Making sense of the economic crisis

Two good artices

Michael Lewis-- Let the Heads Roll


Jack Shafer-- Fannie Mae and the Vast Bipartisan Conspiracy

Lewis has has harsh words for the Wall Street executives who have cratered their companies after pocketing huge bonuses. However, he is also asture enough to nothe the market dynamics that drove their actions.

But interestingly, if any of these men had behaved well and resisted the pressures and temptations of the moment, his firm would have, for several years, dramatically underperformed the competition. Probably he would have lost his job.

This passage from Shafer stopped me in my tracks

Next up is Jamie S. Gorelick, whose official résumé describes her as "one of the longest serving Deputy Attorneys General of the United States," a position she held during the Clinton administration. Although Gorelick had no background in finance, she joined Fannie Mae in 1997 as vice chair and departed in 2003. For her trouble, Gorelick collected a staggering $26.4 million in total compensation, including bonuses. Federal investigators (PDF) would later say that "Fannie Mae's management directed employees to manipulate accounting and earnings to trigger maximum bonuses for senior executives from 1998 to 2003." The New York Times would call the manipulations an "$11 billion accounting scandal." Gorelick, it should be noted, has never been charged with any wrongdoing.

Gorelick was responsible for hindering counter-terrorism efforts in the Reno Justice Department. The Wall she helped erect may have contributed to the 9-11 disaster.


Now we find out that she was hip-deep in the largest economic disaster of our time. Yet despite her sorry track record, she was selected to serve on the 9-11 Commission.

Gorelick is interesting in another way. She has exactly the sort of "elite" resume that lights David Brooks's fire. Given the results she's produced (almost uniformly bad), Sarah Palin's "Limited experience" looks like a powerful point in her favor.

Gorelick: the once and future boss?

This post in The Corner from last year bolsters, to some extent, the anti-Gorelick case.

SCARY FLASHBACK--GORELICK FOR CIA! [Rich Lowry]
E-mail:

"9/11 Commission member Jamie Gorelick was mentioned during the Clinton administration as a possible appointment to the CIA and/or Defense Department!

Source: The New Republic (December 2, 1996)

Article 'Cabinet-Making, Clinton Style: E.G.G. Heads'

by Hanna Rosin

Meanwhile, the White House is hiding an ace named Jamie Gorelick, the deputy attorney general who is mentioned for just about everything, including the CIA and undersecretary of defense. 'Can you imagine, the number two in the Defense Department being a girl!' says one justice official. 'The head of the CIA in a skirt! That seems a sentimental historic move Clinton can't resist.' The widely respected Gorelick has only one problem. 'She doesn't come with the right constituency,' says a White House source. 'The women's groups don't see her as one of them.'"

If chief architect of "the wall" might become your boss, and is clearly is perceived as a "star" by the White House, it might be prudent to follow her lead on information sharing. That is so even if you don't currently answer to her and her directives do not directly apply to you department.

Notes on the current crisis


Jamies Gorelick is emblematic of a large part of the problem.

Mistress of Disaster: Jamie Gorelick

Making sense of the economic crisis

It is bad enough that insiders like her bounce from failure to failure while collecting huge paychecks. What is really galling is the lack of scrutiny people like Gorelick receive from the “watchdog press”.

No surprise. When her conflict of interest on the 9-11 Commission came to light, she did not lack for defenders. Establishment pundit David Ignatius raced forward to denounce criticism of his “friend” as partisan smears. In such an environment, you cannot expect the MSM to look into the actions of sharp operators like Gorelick, Raines, or Johnson.

The greater sin of the elite media is the fairy tale version of Washington they foist upon their readers/viewers. In their telling of the story, the Party of Free Enterprise wages a vicious, partisan war against the Party Opposed to Big Business.

The reality is something far different. Liberal Democrats like Chris Dodd, Barack Obama, and Barney Frank received huge sums of campaign cash from Freddie and Fanny. Joe Biden watches out for the interest of credit card giant MBNA while his family dabbles in running hedge funds.

The fairy tale has been obsolete for decades. The Democrats made their peace with Big Business in 1975 when Phil Burton and Tip O’Neil realized that they could use corporate money to preserve their post-Watergate majorities.

The Beltway and Wall Street seem so connected that the ethos of crony capitalism prevails. The Republican Secretary of the Treasury, a former chairman of Goldman Sachs, crafts bailouts with the input of the current chairman of Goldman Sachs. Should anyone raise questions about the propriety of this cozy deal-making, both men can count on a ringing defense from a past Democratic Treasury Secretary and the Democratic Governor of New Jersey. Oddly enough, both men are Goldman alums.

The fairy tale conflict and cozy bipartisan reality is a negative by-product of the “mediated democracy” Powerline discussed.


There seems to be a fatal contradiction in free market theory when it comes to financial services. On one hand, “too big to fail” is cold unpleasant reality. The terrible thing is that it encourages big firms to take too much risk because the Feds will have to save their bacon to avoid a financial meltdown. Right-wingers hate this.

At the same time, they hate anti-trust action. Therefore, they permit more and more financial services companies to reach that “too big to fail” threshhold.

‘Tis a puzzlement.

In our market research in consumer banking we ran into a concept called “the moralization of credit.” A certain segment of the population looks at how their neighbors manage their money through a prism of “right and wrong” not “prudent or unwise”. I hear echoes of that in many conservative commentators.

Frequently, these moralists seem most offended by the borrower who cannot pay, not the banks who encourage the borrowing (and turned a tidy profit for a time.)

Yet these same conservatives recognize that the drug dealer is a bigger villain than the addict. How is credit different from dope?

I think a sensible conservative has to add a little Niebuhr to his Hayek. We cannot expect men in groups to behave as morally and as responsibly as men will as individuals. That does not change just because the group is a for-profit corporation.

A sad quirk of fate is that McCain did more than most senators to address these problems before they became a crisis. Yet, he does not get credit for his foresight. Instead, the economic bad news will probably cost him the election.

In the aftermath of this crisis, many companies will fail, or merge, or be taken over in a shotgun marriage. Nearly everyone will blame the unforeseen credit crunch, market meltdowns, etc., etc. in many cases this is just a new form of failure laundering. The true cause of their problems are bad strategies or poor management. The broader economic problems just provide a convenient fig leaf to hide these executive failures.

There is a special class of market victims in these sorts of bubbles and they get almost not attention. These are businesses who tried to manage prudently while the irrational exuberance was rising toward flood tide. In the Hayekian/Darwinian fairy tales of the Right, these firms will step forward to pick up the pieces. The reality is that many of these firms have disappeared. What now looks like prudence was formerly condemned as stodgy, unimaginative, and out of touch. Their lagging stock price made them takeover bait for the glamorous high rollers who then crashed and burned. Other once prudent businesses replaced their “underperforming” executives with aggressive charismatic executives who drank freely of the bubble Koolaid.

The Bush-Cheney administration has worked assiduously to restore the power and prerogatives of the executive branch. They have been curiously loath to wield those powers at critical times. We saw it first in their lackadaisical efforts to win the Iraq War. We saw it again in the present economic mess.

Hmmm, jealous of its prerogatives yet indolent in governing. That sounds more like a decadent monarchy than a vigorous Jacksonian chief executive. I think the Right got Bush wrong. Today, he seems more like G.W. Bush II of Connecticut than he does the forceful W from west Texas.

ABLE DANGER

Captain's Quarters has more material on Jamie Gorelick, "The Wall", and its impact on the DOD.

It is good stuff, and is important for a better understanding of the pre-9-11 mindset of official Washington. I still think that we make a mistake if we over-focus on Gorelick. The legal culture of at DOD still deserves scrutiny for reasons that have nothing to do with a Clinton appointee who is long gone from government. See here:

Able Danger: Beyond Gorelick

Jack Kelly at Irish Pennants is especially good today on the still unanswered AND UNASKED questions on the whole matter.

Able Danger: Beyond Gorelick

Jamie Gorelick has received most of the blame for the sequestering of the ABLE DANGER information. She makes an inviting target given her role in reinforcing the Wall and her position on the 9-11 Commission. However, the actions of the DOD lawyers deserve further scrutiny. It is not so much the particulars of their role in ABLE DANGER. Rather, it is that this is one more example of a deeply disturbing pattern of behavior by DOD lawyers in the War on Terror.

I posted this in May 2004 when the first Sy Hersh stories about Abu Ghraib appeared.

The revelation is the aggressive actions by military lawyers to undermine the war on terror (not just black ops in Iraq). Hersh admits that the some of the impetus behind Rumsfeld's decision to use special operations began in Afghanistan when a military lawyer refused to OK an air strike against a convoy believed to include Mullah Omar in October 7, 2001. JAG lawyers began to fume about "being cut out of the policy formulation process." But here is the kicker:

In 2003, Rumsfeld's apparent disregard for the requirements of the Geneva Conventions while carrying out the war on terror had led a group of senior military legal officers from the Judge Advocate General's (jag) Corps to pay two surprise visits within five months to Scott Horton, who was then chairman of the New York City Bar Association's Committee on International Human Rights. "They wanted us to challenge the Bush Administration about its standards for detentions and interrogation," Horton told me. "They were urging us to get involved and speak in a very loud voice. It came pretty much out of the blue. The message was that conditions are ripe for abuse, and it's going to occur."

A bunch of JAG lawyers went to an outside group to encourage them to agitate against our actions in the war on terror. They had no specific examples of abuse, just a belief that "it's going to occur." They did not raise their voices publically or go up the chain of command: they opted for behind the scenes manipulation. Is that the conduct of an officer or a gentleman? Moreover, is it possible that the some of these JAG lawyers are assigned to the Abu Ghraib cases? If so,they are primed to paint the abuse by the guards as a systemic problem and to go public with the pictures This both helps their clients and makes their case against the special operations tactics employed against al Qaeda?

The DOD lawyers are important for two reasons. One: ABLE DANGER is symptomatic of their habitual foot-dragging that persisted after 9-11. Gorelick is out of government, but the lawyers in the Pentagon are still making policy, raising objections, and leaking to reporters. Two: Those lawyers may have a role in determining what ABLE DANGER information will be released and how it will be framed.

This is important in light of Andy McCarthy's question in the Corner:

What does the Pentagon have to say about all this? I repeat: it has been four years and there have been a zillion investigations during which the Defense Department (and other organs of government that may be relevant here) have been directed, re-directed, and re-re-directed to probe every scrap of paper, every databyte and every source in their possession in order that the country could understand what the state of our intelligence was prior to 9/11 and why we were unable to thwart the attacks. Why does it take more than 10 seconds at this point, August 2005, for DoD to say: "yes, we have documentation showing an identification of Atta and/or other hijackers prior to 9/11," or "no, we don't."

Other related point: AJSrata points to some other legalistic roadblocks pre-911.

Bill West at the Counterterrorism blog makes the point that the roadblocks to using ABLE DANGER were not all internal to DOD.

If the news about the DoD intelligence is true, that infamous intelligence "wall" truly did create a huge missed opportunity in this...along with what was then the Clinton Administration's generally fouled-up Immigration and Naturalization Service (INS), where I served in the Investigations Division for 25 years.

The INS Headquarters National Security Unit (NSU), which was created in the late 1990s in spite of considerable obstacles generated by the INS High Command, was one of the few and small success stories within the INS. The INS/NSU, circa 1999-2000, tried to post a liaison officer to the Defense Intelligence Agency (DIA) specifically to tap into DoD intelligence on counter-terrorism matters. The NSU Director at the time approved it and DIA bought off on the plan...but INS senior management above the NSU Director nixed it so it never happened. When I was on the job, I dealt with the NSU folks regularly...at times almost daily...on various operational matters.

Contrast that this obstructionism on a reasonable counter-terrorism matter with the high level urgency the senior ranks of the INS brought to a routine child custody case in Florida (Elian Gonzalez). Now tell me again how dedicated to proactive anti-terrorism Reno, et. al. were.

In light of this information, Richard Clarke really tried to sell the Commission a bill of goods with the help of "60 Minutes."

What's new with the "Mistress of Disaster"?

Jamie Gorelick is still doing fine, thanks for asking.

Jamie Gorelick At It Again

Revealing Quote

From David Ignatius in the Washington Post:

And it's reassuring, too, that the commission united partly because of a vicious partisan attack by Attorney General John Ashcroft on one of its Democratic members, Clinton administration deputy attorney general Jamie Gorelick. You don't have to be a friend of Gorelick's (which I happen to be) to think that Ashcroft's attempt to blame her personally for the FBI's problems on Sept. 11 was a smear. When the Bushies tried to divide the commission in this way, the 10 members instead came together. Bravo.

Apparently, bipartisanship means never being mean to the cool kids. No matter what policies they put in place or how much they compromise the integrity of an important investigation.

ABLE DANGER: Is it fair to bring up Tailhook?

It might seem a stretch, but I think that it has some relevance to what SOCOM was doing in 2001 and why the Army shut it down without public protest. (See Jack Kelly for more.)

Tailhook started out as a scandal over the drunken behavior of some naval aviators. But it soon grew into a big political battle over military culture with a big dose of congressional posturing, anti-military press bias, and careerist behavior by senior Pentagon leadership. Although Tailhook made the Navy ground zero, both the Army and Air Force faced the same issues and PR nightmares.

The indispensable James Webb was the most prominent and thoughtful voice decrying the madness. Here is how PBS describes his Luther moment:

In April 1996, Webb delivered a powerful speech at the Naval Academy accusing the Navy's current leaders of failing to defend its hallowed traditions and unique culture for the sake of their own careers. He cited the destruction of careers in the post-Tailhook turmoil, noting in particular the cases of Admirals Jack Snyder and Stan Arthur. Webb asked: "Who expressed their outrage? Who fought this?" The Annapolis midshipmen gave him a standing ovation.

Here are two excerpts from the speech:

When the acting Secretary of the Navy, who had never spent a day in uniform, called a press conference and announced that the antics of one group of aviators at Tailhook was an indication that the Navy as a whole had cultural problems-cultural, as in ethos, as in the overall body of traits that constitutes an institution's history and traditions--how could the CNO stand next to him and fail to defend the way of life he had spent a career helping to shape?
***********
When one of the finest candidates for Commander in Chief of the Pacific in recent times, a man who flew more than 500 combat missions in Vietnam and then in the Gulf War commanded the largest naval armada since World War II, is ordered into early retirement by the Chief of Naval Operations because one Senator asked on behalf of a constituent why Stan Arthur as Vice Chief of Naval Operations had simply approved a report upholding a decision to wash out a female officer from flight school, who expressed their outrage? Who fought this? Who condemned it?

This interview with Webb goes into more detail. In it the interviewer notes that more admirals were ruined by Tailhook than by Pearl Harbor. Ponder that for just a moment.

Now, a little context:

The acting Navy secretary was a Bush '41 appointee. The Senator who ruined Adm. Arthur's career was a Republican from Minnesota.

In the 1990s, neither party was a reliable defender of the military services. Nor, as Webb makes clear, was the senior leadership willing to fight against the politicians and media when they ginned up a scandal in the post-Anita Hill world.

Any reasonably astute officer knew that a PR disaster is a career-ender-EVEN IF THE PR SCANDAL IS LARGELY CONTRIVED. The underlying facts mattered less than what "60 Minutes" put on the screen. Neither Republicans nor Democrats were willing standup to the media juggernaut to ensure a fair hearing so the facts can come out.

That is the sort of environment that might make officers just a tad risk-averse.

Now add a counter-terrorist operation down in Florida that is really pushing the envelope. New methodologies, new technology, few controls on who gets analyzed. So far it is showing promise, but the lawyers are worried that it invades the privacy of United States citizens.

Pretend that you are one of the officers in charge or involved. Your program has promise but it has not caught any terrorists or prevented any attacks. The lawyers think you should shut it down. They are "concerned" that word will get out and ignite a media firestorm over civil liberties, high-tech invasions of privacy, and racial profiling. You suspect that they are right and you also are not confident that one of the lawyers will not leak the details to some obliging reporter.

If the story is leaked, who can you depend on? The brass? Congress? George H. W. Bush's son?
_____________________________

Maybe we are barking up the wrong tree on Gorelick. "The Wall" may have had some impact on the men in charge of ABLE DANGER. OTOH, the post-Tailhook behavior of Republicans and Democrats might be more important.

I do not expect that this idea is going to go anywhere in the blogosphere. If it is correct, the blame is bi-partisan. Trent Lott is as culpable as Gorelick or Hilliary. Bi-partisan outrage is popular only when it can be directed at social conservatives.

UPDATE: If you have not read it, make sure you read Webb's book-- Born Fighting. Check out the sidebar to your left.

UPDATE 2: Welcome Instapundit and Michelle Malkin readers. Take a look around, stay a while. Consider adding this blog to your RSS reader. I have handy buttons on left for Bloglines and My Yahoo. And thanks for stopping by.

Richard Jewell (III)

I came across this outstanding article from 1997.

AMERICAN NIGHTMARE- THE BALLAD OF RICHARD JEWELL (.PDF)

It deserves to be read in its entirety. Here are a few points that caught my eye:

A. Louis Freeh might not have told the whole truth in his memoirs. (gasp!). He portrays himself as disengaged from the investigation. Brenner found that some FBI agents thought differently:

The case became an investigative catastrophe, which laid bare long-simmering resentments of many F.B.I. career professionals regarding the micromanagement style and imperious attitude of Louis Freeh and his inner circle of former New York prosecutors, who have worked together since their days at the U.S. Attorney’s Office in the Southern District. Within the bureau, the beleaguered director now has a new nickname: J. Edgar Hoover with children.

AND

In November and December, the Office of Professional Responsibility conducted an exhaustive investigation into the Jewell affair. Responding to an attempt by headquarters and certain officials to distance themselves, according to F.B.I. sources, several agents, including a senior F.B.I. supervisor in Atlanta, have provided the O.P.R. with signed statements insisting that Freeh himself was responsible for "oversight" during the crisis. These agents "shocked the investigators" because they reiterated, when asked who was in charge of the overall command of the investigation, that it was the director himself.

Moreover, Freeh acts as though leaks were something he deplored but had to live with (“That’s Washington”). Brenner, in contrast, shows that Freeh and those around him were masters at leaking and using the press to make themselves and the Bureau look good.

B. The immolation of Richard Jewell was not something that just happened. The Bureau lit the match and poured the gasoline. The first tip to the Atlanta Journal-Constitution naming Jewell came from an FBI agent. Brenner’s reporting suggests that the leak may have been part of the G-men’s strategy to break Jewell and that Freeh was partly responsible for setting the plan in motion:

Freeh made a decision: however experienced Montgomery, Fuentes, and Mawn were, this investigation would be run by Division 5 of the F.B.I., the National Security Division, a former counterintelligence unit that has been looking for a purpose since the Cold War ended. Trained in observation, division members rarely made a criminal case--their strength was intimidation and manipulation rather than the deliberate gathering of evidence to be presented in court. The F.B.I. promptly declared the bombing a terrorism case and placed it under the authority of Bob Bryant, head of the division. David Tubbs of Division 5 was sent to Atlanta to be the spokesman and to augment Woody Johnson, the Atlanta special agent in charge (S.A.C.), who had been trained in hostage rescue and who was awkward in press briefings. Tubbs was not as experienced in criminal cases as Mawn or Montgomery, who returned to Newark and Quantico, respectively, "to get out of the line of fire," according to numerous F.B.I. sources. But Bryant and Freeh were reportedly micromanaging the S.A.C.’s and, later, the case agents Don Johnson and Diader Rosario.

The FBI intimidation of Jewell was by no means subtle. They followed his every move in three and four car caravans. They questioned his friends at their job sites. They sent 40 people to search his mother’s small 2-bedroom apartment.

C. The fruitless and vicious pursuit of Richard Jewell had other consequences. First, the real bomber--Eric Rudolph--was free to commit other crimes including a fatal bombing in Birmingham. That is a point often overlooked when a case of wrongful prosecution or a police rush to judgment takes place. The innocent suffer while the guilty are free to commit more crimes.

Second, AG Janet Reno and her deputy Jamie Gorelick became concerned with the FBI’s treatment of Jewell and their overall handling of the case. Did the Atlanta bombing and the FBI’s tactics influence subsequent policy for terrorism investigations? It’s hard to tell, I’ve seen no reporting that looks at this point. But it seems like an interesting question.

When it comes to “The Wall” and FISA, we usually tell the story backwards. We start at 9-11-01 and look for the “mistakes” that let it happen. The Jewell story offers us a different perspective. Unfortunately, at this time, no one has dug into the question of how the FBI mingled intelligence and investigation functions in the Atlanta case. Nor have they looked at the internal DOJ reaction to that part of the fiasco.

Brenner does provide us with one telling passage:

But the local U.S. attorney, Kent Alexander, insisted that their phones were not tapped. "There are no wiretap warrants," he said.

Maybe I am just the suspicious type, , but that denial is sounds almost Nifongesque.

D. Brenner is quite good at showing the harm done by the unholy alliance of cops and police reporters. When it comes to crime stories, the press is not the guardian of our rights; they are the compromised junior partners of police. At worst, they become the willing accessories of rogue police and prosecutors.

The page-one story had a double byline: Kathy Scruggs and Ron Martz. Walter had told these two early on that they would be the reporters assigned to any Olympic catastrophe. Martz, who had covered the Gulf War, had been assigned the security beat for the Olympics; Scruggs routinely covered local crime. Scruggs had good contacts in the Atlanta police, and she was tough. She was characterized as "a police groupie" by one former staff member. "Kathy has a hard edge that some people find offensive," one of her editors told me, but he praised her skills. Police reporters are often "dictation pads" for local law enforcement; recently the American Journalism Review sharply criticized The A.J.C. for the scanty confirmation and lack of skepticism in its coverage of Jewell.

Finally, Brenner relates a small, but telling, anecdote about America’s Favorite Failing Newsreader. This takes place after Jewell has to cancel an appearance on the Today Show after he is exonerated by the DOJ:

That evening a very testy Katie Couric tracked Bryant down at Nadya Light’s apartment, where we had gone to watch the news. "I want you to know that I canceled interviewing Barbra Streisand in L.A. for Richard Jewell. Don’t think he is always going to be a news story. No one will care about him in three days," she said, according to Bryant.

So America’s Aging Former Perky Sweetheart is a bitch. She was right about one thing. No one cared about the wrongly accused hero. For weeks the press had made his life a living Hell and passed along every scurrilous rumor and vicious lie. That was called NEWS. The truth, however, did nothing for the ratings and Richard Jewell’s whole story never got the attention it deserved. That’s why they are called the drive-by media.

UPDATE: This is how Katie Couric reported the death of Richard Jewell:

Back in 1996, the FBI investigated Richard Jewell, an Atlanta security guard, in connection with the Olympic Park bombing in Atlanta. Richard Jewell died today of complications from diabetes. He was 44. Jewell was never charged with any crime. There is much more CBS… [FADE-OUT]

Sometimes the MSM just leaves you speechless.

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Tales of television journalism

So ABC "News" decided to look at armed civilian response in mass shootings. I had no doubt that Disney/ABC had an agenda and expected 20/20 to make a hash of the subject. I was not disappointed.

Other bloggers have weighed in. The best critique is at Sensibly Progressive:

ABC anti-gun hatchet job on 20/20

John Lott and Snowflakes in Hell have smart things to say as well.

PBS Frontline ran "Inside the Meltdown" this week. It was many cuts above the ABC product. It was an insightful look at the decision- making of Paulson, the Fed, and Congress during the crucial weeks in September when everything fell apart.


It was television so it was not a definitive history. At times, a little context would have been helpful. Nonetheless, it was a powerful documentary.

It did have its biases. The worst one was its treatment of Chris Dodd and Barney Frank. It used both men as disinterested commentators/reporters. This is inexcusable in light of their roles in creating this mess.

I like documentaries, even imperfect one's like Frontline. I often wonder why conservatives do not make more of them. I know Hollywood is a liberal town, but that is an even better reason to focus on documentaries. If a conservative wants to make a conventional movie, she has to convince a bunch of lefties to give her a pile of money. The she has to persuade a bunch of other lefties to sign onto the project and work with her.

A documentary is cheaper to make and requires fewer people . All in all, that means lower barriers to entry.

Nonfiction movies even get made outside of Hollywood. Look at the success those slacker/losers had with their 9/11 conspiracy movie.

Just for starters, think of what an investigative journalist could do with Jamie Gorelick, Chris Dodd, and Barney Frank.

Barney Frank

Like Ace says "He Likes Bad Boys"


Atlas Shrugs reviews the history

Barney Frank's Pot Bust


Barney Frank's lover, Stephen L. Gobie, ran a gay prostitution ring out of Frank's home.

Barney Frank's lover, Herb Moses, was a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions. Frank became the chairman of the House Financial Services Committee in 2007 after the Democratic Party won a majority in the House. The committee oversees the entire financial services industry, which includes the securities, insurance, banking, and housing industries.

And now Barney is pushing weed legislation while he dallies with his pothead lover.

This track record would doom the career of most politicians. But Frank seems to skate away from every scandal.

He is a member of the club, you see. That select club of the Washington elite that includes Larry Summers and Jamie Gorelick. Membership has its privileges. The most valuable of which is the presumption of righteousness anytime a member is caught up in something unseemly.

Is Pima County Sheriff Clarence Dupnik engaged in a cover-up?

That's the impression you have to ask after reading the latest from Bob Owens.

Seventy-One Shots: The Death of Jose Guereña

Jose Guereña survived two tours in Iraq, but he couldn't survive his own government

Wonder if there are any enterprising Woodwards out there in Arizona. Or has Dupnik earned provisional Gorelick status for his attempt to slander the Tea Party movement in the wake of the Rep. Giffords shooting?

Unbelievably good

Matt Taibbi takes down David Brooks:

Populism: Just Like Racism!

And even if I were to accept the Brooksian view of an upper class that must be looked to to fix things and take care of the lower classes and create the needed wealth to help us escape our economic crisis, the whole point is that this upper class he is talking about has abdicated that very responsibility — and, perhaps having reached the cynical conclusion that our society is not worth saving, has taken on a new mission that involves not creating wealth for all but simply absconding with whatever wealth is remaining.

It’s not pessimism or “combative divisiveness” to talk about these problems and insist that they get fixed. On the contrary, it’s a very positive view of what citizenship is to believe that everyone has a real role in fixing his country’s problems, and that when we identify problems, we should try to do something about them because we might actually succeed.

On the other hand, telling oneself that when powerful people “rig the game” one should just tolerate it, because one’s best hope for seeing the situation fixed rests in hoping those same powerful people fix it themselves — I would describe that as pessimism, or something worse than pessimism. The whole point of America is that we are all supposed to be our own masters, never viewing anyone as being by birth or situation inherently better or more capable than ourselves, and so the notion of relying upon some nebulous class of investment bankers to “channel opportunity” from on high strikes me as being un-American.

If there is a Republican who aspires to be Reagan 2.0, the best thing they can do is read Taibbi's reporting on the Bubble and Crash. The game-changing candidate will be the one who combines an intelligent appreciation of Hayek with a clear-eyed willingness to address the need for financial reform.

Hint-- Jamie Gorelick, Larry Summers, and Barney Frank are gifts that keep on giving.,

Note that Ann Coulter gets it.

Making sense of the mess

Some worthwhile reading on AIG and the wider political and economic issues at stake.

Is Physiognomy Destiny?

Last fall I thought Jamie Gorelick was emblematic of the disaster. Lawrence Summers is another poster boy for the flawed system that created the crisis and now prolongs it. David Warsh hits the gruesome highlights in a fair but tough-minded article.

Despite all his baggage, The New Republic thinks it is time to “unleash” Larry Summers. That is how our mediated democracy works. Those inside the charmed circle take care of one another. Once inside, no number of blunders, policy mistakes, or acts of dishonesty can undermine one’s standing.

In an honest, reality-based community, The New Republic would be interred next to the Weekly World News and Larry Summers would be fenced off from the levers of power.

The American Spectator zeroes in on another member of the Beltway elect.

Plenty of Rahm at the AIG Table

Why is the press so uncurious about Rahm Emanuel’s role in protecting the AIG bonuses?

Another hidden tidbit. The maneuvering around AIG was an all Democrat production. Pelosi and Reid excluded Republicans from the conference committee negotiations.

Maybe someone will ask President Obama how that fits into his efforts to transcend partisan bickering.

Edward Jay Epstein explains why AIG had to offer those retention bonues.

Sympathy For The Devil: Why AIG Had No Choice But To Pay

Joe Nocera provides a welcome level-headed assessment of the state of play and outlines the danger of mindless AIG bashing. (Hint: it costs the taxpayers money.)

The Problem With Flogging A.I.G

Nocera also makes a the point that much of the taxpayer money propping up AIG is immediately passed on to other financial institutions. One of the leading recipients is Goldman Sachs which is sitting on a cool $100 BILLION in cash as it collects your tax dollars through AIG.

Seems outrageous. Actually it stinks to high heaven when you remember that Goldman is the former employer of Clinton’s Treasury Secretary Rubin and Bush’s last Treasury Secretary Paulson. (Not to mention Chris Dodd’s colleague John Corzine.)

Finally, my own snarky little contribution. Several of these stories note that people who created the mess at AIG are no longer on the payroll. Joseph J. Cassano, for instance, no longer heads the financial products division that wrote and traded all those toxic credit default swaps. BTW, anybody want to guess whose campaigns Mr. Cassano contributed to?

If you said Chris Dodd and Barak Obama, you are a winner.

What kind of journalism do they do at Newsweek?

The apologists for the MSM keep telling me that professional journalists are a necessary bulwark to freedom and good government. We can count on them (and only them) to call the mighty to account.

That is pretty hard to reconcile with this confession by Evan Thomas:

If you are of the establishment persuasion (and I am), reading Krugman makes you uneasy. You hope he's wrong, and you sense he's being a little harsh (especially about Geithner), but you have a creeping feeling that he knows something that others cannot, or will not, see. By definition, establishments believe in propping up the existing order. Members of the ruling class have a vested interest in keeping things pretty much the way they are. Safeguarding the status quo, protecting traditional institutions, can be healthy and useful, stabilizing and reassuring. But sometimes, beneath the pleasant murmur and tinkle of cocktails, the old guard cannot hear the sound of ice cracking. The in crowd of any age can be deceived by self-confidence, as Liaquat Ahamed has shown in "Lords of Finance," his new book about the folly of central bankers before the Great Depression, and David Halberstam revealed in his Vietnam War classic, "The Best and the Brightest."

That helps to explain why insiders like Jamie Gorelick get a pass from prestigious journalists.

Evan Thomas produced one of the most memorable lines from the Duke lacrosse case. He tried to explain why Newsweek and the rest of the MSM ended up with egg on their face after they rushed to convict the lacrosse team in 2006.

We just got the facts wrong. The narrative was right, but the facts were wrong.

Here most of us plebes thought getting the facts right was Job #1 for journalists. Apparently we were naive.

Thomas's quote in context is even more damning:

"We fell into a stereotype of the Duke lacrosse players," says Newsweek's Evan Thomas. "It's complicated because there is a strong stereotype [that] lacrosse players can be loutish, and there's evidence to back that up. There's even some evidence that that the Duke lacrosse players were loutish, and we were too quick to connect those dots."

But he adds: "It was about race. Nifong's motivations clearly were rooted in his need to win black votes. There were tensions between town and gown, that part was true. The narrative was properly about race, sex and class... We went a beat too fast in assuming that a rape took place... We just got the facts wrong. The narrative was right, but the facts were wrong."

If the facts are wrong, though, why explore the narrative at all? Is it fair to use the Duke lacrosse players to tell a larger story of athletes run wild--a theme that appeared not only on sports pages but also was splashed, repeatedly, on the front pages of major newspapers and amplified on cable shoutfests? Says Johnson: Once the facts are "proven not to be true, you certainly have to consider whether the narrative is relevant."

Gee, the MSM has lectured us for decades that USING STEREOTYPES IS WRONG! Yet here we see Thomas trying to defend his rag by explaining that they relied on stereotypes instead of digging for facts. I guess that is all part of the nuanced thinking that the Big Brains of the Big Media get paid for.

Or, just maybe, the MSM is trapped by their knowingness and the limits of their education.

Why Letterman matters (Part I)

It is not just about Sarah Palin. Think of Palin as the canary on the coal mine. This battle is part of the war between the Jacksonian strain of American politics and the "mediated democracy" that has evolved over the last couple of decades.

It is that Jacksonian strain that sets America apart. It has given us some of our greatest presidents-- Jackson himself, Lincoln, TR, Truman, and Reagan. It fuels our military strength. It is a vital component to our political economy.

Without it we might look a lot like Europe: sclerotic, corrupt, and military impotent.

With a mediated democracy, those with the right resume and right friends are never called to account for their mistakes and corruption. Jamie Gorelick, Barney Frank, Larry Summers, and Chris Dodd can create mess after mess and yet,, they remain members of the club.

Contrast the unrelenting stream of abuse hurled at Sarah Palin with the silence that surrounds the gaffes of crazy Joe Biden.

Palin was a dangerous outsider; Biden is a member of the club's DC branch. Plus Biden was selected by The One.

The Letterman attacks were just the latest demonstration that the club will sink to any level to repel outsiders. All that concern for civility? That only applies to those inside the charmed circle.

So the issue is not Sarah Palin. Any effective outsider will get the same treatment. (E.g. the Tea Parties, Joe the Plumber, Carrie Prejean).

There is a political calculus at work as well. America remains a nation where neither Left nor Right commands a majority. Surprisingly, the Right is still larger than the Left.

The natural equilibrium, therefore, is Center-Right.

The Left has only one effective tactic. They must demonize and marginalize the RIght. They must make the Right an anathema to moderates so that those in the center support the Left.

That's why resercons are so valuable to the members of the club. and liberals in general.

For resercons in waiting, bashing conservative outsiders is a sure way to get the attention of the membership committee of the Guild of People Who Really Matter. R. S. MacCain has discussed this repeatedly-- most recently here.

Worth a read

The Generation of ’91

It providers further evidence that Victoria Nuland, like Jamie Gorelick, is a true Mistress of Disaster.

Whatever the case, there is ample evidence that the US was in the midst of things, in the form of Assistant Secretary of State Victoria Nuland’s famous phone call to the American ambassador to Ukraine, conveniently taped and made public by the Russians. ....

Strobe Talbott, Clinton’s Rhodes scholarship classmate at Oxford, was at the center of US policy towards Russia throughout the ’90s. A one-time Time magazine journalist, Talbott served as Ambassador-at-Large to the New Independent States before becoming Deputy Secretary of State in 1994.Today he is president of the Brooking Institution....

Talbott’s State Department chief of staff, Nuland, is at the helm of the State Department’s Eurasian affairs today. During the Bush administration she advised Vice President Dick Cheney on the eve of the Iraq invasion and served as US ambassador to NATO.

And remember, Nuland helped push the Benghazi lies and cover-up.

ABLE DANGER: Filling in the blank spaces

Two interesting articles that provide some useful background for ABLE DANGER.

The Houston Chronicle profiles Fran Townsend. Clearly, she has become a major player in the Bush administration.

But by all accounts, Townsend has impressed Bush with a tough efficiency and a bit of a swagger that resembles his own. Her influence has grown to the point that Cabinet secretaries and agency directors who do not normally return media calls about White House staff members rush to phone with lavish praise for a profile.

She is also not shy about using her clout:

Asa Hutchinson, then an undersecretary at the Department of Homeland Security, recalled that he deferred to his absent boss. But Townsend, the top White House adviser on counterterrorism and homeland security, had a higher authority to invoke. "You don't understand," she said. "The president will be calling momentarily. We need your position."
From a basement office in the West Wing, Townsend runs President Bush's far-flung campaign against terrorism. Her two predecessors were four-star generals who brought decades of experience to the fight. Townsend, 43, a former mob prosecutor, has a different credential - the president's ear.

Townsend may be Bush's Gorelick. ABLE DANGER raises serious questions about her leadership of OIPR. Yet her powerful role in the White House may hinder our ability to discover the whole story.

This is especially true if Donald Sensing is correct that Chertoff is in trouble as head of the Department of Homeland Security. What if Bush replaces Chertoff with Townsend as head of HS?

The other article is a 2001 piece that gives a flavor of how domestic counter-terrorist efforts by the military were viewed pre- 9/11.

Military role grows on home front

A couple of representative quotes:

Some argue that the role makes sense in light of the threat posed by modern terrorist groups. But a diverse coalition of civilian law enforcement agencies, civil rights advocates and libertarian groups worry about allowing the military to play so prominent a role on U.S. soil.
"There used to be a bright line separating the military from involvement in civilian affairs," says Steve Aftergood, who directs the Project on Government Secrecy at the American Federation of Scientists. "The pernicious aspect of terrorism is that it threatens to erode what is a clear distinction. We are seeing them on all these 'fronts.'"

And this:

Officials at several key civilian agencies - from the FBI to the Public Health Service and the Federal Emergency Management Agency - say the military's growing role in preparing for a domestic terrorist attack is disconcerting.
"We used to be the main people involved in this," said a domestic preparedness official with the Public Health Service who spoke only on condition of anonymity. "Now, there are fewer of us and more of them."

See also:

The Wall and Fran Townsend

The Wall and Fran Townsend

Captain's Quarters (which seems to be down) had a good post up that traced the development of the FISA "Wall" that goes beyond mere Gorelick-bashing. Of all the players he discusses, I think Fran Townsend is the most interesting. For one thing, she was Reno's most trusted advisor while still enjoying a good working relationship with Louis Freeh. For another, she is still in government.

This US News profile raises several other points.

1. It changes the context of the Rowley memo:

in November 2000, the FISA court held a rare meeting of the full court to discuss "wall" -related issues. "The chief judge was so annoyed with me," says Townsend, "that he wouldn't permit me personally to attend, because I had pushed so hard against the restrictions they had imposed." Others say the real root of Lamberth's anger at Townsend was the false information given by the FBI in dozens of wiretap applications to the FISA court. Lamberth declined to comment. But he told Reno's successor, Ashcroft, that he had lost faith in Townsend.

So it just was not obtuse bureaucrats at FBI headquarters who were scrutinizing FISA requests more carefully. Why? What was the FBI lying about?

2. What groups were being investigated when the FISA court approved those warrants based on "false information given by the FBI"? Was it al Qaeda? Or did the FBI have other high priority terrorism investigations going on?

3. Some of her critics suggest that Townsend kept the Wall high for reasons having nothing to do with Reno's wishes.

But others suspect an ulterior motive. Some Justice Department prosecutors felt Townsend wanted to keep the wall up because it kept prosecutors out of national security investigations, leaving more authority in the hands of Townsend and friendly bureau agents.

If Townsend used OIPR to keep prosecutors away from FBI national security investigations, did she do the same when it came to other agencies? Did the DOD lawyers fear that Townsend would resent SOCOM for encroaching on the turf of her beloved Bureau? The FBI has a well-established reputation for demanding to be the lead dog on every investigation it touches. Did Townsend restrain that impulse on counterterrorism matters? Or did she use her position at OIPR to encourage it?

The Commission and ABLE DANGER: Beware the carefully crafted question/answer/rebuttal

As we sort through the ABLE DANGER story, we need to beware the carefully crafted statement that seems to answer more than it does or that refutes a charge that was never made. The 9-11 Commission and staff have a lot at stake here. And some members of the Commission know how to play the game. Remember the stunt over the PDB from August 2001?

But just read the PDB. You don't have to be James Bond to see there is no actionable intelligence there at all. Not a shred.

This needless declassification of a Top Secret document was the result of a stunt by Richard Ben-Veniste, a member - as unbelievable as it sounds - of the 9/11 Commission.

When it was his turn to query Condoleezza Rice during Thursday's public hearings, Ben-Veniste brought-up the PDB. He said, "Isn't it a fact, Dr. Rice, that the August 6th PDB warned against possible attacks in this country? And I ask you whether you recall the title of that PDB."

Rice replied, "I believe the title was, Bin Laden Determined to Attack Inside the United States."

Immediately after she finished her sentence, Ben-Veniste tried to cut her off. Clearly, his intent was not to ask a question, but simply to force Rice into publicly speaking the words of the title, thereby inflicting political damage on a war-time President.

Rice would have none of it. She verbally pushed Ben-Veniste aside, explaining the PDB piece was synthesized from historical intelligence and written in response to questions the President had asked. The article was not a threat report, said Rice.
However, it was to no avail. Ben-Veniste's words had done their work.

The next day's press was filled with reports on the 'secret warning.' The Los Angeles Times, for example, carried a front page story about "disclosures from the commission that President Bush was warned in a highly classified intelligence briefing five weeks before the attacks..."

Ben-Veniste knew what he was doing. By asking only about the title of the classified document he was determined to imply that Bush received a strong warning about 9-11 weeks before the attacks. The MSM played along.

There is a lot of soundbite wiggle room given the problems of names and known aliases. Imagine three documents. One written in December 2000 lists "Manzoor Ali" as an important Al Qaeda operative. The second, written in December 2001 suggests, based on further digging, that Ali is an alias for Atta. The third document, written in December 2003, makes a near-iron clad case that Ali is a previously unknown alias for Atta.

The skeptics can honestly say "no document written before 9-11 mentioned Atta or any of his known aliases. All they had was some dubious post-9-11 speculation that is contrary to the FBI's exhaustive investigation."

End of story, right?

Except that the FBI investigation may have been compromised in ways they did not understand in 2002-2003. The three documents, taken together, could be a serious avenue of investigation.

The larger point-that the December 2000 document might have uncovered Atta if it had been given to the INS and FBI-remains true. But that can get lost in the charge/counter-charge crossfire. Journalists and bloggers need to sift this stuff carefully.

Perhaps as a starting point right bloggers should give the Gorelick/Wall angle a rest for a few days. This is not the time to get tunnel vision.

I'll have more on that in my next post.

OTOH, I really want to know what happened between October 2003-when 9-11 Commission staffers met with Shaffer and requested a follow-up-and January 2004-when the staffers told Shaffer that they did not need to talk to him. When analyzing intelligence matters nothing beats a good chronology.

I'd also like to know how ABLE DANGER and its progeny fit into Rumsfeld's "transformation" efforts at DOD. That is a big, unseen bureaucratic war. What looks like a conscious cover-up could be routine collateral damage.

It could also be a simple case of a damaged institutional memory. This quote from Shaffer suggests some of that is going one:

Now, back to the information that DOD passed to them. DOD passed two containers, approximately briefcase-sized containers over to them in the February-March time frame of '04. That is not one-twentieth of the information which was available out there on Able Danger and the project.

And plus, they asked DIA for it. It was not a DIA project. And I think they asked the wrong questions of DOD in some cases. And I know for a fact right not DOD is trying to get to the bottom of this.

UPDATE: The JunkYard Blog has a good post up that shows how well the 9-11 Commission takes criticism.