors, the Army outsourced the job to one of its major contractors, because it no longer had the in-house expertise. The Department of Homeland Security is paying Boeing $2.5 billion not just to build a "virtual fence" on U.S. borders but also to design the entire border initiative because, according to the department's inspector general, the DHS "does not have the capacity needed to effectively plan, oversee, and execute the program."

Governing is reduced to running an ATM machine -- awarding contracts to private players. And increasingly, we are hearing about the contracts themselves being written by the companies that eventually win the contracts, while another company is contracted to see that the contract is fulfilled. Under George W. Bush, the state still has all the trappings of a government -- the impressive buildings, presidential press briefings, policy battles -- but it no more does the actual work of governing than the employees at Nike's Oregon headquarters actually stitch running shoes.

TO BE CONTINUED TOMORROW...

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