Why home prices are about to plummet--and take the recovery with them.

... during the last week in February, when Greenspan recommended that the home-owning public take a good hard look at switching from fixed-rate mortgages, under whose terms payments stay the same no matter what interest rates do, to adjustable rate mortgages (ARMs), where payments fluctuate along with interest rates--which, right now, makes close to zero sense.

Interest rates are lower than they've been in 30 years, and, with all economists predicting a general economic upturn, and Bush's budget deficit and the weak dollar sucking up capital, little doubt exists that interest rates must rise, in which case, switching from a fixed-rate to adjustable-rate mortgage would be pretty costly for any family naïve enough to take Greenspan at his word. The episode did not pass completely without critical notice. It was "the strangest bit of advice ever to be proffered by an American central banker," Jim Grant, publisher of Grant's Interest Rate Observer, told the San Francisco Chronicle. Then the press moved on: "Oh, it's just Greenspan."

But sometimes wacko ideas can betray deeper truths. It is tempting to ask what stake the chairman might have in trying to convince millions of people to do something so contrary to their own interest. One theory floated by Fed-watchers is that the chairman is trying to help out his classic institutional constituency, the big banks, which hold trillions of dollars in fixed-rate mortgage paper. There may be something to that theory, but there is almost certainly a deeper and more important motive behind this curious advice. Quite simply, Greenspan is trying to keep a wobbly and fragile recovery alive--and using mortgage refinancing to do it.

There are many strange things about the choppy recovery we're in, but among the most curious is that it is being fueled largely by consumer spending. Why consumers should continue to spend, and why they've done it throughout the recession, is not immediately obvious. After all, average income growth has been puny in the last few years. There's been a big falloff in jobs. Health care and tuition costs have only been going up. And the stock market has spent the last three years unsuccessfully huffing and puffing to get back to the level where it was in early 2001. Why have consumers been spending so much?

Economists have advanced two main reasons. One is that Americans have so lost their moorings that they've had few qualms about going deep into debt. That's certainly true. The average person's debt as a percentage of his income is now higher than it's ever been. But there's another reason, too: Americans have been using their homes as ATM machines, refinancing their mortgages in order to fund their spending. This, of course, makes sense. The one sector of the economy that has consistently swelled has been housing prices. This has intrigued and surprised many economists, because housing is supposed to operate in sync with the economy, expanding during flush times and contracting when things go poorly. But even in a down economy, prices have soared.

Because of these rising prices, people have felt that despite all the ups and downs in stocks and salaries, that their overall situation was okay. Homes are the biggest asset most families own, and their value has been rising nicely. For that reason, Americans have felt more comfortable buying big-ticket items, from SUVs to new computers to Disney World vacations. Much of that spending has gone right onto the VISA card. But that debt has been kept somewhat manageable by another factor in housing prices: mortgage refinancing.

With home prices rising and the Fed keeping rates low, a mortgage refinancing industry that barely existed 15 years ago exploded into one of the fastest growing sectors of the financial services industry. Last year, one-third of all homeowners used cash-out mortgages to refinance their homes, a rate roughly consistent over the past five years. Savvy investors, says Harvard economist William Apgar, are likely to have refinanced "two or three times in the last two years." Each time they do, they have either been able to lower their monthly payments, or walk away with a chunk of cash. And where does that extra cash go? The ubiquitous Ditech TV ads say it all: "I just refinanced my home and paid off my credit cards!" American homeowners have gained $1.6 trillion in cash from refinancing in the last five years, and those gains have flowed almost wholly into purchases of consumer goods. The resulting spending, says Wharton's Susan Wachter, is "propping up" the American economy.

Greenspan has played enabler to this boom. But with the Fed fund's rate at 1 percent, the chairman can't do much more to sustain it. Tens of millions of Americans have already refinanced their mortgages, and at current rates, can't be induced to do so again. This small window is closing, fast: For six months, refinancing has been tapering off, and economists expect it to narrow further--many economists have argued the gains from refinancing are likely to halve ths year. Moreover, as soon as interest rates rise (as Greenspan himself has said they will within the next year), virtually all refinancing will cease.

Greenspan's rather ham-handed effort to get them to go for ARMs, is a sign not of the chairman's own eccentricity or advanced age, but, instead, of the economy's current unsteadiness. Greenspan knows, perhaps better than anyone, that this economy is perched nervously on top of a wobbly, Dr. Seuss-like tower. Our recovery is propped up by consumer spending, which is in turn propped up by mortgage refinancing, and if that refinancing dries up before more props can be put in, the whole edifice could fall. "Since long-term interest rates cannot fall low enough to facilitate another wave of fixed-rate refinancings, he is trying to encourage homeowners to refinance one last time: fixed to ARM," Peter Schiff, president of Euro Pacific Capital in Los Angeles told the San Francisco Chronicle.

Let's assume for a moment that enough people get fooled, and the refinancing boom gets extended for another year. Then what? The real problem hits. Because if you think Greenspan's being cagey on refinancing, the truth he's really avoiding talking about is that we're in the midst of a huge housing bubble, on a scale only seen once before since the Depression. Worse, the inflated housing market is now in an historically unique position, as the motor of the rest of the economy. Within the next year or two, that bubble is likely to burst, and when it does, it very well may take the American economy down with it.

BW Online | July 29, 2004 | The Unbearable Costs of Empire

The Unbearable Costs of Empire
Establishment types are trumpeting America's role as global police force. Too bad the U.S. just can't afford the job

Since September 11, 2001, the phrases "American empire" and "America as an imperial power" are being heard a lot more. But in contrast to the 1960s and 1970s, when such terms were brandished by an angry domestic anti-war movement or by developing nations in U.N. debates, the concept they represent has now at least partially entered the mainstream. However much it has incurred hostility throughout most of the world, including European and other countries usually allied with the U.S., the "new imperialism" has gained ground among the Establishment here.
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The post-9/11 rationale is that America has terrorist enemies and rogue states that will do it serious harm -- maybe even with weapons of mass destruction -- if it doesn't police the world to stop them. "Being an imperial power is more than being the most powerful nation," writes Michael Ingatieff at Harvard's Kennedy Center. "It means enforcing such order as there is in the world and doing so in the American interest."

But what most analysts have missed –- whether or not they support the idea of an American empire -- is that the U.S. simply can't afford the role of global cop.

THE REAL DEBT. First, the U.S. is entering this new age of empire with a gross federal debt that is the highest in more than 50 years as a percentage of gross domestic product. For fiscal 2005, which begins in October, the U.S. gross federal debt is projected to be $8.1 trillion, or 67.5% of GDP. By the time 100,000 U.S. troops were in Vietnam in 1965, it was 46.9% and falling.

One technical point that's vitally important here: It's the gross federal debt and deficits that matter, not the smaller "debt held by the public" and "unified budget deficit" that are generally cited in the press. For example, the most commonly reported estimate of the annual federal budget deficit is $478 billion for 2004. But this number is misleading, because it doesn't include borrowing from federal trust funds -- mostly Social Security and Medicare.

But the money the government is borrowing from Social Security and other trust funds will, with nearly 100% certainty, be paid back -- just like the money it borrows when it sells bonds to Bill Gates or the Chinese government. The annual federal budget deficit is, therefore, $639 billion, according to the numbers from the Congressional Budget Office. This is 5.6% of GDP, a near-record level for the post-World War II era.

BORROWING FROM ABROAD. America can –- just barely -- afford this deficit right now, but that's about to change. First, the interest burden on the debt is currently manageable because of extremely low interest rates. But the Fed is expected to raise short-term rates to 2% by yearend. More important, long-term rates will almost certainly rise even more because inflation has accelerated to 4.9% over the last six months -- a big jump from 2003's 1.9%.

If Kerry wins and takes back the tax cut for households earning more than $200,000 a year, as promised, that won't even reduce the deficit by 1% of GDP. And if he keeps his spending promises, then the monies realized by repealing the tax cut would be canceled out. The Bush budget, which the conservative CATO Institute's Chairman Bill Niskanen recently described as "a fraud" put together by "borrow and spend Republicans," would make the deficit and debt problem even worse.

Then there's the problem of the U.S. –- both the government and the private sector –- borrowing from foreign countries. Most government borrowing is now being financed from overseas -- especially the central banks of China, Japan, and other countries. These institutions are deliberately buying dollars in order to keep their currencies from rising against the greenback. But they won't keep doing this indefinitely. The U.S. is borrowing more than $600 billion a year from the rest of the world, and it can't go on much longer.

THE BIG BANG. Sometime within a decade, and most likely in the next couple of years, foreign investors will see that a steep decline of the dollar is unavoidable and will begin to unload them and U.S. Treasury securities. As with any bubble, it will be better if this one bursts sooner rather than later, when it would be even bigger. But adjustment and pain will still occur, including higher interest rates and consequently slower growth.

Slower growth will also mean larger federal budget deficits. And one event that will certainly slow growth and increase federal government borrowing well beyond current projections is the bursting of the housing bubble. Housing prices have seen an unprecedented run-up since 1995 of more than 35 percentage points above the rate of inflation. That has created more than $3 trillion in paper wealth that –- just like the illusory wealth of the stock-market bubble -- is programmed to disappear. This, too, is almost certain to happen in the next few years.

The economic impact will be at least equivalent to that of equities popping in 2000-02, which caused the last recession. Another slump is, therefore, likely in the near future, and with it a further ballooning of the federal budget deficit, as tax revenues fall and automatic countercyclical spending rises.

CHINA RISING. The combination of unsustainable public debt and foreign debt is a deadly and explosive mix by itself. Rising real interest rates and a looming housing bubble bursting make it all the more dangerous. Financial markets will exert the necessary discipline if politicians refuse to do so, but either way the U.S. can't afford even the $486 billion a year that it's currently spending annually on the military and homeland security.

And even these spending levels are a lot less than would be necessary to maintain America's power in the world. Over the next decade or so, the Chinese economy will actually surpass the U.S. in size. America has 100,000 troops in East Asia. If the U.S. were to try to maintain its current dominance of the region -- something that will probably prove impossible -- it would boost our military spending even further.

The bottom line is that the American empire just isn't affordable. Within a decade or so, the U.S. will be forced to be much less preemptive and outward-looking and to engage in scaled-back foreign policy -- even if the foreign-policy Establishment never changes its views or ambitions.

REALITY CHECK. In the meantime, the segment of American society that would like to see advances in health care, education, poverty alleviation, or any other positive economic or social goals will get bad news. The foreseeable future is a lot different from most of the post-World War II era, during which the U.S. added such programs as Medicare and Medicaid while spending literally trillions of dollars on cold and hot wars.

This time, little or no federal money will be available for any of these things until U.S. foreign policy changes. The most likely scenario is that most areas of nonmilitary discretionary spending will be squeezed relentlessly before anything gives in the realm of superpower ambitions.

The post-9/11 age of American empire will close not with a bang but a whimper, suffocated by the laws of arithmetic, the constraints of public financing, and the limits of foreign borrowing. What remains to be determined is how much the U.S. will pay -- in lost and ruined lives, as well as bills for future generations -- and how many enemies it will make throughout the world, before coming to grips with reality.

Refinancing Bubble Bursting ? Fannie Mae shares drop 13 percent in three days

WASHINGTON (AP) - Shares of Fannie Mae fell again on Friday, capping a three-day slide of more than 13 percent, as investor concerns widened after a government regulator accused top executives of the mortgage giant of mismanagement and serious accounting misdeeds.

While the impact so far has been limited to shareholders, the fallout could eventually reach millions of Americans if they have to pay higher rates for new mortgages for home purchases or refinancings, analysts say. That could be one of the consequences if Fannie Mae is forced to pay higher rates on its nearly $1 trillion in debt.



Fannie Mae and another government-sponsored mortgage financer, Freddie Mac, purchase billions of dollars of mortgages each year from banks and other mortgage lenders, then package them into bonds that are resold to investors. While they are not directly guaranteed by the government, they have special privileges - notably the ability to borrow directly from the U.S. Treasury, which makes their borrowing rates lower than competing firms.

The two companies, whose stock and debt is widely held by investors in the United States and throughout the world, have long contended that home buyers - especially low-income borrowers - have benefited from lower mortgage rates because of their ability to provide a standard way for the loans to be bundled and resold to investors.

But now that both of the firms have become embroiled in accounting scandals within 15 months of each other, their days of low-rate borrowing could be in danger. The Standard & Poor's rating agency said on Thursday that it is considering downgrading some of Fannie Mae's debt. Investors typically demand higher rates from companies with reduced credit ratings as compensation for the increased risk they assume.

Fannie Mae's shares fell $1.64, or 2.4 percent, to a 52-week low of $65.51 in trading Friday on the New York Stock Exchange. The shares closed roughly $10 higher on Tuesday before word of the regulatory findings."

On the road to perdition

If Iraq is 'the crucible in which the future of global terrorism is decided', that is because the actions of Bush and Blair have made it so. The question is what the Prime Minister plans to do now, beyond praying that elections work. Will he stand by the President if Mr Bush goes for Shock and Awe Mark Two or will he be bold enough to step aside?

For now, it seems probable that more innocents will beg on grainy videos for help from politicians rendered powerless not only by the monstrosity of others, but through their own folly. Onlookers will stare again in sorrow and unease at the pain of strangers. Human impulses prompted good people of all faiths to yearn for Ken Bigley's freedom, but so did the awareness that we are all part of his story.

As international affairs analyst Fred Halliday has said, universalism is dying. The US, post 9/11, has put hardline survivalism first and last. Islamic extremists move further towards medieval savagery. As the world converges on the edge of the abyss, the fate of individuals shows what may lie ahead if politicians cannot heed the warning signs. Kenneth Bigley, never a figure of little consequence, is the unwitting signalman on the road to hell."

Men, Women More Different Than Thought

CHICAGO - Beyond the tired cliches and sperm-and-egg basics taught in grade school science class, researchers are discovering that men and women are even more different than anyone realized.

It turns out that major illnesses like heart disease and lung cancer are influenced by gender and that perhaps treatments for women ought to be slightly different from the approach used for men.

These discoveries are part of a quiet but revolutionary change infiltrating U.S. medicine as a growing number of scientists realize there's more to women's health than just the anatomy that makes them female, and that the same diseases often affect men and women in different ways.

'Women are different than men, not only psychologically (but) physiologically, and I think we need to understand those differences,' says Dr. Catherine DeAngelis, editor of the Journal of the American Medical Association (news - web sites).

DeAngelis, who became the journal's first female editor in 1999, says she has made it a mission to publish only research in which data are broken down by sex unless it involves a disease that affects just men or women."

Catastrophic success

"Bush also acknowledged in the interview that the administration did not anticipate the nature of the resistance in Iraq, and he said that was his greatest mistake in office. 'Had we had to do it over again,' he said, 'we would look at the consequences of catastrophic success, being so successful so fast that an enemy that should have surrendered or been done in escaped and lived to fight another day.'

Democrats tried Sunday to exploit that acknowledgment. 'The president is now describing his Iraq policy as a catastrophic success,' Democratic vice presidential nominee John Edwards said in Washington. 'I, like most Americans, have no idea what that means, but it is long past time for this president to accept personal responsibility for his failures and for his performance.' Edwards said the Iraq war 'has clearly been a failure.'"

Cheney Protester Assaulted in Eugene

Free speech in a headlock again...

A chilling aspect of the 6:00 news report on Cheney's Eugene bund rally yesterday was the completely tolerated violent group assault on a protester. A man in a white t-shirt with "Pro-Jesus, Bring the Troops Home" written on it began shouting during Cheney's speech. A 66 year old man, Art Briga of Springfield, in a red-orange jacket, lunged at the protester and put him in a wrestling headlock -- with a hand clamped over the protester's mouth. Another man shoved the protester backwards as others began pulling the protester from behind. The protester's female companion (similar t-shirt) seemed to be appealling to them to stop the assualt. The TV report then showed the man (Art Briga) who committed the initial assault outside after the rally, saying that protesters are "snakes in the grass" and need to be stamped down.

This is certainly similar to the hand-over-mouth assault on Kendra in Beaverton during the Bush bund rally, and a pictured hair-pulling attack on another protester inside another Republican rally recently. The double standard is obvious -- imagine if a protester did such a thing -- we would be doing time. But apparently for Bu$h/Cheney supporters it is open season on protesters, with impunity. The violent attack in Eugene was so obvious that Cheney himself had to mention it: "Treat him with kindness, now."

Daily Kos :: U.S, Killing More Civilians Than Insurgents Are

From Daily Kos

Coalition fatalities in Iraq: 1183

U.S. military fatalities in Iraq: 1048

Iraqi military fatalities: Several thousand

Iraqi civilian fatalities: At least 12,927

Number of Weapons of Mass Destruction discovered: Zero

Iyad Allawi, the Bush Administration’s dancing bear, scarcely strained on his leash during his visit to America to shore up support for the war that Dubyanocchio told us was all but over when he did his own little dance on the USS Abraham Lincoln nearly 17 months ago. While Allawi had harsh words for the insurgents and the thugs who kidnap and behead foreigners in Iraq, not a word was spoken about this:

Iraqi civilian casualties mounting

BAGHDAD, Iraq - Operations by U.S. and multinational forces and Iraqi police are killing twice as many Iraqis - most of them civilians - as attacks by insurgents, according to statistics compiled by the Iraqi Health Ministry and obtained exclusively by Knight Ridder.

According to the ministry, the interim Iraqi government recorded 3,487 Iraqi deaths in 15 of the country's 18 provinces from April 5 - when the ministry began compiling the data - until Sept. 19. Of those, 328 were women and children. Another 13,720 Iraqis were injured, the ministry said.

While most of the dead are believed to be civilians, the data include an unknown number of police and Iraqi national guardsmen. Many Iraqi deaths, especially of insurgents, are never reported, so the actual number of Iraqis killed in fighting could be significantly higher.

Tying Kerry to Terror Tests Rhetorical Limits (washingtonpost.com)

President Bush and leading Republicans are increasingly charging that Democratic presidential nominee John F. Kerry and others in his party are giving comfort to terrorists and undermining the war in Iraq -- a line of attack that tests the conventional bounds of political rhetoric.

Appearing in the Rose Garden yesterday with Iraq's interim prime minister, Ayad Allawi, Bush said Kerry's statements about Iraq "can embolden an enemy." After Kerry criticized Allawi's speech to Congress, Vice President Cheney tore into the Democratic nominee, calling him "destructive" to the effort in Iraq and the struggle against terrorism.

CBS News, R.I.P. : Network delays bombshell Iraq story until after election

CBS News is officially dead. The network is postponing its bombshell expose on Chimp's Iraq lies --- until after the election. Yes, this is the report that was bumped so the TANG story could run. And why won't it run now:

'We now believe it would be inappropriate to air the report so close to the presidential election,' the spokeswoman, Kelli Edwards, said in a statement.

Got that? It's now inapropriate to report the facts about how the President lied the country into war.

'60 Minutes' Delays Report Questioning Reasons for Iraq War

By KATE ZERNIKE

Published: September 25, 2004

CBS News said yesterday that it had postponed a '60 Minutes' segment that questioned Bush administration rationales for going to war in Iraq.

The announcement, in a statement by a spokeswoman, was issued four days after the network acknowledged that it could not prove the authenticity of documents it used to raise new questions about President Bush's Vietnam-era military service.

The Iraq segment had been ready for broadcast on Sept. 8, CBS said, but was bumped at the last minute for the segment on Mr. Bush's National Guard service. The Guard segment was considered a highly competitive report, one that other journalists were pursuing.

CBS said last night that the report on the war would not run before Nov. 2.

'We now believe it would be inappropriate to air the report so close to the presidential election,' the spokeswoman, Kelli Edwards, said in a statement.

http://www.nytimes.com/2004/09/25/politics/campaign/25cbs.html

Pakistan President: Iraq war made the world more dangerous

Pakistan President: Iraq war made the world more dangerous

He says what I and other libbies have been saying for ages. And he is an ally of Bush !

-------------------------
Just read the transcripts below (as seen on TV just today)

Paula Zahn Now - September 24, 2004

ZAHN: Is the world a safer place because of the war in Iraq?

MUSHARRAF: No. It's more dangerous. It's not safer, certainly not.

ZAHN: How so?

MUSHARRAF: Well, because it has aroused actions of the Muslims more. It's aroused certain sentiments of the Muslim world, and then the responses, the latest phenomena of explosives, more frequent for bombs and suicide bombings. This phenomenon is extremely dangerous.

ZAHN: Was it a mistake to have gone to war with Iraq?

MUSHARRAF: Well, I would say that it has ended up bringing more trouble to the world.

ZAHN: Even members of President Bush's party are saying that the United States is in trouble in Iraq and it's possible the United States won't win the war in Iraq. Is that the way you see it?

MUSHARRAF: Well, when you enter operations, you can go wrong in your calculations. That always is a possibility in any operation.

ZAHN: Has that happened in Iraq?

MUSHARRAF: Well, there are difficulties. One can't predict. Maybe the difficulties are surmounted and then it ends up with a victory, with a success. But, at the moment, we are bogged down, yes, yes indeed.

ZAHN: Are you fearful the United States will pull out before it should militarily?

MUSHARRAF: That will be a folly. They must leave a stable, territorially integrated Iraq. We have people of Iraq hard administering themselves, governing themselves, and governing their own natural resources. That must be left intact. They must not leave a disturbed area there. The disturbance can spread to other areas.

ZAHN: Do you think that the war in Iraq has undermined the overall war on terror?

MUSHARRAF: It has complicated it, certainly. I wouldn't say undermined. It has further complicated it. It has made the job more difficult..

And below, on NBC Nightly News, Musharaff says the same thing, but with a more "cautious" air to his words.

-----------------------------
NBC Nightly News, September 24, 2004

Brokaw: Do you think the American war against Iraq was a mistake?

Musharraf: Well, I wouldn't comment on that. But I will certainly say that it has complicated the issue.

Brokaw: In your part of the world.

Musharraf: In the Islamic world. In the Iraqi region. In the Middle East.

Brokaw: Made it worse for America?

Musharraf: Yes.

So far, only the liberal blogs and CNN have the scoop. See video in the link below

http://www.cnn.com/2004/WORLD/asiapcf/09/25/musharraf/index.html

Musharraf was less enthusiastic in his support for the U.S. war in Iraq, saying the world is less safe in the wake of the invasion.

But the Pakistani president stopped short of calling the invasion a mistake, saying, "I would say that it has ended up bringing more trouble to the world."

Musharraf also said that because of the situation in Iraq, he does not foresee Pakistan sending troops to help with the effort.

Aljazeera.Net - Musharraf: Iraq war a mistake

Saturday 25 September 2004, 7:24 Makka Time, 4:24 GMT

The Pakistani president said the US-led invasion was a mistake

Pakistan's President Pervez Musharraf has said the US-led invasion of Iraq made the world a more dangerous place.

Though an ally of the United States, Musharraf on Friday described the invasion as a mistake and said it had complicated the 'war on terror'.

'It has ended up bringing more trouble to the world,' Musharraf said in a television interview.

'The world is more dangerous because the Iraq war has aroused the passions of the Muslims more,' he added.

'The war in Iraq has complicated the war on terror ... it has made the job more difficult.'"

Operation 'Shame on You'

Operation 'Shame on You'

From Daily Kos
Newspapers all over the country are gearing up to make their endorsements for President. Many of them are predictable, of course. The Chicago Tribune, where I live, historically endorses the Republican candidate, regardless of who it is. If the GOP nominated an avocado, the avocado would be trumpeted as the 'right way to go for our country.' So what can you do?

Here's the plan:

Last week, I went on the web and looked up all of the Bush endorsements that I could find from the 2000 election. A lot of links to these publications can be found on this website:

http://www.gwu.edu/~action/natendorse5.html

(Warning: many of these threads, being four years old, are now dead. If you find more, e-mail me at Cyberactor@aol.com.)

For example, I found this from the Detroit News, who said of Bush:

'Mr. Bush will be a far better friend to Michigan workers. Preserving and growing jobs through smarter economic and conservation approaches is far better for the state's unionized work force than the empty and tired slogans of Mr. Gore.'

Well, even an avocado knows what happened, right? So here is my idea: We go and find these endorsements. We spread these ridiculous predictions far and wide. And we respond to them. In force. Letters to the editor of each of these dailies, especially those in Ohio, Michigan, Pennsylvania...you get the idea.

Point out to the editors (as I did earlier to the Detroit News, the Cincinnati Post, the Cincinnati Enquirer and the Milwaukee Journal-Sentinel), that their predictions of what kind of president George Bush would be proved to be disastrously wrong. Some of our letters might get published. Maybe not. Some of these editors might be shamed into endorsing Kerry this time around. Maybe not.

But it's worth a shot.

A 5 line hack can break into e-vote machines!!!!

From Daily Kos

Activists Find More E-Vote Flaws
http://www.wired.com/news/evote/0,2645,65031,00.html?tw=rss.TOP

In the demonstration, a five-line script whipped up by a hacker in Notepad altered the election tallies in Global Election Management System, or GEMS, the (Windows-based) software that runs on a county's server and tallies votes after they come in from Diebold touch-screen and optical-scan machines in polling places. Diebold's reponse?

Diebold spokesman David Bear said by phone that no one would risk manipulating votes in an election because it's against the law and carries a heavy penalty.

Feel better now?"

We're Losing 'Cause We're Winning

From DailyKos:

Interim Iraqi prime minister Ayad Allawi parroted Karl Rove's script today. And the New York Times ate it up. Allawi's words:

They are becoming more deadly because we think they are getting more desperate.

That's speaking of the insurgents, of course. And it would almost make sense -- if the Bush administration hadn't been saying the same thing since the war began. Surely, if increases in violence meant we were close to winning a year ago, we'd have won by now?

This isn't brain surgery, folks. It's PR. And I'd just like once for a reporter to point out how long this spin point has been floating around. Much more below the fold.

Diaries :: whopundit's diary ::

A Brief History of the Bush "Failure Is Victory" Doctrine

This is the behavior of desperate men. Iraqi authorities know their days are numbered. And while the Iraqi regime is on the way out, it's important to know that it can still be brutal, particularly in the moments before it finally succumbs. This campaign could well grow more dangerous in the coming days and weeks as coalition forces close on Baghdad and the regime is faced with its certain death.
(Secretary of Defense Donald Rumsfeld, March 25, 2003)

I think these people are the last remnants of a dying cause.
(Secretary of Defense Donald Rumsfeld, on "dead-enders," June 18, 2003)

Every sign of progress in Iraq adds to the desperation of the terrorists and the remnants of Saddam's brutal regime.
(George W. Bush, Aug. 19, 2003)

This progress makes the remaining terrorists even more desperate and willing to lash out.
(George W. Bush, Aug. 23, 2003)

The more progress we make in Iraq, the more desperate the terrorists will become.
(George W. Bush, Aug. 26, 2003)

You have some remnants -- you have remnants of a regime that we removed, that was an oppressive regime, that is desperate -- more and more desperate every single day, because of the progress we are making on many fronts in Afghanistan.
(Press Secretary Scott McClellan, Sept. 17, 2003)

The more progress we make, the more desperate the holdouts of Saddam Hussein's regime and foreign terrorists become.
(Press Secretary Scott McClellan, Oct. 14, 2003)

The more progress we make on the ground, the more free the Iraqis become, the more electricity that's available, the more jobs are available, the more kids that are going to school, the more desperate these killers become.
(George W. Bush, Oct. 27, 2003)

The more progress we make, the more desperate they tend to become.
(Press Secretary Scott McClellan, Nov. 10, 2003)

As democracy takes hold in Iraq, the enemies of freedom will do all in their power to spread violence and fear.
(George W. Bush, State of the Union Address, Jan. 20, 2004)

The closer we come to passing sovereignty, the more likely it is that foreign fighters, disgruntled Baathists or friends of the Shia cleric will try to stop progress.
(George W. Bush, April 28, 2004)

[Our enemies] know that time is against them, and their only chance is to shake the resolve of Iraqis, Americans, anybody else who loves freedom. And that's why their actions have grown more cruel and sadistic. (George W. Bush, July 4, 2004)

The bad guys, the army of the darkness, are getting more helpless and hopeless. That's why they are stepping up these things. (Iraqi president Ghazi al-Yawer, July 3-, 2004

I'm sure there are other examples, as well. When will get a strategy for winning that doesn't involve losing? How desperate will these killers have to become before the administration finds a new line?

Better yet, when will our nation's highest-paid reporters start paying attention?

- Marc
http://whopundit.blogspot.com

Commentary: Iraq's bridge too far - (United Press International)

Commentary: Iraq's bridge too far


By Arnaud de Borchgrave
UPI Editor at Large

Madrid, Spain, Sep. 15 (UPI) -- Before the Iraqi war, Europe's principal intelligence services shared the Bush administration's view that Saddam Hussein was hiding his stockpiles of chemical and biological weapons of mass destruction. Today, these same services disagree with the White House on several critical assessments.

Off the record conversations with intelligence chiefs in five major European countries -- each with multiple assets in Iraq -- showed remarkable agreement on these points:

-- The neo-con objectives for restructuring Iraq into a functioning model democracy were a bridge too far. They were never realistic.

-- The plan to train Iraqi military and security forces in time to cope with a budding insurgency before it spun out of control was stillborn.

-- The insurgency has mushroomed from 5,000 in the months following the collapse of the Saddam Hussein regime to an estimated 20,000 today, which is still growing. Insurgents are targeting green Iraqi units and volunteers for training and some have already defected to the rebels.

-- Iraqi soldiers trained by the United States are complaining that the equipment ordered by the U.S. from the Ukraine that is being assigned to them gives them "2nd class status."

-- To cope with the insurgency, the United States requires 10 times the rebel strength -- or some 200,000 as a bare minimum. Short of that number, the insurgency will continue to gain momentum. The multiple is based on the British experience in Northern Ireland for a quarter of a century as well as France's civil war in Algeria (1954-62), when nationalist guerrillas were defeated militarily, but won the war diplomatically. France deployed half a million men to defeat the fellaghas in Algeria.

-- The U.S. occupation has lost control of large swathes of Iraq where the insurgency operates with virtual impunity.

-- Iraq was a diversion from the war on a global movement that was never anchored in Baghdad.

-- Iraq does not facilitate a solution to the Mideast crisis. And without such a solution, the global terrorist movement will continue to spread.

-- Iraq has become a magnet for would-be Muslim jihadis the world over; it has greatly facilitated transnational terrorism.

-- Charting a course out of the present chaos requires an open-ended commitment to maintain U.S. forces at the present level and higher through 2010 or longer.

-- The once magnificent obsession about building a model Arab democracy in Iraq now has the potential of a Vietnam-type quagmire.

-- Everything now undertaken in Iraq is palliative to tide the administration over the elections.

-- What is urgently needed, whether a Bush II administration or a Kerry White House, is for the world's great democracies to meet at the summit to map a common strategy to confront a global challenge. The war on terrorism -- on the terrorists who have hijacked Islam -- is only one part of a common approach for (1) the defense of Western democracies and (2) the gradual transformation of an Arab world that must be assisted out of poverty, despair and defeat.

-- A war on terrorism without a global strategy, which must include the funding of major educational reforms in poor countries like Pakistan, where wannabe jihadis are still being churned out by the hundreds of thousands, could only lead to the gradual erosion of Western democratic structures.

-- The "war on terror" is a misnomer that is tantamount to rhetorical disinformation. One can no more fight terrorism than one could declare war on Hitler's Panzers in World War II or Dreadnoughts in World War I. Terrorism is a weapons system that has been used time and again for the last 5,000 years. The root causes are the problem, not the weapon.

-- To ignore the causes is to guarantee escalation -- to weapons of mass destruction

GODvsBUSH.

Quick exit from Iraq is likely

By Robert Novak (!!)

Inside the Bush administration policymaking apparatus, there is strong feeling that U.S. troops must leave Iraq next year. This determination is not predicated on success in implanting Iraqi democracy and internal stability. Rather, the officials are saying: Ready or not, here we go.

This prospective policy is based on Iraq's national elections in late January, but not predicated on ending the insurgency or reaching a national political settlement. Getting out of Iraq would end the neoconservative dream of building democracy in the Arab world. The United States would be content having saved the world from Saddam Hussein's quest for weapons of mass destruction."

9/11 Commission Report Confirms Key Fahrenheit 911 Facts

http://www.9-11commission.gov/

9/11 Commission Report Confirms Key Fahrenheit 911 Facts

The September 11 Commission's 567-page final report has confirmed key
facts presented in Fahrenheit 9/11. These include:

* Attorney General John Ashcroft told acting FBI director Thomas
Pickard that he did not want to hear anything more about terrorist
threats. Confirmed, Commission Report at p. 265

* After Bush was informed of the first plane hitting the World
Trade Center, he went ahead with his classroom event. After Bush was
informed that the nation was under attack after the second plane hit,
Bush stayed in the classroom for nearly seven more minutes, continuing
to read with the children. Confirmed, Commission Report at pp. 35, 38-39.

* Bush failed to have even one meeting to discuss the threat of
terrorism with his head of counterterrorism Richard Clarke.
Confirmed, Commission Report at p. 201.

* Bush failed to react to the August 6, 2001 security briefing,
"Bin Laden Determined to Strike in U.S." Confirmed, Commission Report
at pp. 260-262.

* 142 Saudis, including 24 members of the bin Laden family, were
allowed to leave the country after September 13. Confirmed, Commission
Report at p. 556, n. 25 [Note that Fahrenheit 9/11 understates the
number of Saudis who left.]

* Individuals were interviewed by the FBI before being allowed to
leave (although the report confirms that most individuals on these
flights were not interviewed.) Confirmed, Commission Report at p.
557, n. 28.

* White House former counterterrorism chief Richard Clarke
approved these flights. Confirmed, Commission Report at p. 329.

It should also be noted that the 9/11 Commission does not address or
deem important a number of other issues either addressed in Fahrenheit
9/11 or revealed since completion of the film, including:

* What exactly was the rush in getting these individuals out of
the country so soon after the worst attack in U.S. history, why did
Saudi Royals and bin Laden family members receive such special
treatment at a time when most Americans still could not get flights
(even though airspace may have been open), and how exactly were the
flights arranged by the U.S. government?

* Several unanswered questions posed by Senator Byron Dorgan
(D-ND) in a July 20, 2004, Grand Forks Herald column: "At a time when
14 of the 19 terrorists from Sept. 11 were Saudi citizens, how and why
were six secret flights allowed to sneak 142 Saudi citizens out of the
United States in the days after Sept. 11 before they were properly
interrogated? How do we know they weren't properly questioned? Because
Dale Watson, the No. 2 man and former head of counterterrorism at the
FBI has said none of them were subjected to `serious' interrogation or
questions before being allowed to leave. In fact, we now know that at
least two and perhaps more of the Saudis who were allowed to leave
after Sept. 11 were under investigation by the FBI for alleged
terrorist connections."

* Information that came to light in Dana Milbank's July 22, 2004
Washington Post article, including the fact that at least one bin
Laden family member who was allowed to leave lived with a nephew of
Osama bin Laden, who "was involved in forming the U.S. branch of the
World Assembly of Muslim Youth" (WAMY), which the FBI has described as
"a suspected terrorist organization," and that the bin Ladens flew out
of the country on the same airplane that "has been chartered
frequently by the White House for the press corps traveling with
President Bush."

George W. Bush Meets "Baghdad Bob"

It started with a joke, but once the laughter stopped I had to admit that the President's sunny statements about Iraq last week did sound disturbingly similar to some of the classics uttered by Saddam's former Minister of Information. "Be assured: Baghdad is safe."

By Greg Mitchell

(September 19, 2004) -- On his Friday night chat show on HBO, comedian Bill Maher cracked a joke about President Bush remaining relentlessly upbeat about our war effort in Iraq despite a week of seemingly serious setbacks. Bush, according to Maher, sounds more like "Baghdad Bob" every day.

Baghdad Bob, of course, was Saddam Hussein's minister of information, now immortalized on t-shirts, Web sites and even a DVD for his optimistic, if fanciful, statements about Iraq's triumph over the American infidels, right up to the point we toppled his boss's statue. Baghdad Bob, real name Muhammed Saeed al-Sahaf, somehow survived and at last report was happily working as an Arab TV commentator, sans trademark beret.

Maher's joke was funny because it got at an essential truth, even as he stretched it. But the next day, I got to thinking, what if that's not such an exaggeration after all?

Consider that in the past week violence flared at unprecedented levels all over Iraq; U.S. deaths there soared past the 1,000 mark with more killed than at any time in recent weeks; a declassified National Intelligence Estimate painted a dire picture of prospects in Iraq; and reports circulated that our military plans to mobilize more troops and launch bloody attacks (post-election) on insurgent strongholds. A leading GOP senator, Chuck Hagel of Nebraska, said, "the worst thing we can do is hold ourselves hostage to some grand illusion that we're winning. Right now, we are not winning. Things are getting worse."

And yet President Bush suggested all week that Iraq was firmly on the path to stability and democracy. On Friday he told a newspaper, "The Iraqis are defying the dire predictions of a lot of people by moving toward democracy....I'm pleased with the progress."

So was John Kerry right last week when he said Bush was living in "a fantasy world of spin"? Is the president really not so different from Baghdad Bob? Should he now be known as "D.C. Dubya"? Or "Baghdad Bush"?

Here are a few Baghdad Bob classics from the spring of 2003 (courtesy of one of his many Web shrines), verbatim. See if you can imagine them coming out of the mouth of our president speaking to the press today.

*****

"I will only answer reasonable questions."

"No, I am not scared, and neither should you be."

"Be assured: Baghdad is safe, protected."

"We are in control, they are not in control of anything, they don't even control themselves!"

"The battle is very fierce and God made us victorious."

"They mock me for how I speak. I speak better English than they do."

"I have detailed information about the situation...which completely proves that what they allege are illusions . . . They lie every day."

"I blame Al-Jazeera."

"I can assure you that those villains will recognize in the future how they are pretending things which have never taken place."

"I would like to clarify a simple fact here: How can you lay siege to a whole country? Who is really under siege now?"

"We're giving them a real lesson today. Heavy doesn't accurately describe the level of casualties we have inflicted."

"Those are not Iraqis at all. Where did they bring them from?"

"The American press is all about lies! All they tell is lies, lies and more lies!"

"They are becoming hysterical. This is the result of frustration."

"Just look carefully, I only want you to look carefully. Do not repeat the lies of liars. Do not become like them."

"Search for the truth. I tell you things and I always ask you to verify what I say."

"The United Nations...it is all their fault."

"Even those who live on another planet, if there are such people, would condemn them."

"This is unbiased: They are retreating on all fronts. Their effort is a subject of laughter throughout the world."

"The force that was near the airport, this force was destroyed."

"They are achieving nothing; they are suffering from casualties. Those casualties are increasing, not decreasing."

"They think that by killing civilians and trying to distort the feelings of the people they will win."

"Our estimates are that none of them will come out alive unless they surrender to us quickly."

"They hold no place in Iraq. This is an illusion."

"Once again, I blame al-Jazeera. Please, make sure of what you say and do not play such a role."

"These cowards have no morals. They have no shame about lying."

"You can go and visit those places. Everything is okay. They are not in Najaf. They are nowhere. They are on the moon."

"Rumsfeld, he needs to be hit on the head."