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This is big news and it could mean very bad things for us “little people.” Credit cards rates will skyrocket, along with other bank interest rates such as your mortgage. What’s next? With all the shootings and cries of “terrorism” it could be martial law. This bears watching and following in the news…

From Huffington Post

Ryan Grim

First Posted: 11- 5-09 05:59 PM   |   Updated: 11- 6-09 05:38 PM

bankAmid the ongoing financial regulation overhaul, the banking industry is hoping to pull off a quiet power grab that has eluded its grasp since the Great Depression, by stripping the independence of the board that sets financial accounting standards.

The move could effectively let banks set their own accounting standards in rough economic times.

Astonishingly, at a time when the public is crying out for greater regulation to limit excessive risk-taking by financial institutions, the banks are trying to get Congress to agree that the next time there’s a big downturn, they should have the ability to alter their accounting standards — essentially, fudge the numbers — so that the public and investors won’t be able to tell how insolvent they really are. By ignoring their declining asset values, they can avoid the standard requirement of raising more capital.

The mechanism is contained in an amendment set to be introduced in mid-November by Rep. Ed Perlmutter (D-Colo.) that would move final authority over the Financial Accounting Standards Board (FASB) from the Securities and Exchange Commission to a new body, a so-called “oversight” board, that would include the officials charged with managing systemic risks to the financial markets.

These regulators would have the authority to override FASB’s accounting guidelines by taking into account economic conditions.

The move is so radical that it has split corporate America. The bankers and members of Congress who support it have earned themselves an unlikely enemy: the U.S. Chamber of Commerce.

A typical business or investor, after all, prefers honest, independent accounting, because they buy and sell real things based on real value.

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“Washington isn’t thinking straight,” said Josh Rosner, managing director of Graham, Fischer & Co, a New York-based financial analyst who advises regulators and institutional investors. “Financial statements are for the benefit of investors.”

Indeed, allowing banks to alter accounting standards when they run into trouble is incentive to take more risk and, in essence, institutionalizes fraud. The regulators would now be under enormous political pressure — and sometimes under direct orders — to allow banks to remain in business long after they’ve become insolvent, in the hopes that things will turn around and they’ll grow again.

And rather than stabilize the system, removing accounting independence destabilizes it in the long run, as investors and other banks have little confidence in the veracity of financial statements.

Perlmutter told the Huffington Post that under his proposal, the FASB “would stay with the SEC, but in instances where an accounting procedure or a way it’s being implemented poses a threat to the financial system by exaggerating what’s going on — is pro-cyclical to a point that it, too, threatens the system — then the financial regulator, the systemic regulator, could look in to it.

“For virtually every situation you can think of, there’s no change, but [there would be a change] in the event that there’s a threat to the system, like the dysfunctional market we had from October through March, and that the accounting procedures just didn’t fit for a system where there was no market,” Perlmutter said.

Leslie Oliver, a spokeswoman for Perlmutter, said backers of the amendment haven’t been surprised at the opposition from certain sectors of corporate America.

“That’s understandable for a company that has tangible assets,” she said. Perlmutter said he has yet to hear directly from the Chamber.

That the banking industry finds itself in opposition to large sectors of the business community is evidence that a historic power struggle for control of the economy is underway.

The issue is stirring up the House Financial Services Committee. “It’s caused a great deal of controversy,” said committee chairman Barney Frank (D-Mass.). Frank has yet to take a position, he said, waiting until Perlmutter finishes meeting with members of the committee. “I told him I would wait until he finishes his conversations,” Frank told HuffPost.

FASB is fighting to keep its independence. “The amendment that’s being considered represents a shift that threatens to fundamentally challenge the objectives of financial accounting and politicize the process and harm financial system,” said FASB spokesman Neal McGarity. “The mission of bank regulators is to ensure the safety and soundness of the banking system. We have a different mandate. That’s why this is of considerable concern.”

A powerful subcommittee chairman already opposes it. “I’m for keeping the independent FASB and I see no reason to change it,” Rep. Paul Kanjorski told HuffPost.

The Chamber joined with investors and auditors in opposing the Perlmutter amendment.

From a letter sent to top committee members by representatives of the Center For Audit Quality; the Chamber of Commerce; and the Council of Institutional Investors:

“By placing the FASB under the jurisdiction of a structure charged with managing systemic risks to the financial markets, accounting rules will be viewed though the narrow lens of a few large companies from specific industries, rather than considerate of the applicability of financial reporting policies to over 15,000 public companies. Such a narrow focus can skew standards such that it makes understanding of transactions that businesses engage in on a daily basis more difficult and undermine the confidence of investors. We believe that the SEC has been and continues to be best suited to provide the oversight of the FASB for such a broad and diverse economy.”

The American Bankers Association stands on the other side. “A Systemic Risk Oversight Council could not possibly do its job if does not have oversight authority over accounting rulemaking,” top bank lobbyist Ed Yingling testified before the committee on October 29. “This is a major deficiency in the draft legislation. Accounting policies are increasingly and profoundly influencing financial policy and the basic structure of our financial system. Thus, accounting standards must now be part of any systemic risk calculation. To do anything less creates the potential to undermine any action taken to address a systemic risk. The Financial Accounting Standards Board should continue to function as it does today, but it should no longer report only to the Securities and Exchange Commission (SEC). The SEC’s view is simply too narrow. Accounting policies contributed to the crisis, as has now been well documented, and yet the SEC is not charged with considering systemic and structural effects.”

Yingling said the ABA “strongly supported” the approach taken by Perlmutter. “We thank Representatives Perlmutter and [Frank] Lucas [R-Okla.] for their foresight and leadership on this critical issue.”

While the big banks would be pleased by the change, Frank said, the major push has come from community banks. Perlmutter said that his amendment was one of the community bankers’ highest priorities.

Community banks are a popular and powerful political force in Congress. They didn’t heavily trade the exotic products that nearly brought down the global economy; they received little in the way of bailout money; they don’t give multi-billion-dollar bonuses; they tend to take more responsibility for loans that they issue; and they’re generally respected members of the local community.

“Many members of the committee are supportive of community banks,” said Rep. Maxine Waters (D-Calif.), one of the most progressive members of the committee and a subcommittee chair. “The big banks have been such an outrageous, scandalous story about how they operate and what they have done that we tend to want to support the community banks in whatever they ask us to do.”

Waters told HuffPost she supports Perlmutter’s amendment.

And winning the support of community bankers is in essence a necessary condition for Democrats who want to pass reform legislation through the Financial Services Committee. The Perlmutter amendment could be a way to win community banks over to the idea of a systemic regulator, a priority of the administration.

But working to loosen accounting rules could come back to hurt the Democratic Party: When the system goes down again, voters will want to know why.

When HuffPost asked Frank if Wall Street was pushing Perlmutter’s measure, he responded emphatically.

“You have this caricature in your heads. You literally don’t understand the way the world works,” he said. “It’s the community banks, the credit unions, who are driving this…Seriously, the community banks have the political clout here. Not the Wall Street banks.”

Frank said the ABA was likely pushing for the amendment to win favor with community banks in its rivalry with the Independent Community Bankers of America.

Perlmutter agreed. “It’s the community banks I’ve been working with. I’m not hearing it from the Wall Street guys,” he said.

While the ABA has traditionally been associated with large Wall Street banks, it also represents small banks and is attempting to expand its membership by signing up more community bankers.

It works well for the big banks when their interests are aligned with the little ones, as is the case here. When their interests are not aligned, the little banks often win. Community banks, for instance, won an exemption from examinations — though not the rules — related to the Consumer Financial Protection Agency.

The ICBA wants to use its clout and the distrust of the big banks to move Perlmutter’s amendment even further in their direction. “We’re not buying and selling all the time. We hold a lot of things for the long term…. So we’d like to build in some additional sensitivity to community banks so would like to make that more explicit,” Steve Verdier, an ICBA senior vice president, told HuffPost. “We’re going to get in touch with [Perlmutter] to see if there are more things that can be done to tweak it in our direction.”

Much of the debate around the amendment comes down to what is called the mark-to-market accounting requirement. Banks — both big and small — have long sought to avoid marking their assets down to market prices when those market prices are too low. Marking down the assets requires the bank to take a loss on its books, which then requires it to raise more capital by selling off assets at low prices. Banks claimed that in the fall, the market had frozen and that they couldn’t sell assets. Another way of putting it is that the market price was lower than they wanted to accept.

Regardless, forced selling at low prices creates a downward spiral that banks and the GOP blame for the financial crisis last fall. The GOP called for a study of the effect of mark-to-market accounting on the economic collapse as part of the bailout. That report found the accounting practice did not cause the collapse. Either way, the banks hope to avoid that cycle when the commercial real estate market collapses and they find themselves with bad loans again.

“It’s about easing the pressure to reduce the value of their assets in community banks, so they don’t have to raise more capital,” Frank said.

Asking accountants to change standards based on economic conditions could very well make their heads explode, however. It’s not their job, they say, to keep the system from collapsing. It’s their job to give honest numbers. If a company is bankrupt, it’s bankrupt.

“Accounting standards are not policy,” remarked one person involved in the fight.

But they have become policy. In the spring, Kanjorski’s subcommittee hauled the head of FASB in for a hearing and demanded the number-crunchers change their mark-to-market standards within three weeks or Congress would do it for them. FASB’s head pushed back during the hearing, saying that banks who called him asking for such a change were usually bankrupt fairly quickly.

“They practically dragged him into the hallway and beat him to death,” said Rep. Brad Miller (D-N.C.), a committee member skeptical of the Perlmutter amendment.

Three weeks later, they eased their accounting rules. But it wasn’t simple for the banks. Even with the intense congressional pressure, the change only sneaked by by a single vote and created tension on a board accustomed to a freedom from politics. The Perlmutter amendment would make such a battle unnecessary for the banks.

“There are a lot of banks that are in a lot of trouble and have a lot of exposure to commercial real estate,” Miller said. “You can’t fix that with accounting.”

Rep. Alan Grayson (D-Fla.) fought a lonely battle last spring to stave off the loosening of the accounting rules and opposes this more dramatic shift, as well. Banks may have good reason to want to overstate the value of their assets, he said, and it may work for a time. But an economy can’t be run indefinitely on imaginary numbers. “I enjoy reading fiction, but not in financial statements,” he said.

UPDATE: HuffPost obtained a copy of the amendment language that is circulating among lobbyists. Perlmutter’s spokeswoman confirmed its authenticity.

The amendment would empower the council overseeing FASB to “recommend to the SEC, either publicly or privately to take such action as is necessary, including but not limited to suspension, modification or elimination of such accounting principles, standards or procedures as they may apply to the stability of the financial system or the safety and soundness of financial companies, as a whole, for such duration as is reasonable and appropriate.”

If the SEC doesn’t follow the “recommendation,” according to section (c) of the amendment, the council can order it to do so.

In other words, for the sake of financial stability, bank regulators could secretly order the “elimination” of accounting standards.

SEC. 1103. PRUDENTIAL OVERSIGHT OF ACCOUNTING PRINCIPLES AND STANDARDS THAT POSE SYSTEMIC RISKS.(a) IN GENERAL.–In the event that any member of the Council believes that an accounting principle, standard or procedure threatens the stability of the United States financial system or companies, as a whole, then the Council shall investigate and by a majority vote, determine whether any corrective action, emergency or otherwise, is necessary to prevent or mitigate any adverse effects from such principle, standard or procedure. In the event that the Council determines that corrective action is necessary then, the Council shall recommend to the SEC, either publicly or privately to take such action as is necessary, including but not limited to suspension, modification or elimination of such accounting principles, standards or procedures as they may apply to the stability of the financial system or the safety and soundness of financial companies, as a whole, for such duration as is reasonable and appropriate.

(b) ADOPTION OF COUNCIL RECOMMENDATIONS BY SECURITIES AND EXCHANGE COMMISSION.–the Securities and Exchange Commission shall ensure that the prudential standards recommended by the Council are implemented within 60 days of the Council’s recommendation or within such other time period specified by the Council.

(c) FAILURE TO ADOPT STANDARDS.–If the Securities and Exchange Commission fails to ensure that the prudential standards recommended by the Council are implemented within the time period specified in paragraph (b), the Council is authorized to direct that any recommendations issued pursuant to paragraph (a) be implemented for the purposes of generally accepted accounting principles.”

UPDATE II: The SEC and the American Institute of Certified Public Accountants both oppose the amendment, as well. “Accounting should be about accounting, and not about anything else,” writes SEC chair Mary Schapiro in a letter to Frank sent Thursday.

From a letter from the AICPA:

It is our understanding that Congressman Ed Perlmutter (D-CO) is considering language to amend the Financial Stability Improvement Act of 2009, which would undermine the independent accounting standard process as currently carried out by the Financial Accounting Standards Board (FASB). The American Institute of Certified Public Accountants (AICPA) strongly opposes this amendment and any attempt that would serve to undermine the independence of accounting standard setting. The purpose of public company financial reporting is to provide investors with clear, objective, and transparent financial information. This helps investors make informed investment decisions. Any attempt to divert financial reporting from its primary investor-focused objectives to other policy objectives with regard to financial institutions damages investor protections.

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from the Project Syndicate

by Naomi Wolf

Is it possible to fall out of love with your own country? For two years, I, like many Americans, have been focused intently on documenting, exposing, and alerting the nation to the Bush administration’s criminality and its assault on the Constitution and the rule of law – a story often marginalized at home. I was certain that when Americans knew what was being done in their name, they would react with horror and outrage.

Three months ago, the Bush administration still clung to its devil’s sound bite, “We don’t torture.” Now, Physicians for Human Rights has issued its report documenting American-held detainees’ traumas, and even lie detector tests confirm they have been tortured. The Red Cross report has leaked: torture and war crimes. Jane Mayer’s impeccably researched exposé The Dark Side just hit the stores: torture, crafted and directed from the top. The Washington Post gave readers actual video footage of the abusive interrogation of a Canadian minor, Omar Khadr, who was seen showing his still-bleeding abdominal wounds, weeping and pleading with his captors.

So the truth is out and freely available. And America is still napping, worrying about its weight, and hanging out at the mall.

I had thought that after so much exposure, thousands of Americans would be holding vigils on Capitol Hill, that religious leaders would be asking God’s forgiveness, and that a popular groundswell of revulsion, similar to the nineteenth-century anti-slavery movement, would emerge. To paraphrase Abraham Lincoln, if torture is not wrong, nothing is wrong.

And yet no such thing has occurred. There is no crisis in America’s churches and synagogues, no Christian and Jewish leaders crying out for justice in the name of Jesus, a tortured political prisoner, or of Yahweh, who demands righteousness. I asked a contact in the interfaith world why. He replied, “The mainstream churches don’t care, because they are Republican. And the synagogues don’t care, because the prisoners are Arabs.”

It was then that I realized that I could not be in love with my country right now. How can I care about the fate of people like that? If this is what Americans are feeling, if that is who we are, we don’t deserve our Constitution and Bill of Rights.

Even America’s vaunted judicial system has failed to constrain obvious abuses. A Federal court has ruled that the military tribunals system – Star Chambers where evidence derived from torture is used against the accused – can proceed. Another recently ruled that the president may call anyone anywhere an “enemy combatant” and detain him or her indefinitely.

So Americans are colluding with a criminal regime. We have become an outlaw nation – a clear and present danger to international law and global stability – among civilized countries that have been our allies. We are – rightly – on Canada’s list of rogue nations that torture.

Europe is still high from Barack Obama’s recent visit. Many Americans, too, hope that an Obama victory in November will roll back this nightmare. But this is no time to yield to delusions. Even if Obama wins, he may well be a radically weakened president. The Bush administration has created a transnational apparatus of lawlessness that he alone, without global intervention, can neither roll back nor control.

Private security firms – for example, Blackwater – will still be operating, accountable neither to him nor to Congress, and not bound, they have argued, by international treaties. Weapons manufacturers and the telecommunications industry, with billions at stake in maintaining a hyped “war on terror” and their new global surveillance market, will deploy a lavishly financed army of lobbyists to defend their interests.

Moreover, if elected, Obama will be constrained by his own Democratic Party. America’s political parties bear little resemblance to the disciplined organizations familiar in parliamentary democracies in Europe and elsewhere. And Democrats in Congress will be even more divided after November if, as many expect, conservative members defeat Republican incumbents damaged by their association with Bush.

To be sure, some Democrats have recently launched Congressional hearings into the Bush administration’s abuses of power. Unfortunately, with virtually no media coverage, there is little pressure to broaden official investigations and ensure genuine accountability.

But, while grassroots pressure has not worked, money still talks. We need targeted government-led sanctions against the US by civilized countries, including international divestment of capital. Many studies have shown that tying investment to democracy and human rights reform is effective in the developing world. There is no reason why it can’t be effective against the world’s superpower.

We also need an internationally coordinated strategy for prosecuting war criminals at the top and further down the chain of command – individual countries pressing charges, as Italy and France have done. Although the United States is not a signatory to the statute that established the International Criminal Court, violations of Common Article 3 of the Geneva Conventions are war crimes for which anyone – potentially even the US president – may be tried in any of the other 193 countries that are parties to the conventions. The whole world can hunt these criminals down.

An outlaw America is a global problem that threatens the rest of the international community. If this regime gets away with flouting international law, what is to prevent the next administration – or this administration, continuing under its secret succession plan in the event of an emergency – from going further and targeting its political opponents at home and abroad?

We Americans are either too incapable, or too dysfunctional, to help ourselves right now. Like drug addicts or the mentally ill who refuse treatment, we need our friends to intervene. So remember us as we were in our better moments, and take action to save us – and the world – from ourselves.

Maybe then I can fall in love with my country again.

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Posted 10/6/08 at RonPaul.org

Texas Straight Talk

A weekly column

The Do-Something Congress

It has not been a good week for the Republic.  It took quite a bit of trampling of the Constitution, but the bailout bill passed, as I suspected it would.

 The bailout failed the first time it was brought to the House.  Undaunted, the Senate pressed on by attaching the bailout as an amendment to another House passed bill that was pending in the Senate.  The new bailout version had new taxes, so according to the Constitution it should not have originated in the Senate. 

 

The rallying cry heard all over the Hill the past two weeks was that Congress must act.  Our economy is facing a meltdown.  Would this bill fix it?  Nobody could really explain how it would.  In fact, few demonstrated any real understanding of credit markets, of derivatives, of credit default swaps or mortgage-backed securities.  If they did, they would have known better than to vote for this bill.  All they knew was that this administration was saying some frightening things, and asking for a lot of money.  And when has Congress ever been able to come up with a better solution to a problem than to throw more of your money at it?  So that is what Congress did, enacting a financial PATRIOT Act in the process.

 

In its embarrassment at being called a “Do-Nothing Congress” the 110th Congress took decisive action and did SOMETHING.  No matter that it was the wrong thing.  In fact, it wasn’t until the Senate had a chance to load it up with even MORE spending, when it was finally inflationary and horrible enough, at $850 billion instead of a mere $700 billion, that it passed – and with a comfortable margin, in spite of constituent calls still coming in overwhelmingly against it.  57 members switched their vote!

 

The market went down anyway.  Our nation is now just that much more in the hole.  You will pay your part of this mess through inflation, and very likely hyperinflation.

 

Sometimes doing nothing is much better than thrashing about aimlessly.  When one is caught in quicksand, for example, or when one doesn’t understand economics and finds oneself in the position Congress was in for the past two weeks, with decades of irresponsible monetary policy coming to a head.  Why should we trust the same people who said just a few months ago that the economy was perfectly sound?  The same people who just knew there were weapons of mass destruction?  The same people that crammed the PATRIOT Act down our throats?  Why not consult the people who had the foresight and understanding to see this coming?  They would have recommended such logical actions as repealing the Community Reinvestment Act, which forces banks to make bad loans, or allowing the market to set interest rates instead of the Federal Reserve system.  How about abolishing the Federal Reserve altogether?  There are many things that could have been done, but don’t expect Congress take a course of action that comes from a place of understanding and competence when they could just spend money.

 

This bailout will be the legacy of the 110th “Do-Something” Congress, along with record low approval ratings.  Here’s hoping the 111th Congress will be a “Do the Right Thing” Congress, and will focus on repealing and abolishing what is wrong with government instead of reinforcing it.

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This man should be given a lot of credit for standing up and speaking out, seemingly alone, against all the blatant Washington corruption and lies. Give him whatever support you can.

An email received from Robert Wexler:

robertwexler.jpg

Today, in hearings on Capitol Hill, I confronted Secretary of State Condoleezza Rice on her role in the lies, exaggerations, and misdirection that led us into the Iraq war.

During my questioning, Secretary Rice falsely stated that she never saw intelligence casting doubt on the Bush Administration claims that Saddam possessed weapons of mass destruction. This unbelievable statement is flatly contradicted by numerous government reports and CIA testimonials. (To watch the video of my exchange with Secretary Rice, click here.)

Secretary Rice’s responses demonstrate once and for all that we need aggressive oversight over this out of control Administration. Unfortunately, the Bush Administration has ignored the constitutional right of Congress to provide such oversight.

It is time Congress took aggressive action to assert our rights on behalf of the American people.

The House of Representatives must immediately hold former White House Counsel Harriet Miers and White House Chief of Staff Josh Bolten in contempt of Congress for their failure to respond to congressional subpoenas.

I have been aggressively lobbying Members of Congress to support a vote on contempt, and I am thrilled to report that Speaker Pelosi told me directly that she agrees it is well past time to vote on contempt. I am anticipating that the House will shortly vote on resolutions of both civil and criminal contempt for both Miers and Bolten.

No one should be immune from accountability and the rule of law.

Not Harriet Miers or Josh Bolten.

And especially not Condoleezza Rice, George W. Bush or Dick Cheney.

It is time to defend the Constitution and our rights as a co-equal branch of government.

I will continue to take on the Bush Administration for their outrageous abuses just as I confronted Condoleezza Rice today and Attorney General Mukasey last week. (Click here to see my questioning of Mukasey.)

With your help we will hold these top Bush officials in contempt and continue our efforts to hold impeachment hearings for Vice President Dick Cheney.

Thank you, as always, for your great support.

Yours truly,

Congressman Robert Wexler

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An email received from the American Freedom Campaign:

liberty_by_katta80.jpgWith your participation, the American Freedom Campaign can help stop one of the most outrageous political power grabs in this nation’s history. At stake is not only our Constitution, but also the lives of Americans. Please continue reading this alert and then take immediate action by clicking on one of the links below.

Recently, I wrote about President Bush’s plan to sign an agreement with the Iraqi government, making long-term economic and military commitments, without congressional approval. The negotiations over this agreement continue and the final outcome may not be known for months.

What is known for certain, however, is that the Bush administration cannot be trusted. That is why three members of the U.S. House of Representatives are poised to introduce a resolution that would make it absolutely clear that President Bush CANNOT, under the Constitution of the United States, make long-term, binding military or economic commitments to a foreign government without congressional approval.

Click on the following link to urge your U.S. representative to co-sponsor this resolution and push for its immediate consideration on the House floor:

http://salsa.democracyinaction.org/o/2165/t/1027/campaign.jsp?campaign_KEY=22955

Since my last email on this subject (“Tell Congress: George Bush is not king,” January 28), the Bush administration has started to backtrack on its contention that it could make certain military commitments to Iraq without congressional approval.[1] While this is certainly a good sign — and we should all be proud that we helped change their tune — it would be foolish to take the administration at its word. Instead, Congress must proactively assert its own authority under the Constitution and clearly convey its position to the public.

A resolution proposed by Congresswomen Barbara Lee, Lynn Woolsey, and Maxine Waters would accomplish these objectives. As stated in the resolution itself, its primary purpose is to reaffirm “the importance of following constitutional processes when the United States Government makes national commitments regarding the use or maintenance of the United States Armed Forces.” This resolution is not “anti-war;” it is “pro-Constitution.”

The House needs to pass this resolution. And the more co-sponsors it has, the more likely its passage becomes.

So please send an email to your U.S. representative today and urge him or her to co-sponsor this important piece of legislation. Just click on the following link to get started:

http://salsa.democracyinaction.org/o/2165/t/1027/campaign.jsp?campaign_KEY=22955

Thank you for taking action in support of the Constitution.

Best,
Steve

Steve Fox
Campaign Director
American Freedom Campaign Action Fund

[1] “Gates seeks to reassure Senate on Iraq agreement,” Boston Globe, February 7, 2008.

http://www.boston.com/news/world/articles/2008/02/07/gates_seeks_to_reassure_senate_on_iraq_agreement/?page=1

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by Greg Palast

January 29th, 2008

Here’s your question, class:

In his State of the Union, the President asked Congress for $300 million for poor kids in the inner city. As there are, officially, 15 million children in America living in poverty, how much is that per child? Correct! $20.

Here’s your second question. The President also demanded that Congress extend his tax cuts. The cost: $4.3 trillion over ten years. The big recipients are millionaires. And the number of millionaires happens, not coincidentally, to equal the number of poor kids, roughly 15 million of them. OK class: what is the cost of the tax cut per millionaire? That’s right, Richie, $287,000 apiece.

richierich.jpg

Mr. Bush said, “In neighborhoods across our country, there are boys and girls with dreams. And a decent education is their only hope of achieving them.”

So how much educational dreaming will $20 buy?

-George Bush’s alma mater, Phillips Andover Academy, tells us their annual tuition is $37,200. The $20 “Pell Grant for Kids,” as the White House calls it, will buy a poor kid about 35 minutes of this educational dream. So they’ll have to wake up quickly.

-$20 won’t cover the cost of the final book in the Harry Potter series.

If you can’t buy a book nor pay tuition with a sawbuck, what exactly can a poor kid buy with $20 in urban America? The Palast Investigative Team donned baseball caps and big pants and discovered we could obtain what local citizens call a “rock” of crack cocaine. For $20, we were guaranteed we could fulfill any kid’s dream for at least 15 minutes.

Now we could see the incontrovertible logic in what appeared to be quixotic ravings by the President about free trade with Colombia, Pell Grant for Kids and the surge in Iraq. In Iraq, General Petraeus tells us we must continue to feed in troops for another ten years. There is no way the military can recruit these freedom fighters unless our lower income youth are high, hooked and desperate. Don’t say, ‘crack vials,’ they’re, ‘Democracy Rocks’!

The plan would have been clearer if Mr. Bush had kept in his speech the line from his original draft which read, “I have ordered 30,000 additional troops to Iraq this year – and I am proud to say my military-age kids are not among them.”

Of course, there’s an effective alternative to Mr. Bush’s plan – which won’t cost a penny more. Simply turn it upside down. Let’s give each millionaire in America a $20 bill, and every poor child $287,000.

And, there’s an added benefit to this alternative. Had we turned Mr. Bush and his plan upside down, he could have spoken to Congress from his heart.

=======

-For more on Bush and education read “No Child’s Behind Left” in Armed Madhouse excerpted here.
-Also read Palast’s take on the 2007 State of the Union here.

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This act will “require all persons in the United States between the ages of 18 and 42 to perform national service, either as a member of the uniformed services or in civilian service in furtherance of the national defense and homeland security, to authorize the induction of persons in the uniformed services during wartime to meet end-strength requirements of the uniformed services, to amend the Internal Revenue Code of 1986 to make permanent the favorable treatment afforded combat pay under the earned income tax credit, and for other purposes.”

Further, this act proposes “that all residents in the United States aged between 18 and 42 carry out national service, and be available for conscription during wartime. It would allow no deferments after age 20.”

http://www.govtrack.us/congress/bill.xpd?bill=h110-393 

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