Chris Hedges's Blog, page 310

FAA Takes Heat as Other Nations Ground Boeing Jets

WASHINGTON—The U.S. Federal Aviation Administration is facing mounting criticism for backing the airworthiness of Boeing’s 737 Max jets as the number of countries that have grounded the aircraft grows in the wake of the Ethiopian Airlines crash over the weekend.

The rest of the world typically takes it cues from the FAA, long considered the world’s gold standard for aircraft safety. Yet other aviation safety regulators, including the European Union, China, Australia and the United Kingdom, have decided not to wait for the FAA to act. The Ethiopian disaster came just five months after the deadly crash of another new Boeing 737 Max 8 operated by Lion Air in Indonesia.

Rep. Peter DeFazio, D-Ore., the chairman of the House Transportation and Infrastructure Committee, said in a statement Tuesday that he’s concerned that international aviation regulators are providing more certainty to the flying public than the FAA.

“In the coming days, it is absolutely critical that we get answers as to what caused the devastating crash of Ethiopian Airlines flight 302 and whether there is any connection to what caused the Lion Air accident just five months ago,” DeFazio said.

The FAA has increasingly become cozy with airplane manufacturers and airlines when it should be more pro-active in safety, said Bill McGee, aviation adviser for Consumer Reports.

The magazine and website on Tuesday called on airlines and the FAA to ground the 737 Max planes until an investigation into the cause of the Ethiopian crash is completed to see if it’s related to the Lion Air crash in October.

“They have not presented any evidence that the problems that we’ve seen with these two crashes are not problems that could potentially exist here in the U.S.,” McGee said.

“Increasingly the FAA is relying more and more on what the industry calls electronic surveillance,” added McGee, who has written about aviation for nearly two decades. “Not going out and kicking the tires, seeing the work being done, making sure it’s being done properly.”

Former Transportation Secretary Ray LaHood also called for the U.S. to ground the 737 Max, just as his agency halted flights of another Boeing plane six years ago because of safety concerns.

“These planes need to be inspected before people get on them,” LaHood said Tuesday. “The flying public expects somebody in the government to look after safety, and that’s DOT’s responsibility.”

LaHood was Department of Transportation secretary in 2013 when the department grounded the Boeing 787 because of overheating lithium-ion battery packs. The planes were idled for less than a month, until Boeing crafted new fire-resistant compartments around the batteries.

LaHood said current Secretary Elaine Chao should do the same thing with the Max 8, even if it means overruling the FAA, which has taken no action in the face of the dozens of other countries banning the plane from their skies. “The secretary has the authority to suspend these planes” and require inspections by both FAA and Boeing personnel, he said. “She has the authority to do it no matter what the FAA thinks.”

But veteran accident investigators defended the FAA, which has said there’s no data to link the two crashes.

“I don’t see the facts to justify what they’ve done,” John Goglia, an independent safety consultant and former member of the National Transportation Safety Board, said of the moves by other countries to stop the Max 8 from flying. “If they have facts, I wish they would share them with the rest of the world so we can protect the air-traveling public.”

The FAA said it was reviewing all available data, and so far had found no basis to ground the planes.

John Cox, president and CEO of the aviation consultancy Safety Operating Systems, said countries that have grounded the Max 8 may have linked the Ethiopian and Indonesian crashes even though investigators had yet to analyze the Ethiopian plane’s black boxes.

“The FAA is on solid ground so far,” said Cox, a former airline pilot and accident investigator. “But politics may overwhelm them if enough members get together and demand the planes be grounded.”

Democratic Sens. Richard Blumenthal of Connecticut and Dianne Feinstein of California already have urged FAA to do just that, signaling that the agency may soon face escalating pressure from Capitol Hill.

“My fear is that the FAA is simply trying to save face and avoid acknowledging the safety defect that they failed to find when they certified the plane’s safety,” said Blumenthal, a member of the Senate Committee on Commerce, Science and Transportation.

Air safety regulators in at least 40 countries, including the European Union, have either grounded Boeing 737 Max jets or banned them from their airspace after Sunday’s deadly crash in Ethiopia. In addition, at least 10 airlines worldwide have stopped flying the planes.

The European Union Aviation Safety Agency, which covers 32 countries, announced Tuesday that it would ban the planes from flying in its airspace. Other countries that have either grounded the planes or temporarily banned them include China, the United Kingdom, India, Indonesia, Singapore, Oman, Malaysia and Australia.

Airlines that have stopped using the planes include Gol Airlines of Brazil, Cayman Airways, Ethiopian Airways, Jet Airways of India, Aeromexico, Norwegian Air Shuttle, Turkish Airlines, Eastar Jet of South Korea, Smartwings of the Czech Republic and LOT of Poland.

Sandy Morris, an aerospace analyst at Jefferies in London, called the string of bans on the Boeing Max jets unprecedented.

“It seems like a rebellion against the FAA,” Morris said.

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Krisher reported from Detroit. Associated Press writers David Koenig in Houston, Carlo Piovano in London and Cathy Bussewitz in New York contributed to this report.

Three Key Issues on Which Democrats Are Moving Left

Early in the 2020 primary, many Democratic candidates are moving leftward, in speeches and in media interviews and, among current officeholders, sometimes in the bills they co-sponsor.

All the Democratic senators running for president in 2020 have supported at least one version of a Medicare-for-all bill. Former housing secretary Julián Castro has called for a federal study on reparations for black Americans. The House and Senate both have Green New Deal proposals involving wide-ranging environmental programs to slow climate change and create jobs. And, as The New York Times reports, during the Philadelphia stop of his book tour, candidate and South Bend, Ind., Mayor Pete Buttigieg indicated that he would consider court packing, a topic that was arguably last viable during the Franklin Roosevelt administration.

“This is not your father’s Democratic Party, and it’s not 2016 anymore,” James Hohman observes in The Washington Post. That Democratic candidates are leaning left reveals the “success” of a strategy used by activists: “pushing an issue that had mostly thrived on the fringe into the 2020 conversation,” Sydney Ember and Astead Herndon write in The New York Times

According to Ember and Herndon, “Activists are leveraging the early stages of the Democratic primary, creating pseudo-litmus tests for candidates eager to respond to the energy that is driving more extreme policy proposals.”

The strategy has influenced the questions candidates are getting at campaign events, both from the press and from the crowds in attendance. Ember and Herndon write:

Senator Bernie Sanders, for instance, has been asked repeatedly about reparations, including recently on ABC’s “The View.” Senator Elizabeth Warren answered a question about ending the filibuster at an event last week in New York. And on Sunday, Mr. Buttigieg was asked again about packing the courts — during a town hall-style forum on CNN

Some question whether procedural issues, such as adding justices to the Supreme Court or abolishing the filibuster, can gain traction with voters. “I would be knocked over with a feather if voters picked the Democratic nominee for president on the basis of getting rid of the filibuster,” Robert Shrum, a Democratic strategist who has worked for everyone from the late Sen. Ted Kennedy to former Secretary of State John Kerry, told the Times.

Just a few years ago, many of these issues seemed like what the Times article refers to as “fringe.”

When he ran for president in 2008, Barack Obama opposed directly paying reparations to descendants of slaves in America. In his answers to an NAACP candidate questionnaire, he called reparations “an excuse for some to say ‘we’ve paid our debt’ and to avoid the much harder work” of fighting structural racism in America. In 2016, Hillary Clinton deflected the question in multiple interviews, stressing instead, on the podcast Another Round, that America needs to make “many more investments in everything from preschool education to affordable housing; that’s my form of trying to give people the chance to be empowered.” Bernie Sanders called it “divisive” at the Iowa Brown & Black Presidential Forum, before echoing both Obama and Clinton’s emphasis on broad programs to boost economic equality across multiple groups.

While Sanders advocated for single-payer health insurance in 2016, Clinton stopped short, and in 2009, even a Democratic Congress resisted a Medicare opt-in, threatening the Affordable Care Act. Now, as CNBC points out, “The same public option looks like a small step for a Democratic Party that has embraced sweeping change on health care as it looks to recapture the White House.”

In the 2020 primary, activists say they’re committed to driving the conversation toward progressive issues. Proponents of the Green New Deal are just one example. “We’re going to ensure that no one gets out of these primary states like Iowa and New Hampshire without hearing about the Green New Deal over and over and over again,” Varshini Prakash, executive director of the Sunrise Movement, which was instrumental in developing the House bill, told the Times.

Jenifer Fernandez Ancona, a leader of the grassroots funding group Women Donors Network,  concurred, telling the Times, “The path to electability is through boldness right now.”

Brexit: Votes on No-Deal, Delay Still Planned

LONDON — The Latest on Brexit (all times local):

7:30 p.m.

British Prime Minister Theresa May has confirmed that Parliament will get to decide between leaving the European Union with no deal and delaying Brexit.

May says she “profoundly regrets” the House of Commons rejection of her deal Tuesday and said delaying Britain’s departure won’t solve the underlying problem.

She says Parliament will be given a chance to “decline” leaving the EU without a deal on March 29 in a Wednesday vote.

If that is the choice, Parliament will decide Thursday whether to seek an extension that would delay Britain’s departure date.

May cautions that the EU will need a reason to approve a delay.

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7:20 p.m.

Britain’s Parliament has dealt a major blow to Prime Minister Theresa May, resoundingly rejecting her Brexit deal just 17 days before the U.K. is due to leave the bloc.

Lawmakers voted by 391 to 242 against the deal, the second time they have defeated it.

The House of Commons threw out the agreement by an overwhelming majority in January, sending May back to the EU to seek changes.

On Monday, May said she had secured “legally binding” changes to allay lawmakers’ fears — but it wasn’t enough.

Lawmakers will now vote on whether to leave the EU without a deal on the scheduled date of March 29, or to ask the bloc to postpone Britain’s departure.

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2:35 p.m.

Northern Ireland’s Democratic Unionist Party says it won’t back U.K. Prime Minister Theresa May’s revamped divorce deal from the European Union.

The party, which plays a pivotal role in the Brexit votes in Parliament because of the prominence of the Northern Ireland border with EU member Ireland, said in a statement that May had made “limited” progress. However, it added that in its view “sufficient progress has not been achieved at this time.”

May has long courted the party’s support because she needs its 10 votes to win a majority in Parliament.

May had announced changes on Monday designed to overcome lawmakers’ concerns about provisions designed to ensure the border on the island of Ireland remains open after Brexit.

The so-called backstop is an insurance mechanism that would be implemented only if Britain and the EU can’t agree on the terms of their future relationship in the second phase of negotiations.

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2:10 p.m.

British Prime Minister Theresa May has implored lawmakers to back her EU divorce agreement, telling them that “if this deal is not passed then Brexit could be lost.”

May — her voice reduced to a raw whisper after days of frantic Brexit diplomacy — spoke as the House of Commons began debating the deal before a vote later Tuesday.

She said she had secured “improvements” from the European Union to the deal that lawmakers rejected in January.

But many pro-Brexit lawmakers still think the agreement keeps Britain bound too closely to the EU and say they plan to vote against it.

Britain is due to leave the bloc in less than three weeks, on March 29.

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1:45 p.m.

German Chancellor Angela Merkel says the European Union made “clear, far-reaching proposals” to address Britain’s concerns about its withdrawal deal.

Merkel said at a brief news conference in Berlin with visiting Belgian Prime Minister Charles Michel that “today is an important day” and she will watch closely what happens in Britain this week. She stressed that “we want an orderly British withdrawal.”

She said that “we made an effort to address British sensitivities, British wishes and British concerns.” Before a British Parliament vote Tuesday on the withdrawal agreement, Merkel didn’t address the assessment by Britain’s attorney general that last-minute changes secured from the EU didn’t give Britain the power to cut itself free of ties to the bloc.

Merkel deflected a question on whether she was prepared to delay the Brexit deadline. She said that the British Parliament is holding votes this week — “we will now wait for these votes and then we will decide.”

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1:15 p.m.

An influential group of Brexit-backing lawmakers in Britain says it won’t vote for Prime Minister Theresa May’s EU divorce deal because changes she has secured are not good enough.

The European Research Group of Conservative Brexiteers says its lawyers looked at the documents and found them wanting.

Group member Bill Cash says “we do not recommend accepting the government’s motion today.”

The announcement is another blow to May’s deal, after Attorney General Geoffrey Cox said last-minute changes did not eliminate the risk Britain could be trapped in EU rules against its will.

The House of Commons is due to vote later on whether to approve or reject the deal.

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12 p.m.

The head of the European Parliament says the European Union will not make further concessions to Britain after the country’s attorney general failed to fundamentally alter his legal advice on Prime Minister Theresa May’s revised deal.

EU Parliament President Antonio Tajani said the problems raised by the attorney general are “an internal problem of the U.K.” and would not prompt the EU to reconsider the Brexit deal again.

“We are very clear It is impossible to change our position,” Tajani said after he heard about the objections.

May hoped that concessions she got from the EU late Monday would be enough to prompt Attorney General Geoffrey Cox to alter his advice that the country could end up being tied indefinitely in a customs union with the EU after Brexit.

He still hoped U.K. lawmakers would back the withdrawal agreement later.

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11:30 a.m.

The pound has slumped by more than 1 percent against the dollar after the British Attorney General’s assessment of Prime Minister Theresa May’s reinforced expectations that lawmakers will reject it.

In a letter outlining his thoughts over May’s latest Brexit deal, Geoffrey Cox said the latest concessions from the EU don’t eliminate the risk the country will remain entwined with the EU customs union indefinitely.

His advice suggests that many lawmakers who have opposed May’s deal are unlikely to change the way they vote in Parliament later. That raises the prospect of more uncertainty, including a potential delay to Brexit.

Minutes after Cox’s advice, the pound was 1.1 percent lower at $1.3014, almost two cents down from where it was earlier. The fall means the pound has given up all the gains in made after May claimed she had secured “legally binding” changes to the withdrawal agreement.

David Cheetham, chief market analyst at XTB, said it now “looks like any hopes of an unlikely victory for the PM’s deal later have just been extinguished.”

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11:15 a.m.

Britain’s attorney general says changes to the Brexit divorce deal secured by Prime Minister Theresa May don’t eliminate the risk the country will remain entwined with European Union rules indefinitely.

Geoffrey Cox says the changes “reduce the risk that the United Kingdom could be indefinitely and involuntarily detained” in a part of the withdrawal agreement known as the backstop.

But he says they don’t give the U.K. an “internationally lawful means” of getting out of the arrangement without the EU’s approval.

The opinion is a blow to May’s hopes of persuading pro-Brexit lawmakers to vote for her deal in Parliament on Tuesday.

The Brexiteers feel the backstop, designed to maintain an open Irish border, could trap Britain in lockstep with EU rules.

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10:50 a.m.

Germany and other EU nations welcomed the overnight agreement reached between European Commission President Jean-Claude Juncker and British Prime Minister Theresa May as a last-ditch effort to avoid a chaotic Brexit at the end of the month.

Arriving in Bucharest, most EU European affairs ministers were upbeat about the deal which will be voted upon by the U.K. parliament Tuesday night.

Germany’s EU affairs minister, Michael Roth, called it “a far-reaching compromise. For the EU it’s of utmost importance that the integrity of the single market be preserved, and that there be no hard border between Northern Ireland and Ireland.”

He called on the House of Commons to accept the deal “because I don’t see further chances for negotiations.”

Dutch Prime Minister Mark Rutte tweeted that he was “pleased with the agreement” and implored that British legislators approve the deal. “An orderly #Brexit is crucial for both the EU and the UK,” Rutte tweeted. “There is no alternative.”

European Affairs Minister George Ciamba of Romania, which has the EU presidency, held out “hope this will be a game changer…but we shouldn’t pre-judge the outcome of the vote in the Commons…a disorderly exit would be the worst scenario.′

Luxembourg Foreign Minister Jean Asselborn called it “the last chance to avoid a no-deal.”

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8:50 a.m.

British Prime Minister Theresa May is facing continued opposition to her European Union divorce deal despite “legally binding” changes that she hopes will win parliamentary support for the agreement.

The House of Commons will vote later Tuesday after last-minute talks with the EU produced assurances that May said means the deal couldn’t be used to tie Britain to the bloc indefinitely.

Both Keir Starmer, the opposition Labour Party’s Brexit spokesman, and Conservative lawmaker Dominic Grieve expressed skepticism about whether May had won substantive concessions.

May flew to Strasbourg, France, late Monday for talks with European Commission President Jean-Claude Juncker. At a news conference, they announced changes designed to overcome lawmakers’ concerns about provisions designed to ensure the border between EU member Ireland and Britain’s Northern Ireland remains open after Brexit.

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Follow AP’s full coverage of Brexit at: https://www.apnews.com/Brexit

Uncle Sam Sent Me to Rehab for PTSD

I arrived an absolute mess; most of us did. Bloated cheeks, sunken eyes, wearing my PTSD and depression on every inch of my face. I can’t say I really wanted to be there, even if I had volunteered. Ironic, wasn’t it?

This, a civilian treatment facility in nowhere, Arizona, was to be my last official duty as an officer in the U.S. Army—an ignominious end to a once-bright career. Still, the truth is I needed it: After several years of treatment for post-traumatic stress, depression and anxiety, I wasn’t getting any better. The Army saw it and decided to retire me a few years early. Over the last year, my life ran off the rails—self medicating, spiraling, the standard drill for a broken vet.

Only those closest to me saw it; however, these were the very ones I’d hurt, who couldn’t take it anymore—with the fallout of bridges burned and relationships sabotaged. Nonetheless, most of us remain publicly functional long after these afflictions have taken the wheel. The frightening paradox of it all was that while my writing only improved, my emotional health deteriorated. That said, kudos to the Army, I suppose, for footing the bill and offering the opportunity for inpatient treatment on my way out the proverbial door. That’s how they do it: Ask the impossible, shatter a life, send for help when you’re too far gone to be of much use any longer—the assembly line of endless wars and the unfortunates who fight them.

It was a strange place, this facility on the outskirts of Phoenix. And expensive! Some 60 percent of the “clients” (as the staff unnervingly referred to patients) were wealthy professionals, well-off white folks with afflictions ranging from depression to suicidal ideation to personality disorders to heroin addiction. Some had Cadillac health insurance plans; a surprising number paid cash, a cool 60 grand.

The rest, well, they were veterans, active or retired, from every branch of the service. Tricare, our (ironically) socialistic government insurer, footed the bill. These men and women, my peers, looked and spoke differently from the civilian “clients” at the center. A microcosm of the select class of volunteers that fight America’s hopeless wars, they were generally enlisted, younger, browner, poorer, less educated and more rural than their civilian counterparts. God, you could just feel the distance that separates military from civilian society in the 21st-century United States—the chasm between polite society and an increasingly unrepresentative military caste.

Perhaps you’re wondering just who these kids—actually, they ranged from 20 to 50 years old—were, what they “were in for,” what they were like. While omitting their names, as is customary when reporting about mental-health matters, let me provide a snapshot, a representation of a generation of damaged warriors the U.S. government has lately produced.

Every morning the lot of us would circle up and publicly announce our name, claim and affirmation. The name was just a given one with a one-letter last initial—anonymity was a way of life in recovery. The affirmation was a positive statement about ourselves meant to rewire the brain to think happy thoughts. Most interesting was the claim, the list of problems that each vet suffered from. Among the civilians, the claims were fairly diverse, but among my fellow veterans, almost everyone claimed what I took to calling the “Military Big Four”: depression, anxiety, PTSD and alcohol abuse.

See, the formula is as simple as it is dreadful: The military takes these kids, trains ‘em for a few months, then sends them off to some unwinnable war (Iraq and Afghanistan are the current go-to spots). There, they’re sometimes killed or mutilated, but more often than not they suffer PTSD and moral injury from what they’ve seen and done. Then they go home, released into the wild of some shitty garrison town. At that point, the trauma begins to manifest as major depression and crippling anxiety. Finally, just to function, or in order to fit into society, the vet begins self-medicating; alcohol is most common, but opiates, and eventually even heroin, are also prevalent. If they spiral too low or consider/attempt suicide, well, then, they end up along with yours truly in an inpatient facility.

Some, and I met more than two dozen like this, are there by mandate, as part of an impending punishment for some “alcohol-related” incident like a fight, hospitalization, arrest or DUI. Make no mistake, our punitive military is still grappling with the correct balance between discipline and treatment. Punishment they know, it’s comfortable; actual treatment, that’s another story.

It’s ironic, though, this obsession with stamping out alcohol-induced “incidents.” After all, the military in which I served supported a culture of alcohol abuse, of binge drinking at every major unit affair—and we had lots of them. Then, back in their modest homes, it was no big secret that troopers from the ranks of private to major general regularly abused substances to numb combat trauma. Just about every vet down in Arizona fit this disturbing profile.

There were other unsettling trends. Perhaps 25 percent had attempted or seriously considered suicide just prior to intake. That shouldn’tbe surprising—after all, military suicide is a veritable epidemic, with an average of 22 successful veteran attempts on the daily—but I bet it still is for many uninformed civilians.

Then there were the female vets. I hadn’t served with many of these during my time in pre-integrated combat units, so even I was a bit shocked by what I found. No less than half the military women in the facility were victims of sexual assault while in the service. And, though the active military touts its recent successes on this front, the disreputable patterns persist. Statistics indicate that one in four female veterans report at least one sexual assault during their term of service. Despicable.

Meeting these women in person, I couldn’t help but wonder if Democratic presidential hopeful and New York Sen. Kirsten Gillibrand is right: The military might not be capable of processing and prosecuting these cases fairly, and it’s time for civilian arbiters to take over. This, of course, rates as blasphemy among my fellow officers, who guard their authorities with special care, but my time in Arizona indicated the status quo is irreparably broken.

Consider a few final vignettes about my peers in the facility, many of whom are representative of thousands more similar cases. There was my Air Force buddy from whom I’d become inseparable and who’d served a tour in mortuary affairs cleaning and processing the bodies of young American troopers. His dreams haunted by that experience for years, he turned inward, to the bottle, and, eventually attempted suicide. The poor guy just wanted out of his contract, but the Air Force wouldn’t let him go.

Then there was the former army infantryman, wounded in a bomb attack, crippled by chronic pain after retiring. He turned to opiates for relief, then to cheaper heroin, and finally, to more powerful synthetic fentanyl. He overdosed, found himself in the emergency room a time or two, and awoke in Arizona.

I remain haunted, too, by the ever-so-young serviceman who checked in for alcohol abuse and depression but was actually suffering as a closeted homosexual. Despite the Obama-era repeal of “don’t ask, don’t tell” restrictions on gays in the military, neither the kid’s family nor his still-patriarchal and homophobic military peers were accepting. He came out before our eyes in a highly emotional way. I’ll never forget it.

You see, it was the very youth of so many of these men and women at the time of their trauma that was striking. Here we all were, at the funny farm, but I started to realize that so many of these oh-so-publicly adulated veterans arrived “crazy by design.” After all, the military grabs kids, purposefully, before their brains have fully developed, when they’re physically and emotionally pliant. Many, I’d guess a disproportionate number, enter service with a history of childhood trauma and hail from families positioned on the bottom half of the economic scale. Our government then uses and abuses them, ships them off to wars that can’t be won (and that Congress never even authorized) and implants emotional grenades in their psyches. That’s the last the American people usually hear of them—but I spent a month with those for whom the grenade has finally exploded.

Such is the tragic reality: The military breaks us and then kindly allots 30-45 days to “get right.”  The outcomes, I fear, will be less than hopeful.

I’ve left now, with Arizona in my rear view, never, I hope, to return. Nevertheless, part of me stayed there, just as pieces of my soul still roam Baghdad and Kandahar. Something about the latest experience sticks with me; I can’t shake the thoughts—perhaps some inherent meaning that’s all in the mind. Anyway, heck, I’m a writer. May as well write about it.

Here it is: I’m left with the profound, if hopeless, wish that every American voter and aspirant adolescent soldier would spend a moment with the veterans in rehab across this country tonight. To know what I know, to see what we—all of us—have allowed to happen in our names. There’s romance, and naivety, in that wish, I know, but I wish it just the same.

But oh, the satire of it all: I hadn’t wanted to go to that “loony bin” in Arizona in the first place, but there I eventually stood, crying in the airport on my discharge date. I fell in something approaching love, literally and figuratively, with some of my peers, friends I hope, in the program. In treatment I was safe, and healthy, and authentic—the so-called crazy clients, especially the band of broken vets, really got me. The outside was terrifying; maybe it should be.

Then it hit me.  This transition, out of the madhouse and into the world, was bigger than my own manageable diagnoses. It was the typical discomfiting journey of the professional soldier back into a society that is no more ready for us than we are for it. Think on that for a moment.

No amount of yellow ribbons or thank-you-for-your-service salutes can alter an unmistakable reality. Our country—your country—has waged perpetual war, across the globe, against an ill-defined enemy and with scant hope for “victory,” for nearly two decades. It’s cost some 6 trillion tax dollars, sacrificed 7,000 soldiers and contributed to the killing of perhaps 500,000 foreigners, including 240,000 civilians. It has done so with a professional, volunteer military, one that’s disjointed from the populace and largely operates in the shadows. Through it all, you’re no safer now—maybe less so—than on 9/11, when many of the damaged vets I met were just children. America, your government owns the fractious world it helped create, and—like it or not—owns the hundreds of thousands of PTSD-afflicted vets living within its borders.

Even if the wars ended tomorrow (they won’t, by the way), American society has another half-century ahead of it, laden with the burden of these unnecessary disabled veterans. It’s inescapable. Would that we’d learn from the tragedy of the forever war as it’s been waged, but chances are our leaders, current and future, will be far too obtuse for all that.

So on the war machine rolls, flattening all before it. Still, the invisible wounds are suffered at home, by my friends—the men and women I slept, ate, laughed and cried with in nowhere, Arizona. I’m tempted to (fruitlessly) plea with the American people: Watch how you vote! Skip the next war! Support your vets by creating fewer of them!

After all, they’re the heart and soul, the best I’ve ever seen. Some will recover and lead happy, meaningful lives. Most won’t, statistically speaking. Alas, they matter.

I wish only this: that you’ll see them, as they saw me—and, perhaps, spare them a sincere thought now and again.

Major Danny Sjursen, a regular Truthdig contributor, is a retired U.S. Army officer and former history instructor at West Point. He served tours with reconnaissance units in Iraq and Afghanistan. He has written a memoir and critical analysis of the Iraq War, “Ghost Riders of Baghdad: Soldiers, Civilians, and the Myth of the Surge.” He lives in Lawrence, Kansas. Follow him on Twitter at @SkepticalVet and check out his podcast “Fortress on a Hill,“ co-hosted with fellow vet Chris “Henri” Henrikson.

Note: The views expressed in this article are those of the author, expressed in an unofficial capacity, and do not reflect the official policy or position of the Department of the Army, Department of Defense, or the U.S. government.

Copyright 2019 Danny Sjursen

Democrats Choose Milwaukee for Convention, Citing Party Values

MILWAUKEE—Milwaukee will host the 2020 Democratic National Convention, party leaders announced Monday, highlighting the battleground state of Wisconsin that helped elect President Donald Trump and now will launch an opponent who could oust him.

Democratic National Committee Chairman Tom Perez chose Milwaukee over Houston and Miami after deliberations lingered longer than party leaders or officials from the three finalist cities had expected.

“Where you hold our convention is a very strong statement of your values and who and what we are fighting for,” Perez said Monday surrounded by state and local officials.

Perez praised Milwaukee’s diversity and its labor unions, along with Wisconsin’s working-class identity. He called it an ideal backdrop for Democrats to launch a fall campaign to reclaim the White House four years after Trump stunningly outpaced Hillary Clinton across the old industrial belt of the upper Midwest and Great Lakes.

“The Democratic Party has again become an every ZIP code party,” Perez said. “We’re listening to people in every corner of the country.”

The convention is scheduled for July 13-16, 2020.

It will be the first time in over a century that Democrats will nominate their presidential candidate in a Midwestern city other than Chicago. Instead, the spotlight will shine for a week on a metro area of about 1.6 million people.

Once dubbed as “The Machine Shop of the World,” the city is the birthplace of Harley-Davidson motorcycles and is known for its enduring love affair with beer — a trait displayed Monday as Perez and surrounding dignitaries closed their celebratory news conference with a toast.

Republicans are set to gather in Charlotte, the largest city in battleground North Carolina, on Aug. 24-27, 2020.

Perez noted that the convention site doesn’t determine the November outcome, but Democrats see plenty of symbolism in Milwaukee after a bitter 2016 election defined by Clinton being nearly swept in what her campaign aides had confidently called a Midwestern “Blue Wall.” That band of states twice sided with President Barack Obama, but Clinton held only Minnesota, ceding Wisconsin, Michigan, Ohio and Pennsylvania — a combined 64 of the necessary 270 electoral votes — as white working-class voters flocked to Trump.

It was the first time since 1984 that Republicans claimed Wisconsin in a presidential election. Afterward, Clinton took withering criticism for not once visiting Wisconsin as a general election candidate.

Since then, Wisconsinites re-elected Democratic Sen. Tammy Baldwin and ousted Republican Gov. Scott Walker in favor of Democrat Tony Evers and the state’s first black lieutenant governor, Mandela Barnes.

Evers and Barnes beamed Monday as they welcomed Perez.

Wisconsin Democrats pointed to those midterm election results as they lobbied Perez and DNC officials. “We plan to carry that momentum into 2020 and beyond,” Barnes said Monday.

“The path to the presidency goes right through Wisconsin as we learned in 2016,” Baldwin, who won re-election in 2018, told The Associated Press. “In 2016, the industrial heartland was really the key and having this convention in Milwaukee, Wisconsin, I think is a powerful statement that nobody should be taken for granted.”

In a political twist, Milwaukee officials have credited Walker for supporting the convention bid. Democratic Party proceedings will play out in the new 17,500-seat arena that Walker helped build for the NBA’s Milwaukee Bucks by securing public financing from state lawmakers. Walker later lobbied GOP-leaning business leaders and donors to support Milwaukee’s effort to land the event.

Perez was not among those praising Walker, repeatedly referring to the “former governor” without naming him and blasting his policies, particularly his fights with public unions and his spending priorities on education, for setting up Democrats’ midterm success.

For his part, Walker avoided the rancor.

“When it comes to a big convention like this, it’s not red, it’s not blue, it’s green,” Walker told the AP after the announcement, referring to the economic impact.

Walker did warn Democrats that for all their enthusiasm, the convention could energize complacent Wisconsin Republicans to Trump’s benefit. “I think you’d be hard-pressed to find anyone who leans Democrat who wasn’t already motivated in the city or the state against the president,” Walker said.

Democratic officials in Washington said picking a host city is as much about logistics as anything else, even as they acknowledge political optics.

On logistics, Milwaukee may have pulled somewhat of an upset, given its small footprint compared to Houston and Miami, cities long accustomed to hosting major events. Houston hosted the Super Bowl as recently as February 2017.

Milwaukee organizers pitched their city — the Democratic stronghold of Wisconsin — as resurgent. Known for some of the country’s biggest brewers, including Pabst, Schlitz, Miller and Blatz, the metro area has a redeveloped downtown, a hotel capacity exceeding 17,000 rooms and a new downtown streetcar line that opened in November.

Still, the city had to prove it has the overall capacity for tens of thousands of delegates, party activists, donors and media.

DNC officials have said that the question wasn’t about hotel rooms but about whether Milwaukee has requisite venues for other convention staples, from daily sit-down breakfast meetings for 57 state and territorial delegations to evening events put on by state parties, corporations, lobbyists and donors. Even as Milwaukee officials insisted they have the venues, some deep-pocketed Democrats in nearby Chicago — a 90-minute drive — stepped in to note their proximity.

Houston and Miami, meanwhile, faced their own challenges.

Miami has an impressive concentration of luxury hotels, but many are in Miami Beach across bridges from downtown. That raised the prospect of delegates spending hours in traffic. The city’s arena also is not as new as Milwaukee’s.

Houston had few if any logistical barriers. But according to party officials with knowledge of the process, the city’s organizing committee struggled to come up with the necessary financing without resorting to oil and gas money. That industry is the city’s bread and butter, but it’s become anathema in Democratic politics because of its part in climate change. The city’s Democratic mayor also is embroiled in a labor dispute with Houston firefighters.

Also, though Houston and Miami are Democratic anchors in their states, Texas and Florida have no Democratic governor or senator between them.

___

Barrow reported from Atlanta. Bauer reported from Madison, Wis.

Fox News’ Tucker Carlson Outed as Misogynist and Rape Apologist

If you’re not a fan of radio shock jocks. you may not be familiar with Todd Clem, aka Bubba the Love Sponge, a friend of Howard Stern who rose to nationally syndicated prominence with stunts like “No Panties Thursdays.” Legal troubles stemmed from some of those stunts, including the time he slaughtered a pig on air (he was acquitted of animal cruelty).

Fox News host and alt-right favorite Tucker Carlson, however, is very familiar with Bubba. According to unearthed recordings from media watchdog organization Media Matters, Carlson used weekly calls to Clem’s show from 2006 to 2011 as an opportunity publicly degrade prominent female journalists, celebrities and politicians.

Carlson, Media Matters reports, “diminished the actions of Warren Jeffs, then on the FBI’s ’Ten Most Wanted Fugitives’ list, for his involvement in arranging illegal marriages between adults and underage girls, talked about sex and young girls, and defended statutory rape.”

When the calls started in 2006, Carlson was an established print journalist with a stint at The Weekly Standard and a television pundit with primetime shows on CNN and MSNBC under his belt.

He may have had the misfortune of being accused of “hurting America” by Jon Stewart in a 2004 appearance on Crossfire, as Jason Zengerle recounted in The New Republic in 2010, but Carlson was well liked enough that his turn from writer to Fox News personality was met, as Lyz Lenz described in a 2018 Columbia Journalism Review analysis of Carlson’s career, “with the same pearl-clutching, righteous tone they use when discussing their aunt in Connecticut who voted for Trump.”

And that was the reaction to his on-air rants against Hillary Clinton or his disparaging The New York Times for their coverage of the Russia investigation. What Media Matters found was much worse:

He referred to Martha Stewart’s daughter Alexis Stewart as ‘cunty,’ called journalist Arianna Huffington a ‘pig,’ and labeled Britney Spears and Paris Hilton ‘the biggest white whores in America.’ ” He also said that women enjoy being told to ‘be quiet and kind of do what you’re told’ and that they are ‘extremely primitive.’

He even found time to degrade Supreme Court Justice Elena Kagan just before her confirmation, not for her views, but for her physical appearance, saying, “I do feel sorry for her in that way. I feel sorry for unattractive women. … physically, the problems with her are fundamental. She’s never going to be an attractive woman.”

Referring to Jeffs, Carlson downplayed the Utah polygamist’s actions, claiming  the child-sexual assault charges against Jeffs were “bullshit,” and adding “arranging a marriage between a 16-year-old and a 27-year-old is not the same as pulling a stranger off the street and raping her.” Jeffs is currently serving a sentence of life plus 20 years.

This is not Carlson’s first unflattering audio moment of 2019. In February, Now This released audio of Carlson telling Dutch historian Rutger Bregman that Bregman has a “tiny brain” and should go “fuck himself,” after he suggested that the world’s wealthiest should pay higher taxes on Fox’s “Tucker Carlson Tonight” show, audio Fox had previously declined to air. In a Fox News video response, Carlson said the segment didn’t air because of the cursing but defended his word choice as “entirely accurate.”

In response to the latest reporting, Carlson once again defended his actions, saying, on Twitter,  “Media Matters caught me saying something naughty on a radio show more than a decade ago. Rather than express the usual ritual contrition, how about this: I’m on television every weeknight live for an hour. If you want to know what I think, you can watch.”

Read the full Media Matters story here.

 

Boeing 737 Max 8s Under Scrutiny After Ethiopia Crash

HEJERE, Ethiopia—Airlines in Ethiopia, China, Indonesia and elsewhere grounded the Boeing 737 Max 8 jetliner Monday after the second devastating crash of one of the planes in five months. But Boeing said it had no reason to pull the popular aircraft from the skies.

As the East African country mourned the 157 victims of the Ethiopian Airlines plane that went down in clear weather shortly after takeoff Sunday, investigators found the jetliner’s two flight recorders at the crash site outside the capital of Addis Ababa.

An airline official, however, said one of the recorders was partially damaged and “we will see what we can retrieve from it.” The official spoke on condition of anonymity for lack of authorization to speak to the media.

Ethiopian authorities are leading the investigation into the crash, assisted by the U.S., Kenya and others.

The crash was similar to that of a Lion Air jet of the same model in Indonesian seas last year, killing 189 people. The crash was likely to renew questions about the 737 Max 8, the newest version of Boeing’s single-aisle airliner, which was first introduced in 1967 and has become the world’s most common passenger jet.

Safety experts cautioned against drawing too many comparisons between the two crashes until more is known. Besides the groundings by airlines in Ethiopia, China and Indonesia, Caribbean carrier Cayman Airways, Comair in South Africa and Royal Air Maroc in Morocco temporarily grounded their Max 8s.

Ethiopian Airlines decided to ground its remaining four 737 Max 8s until further notice as “an extra safety precaution,” spokesman Asrat Begashaw said. The carrier had been using five of the planes and awaiting delivery of 25 more.

But Chicago-based Boeing said it did not intend to issue any new recommendations about the aircraft to its customers. It plans to send a technical team to the crash site to help investigators and issued a statement saying it was “deeply saddened to learn of the passing of the passengers and crew” on the jetliner.

Among the airlines still using the plane are Southwest, American and Air Canada.

It’s unusual for authorities to take the step of grounding planes, and it’s up to each country to set standards on which planes can fly and how those planes are maintained, said Todd Curtis, an aviation safety analyst who directs the Airsafe.com Foundation.

“If there is a suspicion … that there’s not only something inherently wrong with 737 Max 8 aircraft, but there are no procedures in place to cure the problem, then yes, they should either ground the plane, or there are several levels of things they could do,” Curtis said.

People from 35 countries died in the crash six minutes after takeoff from Ethiopia’s capital for Nairobi. Ethiopian Airlines said the senior pilot issued a distress call and was told to return but all contact was lost shortly afterward. The plane plowed into the ground at Hejere near Bishoftu, scattering debris.

“I heard this big noise,” resident Tsegaye Reta told the AP. “The villagers said that it was a plane crash, and we rushed to the site. There was a huge smoke that we couldn’t even see the plane. The parts of the plane were falling apart.”

Kenya lost 32 people, more than any country. Relatives of 25 of the victims had been contacted, Transport Minister James Macharia said, and taking care of their welfare was of utmost importance.

“Some of them, as you know, they are very distressed,” he said. “They are in shock like we are. They are grieving.”

In Addis Ababa, members of an association of Ethiopian airline pilots wept uncontrollably for their dead colleagues. Framed photos of seven crew members sat in chairs at the front of a crowded room.

The flight’s main pilot, Yared Getachew, issued a distress call shortly after takeoff and was told to return, but all contact was lost.

Canada, Ethiopia, the U.S., China, Italy, France, Britain, Egypt, Germany, India and Slovakia all lost four or more citizens.

At least 21 staff members from the United Nations were killed in the crash, said U.N. Secretary-General Antonio Guterres, who led a moment of silence at a meeting where he said “a global tragedy has hit close to home.”

Both Addis Ababa and Nairobi are major hubs for humanitarian workers, and some had been on their way to a large U.N. environmental conference set to begin Monday in Nairobi. The U.N. flag at the event flew at half-staff.

The crash shattered more than two years of relative calm in Africa, where travel had long been chaotic. It also was a serious blow to Ethiopian Airlines, which has expanded to become the continent’s largest and best-managed carrier and turned Addis Ababa into the gateway to Africa.

The state-owned carrier has a good reputation and the company’s CEO told reporters no problems were seen before Sunday’s fight. But investigators also will look into the plane’s maintenance, which may have been an issue in the Lion Air crash.

The plane was delivered to Ethiopian Airlines in November. The jet’s last maintenance was on Feb. 4, and it had flown just 1,200 hours.

China’s Civil Aviation Administration said that it ordered airlines to ground all 737 Max 8 aircraft as of 6 p.m. (1000 GMT) Monday, in line with the principle of “zero tolerance for security risks.”

It said it would issue further notices after consulting with the U.S. Federal Aviation Administration and Boeing.

China Southern Airlines is one of Boeing’s biggest customers for the aircraft.

Comair, the operator of British Airways and Kulula flights in South Africa, said it has grounded its Boeing 737 Max 8 while it consults with Boeing, other operators and technical experts. The statement did not say how many planes are affected. Wrenelle Stander, executive director of Comair’s airline division, said that Comair “remains confident in the inherent safety of the aircraft.”

An official with Royal Air Maroc said the carrier in Morocco has halted the commercial use of its sole operational model, pending tests and examinations. The official, who spoke on condition of anonymity in line with departmental rules, said the plane was scheduled to fly on Monday from Casablanca to London but was replaced.

The 737 is the best-selling airliner in history, and the Max, the newest version of it with more fuel-efficient engines, is a central part of Boeing’s strategy to compete with European rival Airbus.

“Safety is our No. 1 priority and we are taking every measure to fully understand all aspects of this accident, working closely with the investigating team and all regulatory authorities involved,” Boeing said in a statement.

Boeing’s stock fell 7 percent to $391.80 in afternoon trading.

___

Meseret reported from Addis Ababa. Associated Press writer Niniek Karmini in Jakarta, Indonesia, Edith M. Lederer at the United Nations and AP Airlines Writer David Koenig in Dallas, Texas, contributed.

The Global Economy Is a Time Bomb Waiting to Explode

In the aftermath of the greatest financial calamity since the Great Depression, then–chief of staff for the Obama administration Rahm Emanuel made the call for aggressive action to prevent a recurrence of the meltdown of 2008.

Although the U.S. government’s system of checks and balances typically produces incremental reform, Emanuel suggested that during times of financial upheaval, the traditional levers of powers are often scrambled, thereby creating unique conditions whereby legislators could be pushed in the direction of more radical reform. That’s why he suggested that we should never let a crisis go to waste. Ironically, that might be the only pearl of wisdom we ever got from the soon-to-be ex-mayor of Chicago, one of those figures who otherwise embodied the worst Wall Street-centric instincts of the Democratic Party. But give Rahm props for this one useful insight.

But we did let the crisis of 2008 go to waste. Rather than reconstructing a new foundation out of the wreckage, we simply restored the status quo ante, and left the world’s elite financial engineers with a relatively free hand to create a wide range of new destructive financial instruments.

To cite some examples, consider the case of the UK, where England’s local councils have taken on significant risk via structural financial products known as “LOBO loans” (lender option borrower option). Financial blogger Rob Carver explains how they work:

“[Let’s] say I offer to lend you £40 and charge you 3% interest for 5 years. Some other guy comes along and offers you the same deal; but the twist is he will have the option to ask for his money back whenever he likes.

“You wouldn’t borrow money from him because it’s clearly a worse deal. …

“Suppose he sticks to his guns but as a concession he will lend you the money at only 2.9% interest. Would you take that? What about 2.5%? 2%?”

What Carver is describing here is the so-called “teaser”: a seductively low starting interest rate that is sufficiently attractive to induce the buyer to take on the LOBO in the first place. It’s designed to entice someone away from fixed interest rate borrowing (which at least has the virtue of being constant and therefore more readily predictable). The seductive quality of the teaser is that one’s borrowing costs might appear “cheaper” than the higher initial fixed-rate costs offered by the Public Works Loan Board (PWLB), a wing of the government. But the troubles become more apparent with the passage of time.

What happens if and when rates unexpectedly move up? In general, as Carver notes, having to suddenly repay your loan when interest rates have risen to 4 percent is the worst possible time for you. It’s akin to taking away the umbrella the minute it starts to pour. Worse, the authority is likely locked into a contract that typically has a lifespan of 40-70 years. (And who can forecast with any degree of certainty the trend of interest rates over that sort of time span? It makes the whole notion of buying an instrument on that premise to be speculative in the extreme.) Banks have the option of raising rates at their discretion, and although the councils are able to opt out of their contract, they will pay huge penalties if they seek to renegotiate or exercise that option to opt out.

So there’s a huge negotiating imbalance built into the contract, and the likely upshot is that the local council ends up paying more in interest charges over the course of the loan. How much more? According to an activist group, #NoLOBOs (created to help housing authorities combat the impact of these instruments), “a substantial number of housing councils are facing 7-9 % interest rates, which is more than twice the current rate of lending at the PWLB.” And in many instances, the municipalities have been burdened with these higher borrowing costs at a time when additional funding from the national government has been cut back, so they are confronted with a double whammy on both sides of the balance sheet.

What was initially sold as a means to manage risk, then, ultimately metamorphoses into a recipe for financial fragility, especially when it occurs at the municipal level with institutions that don’t have the capacity to create new currency (as a federal authority can do). The “teaser” becomes a poison pill. This means a local authority (or level of government that is a user, rather than issuer, of currency) can go bust.

To give some sense of the magnitude of the market, the Independent notes:

“There is around £18bn worth of private sector loans on councils’ books, according to figures from the Department for Communities and Local Government. … [A]round £15bn of these are Lobos.

“Annual sales to local authorities regularly topped £1bn in the run-up to the financial crisis and peaked at £1.5bn in 2007, before crashing to £600m a year later and then dwindling to nothing in 2012.”

Their revival since 2012 has resulted in hundreds of millions of pounds being skimmed from struggling town hall budgets, which were hit by the double whammy of these toxic instruments, along with austerity-imposed cutbacks from the national government. One particularly egregious example was the cash-strapped town of Newham, which had £398m of exposure to LOBOs back in 2014. Faced as well with cutbacks from the national Tory government, the local council was forced to remove financial support from a homeless hostel, “leading to the eviction of a group of single mothers to save £41,000,” reported British publication Private Eye.

Needless to say, banks and brokers have profited handsomely from the whole exercise, pocketing hundreds of millions of pounds in profits.

Here’s another disaster waiting to happen: Globally, financial markets today are seeing a rebirth of “collateralized loan obligations” (CLOs), instruments broadly similar to the “collateralized debt obligations” (CDOs), which helped to blow up the financial system in 2008. CDOs were asset-backed instruments, a “blended” security comprised of risky mortgage-backed bonds and much of the rest from theoretically safer tranches. The theory underlying them was that the lower the investment quality, the higher the compensating yield, but in reality most turned out to be toxic junk. What distinguishes CLOs from their CDO “cousin” is that instead of repackaging mortgages, subprime and otherwise, CLOs repackage corporate loans, and consumer credit, such as car loans.

Unfortunately, in yet another instance of lessons unlearned from 2008, the collateralized loan obligations, like the CDOs, have virtually non-existent investor protection, “with over 70 percent lacking any covenants that would allow monitoring of financial condition and early intervention to manage problem borrowers. This exacerbates the risk of higher losses,” argues Satyajit Das, a former banker who first identified the risks to financial stability posed by these kinds of instruments back in 2008. In fact, Das elaborates, “relative to mortgages, [CLOs] typically are made up of fewer and larger loans, which increases concentration risk. Leveraged loans are highly sensitive to economic conditions and defaults may be correlated, with many loans experiencing problems simultaneously.” Which intuitively makes total sense: during a slowdown, virtually all economic activity slows down, whether that be housing, car sales, or consumer borrowing. Diversification of risk is therefore more apparent than real.

In an environment of prevailing low interest rates (and, hence, lower yields from conventional instruments), debt investors have been told (again) that they can enhance their portfolio returns, through these higher-yielding CLOs, while mitigating risk simply by diversifying. In theory, the risk is dispersed, but in practice, as Das has pointed out, if you’re simply diversifying different kinds of financial excrement, the end result is more likely to be insolvency for the whole instrument. A common theme is that in spite of the disastrous performance of these instruments during the market crash, many of the underlying loans today still lack standard provisions to protect lenders, such as reporting and requirements to maintain certain income and asset levels. Consequently, more toxic junk is being passed around the system like a hot potato. Last one holding the potato loses.

Given the scale of issuance, all major financial institutions are likely to be left holding these bags. CLOs, notes Das, have been growing at a rate of around $100bn a year for the past decade, and total levels outstanding now approach the size that existed in the CDO market by the time of the 2008 crisis. As the cycle has matured, the quality of the assets of the loans has diminished, and the borrowers have become increasingly leveraged.

This follows a classic pattern of a typical borrowing cycle, as credit structures move from relatively stable “hedge financing” (where the underlying units can meet payment commitments out of income flow) to “Ponzi” finance (borrowing simply to pay interest on the interest), a process originally outlined by the economist Hyman Minsky. Based on the relatively benign conditions of the recent past, both borrowers and lenders are lulled into a false sense of security and increase their respective risk profiles accordingly. Minsky was by no means the only economist whose work has become associated with manias, panic and crash. He built his analysis on the shoulders of analysts of the Great Depression, such as Irving Fisher, John Maynard Keynes, and John Kenneth Galbraith. But what distinguishes Minsky’s scholarship is that he focused it on the “upward” source of the financial instability, as opposed to its disastrous denouement. In relation to today’s CLO market, the parallel is that the decade-long period of stability in the aftermath of 2008 (in reality, faux stability achieved through the injection of trillions of dollars in public sector bailouts) has again given the users a stream of data providing the illusion that leverage is safe.

Rather than respond to each financial meltdown by seeking to curb the activities that led to the crisis in the first place, the sheer ongoing dominance of our financial sector has ensured that policy has merely worked to bail out the big players, and do everything to keep the rigged casino of the economy in their favor. Thus, financial institutions continue to concoct increasingly esoteric and opaque financial instruments that they market to less financially sophisticated counterparties.

Let’s roll back the tape to a few financial crises ago, from the early 1990s. At that time, Bob Citron, the Orange County treasurer, bankrupted his county via leveraged investments he made in structured notes (i.e., customized notes designed to fit the investment wishes and opinions of particular institutional buyers). If you tailor an exotic instrument to fit your investment outlook, you’d better know what you’re doing and appreciate the downside risks. Customization entails a level of financial expertise that Citron later conceded he did not fully possess. He was a sitting duck in a sea of sharks (to mix metaphors). Citron made a bet on the direction of interest rates (he bet they would stay low, which was wrong). As a result of his miscalculation, by 1994 Orange County’s investment portfolio began hemorrhaging hundreds of millions of dollars, ultimately going broke. Without conceding any liability, ultimately Merrill Lynch paid out $400m in penalties to settle the case.

That was an early warning signal, which unfortunately remained unheeded, as it was followed in quick succession by the Asian financial crisis in 1997, the bankruptcy of Long-Term Capital Management and the concomitant Russian debt default in 1998, the dot.com bust, and finally the complete seizure of the global financial system by 2008. Each time, a common foolhardy notion was the idea that higher levels of reward could be achieved without any corresponding increase in risk. All of this occurred against a backdrop of deregulation, minimal transparency and inadequate market supervision.

If you thought the near-breakdown of the global economy in 2008 was enough to make global policymakers and regulators rethink their persistent accommodation of financial innovation and deregulation, think again. Regulators have continued to accommodate this complexity, rather than minimizing it. Complex financial systems beget yet more complex (and ultimately ineffective) regulation. It is better to simplify the system in order to improve the quality of the regulation and the ease of oversight (which the complexity is designed to avoid).

Unfortunately, that’s not what our policymakers have done. Instead of redesigning the system, the monetary authorities have simply inserted themselves in the chain of intermediation that included an ever-evolving variety of books of business without actually considering whether there were too many weak links in the credit chain in the first place. Rather than shorten or redesign the economy’s credit structures, and curb the risks accordingly, central banks instead have simply acted as the ultimate guarantors in a supply chain from money-like instruments to longer-term and riskier credit. Absent any kind of sanction for undertaking more systemically dangerous activities, our policymakers have therefore made the same mistakes that were made in the early 2000s: they are establishing perverse ongoing incentives that increase risk, punishing the timid (prudent?) with low returns. It’s a classic illustration of Gresham’s Law, whereby bad money drives out good.

So here we go again. No less a figure than Claudio Borio, the chief economist of the Bank for International Settlements central, who warned of the dangers of a synchronized housing bubble well before the 2008 crisis, is again sounding the alarm about a recurrence. The crash gave us a chance to downsize finance and restrict its ability to wreak comparable havoc on the economy going forward. Instead, we let the crisis go to waste, which almost certainly means a nasty sequel to 2008 facing us in the near future.

This article was produced by Economy for All, a project of the Independent Media Institute.

Trump’s Venezuela Allies Have Credibility Issues of Their Own

What follows is a conversation between co-director of the Center for Economic Policy Research Mark Weisbrot and Sharmini Peries of the Real News Network. Read a transcript of their conversation below or watch the video at the bottom of the post.

SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries, coming to you from Baltimore.

A favorite talking point of those who support the Trump administration’s policies towards Venezuela is that 50 countries have recognized the opposition leader Juan Guaido as the interim president of Venezuela, and this includes countries like Canada and Europe. So people are very confused. When it is pointed out that 50 out of the 195 countries is only about 1/4 of the world’s countries, and less than 20 percent of the world’s population, the Trump administration argues that these are the world’s main democracies that support Guaido.

Part of the reason for assembling this coalition of countries that are willing to recognize the parallel government in Venezuela is to provide legitimacy to the Trump administration’s effort to oust Nicolas Maduro, the elected president of Venezuela. In some ways, this is similar to the coalition of the willing that President George W. Bush assembled to oust Saddam Hussein from Iraq. But who is this anti-Maduro coalition of the willing? And why are they supporting Trump?

Well, to discuss all of this with me today I’m joined by Mark Weisbrot. And he’s joining us from Washington, DC, where he is the co-director of the Center for Economic and Policy Research. Thanks for joining us, Mark.

MARK WEISBROT: Thanks for inviting me, Sharmini.

SHARMINI PERIES: All right. Mark, let’s start off with Trump’s main allies in this effort in Venezuela; particularly the Latin American allies, Colombia, Brazil, Argentina, Chile, Ecuador, Paraguay, among others. But most of these governments have their own issues of legitimacy, particularly Brazil. Tell us about some of them, and why are they allied with Trump, Bolton, Pompeo, Pence, and group?

MARK WEISBROT: Yes. Well, first I want to emphasize that even if these were the most wonderful governments in the world, there’s no legitimacy to the effort to overthrow the Venezuelan government. And that’s because, first of all, the sanctions that they’re using are illegal. They’re illegal under the Charter of the Organization of American States. They’re illegal under the Charter of the United Nations. And they are illegal under various conventions that these countries, and the United States in particular, have signed. So it wouldn’t be legitimate even if they had only the best countries, and even if they had a majority of countries. It’s just, it’s just illegal. And of course it’s immoral, because they’re using collective punishment against the population of Venezuela by depriving them of medicine and food and other essential goods.

But they still–they use this anyway. So it is kind of worth looking at the coalition. And as you said, why–you know, who is it, and why? So obviously you have some countries that have their own problems of legitimacy. The government of Brazil, which is headed by Jair Bolsonaro, he came to power in an election that was of questionable legitimacy because they excluded the most popular politician in Brazil, Lula da Silva, the former president. And they put him in jail so he couldn’t run. They also made a separate court decision that he couldn’t run from jail. But he was jailed and convicted without any real material evidence against him. It was all based on one plea bargain–the whole case was based on one plea bargain witness who was convicted of corruption. And his plea bargaining was cut off until he changed his story and supported the investigating, prosecuting judge’s view, what he wanted.

So that was very questionable. Then they prevented Lula from speaking to the media. And of course, they wouldn’t have even gotten rid of the Workers Party, Lula’s party, and had this opportunity if they hadn’t impeached Dilma Rousseff, the president from the Workers Party, in 2015 and ’16. They proceeded against her with an impeachment that didn’t actually have a real crime.

So all this was really unconstitutional, illegal. And that’s how Jair Bolsonaro, who’s most famous for his horrible remarks, you know, telling a fellow member of Congress, a woman, that he wouldn’t rape her because she didn’t merit it, and saying all these terrible racist and homophobic things, and glorifying violence. He once said that the Brazilian dictatorship should have killed 30,000 people instead of 3,000. And so this is the kind of president you have.

And so you have an ideological affinity with Trump. And you have also this question of legitimacy. Now, some of the other governments have both this ideological affinity with the U.S., and also owe them a lot. So you have the government of Colombia, and that’s a right-wing government headed by Ivan Duque. And he was picked by Alvaro Uribe, who was the previous president, and kind of the kingmaker. And he has been tied for a long time to death squads, and by our own intelligence agencies and diplomats he’s been tied to the major drug cartels. And in fact, he stepped down last year in the midst of–from the Senate in a criminal investigation. And he’s very–and they’ve both been very close to the U.S. In fact, last year, Colombia announced that it was going to join NATO, which is a very strange thing, since it’s the North Atlantic Treaty Organization. It’s also something that’s very ominous for Latin America, because it would possibly commit them to joining the United States in any military intervention. And so this is the kind of government you have there. It’s not really a surprise.

SHARMINI PERIES: Let’s just rest with that for a moment, there. I understand that Colombia has been in some pseudocapacity admitted as a part of NATO. And this was, I remember when it broke in the news, this was really unusual. This is the first Latin American country that might become a part of NATO. And according to the NATO convention, any country potentially attacked by any other country that is not a member of NATO, all the NATO countries bond around them, or is bound to by the NATO convention. Now, this would mean if there’s any confrontation between Colombia and Venezuela, all of NATO countries would come to their aid. This is a significant shift in Latin America.

MARK WEISBROT: Well. that’s right. And that’s what we’re kind of going through here, is where do these countries come from? It’s all a big shift. And the U.S. was involved in some of the shift. So for example, in Honduras you have a president who literally stole his his last election in 2017. And this there was no doubt, even Luis Almagro, the head of the OAS, called for a new election, didn’t accept the results. And this was ignored because the Trump administration supported it. But this was something where they stopped the vote count, and the opposition was ahead, and it was almost impossible for them to–for the government to win. And then everything was reversed. And so nobody believes that. And they came to power in a coup that was aided and legitimized by the United States. Hillary Clinton wrote about that in her memoirs.

So you have Honduras. You have Argentina which just got a $50 billion–another right-wing government just got a $50 billion loan from the United States; the largest IMF loan ever. And they upped it to $56 billion after the economy didn’t do very well, as it was forecast by the IMF. So these are all governments that are either close to the U.S. ideologically, they’re right wing, and they’re getting money, in many cases. Ecuador is another one. This is always, often touted because the president Lenin Moreno came from the same party as the prior left president, Rafael Correa. But he quickly moved to the right, and now he’s got $10 billion of money, which is enormous. That’s equivalent of $2 trillion in the U.S., relative to their GDP. And the $4.2 billion of it is from the IMF, and the rest is from other international multilateral lending institutions.

And so you have this combination of U.S. influence and ideological affinity, in some cases like Honduras. And Brazil, by the way. The U.S. supported that coup against Dilma. It actually helped get rid of the prior left governments. If you had the Latin America of just a few years ago, you wouldn’t have any support for this at all. And in fact, we saw that in 2013, when Maduro was elected the first time, and there was absolutely no doubt about the election. And the whole world recognized it except for the United States and the secretary general of the OAS at that time, Jose Miguel Insulza. And then the right wing government of Spain. And then those two peeled off because there was a lot of pressure from South America to recognize the legitimately elected government.

So what the United States has done is managed to transform Latin America in the 21st century. They didn’t do that all by themselves, but they helped wherever they could. They’ve got all these right wing and loyal governments, governments that are very loyal to them, that are part of this coalition of the willing.

SHARMINI PERIES: Now, Mark, let’s shift a little bit here to the European countries. You mentioned Spain, there. But other major European countries have come out and supported the recognition of Juan Guido, and that includes Germany, and France, and UK. I mean, these are big countries. And usually Europe is a bit more cautious about jumping on the bandwagon with the U.S., particularly with the Trump administration that they have a lot of question marks about, in terms of the way Trump has been trashing the European Union; often publicly. Now, why is this coalition of European countries willing to play ball with Trump on Venezuela?

MARK WEISBROT: Well, they generally defer to the United States on Latin America, and they often–some of them, like Germany, will tend to follow Spain’s lead. And so there you do see some pressure, because they did twist the arm of Pedro Sanchez, the prime minister. And that was reported in the press. His foreign minister told El Pais that there was enormous pressure on them to support Trump on this.

And so I think they generally–they don’t have an independent foreign policy most of the time, you know, from the United States, Europe in the whole post-World War II period, but on Latin America especially they tend to go along with the U.S. And so this is a case when they’re doing it. Again, the arm twisting helped in the case of Spain, and that probably brought along some other countries. And Spain is facing an election at the end of April. Things could change after that, because they get a lot of pressure from the media there. It’s similar to the media in Latin America. Very pro-regime change in Venezuela. And so they’re doing it partly under electoral pressure.

But Europe is, you know, it’s problematic. A lot of people see Europe as more progressive than the U.S. And of course it is in terms of healthcare, and education, and internally. But on foreign policy, the general rule–and there are exceptions–but the general rule is they go with the U.S. And a lot of that is because they’re rich countries, and they control the major institutions of global governance. The IMF, the World Bank, the World Trade Organization. And they write the rules of the global economy, and they don’t have even the biggest countries, biggest economies in the world. Like, China as the biggest economy the world. It has no voice in the, you know, the deliberations of Europe and the United States and the G7.

And so that’s how they see the world; their leaders, not necessarily the people. And so it’s not really that surprising, although this is kind of an extreme move. I mean, recognizing Guaido, this is outside the bounds of any kind of diplomatic protocol. You don’t get to choose the president of another country, normally. And it also, as I’ve said before, and a lot of people don’t know this, the recognition of Guaido automatically imposed a trade embargo on Venezuela, because the government can–which is exporting, getting all the foreign exchange of the country and everything you need for food and medicine, comes from the oil sales. The government can’t sell that oil in about three quarters of its markets once the Guaido government is recognized by these countries as the legitimate recipient of any oil sales for the government. So that’s why, you know, things are going to get drastically worse, even worse, very soon there.

SHARMINI PERIES: Now, a place where the Europeans are departing from the U.S. when it comes to this kind of sanctions, and so on, is Iran, where they are upholding the nuclear agreement, and they have also found pathways to have economic activity by establishing a sort of a currency exchange process independent of the U.S. and independent of some of the international banks. Now, if the European Union really wanted to, and they want to put their effort into this and play a mediating role, they have ways in which they can engage with Venezuela and its economy. But there’s not a political will to do so.

MARK WEISBROT: Oh, absolutely. I mean, first of all, even on Iran, I think their response has been very weak. They don’t like the U.S. pulling out of the agreement. But they haven’t done very much. The Iranian economy is getting hit very hard by the sanctions, and the European Union has done very little to try and go around them. And this is a problem. You know, this is a real problem for the world. The United States–there’s a dollar-based financial system in the world that is the major part of the world financial system, and the U.S. is able to do this. But the Europeans could push back so much more against it, and they don’t.

SHARMINI PERIES: All right, Mark, we’ll leave it there for now. As always, I thank you so much for joining us, and we’ll keep this conversation going about Venezuela, because there’s so much that you’re doing, and we’d like to benefit from that.

MARK WEISBROT: Thank you.

SHARMINI PERIES: And thank you for joining us here on The Real News Network.

Trump Budget Would Slash Medicaid by $1.1 Trillion

While giving the bloated Pentagon “even more than it hoped for” by boosting U.S. military spending to $750 billion—an increase of $34 billion from last year—President Donald Trump’s 2020 budget would cut Medicaid by $1.1 trillion over the next decade.

Set to be unveiled on Monday, the president’s budget will call for a total of $2.7 trillion in cuts to safety net programs, environmental protection, food and housing assistance, and foreign aid over ten years, according to a summary reviewed by the Washington Post.

Top House Democrats were quick to declare the president’s request—which will also demand $8.6 billion in border wall funding—dead on arrival.

Rep. Nita M. Lowey (D-N.Y.), chair of the House Appropriations Committee, said the proposal is “not even worth the paper it’s written on.”

Trump’s call for deep cuts to Medicaid—which insures over 70 million low-income Americans—is in line with his administration’s previous budgets and his efforts to kick millions off the program by approving punitive work requirements at the state level.

“Each of the past two Trump budgets has targeted benefits and services for individuals and families of modest means for deep cuts, even as it has supported tax cuts conferring large new benefits on those at the top of the income scale,” noted the Center on Budget and Policy Priorities in a preview of the president’s 2020 request. “If enacted, these cuts would have increased poverty and hardship, leaving more people struggling to afford basics like food and rent.”

Trump is LITERALLY asking working families to pay for corporate tax cuts:

#GOPtaxscam deficit? $1.9T

Trump budget cuts:

$1.1T from Medicaid/health

$327B from antipoverty programs

$207B from student loan programs

$200B from fed retirement/Postal Svc

Total? 1.83 Trillion

— Melissa Boteach (@mboteach) March 11, 2019

Meanwhile, Trump is looking to deliver a huge windfall to the Pentagon. As Foreign Policy reported on Sunday, Trump’s request for $750 billion in military spending exceeds the hike expected by Defense Department officials, who were planning for a $733 billion budget.

To raise the military budget while still complying with congressional spending caps, Trump will propose dumping $165 billion into a war account called the Overseas Contingency Operations (OCO), which is not constrained by spending limits.

Mick Mulvaney, Trump’s budget director and acting chief of staff, has previously slammed the OCO as a “slush fund.”