Saturday, June 12, 2010

Fallen to #20, Spiderlegs has...

Artist Charts--Shoegazer
12 Jun 2010

The dream has ended...

The Deepwater Event Horizon

Dig this about Deepwater Horizon and the conditions that led to the rupture and explosion. This has the potential to kill millions of people in Alabama, Florida, and other coastal regions. MILLIONS. I knew some of what is contained in the following, but not much:


The Deepwater Event Horizon

The event horizon metaphor is being widely used among the more dystopic commentators, and it looks appropriate. This is the kind of disaster we can expect to see more often, and worse every time, as Peak Oil drives us to greater extremities to extract ever lessening oil reserves, requiring ever more complex technology and logistics, these being provided in an ever more shoddy way by ever more corrupt corporations. But we can expect the whole mess to be treated and bailed out as Too Big to Fail.

Although it’s tough to penetrate the fog of corporate/government/MSM misinformation, the basic facts seem to be that Transocean, contractor for BP, was drilling into 30,000 feet of rock beneath 5000 feet of sea, seeking an oil reservoir variously projected to be 20-50 million, 100 million, or 1 billion barrels. BP’s own estimate is 100 million, which is probably around the minimum necessary to render the project economically viable in the first place even with taxpayer assistance. The cement casing was installed by Halliburton. The equipment was rated to handle 20,000 PSI but hit an unexpected high pressure zone of  from 60,000 to 75,000 PSI. This ruptured the Blow Out Prevention device, allowing natural gas to separate from the oil, concentrate, and explode. This destroyed the rig, killing 11 workers and sending the wreckage to the bottom a mile down. The rig lacked a simple $500K backup ”acoustic switch” which is standard safety equipment around the world and could have prevented the explosion and subsequent leakage. The Bush administration decreed that backup safety measures didn’t need to be required, that “the market” would voluntarily do whatever was necessary. Obama  endorsed this deregulated status quo.

Since the blowout, oil has been leaking into the Gulf. At first BP, the NOAA, and the Coast Guard closed ranks to claim the flow was 5000 barrels per day, 210K gallons. BP called that a “guesstimate.” The MSM was still repeating this figure as late as yesterday. Meanwhile the official estimates now concede it’s been around 25000-60,000 barrels per day ( & over 1 million gallons). This is the equivalent of an Exxon Valdez every 3 days. 

According to BP’s own prospectus, if the pipe system eroded completely, the leakage could escalate to 163,000 barrels per day, a cataclysmic figure.

They’ve been trying without success to stanch the flow with remote control submarine robots. Burning the oil on the surface doesn’t work well, and spraying chemical dispersal agents also looks insufficient to the magnitude of the problem.

They’ve built three large containment boxes without success, which they hoped to place over the flow, channeling it up through a funnel where it could be controlled. They deployed those by with no success. Since that doesn’t work, the next idea is to drill a relief well (image on the left) to the busted one, using the new conduit to pump in heavy fluid to plug it up. That would take at least three months. (Some, but so far as I can see no one in “authority”, have also discussed or advocated using nukes. The idea would be to seal up the hole by exploding an atom bomb near it. What could go wrong, right?)

Other rigs are being shut down as the slick reaches them. Just weeks after flip-flopping on offshore drilling, Obama has flipped again and now wants the old moratorium back. BP says it will pay all “necessary and appropriate clean-up costs.” (Um, that would be all of them.) Meanwhile the fishermen whose livelihoods have just been destroyed, perhaps permanently, have rushed to join the clean-up effort. BP tried to force them to sign waivers relinquishing in perpetuity all right to sue in exchange for the $5000 payout they were offering. They’ve since retreated on that one, but it seems that legally they don’t have much to fear.

Apparently federal law itself restricts BP’s liability for damages to the absurd figure of $75 million.

Now we see why BP doesn’t have insurance. Why bother – the law itself winks at you and says, Go ahead. Obviously we have another moral hazard situation here. Obviously BP calculated that if anything ever goes wrong the government will socialize the losses and bail them out. (It looks like a foregone conclusion that it’ll be impossible to get effective insurance in the future. But we can expect governments to formally guarantee the costs, I guess.)

This example of corrupt, renegade law is extreme even by the standards of this criminal government.
The effects of this are hard to predict. At best the destruction is likely to be very bad. The Gulf shrimp fishery has already been all but written off. All other fisheries are likely to be severely affected if not completely wiped out. Tourism is probably already being harmed, and will be destroyed to whatever extent the oil fouls the beaches of Florida and elsewhere. By mid-June, the economic damages all around the Gulf are likely to be in the tens of billions of dollars, while the physical mess will take years to clean up.

Whenever oil is drilled, oil is not the only harmful by-product. Several extremely dangerous compounds are also released, like: hydrogen sulfide, benzene, methylene chloride, toluene, and xylene. These compounds are rated to be safe only up to 61 parts per billion (PPB), but are registering at much higher levels. According to the EPA:
Hydrogen Sulfide: its safe amount is 5-10 PPB, but in the Gulf, it has reached levels of 1200 PPB.
Benzene: its safe amount is 0-4 PPB, but in the Gulf has reached levels of 3000 PPB.
Methylene chloride: its safe amount is 61 PPB, but in the Gulf has reached levels of 3000-3400 PPB.
The effects on ecosystems and endangered species like sea turtles would be incalculable. Wherever the wind and sea carry the toxic fumes and residues, bringing poisons like hydrogen sulfide, methylene chloride, benzene, toluene, and xylene, they will bring illnesses ranging from headaches and nausea, to cancer and other severe organic diseases. Since the containers failed, and the new well has to be drilled, taking three months or more, and if that works, by then the damages might be in the hundreds of billions, with the entire Gulf economically devastated for years to come. By itself, this could be the slow death of humanity.

All this is leaving out of account the hurricane wild card.

So far Gulf shipping is being diverted around the spill, but if the affected area got big enough it could choke off Gulf seaborne trade completely.

The dispersant Corexite (which BP is rumored to still be using) is only safe to 2.1 Parts Per Million (PPM). It has the property of being able to phase transition upon reaching supersaturation--meaning that when the Corexite mixes with the warm waters of the Gulf, it will evaporate and condense into clouds, and then rain this toxic shit wherever the rain falls. This will be disastrous.

At the Offshore Technology Conference, where the attitude is Party On!, and everyone’s psyched about potential disaster capitalist opportunities, the NYT reports this in the blandest of tones. This is reminiscent of a pro-nuke NYT piece some years back which argued that because Three Mile Island wasn’t as bad as Chernobyl, we should take that not as a caution and an example of receiving good luck and a second chance, but rather as the green light to plunge ahead. So the NYT is propagating the same party line today regarding offshore drilling: We should take this disaster as an encouraging sign, not a discouraging one. It’s as if you drove home one night badly drunk, miraculously didn’t kill anyone or wreck your car, and your conclusion is not to be appalled and vow never to do that again, but to say, “I did it once and got away with it, so let’s keep doing it.”

Just for the record, even the Bush administration conceded that offshore drilling would never have more than a miniscule effect on imports or gas prices. The fact is that anyone who was sincerely concerned about America's foreign oil dependence would oppose "Drill Baby Drill" because he'd want to save that oil for a day when we might lose access to foreign markets.

The push to drill every domestic drop is intended to accomplish nothing but the liquidation of American public property for the private profit of the oil rackets.

So there’s where we are today, and there’s the more likely, “less bad” effects we can look forward to. But the disaster can become far more severe. If both the containers and the relief well fail, some other “solution” would have to be found. No one can say what could be done, how long it would take, how much it would cost. The Gulf’s environmental and economic devastation would be complete. It would be an economic dead zone for a generation or more. If the winds and currents coincide with the right malevolence, the oil could leak out into the Gulf Stream, which could carry it up the Atlantic seaboard, strewing coastal destruction all the way. In principle, if enough oil leaked it could affect all the world’s oceans.

Beyond the direct evisceration of the Gulf economy, the knock-on effects could be extraordinary. It could constitute the tipping point to bring down the whole Debt Tower.

On the level of the real economy, the devastation of Gulf businesses could reverberate. There could be a domino effect through all their bank loans as they’re forced to default. The already wounded CRE market could take another hit. At the same time the federal government is spending tens or hundreds of billions to deal with the crisis, tax revenues from the region would plummet as a regional Depression sets in. This probably would be the end of any Fed plans to further raise interest rates. Insurance claims would be astronomical. Unemployment would spike even further. The disruption of oil production and imports could lead to spot shortages, with commensurate effects on gas prices. I already mentioned the questionable future of Gulf shipping. All the alleged ”green shoots” would be stomped out once and for all.

This is a replay of the way the banksters crashed the economy. Just like with the finance sector, today’s vast expenditure and risk for the sake of drilling to extract a few measly drops of oil serves no social function, but only extracts looted profits for a few gangsters. All the cost and risk is socialized. It’s the same greed, the same recklessness, the same ideology of deregulation and moral hazard. It’s the same game of profiting during the run-up, and then being bailed out during the crash, while hunting for disaster capitalist opportunities. The costs of this will be very high even in the best-case scenario, and BP has no way to pay the costs, nor does it intend to. Just like all the oil rackets, it was always planning to socialize the costs of the inevitable disaster. The only question is whether it’ll also get a bailout. As I said, there’s already a bailout law absolving it of responsibility for the damages it inflicts. Presumably that’s only the beginning.

Obama is trying to talk tough, saying “we’ll keep the boot on BP’s neck”. (They say that’s not his line, but gotten from from Interior Secretary Salazar.) That rhetoric, coming from him, is even more pathetic than his squeaking about ”fat cats” in December. When Obama talks that way, I take it as evidence that he’s psychologically preparing himself for another looting expedition. he wants to assure himself, through pseudo-tough talk, that he really did intend to fight for the people this time, but that some mysterious circumstance beyond his control prevented him. Of course in the same breath as his pipsqueaking tough-guy talk he continues with his pro-corporate backpedaling, saying we shouldn’t blame BP for the whole disaster.

That’s not only morally absurd but a direct logical self-contradiction. If they’re really not such bad guys, why the boot on the neck? Wouldn’t the situation call for a collegial exchange of views toward a mutually beneficial solution? We know by now that’s always what this corporatist really thinks, no matter what the level of crime. (I’d be more likely to think Obama was getting serious if he dropped the tough guy talk, which doesn’t become him, but instead maintained his professorial demeanor while purging his talk of all pro-corporate amicability, instead calmly declaring his resolve to impose justice. That would be a completely new message, while delivered in the real Obama tone. I don’t expect to ever hear it.)

He sure picked the right time to throw in his lot with “Drill Baby Drill”. He said the issue of oil spills was a “tired debate”. Heckuva job. My opinion of his vaunted intelligence and political skill just keeps soaring… 
I won’t bother hoping people will learn a lesson. Since I became a Peak Oiler I’ve believed mankind will liquidate all fossil fuel reserves, for as long as it’s physically and economically possible. I gave up on the idea that political resistance will ever stop it.

At most, maybe there can be an indirect political effect. While I can believe that Obama will flip-flop again after his first flip-flop, that would only be a temporary respite. If this disaster really could kill offshore drilling (and I’m not saying I think it can), it would only be because everyone perceives the economics including their political aspect, namely the government’s political ability to extend an implicit or explicit Too Big To Fail guarantee to these drilling projects, to be impossible.

What will this do to oil prices? In theory the effect so far shouldn’t be severe, since relative to the global production this well is a drop in the barrel. But if the spill’s advance shuts down other rigs, and if it interferes with imports from Mexico and Venezuela, and if the industry looks ahead to the possibly chilling effects on deepwater drilling in general (always being touted as one of the industry’s great hopes), who knows how it might rattle the futures market, with who knows what reverberations through all the markets. If speculators decide oil is going up, that’s always a self-fulfilling prophecy (and of course civilization learns nothing each time, and these criminals continue to be allowed to prey upon us). And if in turn they decide that means trouble for the rest of the economy, we might already think we hear the sucking sound of investment rushing out of Obama and Wall Street’s pride and joy, the stock bubble. Stocks must also tremble in general at the jitters over how bad the damage will be and who’s going to pay for the cleanup.

Look for $6-7 per gallon gas at the pumps by the end of the summer...

Final: United States 1, England 1

June 12, 2010, 9:55 AM

The United States gets a historic result, a 1-1 draw with England to open the 2010 World Cup for both sides. Steven Gerrard opened the scoring in the fourth minute, but the Americans equalized on one of the craziest goals in World Cup history.

England keeper Robert Green allowed Clint Dempsey’s 25-yard shot to slip through his hands — a stop Green would have made another 200 straight times before fumbling it again — and across the line in the 40th minute to tie the score.

Both teams came close in an often thrilling second half, with England getting the majority of the chances. But the Americans held fast — led by a near-flawless performance by defender Steve Cherundolo, who touched the ball more than any other U.S. player. American keeper Tim Howard was also helped when two England forwards, Emile Heskey and Shaun Wright-Phillips, shot right into his hands.

Now the Americans are over their biggest hurdle and face more manageable foes, Algeria and Slovenia, in their bid to advance. But remember 2006, when the United States drew with Italy, but lost to Ghana and the Czech Republic.

Look below to see how the whole thing unfolded.

And here's Clint Dempsey's equalizer:

Obama the far-left radical

Is there no end to his far-left radical agenda?

Next bubble: Corporate bonds...and stocks

by Jonathan Stempel
NEW YORK | Jun 9, 2010

(Reuters) - Tulip bulbs. Florida real estate. The Nifty Fifty. Gold. Japanese real estate. The Internet. Housing.

History is littered with asset bubbles where investors piled into the next hot thing, only to lose much or all of their investments once the bubble bursts.

One leading strategist said the next bubble could be in something more mundane -- high-quality corporate bonds -- as investors burned after U.S. stocks fell by half from late 2007 to early 2009 flock to perceived safety.

And then, perhaps down the road, it could be the turn of some equities to become overheated again.

"Retail investors buying bonds today, at a time when the supply of corporate bonds is shrinking ... they're chasing a bubble," Tom Lee, chief  U.S. equity strategist at JPMorgan Chase & Co, said Wednesday at the Reuters Investment Outlook summit in New York.

"We had a credit bubble, a mortgage and housing bubble, and that caused equities to collapse," Lee said. "I wouldn't rule out equities as the next area where bubbles could emerge, but I don't think it's going to start in 2010."

Many speakers at the Reuters Investment Summit have said individual investors remain cautious on stocks, despite a 13-month run-up that ended in April, saying net U.S. domestic stock fund inflows have been roughly nil.

In contrast, bonds are attracting bushels of cash. The intermediate-term bond fund Pimco Total Return, the world's largest mutual fund, has some $227.9 billion of assets, according to Morningstar Inc. And the average high-quality corporate bond yields 4.5 percent, a level last seen in 2004.

The love for bonds might not last, Lee said.

"Have Americans ever been satisfied with earning a steady rate of return?" he said. "What we have in American history, I think in capitalism, is rolling bubbles, whether it's real estate, commodities, land speculation, emerging markets, time shares.... Basically, savers chase the next bubble, and then when that bubble shifts, they will move to the next one."


Lee said prices on 10-year Treasuries and high-grade corporate bonds appear rich relative to the price-earnings ratio of companies in the Standard & Poor's 500 .SPX.

Treasuries trade at about a 33 multiple, or the number of years it takes to earn $1 from $1 of principal, while corporate bonds trade around a 20 multiple, he said. But more than half the S&P 500 stocks trade below a 10 multiple, he said.

"Corporate balance sheets are pristine today, so the bond multiples are justified," he said. "But the equity multiples are ridiculously low."

Lee said the average yield on corporate bonds is just 2 percentage points higher than the S&P 500 dividend yield, the smallest differential since 1967.

"Corporate bonds are already (trading) at 108" cents on the dollar, he said. "If they were at 130, what would you do if you were General Mills (Inc)? Buy back all your bonds, and issue new bonds at 3 percent. And then what does it mean for your stock? All of a sudden, maybe you de-equitize by 30 percent, because your cost of capital can justify it."

General Mills bonds have risen in price. Its 5.65 percent notes maturing in 2019, sold in January 2009 at 99.91 cents on the dollar, traded Wednesday at 111.76 cents, yielding 4.03 percent, according to the bond pricing service Trace.

Kirstie Foster, a spokeswoman for the cereal maker, declined to comment, citing a "quiet period" before General Mills reports quarterly results.

Lee said improved corporate credit quality historically heralds increasing stock prices and could do so again.

He expects the S&P 500 index to rise roughly 20 percent by year end to about 1,300, saying it could easily support a price-earnings multiple above 14, compared with about 12 now.

"I think you get the no-brainer to buy stocks for the next decade, unless you just thought we were going to have the world economy shrink," he said, "or if we're Japan."

Obama's Afghanistan Strategy: The News is Bad

Public skepticism about the war is growing. 53% say war "not worth fighting"
by Jim Lobe

WASHINGTON - While U.S. officials insist they are making progress in reversing the momentum built up by the Taliban insurgency over the last several years, the latest news from Afghanistan suggests the opposite may be closer to the truth.

People gather around the coffins of men who were killed in the Kandahar attack. (Reuters) Even senior military officials are conceding privately that their much-touted new counterinsurgency strategy of "clear, hold and build" in contested areas of the Pashtun southern and eastern parts of the country are not working out as planned despite the "surge" of some 20,000 additional U.S. troops over the past six months.

Casualties among the nearly 130,000 U.S. and other NATO troops now deployed in Afghanistan are also mounting quickly.

Four U.S. troops were killed Wednesday when Taliban fire brought down their helicopter in the southern province of Helmand, the scene of a major U.S. offensive centered on the strategic farming region of Marja over the past several months.

That brought the death toll of NATO soldiers just this week to 23, including 10 killed in various attacks around the country on Monday, the deadliest day for NATO forces in two years.

"It's been a tough week," Pentagon spokesman Bryan Whitman said Wednesday.

Seventeen of the 23 were U.S. soldiers, bringing the total U.S. death toll in and around Afghanistan since the U.S. intervened to oust the Taliban from power in late 2001 to more than 1,100, according to the independent iCasualties website.

While senior military officials attributed the steadily rising toll to Washington's surge of a total of 30,000 additional troops by next month, as well as the beginning of the Taliban's annual summer offensive, none other than Secretary of Defense Robert Gates warned that the U.S. and its NATO allies were running out of time to show results.

"The one thing none of the (alliance's) publics...including the American public, will tolerate is the perception of stalemate in which we're losing young men," he said in London Wednesday on the eve of a key NATO ministerial meeting in Brussels this week at which Afghanistan will top the agenda and Gates himself is expected to prod his interlocutors to fulfil pledges to provide more troops.

"All of us, for our publics, are going to have to show by the end of the year that our strategy is on the track, making some headway," he said.

Obama, who last November set a July 2011 as the date after which Washington would begin to withdraw U.S. troops from Afghanistan, has said his administration will conduct a major review of U.S. strategy and whether it is working at the end of this year.

The latest polling here shows a noticeable erosion of support for Washington's commitment to the war compared to eight months ago when Obama agreed to the Pentagon's recommendations to send the 30,000 additional troops to Afghanistan to bring the total U.S. presence there to around 100,000.

An additional 34,000 troops from NATO and non-NATO allies are supposed to be deployed there by year's end.

According to a Washington Post/ABC News poll released Thursday, 53 percent of respondents said the war in Afghanistan, which last month, according to most measures, exceeded the Vietnam conflict as the longest-running war in U.S. history, was "not worth fighting". That was the highest percentage in more than three years.

The same poll found that 39 percent of the public believe that Washington is losing the war, compared to 42 percent who believe it is winning.

While public skepticism about the war appears to be growing, the foreign policy elite, including within the military, also seems increasingly doubtful for a number of reasons.

Disillusionment with President Hamid Karzai - already running high as a result of last year's rigged elections and his tolerance for government and family corruption - gained new momentum last weekend with the forced resignations of his two top security officials, Interior Minister Hanif Atmar and intelligence chief Amrullah Saleh, who were considered by Western officials as among the most competent of Karzai's cabinet members.

The two men reportedly objected strongly to Karzai's order to release all accused Taliban prisoners who are being held without enough evidence for trials.

The order was seen as the latest in a series of moves designed to reconcile with the Taliban leadership, a step that Washington has strongly opposed until now.

Among other things, the U.S. fears that such a move could prompt leaders of the Northern Alliance, which consists of non-Pashtun groups, to break with the government and prepare for renewed civil war of the kind that devastated Afghanistan before the Taliban first took control in 1996.

Karzai's bid for reconciliation stems from his conviction, according to a number of accounts, that U.S. strategy is unlikely to succeed in weakening - let alone defeating - the Taliban and that his hold on power will ultimately rely on reaching an accommodation with them.

That impression may well be grounded in an accurate assessment of the way Washington's counterinsurgency strategy is actually playing out.

Indeed, the Marja campaign, which was heralded as a major test of Washington's new strategy when it was launched in February, appears to be faltering badly. Late last month, Washington's overall military commander, Gen. Stanley McChrystal, even referred to it as "a bleeding ulcer".

While it initially succeeded in "clearing" Taliban from the region McChrystal's pledge that U.S. troops would bring with them an Afghan "government in a box" that would provide basic security and social services proved, as a feature story in Thursday's Washington Post described it, "largely empty".

As a result of local disillusionment with the police and the very few Afghan civilian officials that followed the U.S. military into the area, insurgents have regrouped and in some areas regained the offensive, according to the latest reports. One recent study found that the majority of the population had become more antagonistic to NATO forces than was the case before the operation began.

The Marja experience has cast doubt on a yet more ambitious and strategically critical operation planned for Kandahar.

While Washington had initially planned to launch a major military operation to "clear" Taliban from neighborhoods in and around the city before introducing the civilian component of the counterinsurgency strategy, it has now reversed the order in hopes of not alienating the local population as it did in Marja.

But the presence of more police and civilian officials will no doubt require a build-up of NATO troops to protect them, particularly in light of a stepped-up and highly effective Taliban campaign to intimidate government officials who are perceived as cooperating with the Western forces by assassinating selected targets, including even low-level bureaucrats.

How can the 'War on Drugs' succeed if Prohibition laws failed?

America's Prohibition laws were meant to cut crime and boost morality – they failed on both fronts. So how can the 'War on Drugs' ever succeed? It can't.
by Johann Hari
Friday, 11 June 2010

Since we first prowled the savannahs of Africa, human beings have displayed a few overpowering and ineradicable impulses—for food, for sex, and for drugs. Every human society has hunted for its short cuts to an altered state: The hunger for a chemical high, low, or pleasingly new shuffle sideways is universal. Peer back through history, and it's everywhere. Ovid said drug-induced ecstasy was a divine gift. The Chinese were brewing alcohol in prehistory and cultivating opium by 700 A.D. Cocaine was found in clay-pipe fragments from William Shakespeare's house. George Washington insisted American soldiers be given whiskey every day as part of their rations. Human history is filled with chemicals, come-downs, and hangovers.

Yet in every generation, there are moralists why try to douse this natural impulse in moral condemnation and burn it away. They believe that humans, stripped of their intoxicants, will become more rational or ethical or good. They point to the addicts and the overdoses and believe they reveal the true face - and the logical endpoint - of your order at the bar or your roll-up. And they believe it can be ended, if only we choose to do it. Their vision holds an intoxicating promise of its own.

Their most famous achievement - the criminalisation of alcohol in the United States between 1921 and 1933 - is one of the great parables of modern history. Daniel Okrent's superb new history, 'Last Call: The Rise and Fall of Prohibition', shows how a coalition of mostly well-meaning, big-hearted people came together and changed the Constitution to ban booze. On the day it began, one of the movement's leaders, the former baseball hero turned evangelical preacher Billy Sunday, told his ecstatic congregation what the Dry New World would look like: "The reign of tears is over. The slums will soon be only a memory. We will turn our prisons into factories and our jails into storehouses. Men will walk upright now, women will smile, and the children will laugh. Hell will be forever rent."

The story of the War on Alcohol has never needed to be told more urgently - because its grandchild, the War on Drugs, shares the same DNA. Okrent only alludes to the parallel briefly, on his final page, but it hangs over the book like old booze-fumes - and proves yet again Mark Twain's dictum: "History doesn't repeat itself, but it does rhyme."

There was never an America without chemical highs. The Native Americans used hallucinogens, and the ship that brought John Winthrop and the first Puritans to the continent carried three times more beer than water, along with ten thousand gallons of wine. It was immediately a society so soaked in alcohol that it makes your liver ache to read the raw statistics: by 1830, the average citizen drank seven gallons of pure alcohol a year. In 1839, an English traveller called Frederick Marryat wrote: "I am sure that Americans can fix nothing without a drink. If you meet, you drink; if you make acquaintance, you drink; they quarrel in their drink, and they make up with a drink. They drink because it is hot; they drink because it is cold... They commence it early in life, and the continue it until they soon drop into the grave."

America was so hungry for highs that when there was a backlash against all this boozing, the temperance movement's initial proposal was that people should water down their alcohol with opium.

It's not hard to see how this fug of liquor caused problems, as well as pleasure - and the backlash was launched by a furious housewife with eight children from a small town in Cincinnati. One Sunday in 1874, Eliza Thompson - a woman who had never spoken out on any public issue before - stood before the crowds at her church and announced that America would never be free or godly until the last whisky bottle was emptied onto the dry earth. A huge crowd of women cheered: they believed their husbands were squandering their wages at the saloon.

They marched as one to the nearest bar, where they all sank to their knees and prayed for the soul of its owner. They refused to leave until he repented. They worked in six hour prayer shifts on the streets, until the saloonkeeper finally appeared, head bowed, and agreed to shut it down. This prayerathon then moved around every alcohol-seller in the town. Within ten days, only four of the original thirteen remained, and the rebellion was spreading across the country.

It was women who led the first cry for Temperance, and it was women who made Prohibition happen. A woman called Carry Nation became a symbol of the movement when she travelled from bar to bar with an oversized hatchet and smashed them to pieces. Indeed, Prohibition was one of the first and most direct effects of expanding the vote. This is one of the first strange flecks of gray in this story: the proponents of prohibition were primarily progressives - and some of the most admirable people in American history. The pioneering suffragist Susan B Anthony gave her first public speech demanding a booze ban. The ex-slave and abolitionist Frederick Douglas said: "If we could make the world sober, we would have no slavery." America's greatest Socialist, Eugene V. Debs, said liquor was a capitalist tool to render the workers supine.

The pioneers of American feminism believed alcohol was at the root of men's brutality towards women. The anti-slavery movement saw alcohol addiction as a new form of slavery, replacing leg irons with whisky bottles. You can see the same left-wing prohibitionism today, when people like Al Sharpton says drugs must be criminalized because addiction does real harm in ghettoes.

Of course, there were more obviously sinister proponents of Prohibition too, pressing progressives into weird alliances. The Ku Klux Klan said that "nigger gin" was the main reason why oppressed black people were prone to rebellion, and if you banned alcohol, they would become quiescent. The dry newspaper the Nashville Tenessean wrote: "The Negro, fairly docile and industrious, becomes, when filled with liquor, turbulent and dangerous and a menace to life, proporty, and the repose of the community." And of course there were hints that white women were in greater danger: one Congressman said alcohol "increases the menace of the black man's presence."

This, too, is still there in America's current strain of prohibition. Powder cocaine and crack cocaine are equally harmful, but crack - which is disproportionately used by black people - carries much heavier jail sentences than powder cocaine, which is disproportionately used by white people.

It was in this context that the Anti-Saloon League rose to become the most powerful pressure group in American history, and the only one to ever change the constitution through peaceful political campaigning. They announced their movement "was begun by Almighty God." In fact, it was begun by a little man called Wayne Wheeler, who was as dry as the Sahara and twice as overheated. One of Wheeler's friends said of him: "Like most humourless men, he had to make life into a crusade to make sense of it." Okrent compares him to Ned Flanders, but he was a political genius, maneuvering politicians of all parties into backing a ban. He made them change the school curriculum so children were taught that "the majority of beer drinkers die of dropsy" because it is "a narcotic poison [that will] deaden or paralyze the brain."

Wheeler and the Prohibitionists had a structural advantage over his enemies. As the writer George Ade pointed out: "The Non-Drinkers were organising for fifty years but the Drinkers had no organization whatsoever. They had been too busy drinking." The League succeeded in 1921, when the Eighteenth Amendment came into effect, and it became a crime to drink alcohol anywhere in the United States. They celebrated the arrival of Utopia - and the inevitable dysfunctions of prohibition began.

When you ban a popular drug that millions of people want, it doesn't disappear. Instead, it is transferred from the legal economy into the hand of armed criminal gangs. Across America, gangsters rejoiced that they had just been handed one of the biggest markets in the country, and unleashed an Armada of freighters, steamers, and even submarines to bring booze back. Nobody who wanted a drink went without. As the journalist Malcolm Bingay wrote: "It was absolutely impossible to get a drink, unless you walked at least ten feet and told the busy bartender in a voice loud enough for him to hear you above the uproar."

So if it didn't stop alcoholism, what did it achieve? The same as prohibition does today - a massive unleashing of criminality and violence. Before prohibition, the saloon-keepers could defend their property and their markets by going to the police if they were threatened. After prohibition, the bootleggers could only defend theirs with guns - and they did. As the legendary lawyer Clarence Darrow explained: "The business pays very well, but it is outside the law and they can't go to court, like shoe dealers or real estate men or grocers when they think an injustice has been done them, or unfair competition has arisen in their territory. So, they naturally shoot." Massive gang wars broke out, with the members torturing and murdering each other first to gain control of and then to retain their patches. Thousands of ordinary citizens were caught in the crossfire.

The icon of the new criminal class was Al Capone, a figure so fixed in our minds as the scar-faced King of Charismatic Crime, pursued by the rugged federal agent Eliot Ness, that Okrent's biographical details seem oddly puncturing. Capone was only 25 when he tortured his way to running Chicago's underworld. He was gone from the city by the age of 30, and a syphillitic corpse by 40. But he was an eloquent exponent of his own case, saying simply: "I give to the public what the public wants. I never had to send out high pressure salesmen. Why, I could never meet the demand."

By 1926, he and his fellow gangsters were making $3.6bn (in 1926 money!). To give some perspective, that was more than the entire expenditure of the US government. The criminals could outbid and outgun the state. So they crippled the institutions of a democratic state and ruled, just as drug gangs do today in Mexico, Afghanistan, and ghettoes from South Central Los Angeles to the banlieues of Paris. They have been handed a market so massive that they can tool up to intimidate everyone in their area, bribe many police and judges into submission, and achieve such a vast size the honest police couldn't even begin to get them all. The late Nobel Prize winning economist Milton Friedman said: "Al Capone epitomizes our earlier attempts at Prohibition; the Crips and Bloods epitomize this one."

Occasionally, the alcohol gangs would have "Peace Conferences" in Atlantic City where they would divide up the country, fix prices, and agree to stay out of the other's territory - and violence would go down. But then the police would try to take out one of the many gangs, and war would break out again to seize control of the newly-available territory. This dynamic explains something that might appear, at first, to be a paradox: the more the police try to enforce prohibition, the worse the drug violence becomes. Since Mexican President Felipe Calderon tried to knock out the heads of the drug gangs, 40,000 people have been killed. Each killing triggers a new war for the dead dealer's patch.

Of course excessive alcohol and drug use can cause terrible harm: I have friends whose lives have been ruined by it. But the harm caused by prohibition soon outweighs the harm caused by the drug itself - whether it's alcohol or cannabis or cocaine. An appalled President Hoover soon said in private that prohibition had caused "a complete breakdown in Government" in Detroit with "indiscrimiate shooting on the river." Sound familiar?

One insight, more than any other, ripples down from Okrent's history to our own bout of prohibition. Armed criminal gangs don't fear prohibition: they love it. He has uncovered fascinating evidence that the criminal gangs sometimes financially supported dry politicians, precisely to keep it in place. They knew if it ended, most of organised crime in America would be bankrupted. When Michael Levine, one of America's top narcotics agents, went undercover in the 1980s and 1990s with la Mafia Cruenza, the Bolivian cocaine cartel, he discovered that, as he puts it, "not only did they not fear our war on drugs, they actually counted on it." The cartel's boss, Jorge Roman, told him the drug war was "a sham on the American tax payer" and bragged it was "actually good for business." When Levine told his boss, the officer in charge of the US drug war in South America, about this, he replied: "Yeah, we know it doesn't work, but we sold [the War on Drugs] up and down the Potomac."

So it's a nasty irony that Prohibitionists try to present legalizers - then, and now - as "the bootlegger's friend" or "the drug-dealer's ally." Precisely the opposite is the truth. Legalizers are the only people who can bankrupt and destroy the drug-gangs, just as they destroyed Capone. Only the prohibitionists can keep them alive.

Once a product is controlled only by criminals, all safety controls vanish - and the drug becomes far more deadly. After 1921, it became common to dilute and relabel poisonous industrial alcohol, which could still legally be bought, and sell it by the pint-glass. This "rotgut" caused epidemics of paralysis and poisoning. For example, one single batch of bad booze permenantly crippled 500 people in Wichita in early 1927 - a usual event. That year, 760 people were poisoned to death by bad booze in New York City alone. So many people became partially paralysed by an industrial alcohol known as 'Jake' that a shuffling, stumbling inability to walk was known 'Jake leg.' Wayne Wheeler persuaded the government not to remove fatal toxins from industrial alcohol, saying it was good to keep this 'disincentive' in place.

Prohibition's flaws were so obvious that the politicians in charge privately admitted the law was self-defeating. Warren Harding brought $1800 of booze with him to the White House, while Andrew Mellon - in charge of enforcing the law - called it "unworkable." Similarly, the last three Presidents of the US have been recreational drug users in their youth. If the law was enforced in full, they would all have been ineligible to vote, never mind enter the Oval Office. Once he ceased to be President, Bill Clinton called for the decriminalisation of cannabis, and Obama probably will too. Yet in office, they continue to mouth prohibitionist platitudes about "eradicating drugs", and insist the rest of the world's leaders resist the calls for greater liberalisation from their populations and instead "crack down" on the drug gangs - no matter how much violence it unleashes.

The need to mouth this script can lead even the sharpest brains into unwitting absurdities. Obama recently praised Calderon for his "crackdown" on drugs by - with no apparent irony - calling him "Mexico's Eliot Ness." Yes: he praised an enforcer of drug prohibition by comparing him to an enforcer of alcohol prohibition. Obama should know that Ness came to regard his War on Alcohol as a disastrous failure, and he died a drunk himself - but drug prohibition addles politicians' brains just as drugs addle a chronic addict's.

By 1928, the failure of alcohol prohibition was plain - yet its opponents were demoralised and despairing. It looked like a fixed and immovable part of the American political landscape, since it would require big majorities in every state to amend the Constitution again. Clarence Darrow wrote that "thirteen dry states with a population of less than New York State alone can prevent repeal until Haley's Comet returns," so "one might as well talk about taking a summer vacation of Mars."

Yet it happened. It happened suddenly and completely. Why? The prohibitionists made a serious miscalculations: they reacted to their failure by demanding the laws be tightened even more. Misdemeanours were turned into felonies - and it threw up a series of judgements shocked America. For example, one 48 year old mother called Etta Mae Miller with ten children was given a life sentence - for selling two pints of liquor to an undercover cop.

But the biggest answer is found in your wallet, with the hard cash. After the Great Crash, the government's revenues from income taxes collapsed by 60 percent in just three years, while the need for spending to stimulate the economy was sky-rocketing. The US government needed a new source of income, fast. The giant untaxed, unchecked alcohol industry suddenly looked like a giant pot of cash at the end of the prohibitionist rainbow. They needed it. Could the same thing happen today, after our own Great Crash? The bankrupt state of California is about to hold a referendum to legalize and tax cannabis, and Governor Arnold Schwarzenegger has pointed out that it could raise massive sums. Yes, history does rhyme.

Many people understandably worry that legalization would cause a huge rise in drug use - but the facts suggest this isn't the case. Portugal decriminalized the personal possession of all drugs in 2001, and - as a study by Glenn Greenwald for the American Enterprise Institute found - it had almost no effect at all. Indeed, drug use fell a little among the young. Similarly, Okrent says the end of alcohol prohibition "made it harder, not easier, to get a drink... Now there were closing hours and age limits and Sunday blue laws, as well as a collection of geographic prosecriptions that kept bars or package stories distant from schools, churches and hospitals." People didn't drink much more. The only change was that they didn't have to turn to armed criminal gangs for it, and they didn't end up swigging poison.

Who now defends alcohol prohibition? Is there a single person left? This echoing silence is suggestive. Ending drug prohibition seems like a huge heave, just as ending alcohol prohibition did. But when it is gone, when the drug gangs are a bankrupted memory, when drug addicts are treated not as immoral criminals but as ill people needing healthcare, who will grieve? American history is pocked by utopian movements that prefer glib wish-thinking over a hard scrutiny of reality, but they always crest and crash in the end.

There will always be millions of people who want to get drunk or stoned or high. The only question is whether their needs are met to by mafias and militias, or by legal and regulated businesses. Okrent's dazzling history leaves us with one whisky-sharp insight above all others. The War on Alcohol and the War on Drugs failed because they were, beneath all the blather, a war on human nature.

The new two income trap.

The financial raid against the middle class – 9 of the 10 largest occupations in the U.S. have median wages between $8 per hour and $14per hour. The middle class is inheriting a new serfdom drowning in mountains of debt.

The war against the  middle class is silent and has grown since the recession started.  We don’t hear much about this because in large part, those falling out of the middle class don’t have the funds to purchase airtime with the media who is wedded to Wall Street.  40 million Americans now receive food assistance.  How often do we hear about this?  Each month we add tens of thousands to this number yet we are somehow in a recovery?  A recovery for which group of people is the question we should be asking.  Clearly the middle class isn’t feeling this recovery.  Nearly 17 percent of our population is underemployed.  But then we add 20 percent of those who are employed who are part of the working poor.  If we look at the top 10 occupational sectors in the U.S. we start to realize that many in the middle class are giving up higher paying jobs to service the needs of a tiny elite class.

Take a look at the top 10 occupational sectors in the U.S.:

Source:  BLS

Keep in mind this group is part of the “fully employed” class.  When we think of those who are employed we tend to think that most work in sectors that offer them a decent wage.  That is not the case at all.  In fact, when we look at the median household income of $52,000 we realize that most people are working in the service sector with lower wages and only boost the stat higher because of the two income trap.  9 out of 10 of the above jobs from cashiers to janitors make median wages from $8 to $14.
“To even reach the middle class median income, someone would need to make $25 an hour.  So even looking at the higher end of the above pay scale for these jobs, you would need to have two people making the top $14 to squeak out the necessary $25 per hour to make the $52,000 median income figure.  Keep in mind the above is the top employment sectors in our economy.  In the past where we had a bulk of our population working in manufacturing making the median income wage with one job, now we have given that up for two jobs in service sector work.  I’m not sure many in the middle class wanted to make that trade off.”
Wall Street wouldn’t mind if most Americans were part of the working poor so long as they can keep their exploiting ways going.  In fact, these banks want to sink these people even further by creating this large class of middle class debt serfdom.  Enormous mortgages, student loan debt, and credit cards are the new chains to keep the working and middle class stuck in financial purgatory.  Keep in mind the money the banking industry funnels out is largely taxpayer dollars so the prison we are creating is largely with our own money.  Wall Street investment banks and the too big to fail financial sector is broke.  They would be nonexistent if it weren’t for the complete and generous handout from the U.S. Treasury and Federal Reserve.  How do they repay the people for this?  They begin by squeezing every ounce of productivity of those still working:
Now this is a fascinating chart.  Even in the worst economic crisis since the Great Depression somehow, we are able to become more productive.  Interestingly enough labor costs have fallen at the same time.  Of course the above translates to middle class workers having to put up with stagnant or falling wages while the bottom line keeps getting better.  But better for who?  The banking industry is juicing this game by gambling on Wall Street and not lending money out to the public.  This money was given to them under the pretense of keeping the loan channels alive for American workers.  So we have record foreclosures and bankruptcies while banks keep making billion dollar profits.  The raid on the middle class is like pirates taking the loot in broad daylight.
Yet the spin is out in full force.  Last month the rise in employment was largely from the government sector:
In fact, we can say that the entire rise in employment last month came because of temporary government work.  These Census jobs fall into the trend that we are seeing.  The middle class has to deal with transient work with no security and in order to have access to any semblance of a middle class lifestyle, must enter into a deal of debt serfdom with the banking elite.  We can see that we have hit an absolute structural tipping point in our society with the amount of long-term unemployed:
This is the largest percent of long-term unemployed in modern record keeping history.  What has happened is essentially the last hit against the middle class.  Without any security whatsoever, many are now unable to find work in a highly service oriented world.  The playing field is not level.  The banking sector fills the air with propaganda of the “free market” yet received trillions of dollars in handouts.  The hypocrisy is incredible and many Americans realize this.  This is why satisfaction with both Democrats and Republicans are at all time lows.  Both parties are beholden to the banking and Wall Street elite that work as a leech and are siphoning off every ounce of productivity from the American working and middle class.
The youth of our country are feeling this deeply:
The above chart would seem positive.  More students are taking summer school as opposed to working.  Yet this trend isn’t happening by choice.  It is happening by force.  There are little jobs for teens since they are competing with adults for low pay service sector jobs!  This is the idea of recovery in the new America.  A banking sector that is swimming in gold coins like Scrooge McDuck while middle class Americans find themselves competing with their own children for lower paying service sector jobs.
So what is the solution then?  How the argument is framed is completely false and the Federal Reserve is merely a protector of the banks.  They want to force austerity on the majority of Americans while banks and their predator executives still manage to keep their taxpayer subsidized yachts.  There is money but it went to the banking sector.  The game is fixed for most in the  middle class.  Until we break up the too big to fail banks and have a government that truly represents the people’s best interest, there is little reason to believe that the overall trend will reverse.  The fact that 9 out of our top 10 job sectors are from the low paying service sector is not good news.

Debt Collectors Gone Wild

link to video

Homeland Security's Cyber Bill Would Codify Executive Emergency Powers

Published on 06-11-2010
The Atlantic

At the beginning of the year, the chances that some sort of cybersecurity legislation would reach the president's desk by the end of 2010 were remote. But as of today, there are a half dozen such bills circulating, and the sense of urgency is there, thanks to a huge and largely unremarked upon public lobbying campaign by the defense industry that may or may not comport with the actual level of threat. I don't mean that as a snide aside; I just don't know how vulnerable we are at this moment.

Today, the Senate Homeland Security and Government Affairs Committee unveils its legislation, which would create a Senate-confirmable cyber director in the executive office of the president and imbue him or her with significant emergency powers.

The Protecting Cyberspace as a National Asset Act of 2010 (PC-NAA) is "designed to bring together the disjointed efforts of multiple federal agencies and departments to prevent cyber theft, intrusions, and attacks across the federal government and the private sector," its chief author, Sen. Joe Lieberman, will say in prepared remarks today. "The bill would establish a clear organizational structure to lead federal efforts in safeguarding cyber networks. And it would build a public/private partnership to increase the preparedness and resiliency of those private critical infrastructure cyber networks upon which our way of life depends."

The bill would create another Senate-confirmable position, the head of a new National Cybersecurity and Communications Center inside the Department of Homeland Security; the new NCCC would be responsible for threat prevention and mitigation. It would develop risk-based standards for infrastructure with industry and oversee their implementation. Private entities whose power plants or grids or systems are considered vulnerable and critical could choose among a menu of standards.

According to a summary of the legislation, the Act would also create a "responsible" framework for giving the executive branch significant emergency power in the event of a major intrusion or threat.

The President must notify Congress in advance about the threat and the emergency measures that will be taken to mitigate it. Any emergency measures imposed must be the least disruptive necessary to respond to the threat. These emergency measures will expire after 30 days unless the President orders an extension. The bill does not authorize any new surveillance authorities, or permit the government to "take over" private networks.

Industry will read this part of the bill very carefully, as will civil libertarians. The White House believes it already has a lot of these powers, although it welcomes Congress's attempt to codify them, but my sense is that the National Security Staff does not want to create any new cyber infrastructure within the already over-burdened executive office of the president, and isn't keen on having the top two cyber positions be Senate confirmable.

The Death Of Las Vegas

Published on 06-11-2010
By Michael Snyder 

There are quite a few U.S. cities that are complete and utter economic disaster zones in 2010 (Detroit for example), but there is something about the demise of Las Vegas that is absolutely stunning.  In recent decades, Las Vegas has become a symbol for the over-the-top affluence and decadence of America.  But now it is a microcosm of the economic nightmare that has gripped the entire nation. 

When the subprime mortgage crisis stuck, no major U.S. city was more devastated than Las Vegas.

When the recession went from bad to worse, Americans decided that they really didn't need to gamble so much and casino revenues plummeted.  Suddenly unemployment started to increase dramatically in Vegas and even today it continues to soar.  Like so many other cities that are highly dependent on tourism and entertainment, Las Vegas has gone from boom to bust.  Local officials are hoping that the worst will soon be over, but the truth is that the worst is yet to come.  

As the U.S. economy continues to unravel, average Americans will be spending what little money they do have to put a roof over their heads and to feed their families.   The truth is that the glory days of Las Vegas are over and they are not coming back.

Already, the number of unemployed in Las Vegas is reaching unprecedented levels.  Unemployment rates for the state of Nevada and for the city of Las Vegas both set new records during the month of April.  In Las Vegas the unemployment rate in April was 14.2%.  For the entire state the unemployment rate was 13.7%.

Of course those are just the "official" numbers.  We all know that the "real" unemployment numbers are much higher.

For example, the "official" unemployment figure is about 14 percent in the state of Michigan right now.  But if you actually believe that 86 percent of able-bodied workers in the state of Michigan are employed, then perhaps you would be interested in an offer to purchase the Golden Gate Bridge as well.

Elliott Parker, an economist at the University of Nevada, Reno says that the record-setting unemployment numbers in Nevada are just part of a larger trend....

"Nevada has been losing jobs since March 2008, and we are continuing to do so."

But where the state of Nevada and the city of Las Vegas have really been hammered is in the housing industry.

It is estimated that a whopping 65 percent of all homes in the state of Nevada are underwater.
Let that sink in for a bit.

65 percent of all home owners with a mortgage in the state of Nevada owe more than their homes are worth.

Talk about an implosion.

Nationally, the number of homes that are "underwater" is about 24 percent.  That is an all-time record for the entire nation, but it doesn't come anywhere close to the nightmare that is unfolding in Nevada and in Las Vegas.

And the number of foreclosures taking place in Nevada is absolutely breathtaking.

According to RealtyTrac, Nevada is still ranked number one for foreclosure filings.  In fact, one out of every 79 Nevada homes received a foreclosure filing in the month of May alone.

Nevada’s foreclosure rate is now five times the national average.

By just about any measure, the economy of Nevada is a complete and total disaster.

A reader recently sent an email describing the economic horror that is unfolding in Las Vegas.  No matter what you may think about the city, the truth is that it is sad to see any great U.S. city fall to pieces like this....
"Las Vegas is a goner. The homeless population is out of control. The real estate is far worse than I have seen in the media (no surprise there). The towers of condos are ninety five percent vacant with zero activity. The streets and parks are in decline. Local governments are busy making cuts and fighting unions. When I ride the streets they are deserted, a big change from 2006. The major casino companies have all but moved the casinos out of Nevada. Rooms and restaurants have been closing for years, even while they finished the new projects. The entire town is a skeleton staff providing substandard service and decaying properties. I still work for one of the majors which is in bankruptcy. When the next wave hits there is nowhere to cut. It will be a game of dominoes with the Wynn properties the only ones left standing. I see the ninety nine cent breakfast making a comeback. The bullet train a day late and a few billion dollars short."
So is there any hope for Las Vegas?

Well, if the U.S. economy gets back up off of the operating table and roars back to life there is little doubt that millions of Americans would once again soon be flying there to gamble away their discretionary income.

But the truth is that any "revival" that is going to happen in Vegas is going to be very short-lived.
The U.S. economy as a whole is caught in a death spiral, and we are about to see a repeat of the housing crash that devastated Las Vegas so badly the first time around.

No, there really isn't any way that the death of Las Vegas can be avoided.  Just like the U.S. economy as a whole, it is inevitably doomed.  The numbers don't lie.

The grand total of all government, corporate and consumer debt in the United States is now equal to 360 percent of GDP.  That is a far greater level than the U.S. ever approached during the Great Depression.

The entire U.S. economy is a house of cards built on a gigantic pile of debt and paper money, and it is only a matter of time until it all comes crashing down.

But of course that isn't stopping the U.S. government from spending even more money and getting us all into even more debt.

According to a recent Treasury Department report to Congress, the U.S. national debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015.

But as many of you who have experienced this on a personal level know, getting into continually increasing amounts of debt never ends well.