Small and Midsize U.S. Banks Beginning to Struggle in Credit Crisis

'Losses are mounting so rapidly at some banks that a small number of them, perhaps 50 out of the 7,500 nationwide, could fail over the next 12 to 18 months.'


By ERIC DASH
February 27, 2008


The credit crisis is tightening the screws on thousands of small to midsize banks across the United States, squeezing local builders and businesses that depend on those lenders for financing.

Graphic Small Banks, Big Exposure

Losses are mounting so rapidly at some of these banks that a small number of them, perhaps 50 out of the 7,500 nationwide, could fail over the next 12 to 18 months, analysts said. Some of the others are likely to shut branches or seek out mergers as the weakening economy strains their finances.

Small lenders are in far less danger than they were during the 1980s and early 1990s, when roughly 1,600 federally insured institutions failed during a savings and loan crisis. And unlike many bigger banks, they shied away from complex mortgage-linked investments and subprime home loans.

But the breadth and depth of the current troubles have caught bank executives by surprise.

Federal regulators are particularly concerned about the exposure of smaller banks to the commercial real estate market, which has begun to soften in some parts of the country.

“There were people in denial six to nine months ago,” said Keith D. Maio, the president of the National Bank of Arizona in Phoenix, a small bank owned by the Zions Bancorporation based in Salt Lake City. “I don’t know if anybody is in denial anymore.”

Federal regulators concerned about the health of the industry are stepping up regular bank examinations and forcing some lenders to bolster reserves. During the last four years, just four United States banks have failed.

Stock market investors see trouble brewing. Shares of small banks have tumbled in recent months, with the Standard & Poor’s midcap regional banking index sinking 20 percent from a year ago.

“The megabanks get all the headlines,” said Jaret Seiberg, a research analyst for the Stanford Group, a private wealth management and banking firm. “But this is causing a lot of trouble for the industry and it is going to persist for the next few years.”

Small banks have been losing business to larger rivals for years. Big banks have muscled them aside in the credit card and home mortgage businesses. In response, many small and midsize banks, typically defined as those with assets ranging from less than $1 billion and $20 billion, pushed into construction and commercial lending, betting that their local knowledge of markets would give them an edge.

The strategy paid off, delivering years of strong profit growth. But now, as real estate and construction loans sour, small lenders are starting to see their balance sheets pinched.

Mark T. Fitzgibbon, the director for research at Sandler O’Neil & Partners, said losses at smaller lenders might ultimately reach $105 billion, or 15 percent of what he projected could be $700 billion of losses industrywide.

“The real estate problem has gotten worse and more pervasive, more rapidly,” Mr. Fitzgibbon said. The rapid decline in home prices in areas like Florida and Southern California is just the start. “I think you will see that spread to other parts of the country soon,” he said.

Already, residential construction lending is running into trouble. As new homes have become harder to sell, developers are falling behind on payments, and are no longer seeking new loans.
For all public banks, the late loan payment rate rose in the fourth quarter to 4.11 percent of the total, up 76 percent from the third quarter and 142 percent from the first three months of 2007, according to a Stanford Group analysis.

And the problems are likely to get worse. Some home builders are rapidly drawing down so-called interest reserves, the extra cash cushion built into a loan that is intended to protect banks by ensuring that borrowers can pay back interest. Reserves for loans for construction projects that started before the credit crisis will start running out in the next six months. Small business loans could be next.

“We are seeing an uptick in nonperforming loans to small businesses — the local retail stores, service providers, dentists, vets — but off of historically low rates.” said Steven D. Fritts, associate director for risk management policy for the Federal Deposit Insurance Corporation.
Federal banking regulators are particularly concerned about small banks’ exposure to commercial real estate.

In the last six years at community banks, the ratio of commercial real estate loans to capital, a measure regulators use to monitor loan exposure, nearly doubled to a record 285 percent, according to data from the federal Office of the Comptroller of the Currency. Nearly a third of all community banks exceed 100 percent of their capital.

Granted, most banks report that their loan portfolios are holding up and actual delinquencies remain near all-time lows. But over all, the number of borrowers falling behind is growing.
Timothy W. Long, head of supervision for midsize and community banks at the office of the comptroller, said regulators were monitoring lenders closely. He said the industry had not experienced this tough a period in years.

“I would tell you a lot of bankers out there have never had a loan charged off,” Mr. Long said. “The last time we went through this, the loan officers were in junior high.”

Source:
http://www.nytimes.com/2008/02/27/business/27bank.html?_r=1&ex=1361854800&en=2855348560aabcef&ei=5088&partner=rssnyt&emc=rss&oref=slogin
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Greenspan tells Gulf to drop dollar

Greenspan says inflation rates in Gulf states will fall if they drop their US dollar pegs


Al Jazeera
Feb. 25, 2008


Alan Greenspan, the former chairman of the US central bank, or Fed, has said that inflation rates in Gulf states, which are reaching near record levels, would fall "significantly" if oil producers dropped their US dollar pegs.

Speaking at an investment conference on Monday in Jedda, Saudi Arabia, he said the pegs restrict the region's ability to control inflation by forcing them to duplicate US monetary policy at a time when the Fed is cutting rates to ward off an economic downturn.

Debate is rife in the Gulf on how to tackle inflation.Levels have hit seven per cent in Saudi Arabia, the highest in 27 years and a 19-year peak of 9.3 per cent in the United Arab Emirates in 2006.Free float?

"In the short term free floating ... will not fully dissipate inflationary pressure, although it would significantly do so," Greenspan said.

Saudi and UAE central bank chiefs are in favour of retaining dollar pegs, but Sheikh Hamad bin Jassim bin Jabr al-Thani, the prime minister of Qatar, is pushing for regional currency reform to avert possible unilateral revaluations designed to curb inflation.According to Hamad Saud al-Sayyari, governor of the Saudi central bank, floating the Saudi riyal would not be appropriate for an economy that relies on oil exports. "Floating is beneficial when the economy and exports are diverse ... as for the kingdom it remains reliant on the export of a single commodity," he said.

Investor attraction

The dollar peg was also defended by Sultan Nasser al-Suweidi, the UAE central bank governor, at a conference in Abu Dhabi on Monday.

He said the policy was helping Gulf states attract foreign investments.

"They did very well for our economies because it has led to more capital flows," al-Suweidi said. Qatar, has the region's highest inflation, and is considering the revaluing of the Qatari riyal to combat inflation currently at 13.74 per cent. The exchange rate contributes to about 40 per cent of inflation in Qatar, where the riyal is believed to be 30 per cent undervalued.

Qatar's stand

"We prefer always to act with all the GCC countries," Sheikh Hamad said.

Qatar currently chairs the six-nation Gulf Cooperation Council. "It's now time for the Gulf to have its own currency," he said.

Sheikh Hamad said such a currency should be "like the Japanese yen or other currencies".

Deutsche Bank said last month that both Qatar and the UAE will probably cut ties to the US dollar this year and track currency baskets as Kuwait did last May.

Source:
http://english.aljazeera.net/NR/exeres/FC515689-75CC-4121-BD37-2A84E5BF0C60.htm
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The Real Story Behind Kosovo's Independence


By Jeremy Scahill
AlterNet
February 23, 2008


All of a sudden, DC establishment figures care about "international law" when it suits their interests in Kosovo.

News Flash: The Bush administration acknowledges there is a such thing as international law.

But, predictably, it is not being invoked to address the US prison camps at Guantanamo, the wide use of torture, the invasion and occupation of sovereign countries, the extraordinary rendition program.

No, it is being thrown out forcefully as a condemnation of the Serbian government in the wake of Thursday's attack by protesters on the US embassy in Belgrade following the Bush administration's swift recognition of the declaration of independence by the southern Serbian province of Kosovo.

Some 1,000 protesters broke away from a largely non-violent mass demonstration in downtown Belgrade and targeted the embassy. Some protesters actually made it into the compound, setting a fire and tearing down the American flag.

"I'm outraged by the mob attack against the U.S. embassy in Belgrade," fumed Zalmay Khalilzad,the US Ambassador to the United Nations. "The embassy is sovereign US territory. The government of Serbia has a responsibility under international law to protect diplomatic facilities, particularly embassies."

His comments were echoed by a virtual who's who of the Bill Clinton administration. People like Jamie Rubin, then-Secretary of State Madeleine Albright's deputy, one of the main architects of US policy toward Serbia. "It is sovereign territory of the United States under international law," Rubin declared. "For Serbia to allow these protesters to break windows, break into the American Embassy, is a pretty dramatic sign."

Hillary Clinton, whose husband orchestrated and ran the 78-day NATO bombing of Serbia in 1999, said, "I would be moving very aggressively to hold the Serbian government responsible with their security forces to protect our embassy. Under international law they should be doing that."

There are two major issues here.

One is the situation in Kosovo itself (which we'll get to in a moment), but the other is the attack on the US embassy.

Yes, the Serbian government had an obligation to prevent the embassy from being torched and ransacked. If there was complicity by the Serbian police or authorities in allowing it to be attacked, that is a serious issue. But the US has little moral authority not just in invoking international law (which it only does when it benefits Washington's agenda) but in invoking international law when speaking about attacks on embassies in Belgrade.

Perhaps the greatest crime against any embassy in the history of Yugoslavia was committed not by evil Serb protesters, but by the United States military.

On May 7, 1999, at the height of the 78 day US-led NATO bombing of Yugoslavia, the US bombed the Chinese embassy in Belgrade, killing three Chinese citizens, two of them journalists, and wounding 20 others.

The Clinton administration later said that the bombing was the result of faulty maps provided by the CIA (Sound familiar?).

Beijing rejected that explanation and alleged it was deliberate.

Eventually, under strong pressure from China, the US apologized and paid $28 million in compensation to the victims' families. If the US was serious about international law and the protection of embassies, those responsible for that bombing would have been tried at the Hague along with other alleged war criminals. But "war criminal" is a designation for the losers of US-fueled wars, not bombers sent by Washington to drop humanitarian munitions on "sovereign territory."

Beyond the obvious hypocrisy of the US condemnations of Serbia and the sudden admission that international law exists, the Kosovo story is an important one in the context of the current election campaign in the United States. Perhaps more than any other international conflict, Yugoslavia was the defining foreign policy of President Bill Clinton's time in power. Under his rule, the nation of Yugoslavia was destroyed, dismantled and chopped into ethnically pure para-states.

President Bush's immediate recognition of Kosovo as an independent nation was the icing on the cake of destruction of Yugoslavia and one which was enthusiastically embraced by Hillary Clinton. "I've supported the independence of Kosovo because I think it is imperative that in the heart of Europe we continue to promote independence and democracy," Clinton said at the recent Democratic debate in Austin, Texas.

A few days before the attack on the US embassy in Belgrade, Clinton released a Molotov cocktail statement praising the declaration of independence. In it, she referred to Kosovo by the Albanian "Kosova" and said independence "will allow the people of Kosova to finally live in their own democratic state. It will allow Kosova and Serbia to finally put a difficult chapter in their history behind them and to move forward." She added, "I want to underscore the need to avoid any violence or provocations in the days and weeks ahead."

As seasoned observers of Serbian politics know, there were few things the US could have done to add fuel to the rage in Serbia over the declaration of independence - "provocations" if you will - than to have a political leader named Clinton issue a statement praising independence and using the Albanian name for Kosovo.

On the campaign trail, the Clinton camp has held up Kosovo as a successful model for how to conduct US foreign policy and Clinton criticized Bush for taking "so long for us to reach this historic juncture."

Perhaps a little of that history is in order. If Kosovo is her idea of solid US foreign policy, it speaks volumes to what kind of president she would be. The reality is that there are striking similarities between the Clinton approach to Kosovo and the Bush approach to Iraq.

On March 24, 1999, President Bill Clinton began an 11-week bombing campaign against Yugoslavia. Like Bush with Iraq, Clinton had no UN mandate (he used NATO) and his so-called "diplomacy" to avert the possibility of bombing leading up to the attacks was insincere and a set-up from the jump.

Just like Bush with Iraq.

A month before the bombing began, the Clinton administration issued an ultimatum to President Slobodan Milosevic, which he had to either accept unconditionally or face bombing. Known as the Rambouillet accord, it was a document that no sovereign country would have accepted. I

t contained a provision that would have guaranteed US and NATO forces "free and unrestricted passage and unimpeded access throughout" all of Yugoslavia, not just Kosovo. It also sought to immunize those occupation forces "from any form of arrest, investigation, or detention by the authorities in [Yugoslavia]," as well as grant the occupiers "the use of airports, roads, rails and ports without payment."

Additionally, Milosevic was told he would have to "grant all telecommunications services, including broadcast services, needed for the Operation, as determined by NATO." Similar to Bush's Iraq plan years later, Rambouillet mandated that the economy of Kosovo "shall function in accordance with free market principles."

What Milosevic was actually asked to sign is never discussed. That it would have effectively meant the end of the sovereignty of the nation was a non-story. The dominant narrative for the past nine years, repeated this week by William Cohen, Clinton's defense secretary at the time of the bombing, is this: "We tried to achieve a peaceful resolution of what was taking place in Kosovo. And Slobodan Milosevic refused."

Refused peace?

More like he unwisely refused one of Don Corleone's famous offers. Washington knew he would reject it, but had to give the appearance of diplomacy for international "legitimacy."

So the humanitarian bombs rained down on Serbia. Among the missions: the bombing of the studios of Radio Television Serbia where an airstrike killed 16 media workers; the cluster bombing of a Nis marketplace, shredding human beings into meat; the deliberate targeting of a civilian passenger train; the use of depleted uranium munitions; and the targeting of petrochemical plants, causing toxic chemical waste to pour into the Danube River. Also, the bombing of Albanian refugees, ostensibly the people being protected by the U.S.

Similar to Bush's allegations about Iraqi WMDs in the lead up to the US invasion, in 1999 Clinton administration officials also delivered stunning allegations about the level of brutality present in Kosovo as part of the propaganda campaign.

"We've now seen about 100,000 military-aged men missing ....They may have been murdered," Cohen said five weeks into the bombing. He said that up to 4,600 Kosovo men had been executed, adding, "I suspect it's far higher than that."

Those numbers were flat out false.

Eventually the estimates were scaled back dramatically, as Justin Raimondo pointed out recently in his column on Antiwar.com, from 100,000 to 50,000 to 10,000 and "at that point the War Party stopped talking numbers altogether and just celebrated the glorious victory of 'humanitarian intervention.'"

As it turned out "there was no 'genocide' - the International Tribunal itself reported that just over 2,000 bodies were recovered from postwar Kosovo, including Serbs, Roma, and Kosovars, all victims of the vicious civil war in which we intervened on the side of the latter. The whole fantastic story of another 'holocaust' in the middle of Europe was a fraud," according to Raimondo.

Following the NATO invasion of Kosovo in June of 1999, the US and its allies stood by as the Albanian mafia and gangs of criminals and paramilitaries spread out across the province and systematically cleansed Kosovo of hundreds of thousands of Serbs, Romas and other ethnic minorities. They burned down houses, businesses and churches and implemented a shocking campaign to forcibly expel non-Albanians from the province.

Meanwhile, the US worked closely with the Kosovo Liberation Army and backed the rise of war criminals to the highest levels of power in Kosovo. Today, Kosovo has become a hub for human trafficking, organized crime and narcosmuggling. In short, it is a mafia state. Is this the "democracy" Hillary Clinton speaks of "promoting" in "the heart" of Europe?

It didn't take long for the US to begin construction of a massive US military base, Camp Bondsteel, which conveniently is located in an area of tremendous geopolitical interest to Washington. (Among its most bizarre facilities, Bondsteel now offers classes at the Laura Bush education center, as well as massages from Thai women and all the multinational junk food you could (n)ever wish for).

In November 2005, Alvaro Gil-Robles, the human rights envoy of the Council of Europe, described Bondsteel as a "smaller version of Guantanamo." Oh, and Bondsteel was constructed by former Halliburton subsidiary KBR.

Herein lies an interesting point.

The Serbian government is largely oriented toward Europe, not the US. The country's prime minister, Vojislav Kostunica, is a conservative isolationist who is not enthusiastic about a US military base on Serbian soil any more than Cuba is about Gitmo. He charged that, in recognizing Kosovo, Washington was "ready to unscrupulously and violently jeopardize international order for the sake of its own military interests." To the would-be independent Kosovo government, however, Bondsteel is no problem.

Russia and a few other nations are fighting the recognition of Kosovo as an independent nation, but that is unlikely to succeed. Still, this action will undoubtedly reverberate for years to come.

"We have in Serbia a situation in which the U.S. has forced an action - the proclamation of independence by the Kosovo Albanians - that is in clear violation of the most fundamental principles of international law after World War II," argues Robert Hayden, Director of the Center for Russian and East European Studies at the University of Pittsburgh. "Borders cannot be changed by force and without consent - that principle was actually the main stated reason for the 1991 U.S. attack on Iraq."

And this brings us full circle. International law matters only when it is convenient for the US. So too are the cries for "humanitarian interventions." And despite the extremism of the Bush administration, this is hardly a uniquely Republican phenomenon. In a just world, there would be a humanitarian intervention against the US occupation of Iraq - with its indiscriminate killings of civilians, torture chambers and widespread human rights violations.

There certainly would have been such an intervention during the bipartisan slaughter, through bombs and sanctions, of Iraq's people over the past 18 years. But that's what you get when the cops and judges and prosecutors are the criminals. US policy has always operated on a worthy victim, unworthy victim system that is almost never primarily about saving the victims.

Humanitarianism is the publicly offered justification for the action, seldom, if ever, the primary motivation. With Iraq, Bush wheeled out the humanitarian justification for the occupation - Saddam's brutality - only after the WMD lies were thoroughly debunked. In Yugoslavia, Clinton used it right out of the gates. In both cases, it rang insincere.

If you are a victim who happens to share a common geography with US interests, international law is on your side as long as it is convenient. If not, well, tough. The UN is just a debate club anyway.

Just ask the tens of thousands of Kurds who were slaughtered by Turkey with weapons sold to them by the Clinton administration during the 1990s. Or the Palestinians who live under the brutality of Israel's occupation. In some cases, the "victims" allegedly being protected by the US actually get bombed themselves, as was the case with President Clinton's "humanitarian" bombings of the north and south of Iraq once every three days in the late 1990s.

In the bigger picture, the Bush administration's quick recognition of an independent Kosovo has given us a powerful reminder of a fact that is too often overlooked these days: empire is bipartisan, as are the tactics and rhetoric and bombs used to defend and expand it.

Jeremy Scahill, an independent journalist who reports frequently for the national radio and TV program Democracy Now!, has spent extensive time reporting from Iraq and Yugoslavia. He is currently a Puffin Writing Fellow at The Nation Institute. Scahill is the author of Blackwater: The Rise of the World's Most Powerful Mercenary Army.

Source:
http://www.alternet.org/story/77546/?page=1
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Is John McCain a Crook?


By Chris Suellentrop
Slate.com
Feb. 18, 2000


The controversial George W. Bush-sponsored poll in South Carolina mentioned John McCain's role in the so-called Keating Five scandal, and McCain says his involvement in the scandal "will probably be on my tombstone."

What exactly did McCain do?

In early 1987, at the beginning of his first Senate term, McCain attended two meetings with federal banking regulators to discuss an investigation into Lincoln Savings and Loan, an Irvine, Calif., thrift owned by Arizona developer Charles Keating. Federal auditors were investigating Keating's banking practices, and Keating, fearful that the government would seize his S&L, sought intervention from a number of U.S. senators.

At Keating's behest, four senators--McCain and Democrats Dennis DeConcini of Arizona, Alan Cranston of California, and John Glenn of Ohio--met with Ed Gray, chairman of the Federal Home Loan Bank Board, on April 2. Those four senators and Sen. Don Riegle, D-Mich., attended a second meeting at Keating's behest on April 9 with bank regulators in San Francisco.

Regulators did not seize Lincoln Savings and Loan until two years later. The Lincoln bailout cost taxpayers $2.6 billion, making it the biggest of the S&L scandals. In addition, 17,000 Lincoln investors lost $190 million.

In November 1990, the Senate Ethics Committee launched an investigation into the meetings between the senators and the regulators. McCain, Cranston, DeConcini, Glenn, and Riegle became known as the Keating Five.

(Keating himself was convicted in January 1993 of 73 counts of wire and bankruptcy fraud and served more than four years in prison before his conviction was overturned. Last year, he pleaded guilty to four counts of fraud and was sentenced to time served.)

McCain defended his attendance at the meetings by saying Keating was a constituent and that Keating's development company, American Continental Corporation, was a major Arizona employer. McCain said he wanted to know only whether Keating was being treated fairly and that he had not tried to influence the regulators. At the second meeting, McCain told the regulators, "I wouldn't want any special favors for them," and "I don't want any part of our conversation to be improper."

But Keating was more than a constituent to McCain--he was a longtime friend and associate.

McCain met Keating in 1981 at a Navy League dinner in Arizona where McCain was the speaker.

Keating was a former naval aviator himself, and the two men became friends.

Keating raised money for McCain's two congressional campaigns in 1982 and 1984, and for McCain's 1986 Senate bid. By 1987, McCain campaigns had received $112,000 from Keating, his relatives, and his employees--the most received by any of the Keating Five. (Keating raised a total of $300,000 for the five senators.)

After McCain's election to the House in 1982, he and his family made at least nine trips at Keating's expense, three of which were to Keating's Bahamas retreat. McCain did not disclose the trips (as he was required to under House rules) until the scandal broke in 1989. At that point, he paid Keating $13,433 for the flights.

And in April 1986, one year before the meeting with the regulators, McCain's wife, Cindy, and her father invested $359,100 in a Keating strip mall.

The Senate Ethics Committee probe of the Keating Five began in November 1990, and committee Special Counsel Robert Bennett recommended that McCain and Glenn be dropped from the investigation. They were not. McCain believes Democrats on the committee blocked Bennett's recommendation because he was the lone Keating Five Republican.

In February 1991, the Senate Ethics Committee found McCain and Glenn to be the least blameworthy of the five senators. (McCain and Glenn attended the meetings but did nothing else to influence the regulators.) McCain was guilty of nothing more than "poor judgment," the committee said, and declared his actions were not "improper nor attended with gross negligence."

McCain considered the committee's judgment to be "full exoneration," and he contributed $112,000 (the amount raised for him by Keating) to the U.S. Treasury.

Source:
http://www.slate.com/id/1004633/
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RNC donor event outlines Obama attack plan


By: Jeffrey Ressner
February 18, 2008


Focusing on Barack Obama’s “inexperience” and “undisciplined messaging” are two ways to ensure that the senator from Illinois doesn’t get to be president, according to honchos at the Republican National Committee. Big RNC contributors got an earful this weekend about methods the GOP will use to battle the Democrats for control of the White House this fall, as well as other initiatives central to the conservative cause.

The RNC’s “winter retreat” for major donors at Los Angeles’ Beverly Wilshire Hotel featured such party stalwarts as Karl Rove, RNC chairman Robert Duncan, former Texas Secretary of State Roger Williams, as well as some Hollywood types, including Dave Berg, a segment producer and “political director” for "The Tonight Show" with Jay Leno.

But chief among the RNC’s concerns were how to keep a tight grip on the White House this fall.

Plenty of lowbrow Hillary Rodham Clinton jokes were tossed around at the three-day event, but of highest concern was the notion of Obama seizing the Oval Office in a contest against presumptive GOP nominee John McCain.

“We all dislike Hillary,” declared Southern California Rep. Ken Calvert, from the Inland Empire east of Los Angeles, echoing thoughts of the roughly 75 attendees at a Sunday morning RNC session.

“Forgetting who will be the easiest to beat, I've got to tell you, a President Hillary doesn’t scare me nearly as much as a President Obama.”

RNC Chairman Duncan as well as Co-Chairman Jo Ann Davidson opened the Sunday session with a Power Point presentation outlining five main strategic attacks against the Obama candidacy. A Politico reporter witnessed the document, but not the presentation.

The first called for pointing out what the GOP views as a seeming incongruity between Obama and the mantle of commander in chief. The second point harkened back to Obama’s days in the Illinois state Senate, noting how his “pattern of voting ‘present’ offers many openings to question his candidacy.” The third offered hope to the GOP faithful that “we can be confident in a campaign about issues.” A fourth bullet point relayed how “undisciplined messaging carries great risk,” while the fifth and final attack point stressed, “His greatest weakness is inexperience. He is not ready to be commander in chief. He is not ready to be president.”

The RNC event also broached taking control of traditionally Democratic issues such as health care, with even Rove stressing a need for Republicans to start addressing the matter. Congressman Calvert described health care as “one of the seminal issues” of the upcoming election and asked, “Are we going to move towards socialized medicine or away from it? Because we can’t move towards the middle.”

Calvert spoke during a morning session of California congressmen including Brian Bilbray, John Campbell and Dan Lungren, which focused mainly on immigration and lowering taxes, as well as more esoteric matters such as water rights. Throughout the event, the subject always seemed to return to this November.

“The American people are yearning for leadership,” said Lungren, who represents a Sacramento-area district. “We can win this election. We will win this election. Forget the carping about John McCain not being the perfect conservative. Ronald Reagan wasn’t a perfect conservative, but he was pretty doggone good. I’m not saying John McCain is Ronald Reagan: John McCain is John McCain. But we can win this election.”

For most of the weekend, however, the retreat gave the chance for donors who contributed $15,000 or more to bask in the 70-degree California sun, enjoy some golf or tennis at the L.A. Country Club, wolf down Wolfgang Puck pizzas at Spago, tour the Getty Center and Paramount Studios, and pay tribute at the Ronald Reagan Presidential Library a half-hour away in Simi Valley.

Berg, the "Tonight Show" segment producer, delivered an informal talk about the pride and pitfalls of being a conservative working in Hollywood. Peppering his speech with references to Michael Moore, Julia Louis-Dreyfus and other Tinseltown lefties, he argued against the liberal mindset that he believes dominates the industry.

“We [conservatives] believe capitalism isn’t a dirty word,” he said. “If you’ve seen Daniel Day Lewis’ portrayal of a greedy, sinister oilman in ‘There Will Be Blood,’ it’s just another example of the Hollywood left’s contempt for capitalism.

"People have called Hollywood conservatives ‘the new gays,’ but I don’t think that’s necessarily the case,” Berg contended. “The gays have been accepted in Hollywood for years. They’ve long been out of the closet. In fact, they’re fixing up the closet, decorating it, and it looks nice, actually.”

Berg centered his talk around the “unintended consequences” of the recent Writers Guild of America strike against networks and studios, which ended last week. Berg placed blame on the WGA’s “radical” negotiators, with writers earning six-figure salaries casting themselves as “poor, exploited, downtrodden” workers, “acting like it’s 1957” and they were UAW members trying to get back on the assembly line building Corvettes.

"When the writers went on strike Nov. 5, they entrusted their futures to a leadership that essentially believes Karl Marx is still relevant,” he said. “This was a revolution against The Man.”

Berg discussed the return of "The Tonight Show" without its writers in early January, when the only guests consenting to cross the WGA picket lines were NBC News anchors, goofy animal acts and Republican presidential candidates, including McCain, Mike Huckabee, Mitt Romney and Ron Paul.

“The WGA cut a side deal with David Letterman but not with our show,” he recalled. “We had to go back to work as the No. 4 network with no writers and no stars. Actors would not cross the line. I didn’t read this anywhere, but they were threatened with blackballing if they crossed the line to do our shows” — ironic, he says, since he believes Hollywood is “obsessed” with the 1950s blacklisting era of Joseph McCarthy. “The true threat of McCarthyism,” he says, “is coming from the left.”

[Editors Note: Take this with a cup of salt. The Politico is a front-group with an agenda. Half of what they disseminate is disinformation. But that can be valuable too.]

Source:
http://www.politico.com/news/stories/0208/8564.html
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The US government wants us to have a "verifiable ID".

Let me remind you what a "verifiable ID" looked like in the 1940's.

Washington Vote Counting Stopped at 13%, McCain Declared Winner


Talking Points Memo
Feb. 11, 2008


As you know, here at TPM we've been really curious what happened in the Republican caucus in Washington state. For probably the first time in all the primaries and elections I've ever watched, the folks running the election decided to stop counting the votes with 13% of the votes uncounted. And this wasn't a 70-30 blow out, but a tight race where the two top vote getters were separated by less than 2% of the vote.

Then this morning, state party chair Luke Esser decided to declare McCain the winner.

Now, when we were watching this last night and I was trying to examine the tea leaves this morning, I was assuming they'd come forward with some story that there was some hang up with the votes or some mechanical issue. Whether it would be true is another matter. But you'd think they'd at least come up with a good story.

But state party chair Luke Esser said that he just thought it was the right thing to do.

According to Esser, sometime overnight Esser did some sort of back of the envelope statistical analysis of the the margin of McCain's lead (1.8%) and the number votes left uncounted (13%) and decided that Huckabee didn't have a chance and he'd shut the thing down and declare McCain the winner.

So was that a good idea? Here's Esser's rationale ...

“Maybe it would have been safer if I hadn't said anything. But it was an exciting and historic day for the state and I thought if I was confident about what the outcome would be I should share that with the people who had gone out to their caucuses.”

So it was just such a rollicking good time Esser figured he owed the participants a decision as long as he was confident what the outcome would be.

I'm really not sure I've ever heard anything that ridiculous.

In terms of consequence, Bush v. Gore it ain't. This is a relatively small contest in a nomination campaign that appears to be over. But this is something you'd expect either from Soviet history or a farcical passage in a Faulkner novel. And let's not forget the context. Huckabee starts the day with a blowout win in Kansas. That evening he gets the largest number of votes in Louisiana.

Then in the third contest he's neck and neck with John McCain and looks like he may win all three contests of the day -- a shut-out for the all-but-declared nominee. Then as it's going down to the wire, the head of the state party decides he's seen enough and calls it for McCain.

Here at TPM, as we watched the rate of the reporting slow to halt on Saturday evening, we joked amongst ourselves that with McCain already getting beaten by Huckabee twice that day maybe the organizers of the election figured that if they just held out long enough people would just forget they'd held a caucus. But as it got later and later we started to wonder if it wasn't a joke.

I still find it pretty hard to imagine these bozos would try something quite this brazen. And it may well be an electoral tempest in a teapot. But this one looks and quacks like a duck. So someone should give it a much closer look.

Late Update:

It seems that Washington State GOP chair Luke Esser spent most of the day avoiding calls from the Huckabee campaign. And when he finally got back to them he told a lawyer for Huckabee's campaign that they'd probably count the rest of the votes some time next week. When the lawyer, Lauren Huckabee, the candidate's daughter-in-law, requested that a Huckabee lawyer be present when the remaining votes were counted, Esser hung up on her.

Before the hang up, Huckabee also asked Esser about the DIY statistical analysis he did to conclude that he should call the race (Esser's expertise in statistics apparently stems from previous work as a state prosecutor and a sports writer). Was there an analysis of what precincts the remaining votes came from? According to Huck campaign manager Ed Rollins, Esser admitted that he didn't know which precincts the remaining votes came from.

Source:
http://talkingpointsmemo.com/archives/177863.php
__________________

Anti-War Candidates Are Top Recipients Of ‘08 Donations From U.S. Troops


Huffington Post
Feb. 5, 2008


Conservatives opposed to redeployment in Iraq have consistently claimed that U.S. troops are on their side:

President Bush: The [military] families gathered here understand that our troops want to finish the job. [Link]

Sen. John McCain (R-AZ): I want to — and I want to tell you something, sir. I just finished having Thanksgiving with the troops, and their message to you is — the message of these brave men and women who are serving over there is: Let us win. Let us win. [Link]

Yet U.S. troops disagree. Yesterday, the Center for Responsive Politics reported that members of the military donated the most not to McCain, but to two anti-war candidates:

Individuals in the Army, Navy and Air Force made those branches of the armed services among the top contributors in the 4th Quarter, ranking No. 13, No. 18 and No. 21, respectively.

In 2007, Republican Ron Paul, who opposes U.S. involvement in Iraq and Afghanistan, was the top recipient of money from donors in the military, collecting at least $212,000 from them.

Barack Obama, another war opponent, was second with about $94,000.

These donations reflect the military’s disapproval with the Iraq war and President Bush’s handling of it.

A recent Military Times poll found that just 46 percent of U.S. troops now believe that the country should have invaded Iraq, and only 40 percent approve of Bush’s handling of the war.

Digg it!

Source:
http://www.huffingtonpost.com/2008/02/05/antiwar-candidates-top-r_n_85107.html
_________________

Abracadabra!
Bush Makes Privacy Board Vanish


By Ryan Singel
02.04.08
Wired


The Bush administration has failed to nominate any candidates to a newly empowered privacy and civil-liberties commission. This leaves the board without any members, even as Congress prepares to give the Bush administration extraordinary powers to wiretap without warrants inside the United States.

The failure rankles Sens. Joe Lieberman (I-Connecticut) and Susan Collins (R-Maine), respectively chairman and ranking minority member of the Senate's Homeland Security Committee.

"I urge the president to move swiftly to nominate members to the new board to preserve the public’s faith in our promise to protect their privacy and civil liberties as we work to protect the country against terrorism," Lieberman said in a statement.

"The White House's failure to move forward with appointing the new board is unacceptable, and I call on the administration to do so as quickly as possible to prevent a gap in this vital mission," Collins said in a statement.

In a 2007 measure implementing 9/11 Commission recommendations, Congress reconfigured the oversight committee, known as the Privacy and Civil Liberty Oversight Board. The intent was to make the board more independent of the White House, require it to be bipartisan and make it more accountable to the public.

Those changes came after civil-liberties groups blasted the board for a lack of independence and relevance.

Board chairwoman Carol Dinkins formerly served as a campaign treasurer for President Bush and was a partner at the same law firm as former Attorney General Alberto Gonzales. Also appointed to the board was formidable lawyer Ted Olson, who was named solicitor general after winning the Bush v. Gore case that settled the 2000 election dispute, and whose wife died in the 9/11 attacks.

Lanny Davis -- the board's sole Democrat -- resigned in May 2007 to protest edits the White House made to the board's 2007 annual report to Congress.

The board's findings about issues such as warrantless wiretapping by the National Security Agency were by-and-large administration-friendly, though the board did issue one informative but overlooked report on redress for erroneous inclusion on terrorist watch lists (.pdf).

Terms for the board's original members expired on Jan. 30, but no nominations have been sent to the Senate Homeland Security Committee, which must approve appointees for the five vacancies.

Civil-liberties advocates like Lisa Graves, deputy director of the Center for National Security Studies, considered the board to be apologists for the government's anti-terrorism policies, rather than independent civil-liberties watchdogs.

"This board failed miserably in its mission of helping to protect Americans' privacy and instead acted mainly to help the White House whitewash programs like warrantless NSA wiretapping that violate Americans' civil liberties," Graves said. "Now that Congress has changed the board's rules to make it a little more independent, the White House appears to have no interest in appointing anyone to it."

But even the newly configured board doesn't have enough power and what is really needed is a totally independent body with the ability to subpoena documents, according to Timothy Sparapani, senior legislative counsel for the American Civil Liberties Union.

"We want them to be more than just the privacy version of Congressional Research Service," Sparapani said. "They need to be able to slap hands and force people to consider privacy in the initial creation of programs, and then whack people into line when privacy violations occur."

The board released its second annual report (.pdf) to Congress on Jan. 30, its last day of operation. Its documents are being shipped to the National Archives for storage.

The privacy board ignored repeated requests for comment for this story, and a White House press staffer did not provide information by late Friday about the status of nominees to the board.

Source:
http://www.wired.com/politics/onlinerights/news/2008/02/privacy_board
__________________

Eisenhower's Farewell Address to the Nation




January 17, 1961


Good evening, my fellow Americans: First, I should like to express my gratitude to the radio and television networks for the opportunity they have given me over the years to bring reports and messages to our nation. My special thanks go to them for the opportunity of addressing you this evening.

Three days from now, after a half century of service of our country, I shall lay down the responsibilities of office as, in traditional and solemn ceremony, the authority of the Presidency is vested in my successor.

This evening I come to you with a message of leave-taking and farewell, and to share a few final thoughts with you, my countrymen.

Like every other citizen, I wish the new President, and all who will labor with him, Godspeed. I pray that the coming years will be blessed with peace and prosperity for all.

Our people expect their President and the Congress to find essential agreement on questions of great moment, the wise resolution of which will better shape the future of the nation.

My own relations with Congress, which began on a remote and tenuous basis when, long ago, a member of the Senate appointed me to West Point, have since ranged to the intimate during the war and immediate post-war period, and finally to the mutually interdependent during these past eight years.

In this final relationship, the Congress and the Administration have, on most vital issues, cooperated well, to serve the nation well rather than mere partisanship, and so have assured that the business of the nation should go forward. So my official relationship with Congress ends in a feeling on my part, of gratitude that we have been able to do so much together.

We now stand ten years past the midpoint of a century that has witnessed four major wars among great nations. Three of these involved our own country. Despite these holocausts America is today the strongest, the most influential and most productive nation in the world. Understandably proud of this pre-eminence, we yet realize that America's leadership and prestige depend, not merely upon our unmatched material progress, riches and military strength, but on how we use our power in the interests of world peace and human betterment.

Throughout America's adventure in free government, such basic purposes have been to keep the peace; to foster progress in human achievement, and to enhance liberty, dignity and integrity among peoples and among nations.

To strive for less would be unworthy of a free and religious people.

Any failure traceable to arrogance or our lack of comprehension or readiness to sacrifice would inflict upon us a grievous hurt, both at home and abroad.

Progress toward these noble goals is persistently threatened by the conflict now engulfing the world. It commands our whole attention, absorbs our very beings. We face a hostile ideology global in scope, atheistic in character, ruthless in purpose, and insidious in method. Unhappily the danger it poses promises to be of indefinite duration. To meet it successfully, there is called for, not so much the emotional and transitory sacrifices of crisis, but rather those which enable us to carry forward steadily, surely, and without complaint the burdens of a prolonged and complex struggle – with liberty the stake. Only thus shall we remain, despite every provocation, on our charted course toward permanent peace and human betterment.

Crises there will continue to be. In meeting them, whether foreign or domestic, great or small, there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties. A huge increase in the newer elements of our defenses; development of unrealistic programs to cure every ill in agriculture; a dramatic expansion in basic and applied research – these and many other possibilities, each possibly promising in itself, may be suggested as the only way to the road we wish to travel.

But each proposal must be weighed in light of a broader consideration; the need to maintain balance in and among national programs – balance between the private and the public economy, balance between the cost and hoped for advantages – balance between the clearly necessary and the comfortably desirable; balance between our essential requirements as a nation and the duties imposed by the nation upon the individual; balance between the actions of the moment and the national welfare of the future. Good judgment seeks balance and progress; lack of it eventually finds imbalance and frustration.

The record of many decades stands as proof that our people and their Government have, in the main, understood these truths and have responded to them well in the face of threat and stress.

But threats, new in kind or degree, constantly arise.

Of these, I mention two only.

A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction.

Our military organization today bears little relation to that known by any of my predecessors in peacetime, or indeed by the fighting men of World War II or Korea.

Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations.

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence – economic, political, even spiritual – is felt in every city, every Statehouse, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades.

In this revolution, research has become central, it also becomes more formalized, complex, and costly. A steadily increasing share is conducted for, by, or at the direction of, the Federal government.

Today, the solitary inventor, tinkering in his shop, has been overshadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.

The prospect of domination of the nation's scholars by Federal employment, project allocations, and the power of money is ever present – and is gravely to be regarded.

Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.

It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system – ever aiming toward the supreme goals of our free society.

Another factor in maintaining balance involves the element of time. As we peer into society's future, we – you and I, and our government – must avoid the impulse to live only for today, plundering for, for our own ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without asking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.

Down the long lane of the history yet to be written America knows that this world of ours, ever growing smaller, must avoid becoming a community of dreadful fear and hate, and be, instead, a proud confederation of mutual trust and respect.

Such a confederation must be one of equals. The weakest must come to the conference table with the same confidence as do we, protected as we are by our moral, economic, and military strength. That table, though scarred by many past frustrations, cannot be abandoned for the certain agony of the battlefield.

Disarmament, with mutual honor and confidence, is a continuing imperative. Together we must learn how to compose differences, not with arms, but with intellect and decent purpose. Because this need is so sharp and apparent I confess that I lay down my official responsibilities in this field with a definite sense of disappointment. As one who has witnessed the horror and the lingering sadness of war – as one who knows that another war could utterly destroy this civilization which has been so slowly and painfully built over thousands of years – I wish I could say tonight that a lasting peace is in sight.

Happily, I can say that war has been avoided. Steady progress toward our ultimate goal has been made. But, so much remains to be done. As a private citizen, I shall never cease to do what little I can to help the world advance along that road.

So – in this my last good night to you as your President – I thank you for the many opportunities you have given me for public service in war and peace. I trust that in that service you find some things worthy; as for the rest of it, I know you will find ways to improve performance in the future.

You and I – my fellow citizens – need to be strong in our faith that all nations, under God, will reach the goal of peace with justice. May we be ever unswerving in devotion to principle, confident but humble with power, diligent in pursuit of the Nations' great goals.

To all the peoples of the world, I once more give expression to America's prayerful and continuing aspiration:

We pray that peoples of all faiths, all races, all nations, may have their great human needs satisfied; that those now denied opportunity shall come to enjoy it to the full; that all who yearn for freedom may experience its spiritual blessings; that those who have freedom will understand, also, its heavy responsibilities; that all who are insensitive to the needs of others will learn charity; that the scourges of poverty, disease and ignorance will be made to disappear from the earth, and that, in the goodness of time, all peoples will come to live together in a peace guaranteed by the binding force of mutual respect and love.

Now, on Friday noon, I am to become a private citizen. I am proud to do so. I look forward to it.

Thank you, and good night.

________________

Note some key elements of Ike's thinking:

• Eisenhower didn't believe the Military Industrial Complex was to blame for the Cold War. He laid the blame on communism: "a hostile ideology global in scope, atheistic in character, ruthless in purpose, and insidious in method."
• Eisenhower felt the Military Industrial Complex was necessary.
• Eisenhower felt the influence of the Military Industrial Complex might be "sought or unsought." For 60s leftists, "unsought" power for the Military Industrial Complex was inconceivable.
• A principled Republican, Ike was also skeptical of agricultural and research programs fostered by the federal government. He did not consider military industrial interests uniquely insidious, but rather he distrusted government expansion generally.

Source:
http://mcadams.posc.mu.edu/ike.htm
___________________

Huckabee Scandal

DailyKos
Jan 30, 2008

You probably haven't heard of the Dallas-based Trinity Foundation, but might be familiar with some of their work. The Daily Show's classic "God Stuff" segment with Joe Bob Briggs (a.k.a., John Bloom) was their brainchild. They also publish the Wittenburg Door: "pretty much the world's only religious satire magazine." They live in a kibbutz in one of the roughest neighborhoods in East Dallas, routinely taking in the homeless. But what they are most famous for is their (often sub rosa) exposes of televangelists like Benny Hinn, Paul Crouch, and the ubiquitous Kenneth Copeland.

Most of the hypocrisy they uncover is just plain funny, like the report in the Los Angeles Times that TBN founder Paul Crouch was (allegedly) having sexual relations with a former drug addict working at the station -- who also happened to be male. But occasionally, they come across a diamond in the rough.

Looks like they've got the Huckster in a bit of a bother....
Bouldergeist's diary :: ::

This story is just breaking, and could really use some legs. (It's a press release by Ole and the guys, and intended for wide dissemination; I used to help them out with investigations back in the day.) The bottom line here is that Charles Grassley is breathing down Copeland's neck with his investigation of televangelists who turn their ministries into ATM machines (on a MUCH lighter note, check out Robert "Tootin'" Tilton); the Huckster ran to Copeland for a little cash, and he just happened to be in the market for a little protection.

Republican hopeful Mike Huckabee reached out to a questionable funding source this week.

Texas televangelist Kenneth Copeland, one of the targets of a Senate Finance Committee investigation into the funding and governance of "prosperity gospel" ministries.

At Copeland's annual by-invitation-only Minister's Conference at his Newark, Texas, headquarters Jan. 23, Copeland received a call during the meeting from Huckabee requesting emergency financing. According Doug Wead, former Bush family evangelical adviser, Copeland and his supporters at the conference raised $111,000 in cash for Huckabee, with about a million dollars in pledged donations, after he temporarily adjourned the conference and then reconvened the group as a "private meeting."

Wead relayed a report in his blog from a source at the meeting that "Last night [Jan. 23] the Governor called his friend in the middle of a conference and Copeland, carefully observing all the laws governing non profits, as a private citizen, re-convened a private meeting, turned to his friends and raised a few million dollars for Huckabee." (See "Mike Huckabee's Big Mistake")

According to video clips of the conference obtained by Trinity Foundation, an investigative watchdog group in Dallas, Copeland revealed that Huckabee had pledged his total support to Copeland's ministry while dismissing the Senate investigation.

Video clips are here(the second clip is on Huckabee -- transcribed by them below).

"[Huckabee told me] Why should I stand with them and not stand with you? They've only got 11 per cent approval rating.' And then he said, 'Kenneth Copeland, I will stand with you.' He said, 'You're trying to get prosperity to the people and they're trying to take it away from 'em.' He said, 'I will stand with you any time, anywhere, on any issue.' That settled that right there. I said, 'Yeah, that's my man! That's my man, right there.'"

The Huckster's association with Copeland might just put the final nail in the coffin of his presidential aspirations. Those who delight in opposition research really ought to know.

Source:
http://www.dailykos.com/story/2008/1/30/64350/9840/475/445998
_____________

Facts of the Union 2008



FactCheck.Org
January 29, 2008


The president overlooks some warts and wrinkles while putting the best face he can on the State of the Union.

Summary

Bush pretty much stuck to the facts in his final State of the Union address. But he chose his facts carefully and didn't always tell the whole story.

• He correctly noted that the number of jobs has grown steadily for a record 52 straight months. But the number of jobs gained is a fraction of the gains made during Bill Clinton's years, and wage gains have been eaten up by inflation.


• He claimed his proposal to give tax deductions for those who buy their own health insurance will "put private coverage within reach for millions." Some say that's true, but other experts doubt it. And even the most optimistic say his plan still wouldn't enable the large majority of the uninsured to gain coverage.


• He said "we" foiled a terrorist plot to blow up U.S.-bound airliners over the Atlantic, but the plot was actually uncovered by the British, as Bush himself said in last year's State of the Union address.


• He talked tough about pork-barrel spending, saying he'd issue an executive order for agencies to ignore more Congressional "earmarks." But he delayed the effect until November, rather than making it effective with the current fiscal year.

On other matters, Bush noted that he has begun bringing troops home from Iraq, which is true, though troop levels have been reduced by only a few thousand since the peak of the surge. He said more than 80,000 Iraqis are fighting terrorists, a figure that includes at least 60,000 "concerned local citizens" who are being paid by the U.S.

He was mostly correct in describing progress in test scores since his No Child Left Behind Act was passed, but he overlooked some recent backsliding in reading scores and the fact that some test scores were on an upward trend before the new law went into effect.

Analysis

Jobs and Wages

Bush put the best face he could on the weak job growth and stagnant wages plaguing the economy, which many economists fear is on the brink of the second recession to strike his administration.

Bush: America has added jobs for a record 52 straight months, but jobs are now growing at a slower pace. Wages are up, but so are prices for food and gas.

It's true that the number of consecutive months in which the economy has added jobs is the longest on record, but the number of jobs gained is not. The pace of job creation was far stronger during the Clinton administration, when 22.7 million new jobs were added despite seven months that saw slight declines. Since Bush's "record" run began in August 2003, the gain has been 8.3 million.

It's true that wages are up: Average weekly earnings for rank-and-file workers were $605.96 in December 2007, compared with $578.67 a year earlier, according to the Bureau of Labor Statistics. But after adjustment for rising prices, the buying power of the average weekly paycheck actually declined by nearly a penny on the dollar during 2007.

Tax Increase, "Average" vs. Typical

The president, using an accurate but misleading figure, exaggerated the effect on the typical taxpayer of allowing his tax cuts to expire.

Bush: Unless the Congress acts, most of the tax relief we have delivered over the past seven years will be taken away. Some in Washington argue that letting tax relief expire is not a tax increase. Try explaining that to 116 million American taxpayers who would see their taxes rise by an average of $1,800.

It is true that taxes would go up compared with what people pay now should all the tax cuts enacted from 2001 through 2006 be allowed to expire on the schedule Congress originally set.


The independent, nonpartisan Tax Policy Center calculates the average increase at $1,713, not much different from Bush's figure.But the average increase would not be typical. The increase would be far smaller, $828, for those in the middle 20 percent of the income scale, with earnings between $27,465 and $48,165 a year in today's dollars. And of course, the increase would be lower still for those with lower incomes. Even for the next-highest 20 percent, with incomes between $48,165 and $85,706, the increase would be $1,309, still well below Bush's "average" figure.

But for the top 1 percent, with incomes over $434,766, the tax increase would be $64,154. That's what pulls up the average to well above what ordinary taxpayers would experience. And of course, Bush fails to mention that Democrats don't propose allowing all his tax cuts expire and generally propose cuts for "middle class" taxpayers.

Health Coverage for Millions?

The president repeated his call for a tax deduction for those who buy their own health insurance, saying "millions" would gain coverage:

Bush: So I propose ending the bias in the tax code against those who do not get their health insurance through their employer. This one reform would put private coverage within reach for millions, and I call on the Congress to pass it this year.

Actually, there is a lot of uncertainty as to how many would benefit from Bush’s proposal, which he also made in last year’s State of the Union address. He called for a federal tax deduction of $7,500 for individuals and $15,000 for families who either pay for their own health insurance or get coverage through their employers. The cost of employer-provided health benefits would be taxed as income (a change from current law), and those with employer-sponsored plans that cost more than the deduction would be taxed on the difference. The proposal would give a tax deduction for the first time to those who buy their own coverage but who are not self-employed.

It’s unclear how much such a proposal would affect the number of uninsured, most of whom have low incomes. The nonpartisan Congressional Budget Office said the projected number of uninsured in 2010 – 51 million – would be reduced by about 6.8 million, adding that "significant uncertainty surrounds" these estimates.A somewhat higher estimate was produced by the independent Lewin Group, which put the figure at 9.2 million. But economist Jonathan Gruber at the Massachusetts Institute of Technology calculated that the number of uninsured would actually increase by 1.5 million. And Tax Policy Center, a joint project of the liberal Urban Institute and Brookings Institution, published an evaluation that also found "the plan could actually reduce overall insurance coverage."

One thing these reports agree upon is that the proposal gives much greater tax benefits to those with higher incomes. A majority of the uninsured, however, have such low incomes they wouldn’t see a benefit at all: More than 55 percent of the uninsured have so little income that they don’t pay federal income taxes and thus couldn't benefit from Bush's proposed deduction, according to the Commonwealth Fund.

One reason that some may lose coverage and others will gain it is that the deduction could prompt some employers to stop giving health insurance benefits, and not everyone who lost insurance would be able to, or inclined to, buy individual coverage. Healthy workers wouldn’t have a problem picking up an affordable plan, says the Tax Policy Center report, but those with health issues and low incomes won’t be able to do so.

Who Are 'We'?

Bush argued for extension of wiretap authority for U.S. officials, but misleadingly claimed "we" broke up a plot to blow up airplanes headed to the U.S. from Europe.

Bush: In the past six years, we have stopped numerous attacks, including a plot to fly a plane into the tallest building in Los Angeles and another to blow up passenger jets bound for America over the Atlantic.

The London plot, however, was actually broken up in August 2006 by British law enforcement, according to news accounts at the time and also according to Bush himself, who said just a year ago in his 2007 State of the Union address that "British authorities uncovered a plot to blow up passenger planes bound forAmerica over the Atlantic Ocean." If wiretaps by U.S. officials played any role, no administration official has yet said so publicly, despite plenty of opportunity.

At the time, White House Homeland Security Adviser Fran Townsend gave credit to the British, saying in an Aug. 14, 2006, interview that "this really was a British investigation for the longest time." Townsend added: "We didn‘t see an American threat. It was only recently we developed the American angle working with our British colleagues, but this was really a British threat, and the British did an extraordinary, extraordinary job in investigating it." And a year later, in August 2007, Homeland Security Secretary Michael Chertoff said that "our British counterparts uncovered" the plot.

To be sure, at other times Chertoff and others have said there was some involvement by the U.S., though they have yet to say what that role was. We find no public claim that the special wiretap program secretly authorized by President Bush after the 2001 terrorist attacks had anything to do with foiling the plot.

An Empty Threat on Earmarks

Bush talked tough about Congressional "earmarks," but don't expect his actions to have any immediate effect on federal spending:

Bush: [I]f you send me an appropriations bill that does not cut the number and cost of earmarks in half, I’ll send it back to you with my veto. And tomorrow I will issue an executive order that directs federal agencies to ignore any future earmark that is not voted on by Congress.

By earmarks that are "not voted on by Congress," Bush means provisions that are specified in committee reports but are never part of the text of a bill. According to Steve Ellis, vice president of the spending watchdog group Taxpayers for Common Sense, the "vast, vast majority" of earmarks are of this type, so Bush is threatening to ignore or veto a fairly significant percentage of potential earmarks. But he's not going to do it until fiscal year 2009. Taxpayers for Common Sense complains that Bush is "passing the buck" by vowing to get tough on next year's bills. "[B]y not including the 2008 spending bills, the Executive Order gives Congress months to finagle their way around these changes," writes the president of the organization, Ryan Alexander.

Even if Bush started his anti-earmark crusade immediately, the actual budget effect would be small. TCS estimates that there are $15.3 billion in earmarks for fiscal year 2008. That amounts to a scant 0.6 percent of federal outlays as projected by the nonpartisan Congressional Budget Office. Whatever the merits or demerits of congressional earmarks – and they certainly have their critics – getting rid of them altogether would barely slow down the growth of federal spending, which is projected to jump more than $100 billion this year, not counting additional war costs or the proposed "stimulus" package now working its way through Congress.

Troop Drawdowns

Bush was correct when he said that some U.S. troops are returning from Iraq, but so far the drawdown only amounts to a few thousand.

Bush: As part of this transition, one Army brigade combat team and one Marine Expeditionary Unit have already come home and will not be replaced. In the coming months, four additional brigades and two Marine battalions will follow suit. Taken together, this means more than 20,000 of our troops are coming home.

This is accurate. The president actually announced the return in a press conference on Jan. 8, 2007. On Jan. 10, 2007, Secretary of Defense Robert Gates confirmed Bush's statement:

Gates: Based on the latest information available to me, we are on track to carry out the reductions that General Petraeus talked about and that the president approved last September – as the president indicated, I think, just yesterday or today, the one brigade that's already out, the Marine battalions that are out, and then proceeding with the additional brigades.

According to the Defense Department, Petraeus’ September recommendations included removing a Marine Expeditionary Unit in September 2007 and an Army brigade combat team in mid-December, followed by four more brigade combat teams and two Marine battalions during the first seven months of 2008. The total reduction should be about 20,000 troops.

The Pentagon won't say how many troops have come home already, but an MEU generally has about 2,200 Marines, while a BCT can have anywhere between 2,500 and 4,200 members. So, at most, somewhere in the neighborhood of 6,400 troops have come home already. To put that in context, at the peak of the surge about 162,000 U.S. troops were in Iraq. Prior to the surge, the total was about 130,000, according to The New York Times.

Safety in Numbers?

Bush left out a bit of the back story of the sheer numbers of Iraqi Security Forces.

Bush: Today, this grassroots surge includes more than 80,000 Iraqi citizens who are fighting the terrorists. The government in Baghdad has stepped forward as well, adding more than 100,000 new Iraqi soldiers and police during the past year.

It’s certainly worth pointing out that at least 60,000 of the Iraqi citizens to which Bush refers – they’re called "Concerned Local Citizens" by the U.S. military – are under contract with the U.S. military and being paid about $300 a month. That’s according to the latest Brookings Institution Iraq Index report, published in December, which puts the total number of concerned citizens at 72,000.

As for the new Iraqi soldiers and police, many questions remain as to how well those forces are able to provide security for the country. The Independent Commission on the Security Forces of Iraq, headed by retired Marine Gen. James L. Jones, published a cautiously optimistic report on the subject in September, saying that it wasn’t clear that the national police "can contribute to Iraqi security and stability in a meaningful way." As for the Iraqi Army, the report said that the Iraqi Minister of Defense predicted "the Army would be 60 percent capable of independently protecting Iraq from external threats by 2012 and entirely independent in this regard by 2018."

Right on Iran

Bush was accurate in his assessment of Iran.

Bush: Iran is funding and training militia groups in Iraq, supporting Hezbollah terrorists in Lebanon, and backing Hamas’ efforts to undermine peace in the Holy Land. Tehran is also developing ballistic missiles of increasing range and continues to develop its capability to enrich uranium, which could be used to create a nuclear weapon.

Hezbollah spokesman Hussein Nabulsi freely admitted to the U.N. Office for the Coordination of Humanitarian Affairs that much of Hezbollah’s funding comes from Iran. Iran did offer $50 million in aid to the Hamas-led Palestinian Authority after the U.S. and Europe withdrew funding when Hamas refused to recognize Israel. And according to the State Department’s most recent report on state sponsors of terrorism, Iran has continued to offer funding to Hamas and Hezbollah and has, moreover, "provided guidance and training to select Iraqi Shia political groups, and weapons and training to Shia militant groups to enable anti-Coalition attacks."

Bush is right that Iran continues to develop long-range ballistic missiles. In fact, on Nov. 27, 2007, Iranian Defense Minister Mostafa Mohammad Najjar announced the development of a missile that could reach the entire Middle East as well as southern Europe. And the National Intelligence Council’s National Intelligence Estimate on Iran reported that Iran’s civilian uranium enrichment program was continuing and noted that those technical capabilities could be applied to creating nuclear weapons.

It is worth noting, however, that a civilian enrichment program is not equivalent to a weapons program. And that same NIE reported that Iran halted its nuclear weapons program in 2003 and had not restarted it as of mid-2007.

Passing Grades

The president was mostly correct in describing the results of math and reading tests since enactment of his education legislation, omitting only some recent backsliding in reading scores:

Bush: Six years ago, we came together to pass the No Child Left Behind Act, and today no one can deny its results. Last year, 4th and 8th graders achieved the highest math scores on record. Reading scores are on the rise. African-American and Hispanic students posted all-time highs.

According to the National Assessment of Educational Progress, also called the Nation’s Report Card, the president is correct that scores, generally, have gone up since the enactment of No Child Left Behind.

The "record" of scores dates back to 1990, when the NAEP mathematics scores first came into effect; reading scores were recorded starting in 1992. Scores are taken for both fourth- and eighth-grade students.

Since NCLB’s enactment, in mathematics, both fourth and eighth grades have achieved the highest scores since 1990. Reading scores are now on the rise for fourth-grade students, and last year they recorded their highest scores to date. However, scores for eighth-grade students are only slightly up from the first recorded year and are not the highest on record. The highest scores for eighth graders in reading were scored in 2002, and they have gone down a bit since then.

African-American students' eighth-grade reading scores rose slightly last year over the previous year, having achieved their highest scores in 2002, and they also have gone down somewhat since then. Meanwhile, African-American fourth graders achieved the highest recorded scores in reading last year. The same went for fourth- and eighth-grade African-American students in mathematics. Hispanic students' scores have achieved a record high in fourth and eighth grade reading and math.

Also worth noting is that scores were already on the increase prior to the enactment of the law, with exceptions in overall fourth-grade reading scores, and scores for African Americans and Hispanics in that subject and grade. Prior to NCLB, overall eighth-grade reading and math scores, along with fourth-grade math scores, fluctuated but increased between the first year recorded and the last year before the law’s enactment. That trend was the same for African American and Hispanic fourth- and eighth-grade math scores, as well as African American and Hispanic eighth-grade reading scores. African American and Hispanic fourth-grade reading scores, however, were on the decline prior to the enactment of NCLB, as were overall fourth-grade reading scores. – by Brooks Jackson, with Viveca Novak, Justin Bank, Jess Henig, Emi Kolawole, Joe Miller, Lori Robertson and D'Angelo Gore

Sources

Tax Policy Center, Table T06-0284 - "Combined Effect of the 2001-2006 Tax Cuts, Distribution of Federal Tax Change by Cash Income Percentile, 2011," 13 Nov. 2006.

The Associated Press, "Hamas Gets $50 M Boost From Iran." 16 April 2006. CBS News. 29 Jan. 2008.

Office of the Coordinator for Counterterrorism. "Country Reports on Terrorism: Ch. 3 -- State Sponsors of Terrorism." April 2007. U.S. Department of State. 29 Jan. 2008.

IRIN. "Lebanon: The many hands and faces of Hezbollah." 29 March 2006. U.N. Office for the Coordination of Humanitarian Affairs, 29 Jan. 2008.

National Intelligence Council. "National Intelligence Estimate -- Iran: Nuclear Intentions and Capabilities." Nov. 2007. Office of the Director of National Intelligence, 29 Jan. 2008.

Radio Free Europe/Radio Liberty. "Iran Announces Development Of Longer-Range Missile." Radio Free Europe/Radio Liberty, 27 Nov. 2007.

National Assessment of Educational Progress (NAEP) Data Explorer. Dec. 2007. Institute of Education Sciences: U.S. Department of Education, 29 Jan. 2007.

Bush, George W. "President Bush Participates in Video Teleconference with Iraq Provincial Reconstruction Team Leaders and Brigade Combat Commanders." 8 Jan. 2008. The White House, 29 Jan. 2008.

Gates, Robert M. and Abd al-Qadir al-Mufriji. "DoD Press Briefing with Secretary of Defense Robert M. Gates and Iraqi Minister of Defense Abd al-Qadir al-Mufriji at the Pentagon, Arlington, Va." 10 Jan. 2008. U.S. Department of Defense, 29 Jan. 2008.

Miles, Donna. "Petraeus: Surge in Iraq Works; Reductions Could Begin by Summer 2008." 10 Sept. 2007. U.S. Department of Defense, 29 Jan. 2008.

Sheils, John, and Randy Haught. "President Bush's Health Care Tax Deduction Proposal: Coverage, Costs and Distributional Impacts." The Lewin Group, 29 Jan. 2007.

Gruber, Jonathan. "The Cost and Coverage Impact of the President’s Health Insurance Budget Proposals." Center on Budget and Policy Priorities, 15 Feb. 2006.

U.S. Congressional Budget Office. "An Analysis of the President’s Budgetary Proposals for Fiscal Year 2008," March 2007.

Burman, Leonard E., et. al. "The President’s Proposed Standard Deduction for Health Insurance." Tax Policy Center, 15 Feb. 2007.

Glied, Sherry A. and Dahlia K. Remler. "The Effect of Health Savings Accounts on Health Insurance Coverage." The Commonwealth Fund, 20 April 2005.

O’Hanlon, Michael E. and Jason H. Campbell. "Iraq Index: Tracking Variables of Reconstruction & Security in Post-Saddam Iraq." Brookings Institution, 21 Dec. 2007.

Jones, Gen. James L. "The Report of the Independent Commission on the Security Forces of Iraq," 6 Sept. 2007.

Congressional Budget Office. The Budget and Economic Outlook: Fiscal Years 2008 to 2018, 23 Jan. 2008.

Source:
http://www.factcheck.org/bush/facts_of_the_union_2008.html
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