Godman Sachs Messages Show it Thrived as Economy Fell

NY TIMES– In late 2007, as the mortgage crisis gained momentum and many banks were suffering losses, Goldman Sachs executives traded e-mail messages saying that they would make “some serious money” betting against the housing markets.

The messages, released Saturday by the Senate Permanent Subcommittee on Investigations, appear to contradict statements by Goldman that left the impression that the firm lost money on mortgage-related investments.

In the messages, Lloyd C. Blankfein, the bank’s chief executive, acknowledged in November 2007 that the firm had lost money initially. But it later recovered by making negative bets, known as short positions, to profit as housing prices plummeted. “Of course we didn’t dodge the mortgage mess,” he wrote. “We lost money, then made more than we lost because of shorts.”

He added, “It’s not over, so who knows how it will turn out ultimately.”

In another message, dated July 25, 2007, David A. Viniar, Goldman’s chief financial officer, reacted to figures that said the company had made a $51 million profit from bets that housing securities would drop in value. “Tells you what might be happening to people who don’t have the big short,” he wrote to Gary D. Cohn, now Goldman’s president.

Actions taken by Wall Street firms during the housing collapse have become a major factor in the contentious debate over financial reform. In his weekly radio address on Saturday,President Obama said Wall Street had “hurt just about every sector of our economy” and again pressed the case for tighter regulation. On Monday, Senate Democrats will try to prevent a Republican filibuster in the first major test of the administration’s effort to push through legislation.

Goldman on Saturday denied it made a significant profit on mortgage-related products in 2007 and 2008. It said the subcommittee had “cherry-picked” e-mail messages from the nearly 20 million pages of documents it provided. This sets up a showdown between the Senate subcommittee and Goldman, which has aggressively defended itself since theSecurities and Exchange Commission filed a security fraud complaint against it nine days ago. On Tuesday, seven current and former Goldman employees, including Mr. Blankfein, are expected to testify at a Congressional hearing.

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© COPYRIGHT NY TIMES, 2010

Fed-Ex Discards Injured Worker

TRUTH DIG– Dean Henderson’s career with FedEx ended abruptly when a reckless driver plowed into his company truck and mangled his leg. His doctor will decide this week if it needs to be amputated. No longer able to drive, stripped of value in our commodity culture, he was tossed aside by the company. He became human refuse. He spends most of his days, because of the swelling and the pain, with his leg raised on a recliner in the tiny apartment in Fairfax, Va., he shares with his stepsister. He struggles without an income and medical insurance, and he fears his future.

Henderson is not alone. Workers in our corporate state earn little when they work—Henderson made $18 an hour—and they are abandoned when they can no longer contribute to corporate profits. It is the ethic of the free market. It is the cost of unfettered capitalism. And it is plunging tens of millions of discarded workers into a collective misery and rage that is beginning to manifest itself in a dangerous right-wing backlash.

“This happened while I was wearing their uniform and driving one of their company vehicles,” Henderson, a 40-year-old military veteran, told me. “My foot is destroyed. I have a fused ankle. I have had over a dozen surgeries. It hurts to wear a sock. I was limping pretty badly, but in the spring of 2008 FedEx said I had to come back to work and sit in a chair. It saved them money on workers’ compensation payments. I worked a call center job and answered telephones. I did that for three months. I had my ankle fused in January 2009, and then FedEx fired me. I was discarded. They washed their hands of me and none of this was my fault.”

Our destitute working class is beginning to grasp that Barack Obama and other elected officials in Washington, who speak in a cloying feel-your-pain language, are liars. They are not attempting to prevent wages from sinking, unemployment from mounting, foreclosures from ripping apart communities, banks from looting the U.S. Treasury or jobs from being exported. The gap between our stark reality and the happy illusions peddled by smarmy television news personalities and fatuous academic and financial experts, as well as oily bureaucrats and politicians, is becoming too wide to ignore. Those cast aside are reaching out to anyone, no matter how buffoonish or ignorant, who promises that the parasites and courtiers who serve the corporate state will disappear. Right-wing rage is being fused with right-wing populism. And once this takes hold, a protofascism will sweep across our blighted landscape fueled by a mounting personal and economic despair. Take a look at Sinclair Lewis’ “It Can’t Happen Here.” It is a good window into what awaits us.

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Chris Hedges writes a regular column for Truthdig.com. Hedges graduated from Harvard Divinity School and was for nearly two decades a foreign correspondent for The New York Times. He is the author of many books, including: War Is A Force That Gives Us MeaningWhat Every Person Should Know About War, and American Fascists: The Christian Right and the War on America.  His most recent book is Empire of Illusion: The End of Literacy and the Triumph of Spectacle.

Copyright © 2010 Truthdig, L.L.C.

Photo by Flickr user Travel Eden

Iraqis Outraged as Blackwater Case Gets Thrown Out

ARMY TIMES– Iraqis seeking justice for 17 people shot dead at a Baghdad intersection responded with bitterness and outrage Friday at a U.S. judge’s decision to throw out a case against a Blackwater security team accused in the killings.

The Iraqi government vowed to pursue the case, which became a source of contention between the U.S. and the Iraqi government. Many Iraqis also held up the judge’s decision as proof of what they’d long believed: U.S. security contractors were above the law.

“There is no justice,” said Bura Sadoun Ismael, who was wounded by two bullets and shrapnel during the shooting. “I expected the American court would side with the Blackwater security guards who committed a massacre in Nisoor Square.”

What happened on Nisoor Square on Sept. 16, 2007, raised Iraqi concerns about their sovereignty because Iraqi officials were powerless to do anything to the Blackwater employees who had immunity from local prosecution. The shootings also highlighted the degree to which the U.S. relied on private contractors during the Iraq conflict.

Blackwater had been hired by the State Department to protect U.S. diplomats in Iraq. The guards said they were ambushed at a busy intersection in western Baghdad, but U.S. prosecutors and many Iraqis said the Blackwater guards let loose an unprovoked attack on civilians using machine guns and grenades.

“Investigations conducted by specialized Iraqi authorities confirmed unequivocally that the guards of Blackwater committed the crime of murder and broke the rules by using arms without the existence of any threat obliging them to use force,” Iraqi government spokesman Ali al-Dabbagh said in a statement Friday.

He did not elaborate on what steps the government planned to take to pursue the case.

The shootings led the Iraqi government to strip the North Carolina-based company of its license to work in the country, and Blackwater replaced its management and changed its name to Xe Services.

Five guards from the company were charged in the case with manslaughter and weapons violations. The charges carried mandatory 30-year prison terms, but a federal judge Friday dismissed all the charges.

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By Rebecca Santana- The Associated Press/ Associated Press Writers Katharine Houreld, Saad Abdul-Kadir and Bushra Juhi contributed to this report.

© COPYRIGHT AP, 2010

Another Monsanto Man in Key USDA Post?

GRIST– Like a tractor driven by a drunk, the Obama administration keeps zigzagging on food/ag policy–sometimes veering in the direction of progressive change, other times whipping back toward the agrichemical status quo.

In the last couple of days, there’s been a sharp turn toward the status quo. As I reported yesterday, Obama plucked Islam “Isi” Siddiqui from the nation’s most powerful agrichemical lobby group and made him our chief negotiator on ag issues in global trade talks. This is a major coup for Big Ag. Ramming open foreign markets for our cheap food commodities and pricey ag inputs is critical to the industry’s future profits–and perilous for global food security and the environment.

And today, Obama’s Big Ag side got the best of him again. He tapped Roger Beachy, long-time president of the Danforth Plant Science Center, as chief of the USDA’s newly created National Institute of Food and Agriculture (NIFA). A creation of the 2008 Farm Bill, the NIFA “replaces the Cooperative State Research, Education, and Extension Service, which distributes $200 million in competitive grants and about $280 million in ‘formula funding’ to land-grant universities,” Science blog reports.

Science continues:

The Farm Bill adds another $106 million annually of competitive funding for research into organic farming, biomass, and fruits and vegetables. It also calls for a “distinguished scientist” to be appointed for a 6-year term as director.

So this is a critical post. If the sustainable farming movement is going to scale up and really start providing a large portion of the nation’s calories–and deliver on its potentially huge environmental promises–than we’re going to need a significant commitment of federal research dollars.

And what are we getting with the appointment of Beachy? The Danforth Plant Science Center, nestled in Monsanto’s St. Louis home town, is essentially that company’s NGO research and PR arm. According to its website, the center “was founded in 1998 through gifts from the St. Louis-based Danforth Foundation, the Monsanto Fund (a philanthropic foundation), and a tax credit from the State of Missouri.”

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Photo by flickr user Tim Psych

© COPYRIGHT GRIST, 2010

No More Net Neutrality? New Ruling Eliminates FCC Authority

SALON– The U.S. Court of Appeals for the District of Columbia ruled today [PDF] that the Federal Communications Commission doesn’t have the authority to enforce “net neutrality,” which requires companies to treat all traffic over their networks equally.

The case was brought by Comcast. A little history: the initial case started in 2007, when Comcast customers noticed the company was “throttling,” or slowing/stopping, peer-to-peer network sharing. (Peer-to-peer network sharing has many legitimate uses, but it is most known, of late, for being the way that BitTorrent and other media downloading apparatuses make illegal sharing of copyrighted materials possible).

Why would Comcast care if people were sharing files? For a couple of reasons. Shared media files are often large (think: movie downloads) and take up a lot of bandwidth. Also, Comcast, being a cable company, is in the business of charging people to watch movies and television shows; if people are able to access those programs for free, it loses money. Beyond all of that, Comcast could afford to make P2P sharers angry — in many places, your choice for fast Internet service is Comcast or no one. The fact that Comcast could do this under a thin veil of claiming to be stopping media piracy was just the icing on the cake. The choice to throttle made all kinds of business sense.

Customers, however, were not happy, and two groups filed complaints with the FCC. The FCC told Comcast, “Hey, not cool,” saying the throttling violated the FCC’s “Internet Policy Statement,” which holds that “consumers are entitled to access the lawful Internet content of their choice.” Because that rule already existed, the FCC said it didn’t even need to issue new rules to handle this problem and could, instead, just tell Comcast to knock it off. Comcast agreed. They’d already changed the way they were doing things, so the FCC just made them publish those changes for customers, and said, essentially, if you do this again, we’re gonna make a rule.

Is everyone happy? No. Enter the court challenge. Comcast played along, but it also saw an opening to challenge this FCC ruling. It did so on three points: that the FCC doesn’t have the authority to intervene in how Comcast (and other companies) manage their networks; that the FCC has no real power to adjudicate disputes (that it can only solve problems by issuing rules, not by choosing sides); and that the initial order was “so poorly reasoned as to be arbitrary and capricious.”

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Photo by flickr user Adrienne Serra

© COPYRIGHT SALON, 2010

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