Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

January 22, 2009



- Wall Street is losing faith in Washington's efforts to fix the financial crisis. As bank losses pile up and bank stocks plunge, investors have an urgent question for the new Obama administration: What's the plan?

Timothy Geithner, Obama's pick for treasury secretary, had few answers as he began confirmation hearings Wednesday. He told lawmakers that two goals were to "get credit flowing again" and overhaul the $700 billion bailout, but he offered few details. . .

"The size of the problem is growing faster than the banks' ability to handle it," said Joe Battipaglia, market strategist at Stifel Nicolaus. "We're halfway through the bailout money, and the banks are in worse shape than they were six months ago.". . .

The fear is that both banks are so big, so blended into the global financial system, that their collapse could trigger a catastrophe. The most troubled banks are "going to definitely go down" without more government help, said Jonathan Macey, a law professor at Yale University who wrote a book about a bailout of Sweden's banking system during the 1990s.

"And they may go down with it," he added. "The pace of these bank losses is outrunning the infusions by the government.". . .

In a report last week, Goldman Sachs estimated that financial institutions and investors worldwide will ultimately absorb $2 trillion in losses on U.S. loans - but have recognized only half those losses so far.

William Greider, Nation - The most complex barrier to recovery is globalization and its negative impact on the economy. Given our grossly unbalanced trade, we have kept the system going by playing buyer of last resort--absorbing mountainous trade deficits and accumulating more than $5 trillion in capital debt to pay for swollen imports, while our domestic economy steadily loses jobs and production to other nations. Renewed consumer demand at home will automatically "leak" to rival economies and trading partners by boosting their exports to the US market--which subtracts directly from our GDP. This is the trap the lopsided trading system has created for recovery plans, and it cannot be escaped without fundamental reform.

To put it crudely, Obama's stimulus program might restart factories in China while leaving US unemployment painfully high. In fact, some leakage may occur via the very banks or industrial corporations that taxpayers have generously assisted. What prevents Citigroup and General Motors from using their fresh capital to enhance overseas operations rather than investing at home? The new administration will therefore have to rethink the terms of globalization before its domestic initiatives can succeed. . .

Congress can enact the terms now--a ceiling on US trade deficits that will decline steadily to tolerable levels, as well as new rules for US multinational enterprises that redefine their obligations to the home economy. Unlike in other advanced nations, US companies get a free ride from their home government when they relocate production abroad. That has to change if the United States is to reverse its weakening world position. . .


Robert Fisk, Independent, UK - For the people of the Middle East, the absence of the word "Gaza" - indeed, the word "Israel" as well - was the dark shadow over Obama's inaugural address. Didn't he care? Was he frightened? Did Obama's young speech-writer not realize that talking about black rights - why a black man's father might not have been served in a restaurant 60 years ago - would concentrate Arab minds on the fate of a people who gained the vote only three years ago but were then punished because they voted for the wrong people? It wasn't a question of the elephant in the china shop. It was the sheer amount of corpses heaped up on the floor of the china shop. . .

The friendly message to Muslims, "a new way forward, based on mutual interest and mutual respect", simply did not address the pictures of the Gaza bloodbath at which the world has been staring in outrage. . . Sure, give the man a chance. Maybe George Mitchell will talk to Hamas - he's just the man to try - but what will the old failures such as Denis Ross have to say, and Rahm Emanuel and, indeed, Robert Gates and Hillary Clinton?


David Montero, Christian Science Monitor -
As President Barack Obama steps into the White House and into history, the Taliban have a message for him: Leave Afghanistan. "The insurgent Taliban said Wednesday that US President Barack Obama should learn from the Soviet defeat in Afghanistan and pull his troops out of the country to allow Afghans to decide their own fate," reports The News, a popular English-language daily in Pakistan. "We have no problem with Obama," a spokesman for the extremist Islamist movement [said] after the inauguration of the new US president. However, "he must learn lessons from [former US president George W. Bush] and before that the Soviets," Yousuf Ahmadi said by telephone. .


Arizona Central -
Pinal County supervisors bid goodbye to photo enforcement. Their vote to terminate their contract with Redflex, the company that operates the cameras, came at the recommendation of the county's top law-enforcement official, new Pinal County Sheriff Paul Babeu. "I'm against photo speed enforcement completely," Babeu said, walking the three-member panel through a detailed PowerPoint presentation. "Here in Pinal, it's failed miserably."

Babeu said speed cameras created dangerous road conditions and offered little financial benefit for the county. He plans to boost traffic enforcement through additional manpower. . . Babeu said total motor-vehicle accidents increased by 16 percent in the same time period, and fatal collisions in the Queen Creek area doubled from three to six. The sheriff said he couldn't be certain that speed cameras were to blame for the crashes, but he believes they were a factor.


Gawker - Update from the Wall Street Journal white-powder scare: The evacuation has been so mishandled that employees were reduced to reading Gawker - or picking up the phone and reporting the story themselves. In classic News Corp fashion, after the initial email went out at 11:45 saying that a suspicious package had been received, they proceeded to evacuate 9 and 11 - the op-ed and executive floors - while making no announcement of any kind to the rank-and-file reporters and editors on 10. Need them to get the paper out, after all. Word started to circulate, but a fair number of people learned that the floors directly above and below them had been evacuated only by reading gawker or nytimes.com. Finally another e-mail went out more than an hour later with the news that 9 and 11 had been evacuated, but instructing others to stand by for further instructions from their managers regarding work. At that point, the 10th floor employees just started leaving - they've now all headed home, still with no instructions or information whatsoever from management.


A federal judge in Illinois has ruled against a required moment of silence in public schools in the state, calling it "a subtle effort to force students at impressionable ages to contemplate religion." The law, he noted, required a teacher to "instruct her pupils, especially in the lower grades, about prayer and its meaning as well as the limitations on their 'reflection. "The plain language of the statute, therefore, suggests an intent to force the introduction of the concept of prayer into the schools," he ruled.


Anonymous Anonymous said...

Like Fisk, I was disappointed that Obama did not mention Israel/Gaza at his inaugural. Give that it was such a celebration of a victory over prejudice of one kind, it would have been more than appropriate to speak up against the rising amount of anti-Semitism in the world. No kind of bigotry is acceptable, whether against black people, or gays, or Jews, or any other group. Anti-semitism is a serious threat and it needs to be openly confronted and fought. There are laws against hate crimes, and these need to be enforced not just against those who attack black or gays, but against those who attack Jews as well. It's frustrating that someone who has himself fought discrimination should remain silent in the face of such blatant discrimination against others.

January 24, 2009 1:51 PM  
Anonymous Mairead said...

That's a joke, right? The Jews in Palestine are criminal invaders. Nazi government officials were hanged in 1946 for doing in 1939 what the Zionists then did in 1948 et seq.: take land by violence. The Zionists in Palestine continue to commit the two principal criminal acts under international law: crimes against peace and humanity. That those who should enforce the law are complicit does not make the crimes not-crimes.

Resistance to invaders is completely legal - unless you're a Hohenzollern!

January 25, 2009 6:08 AM  

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