Friday, October 17, 2008

Justices Rule Against Ohio G.O.P. in Voting Case





October 18, 2008

By ADAM LIPTAK and IAN URBINA

WASHINGTON — The Supreme Court on Friday overturned a lower court’s order requiring state officials in Ohio to supply information that would have made it easier to challenge prospective voters. The decision was a setback for Ohio Republicans, who had sued to force the Ohio secretary of state, a Democrat, to provide information about database mismatches to county officials.

The decision has the potential to affect as many as 200,000 of the 660,000 new voters who have been registered in Ohio since Jan. 1, according Social Security Administration and state election officials.

The Supreme Court, in a brief, unsigned decision, said lower federal courts in Ohio should not have ordered the secretary of state, Jennifer Brunner, to turn over the information. The court acted just before a deadline requiring Ms. Brunner to act set by a federal judge in Columbus.

A 2002 federal law, the Help America Vote Act, or HAVA, requires states to check voter registration applications against government databases like those for driver’s license records. Names that do not match are flagged. Ohio Republicans sought to require Ms. Brunner to provide information about mismatches to local officials.

Those officials could use information to require voters to cast provisional ballots rather than regular ones. They could also allow partisan poll workers to challenge people on the lists. Given Democratic success in registering new voters this year, those actions would probably affect that party’s supporters disproportionately.

The court said it expressed “no opinion on the question whether HAVA is being properly implemented.” But it said that Congress probably had not intended to allow private litigants like political parties to sue to enforce the part of the law concerning databases.

Ms. Brunner welcomed Friday’s ruling from the Supreme Court.

“Our nation’s highest court has protected the voting rights of all Ohioans, allowing our bipartisan elections officials to continue preparing for a successful November election,” Ms. Brunner said. “We filed this appeal to protect all Ohio voters from illegal challenges and barriers that unfairly silence the votes of some to the advantage of others.”

Edward B. Foley, a law professor at Ohio State, said the Supreme Court’s action in letting state authorities handle matters in the face of a late challenge was consistent with a general premise of election law. “Federal court intervention is a last resort, even if it’s not at the last minute,” Professor Foley said.

A federal judge in Columbus ordered Ms. Brunner to supply the information on Oct. 9, and the United States Court of Appeals for the Sixth Circuit, in Cincinnati, affirmed that decision on Tuesday by a vote of 10-to-6.

The majority decision in the Sixth Circuit acknowledged that the question about whether private parties may sue under the 2002 law was a close one. But Judge Jeffrey S. Sutton said that question could be deferred, as what the Republican party sought was just information.

No one argues, Judge Sutton wrote, “that a mismatch necessarily requires a voter to be removed from the rolls.” A mismatch may merely prompt further investigation, he said, one that may be satisfied with an explanation as simple as a recent address change.

Voting experts and state election officials added that many voters were likely to be flagged erroneously because the databases used to check voter registrations were prone to errors. Most non-matches are the result of typographical errors by government officials, computer errors, use of nicknames or middle initials, not voter ineligibility, they said.

In one audit of match failures in 2004 by New York City election officials, more than 80 percent of the failures were found to have resulted from errors by government officials; most of the remaining failures were because of immaterial discrepancies between the two records.

Ms. Brunner had also argued that requiring so many voters to cast provisional ballots would raise tensions at the polls and worsen lines and confusion on Election Day in a year when she is expecting unprecedented turnout.

The state Republican Party rejected those arguments.

“Secretary Brunner has fought every effort to validate hundreds of thousands of questionable registrations,” said Ohio Republican Party Chairman Robert Bennett. “As far as I’m concerned, Secretary Brunner is actively working to conceal fraudulent activity in this election.”

The Ohio Republican Party had said it wanted the list so that local election officials could clear up any discrepancies before Election Day and in cases where that was not possible, those voters should vote using a provision ballot. Provisional ballots in Ohio are held for 10 days before being counted while workers check eligibility, and they are often subject to partisan wrangling and legal fights.

Friday’s decision also means that the Ohio Republican Party will not be able to make public information requests to get the data so that poll workers can raise voter challenges at the polls.

In 2004, President George W. Bush won Ohio by a margin of about 118,000 votes. During that race, litigation over Republican plans to challenge about 35,000 voters went to Justice John Paul Stevens on the eve of the election. Justice Stevens said it was too close to the election to intervene, but he added that he expected both sides to act in good faith. The Republicans dropped plans for their challenges.

Polling in the state shows Senator Barack Obama, the Democratic presidential nominee, with a slight lead on his Republican challenger, Senator John McCain.

http://www.nytimes.com/2008/10/18/washington/18scotus.html?hp

Copyright 2008 The New York Times Company

Health Care Issues Side By Side

Want to know the candidates' proposals for health care?

Here is a side-by-side comparison prepared by the Henry J. Kaiser Family Foundation:

http://www.health08.org/healthissues_sidebyside_results.cfm?McCain=yes&Obama=yes&HCR=yes&x=68&y=7

http://www.health08.org/healthissues_sidebyside.cfm

Is 'Joe the Plumber' a plumber? That's debatable





By JOHN SEEWER
The Associated Press
Friday, October 17, 2008; 12:36 AM

HOLLAND, Ohio -- Joe the Plumber's story sprang a few leaks Thursday. Turns out that the man who was held up by John McCain as the typical, hard-working American taxpayer isn't really a licensed plumber. And court documents show he owes nearly $1,200 in back taxes.

"Joe," whose name is Samuel J. Wurzelbacher, was cited repeatedly in Wednesday night's final presidential debate by McCain for questioning Barack Obama's tax policy.

Wurzelbacher instantly became a media celebrity, fielding calls during the debate and facing reporters outside his home near Toledo on Thursday morning for an impromptu nationally televised news conference.

The burly, bald man acknowledged he doesn't have a plumber's license, but said he didn't need one because he works for someone else at a company that does residential work.

But Wurzelbacher still would need to be a licensed apprentice or journeyman to work in Toledo, and he's not, said David Golis, manager and residential building official for the Toledo Division of Building Inspection.

State and local records show Wurzelbacher has no license, although his employer does. Golis said there are no records of inspectors citing Wurzelbacher for unlicensed work in Toledo.

And then there was the matter of his taxes.

Wurzelbacher owes the state of Ohio $1,182.98 in personal income tax, according to Lucas County Court of Common Pleas records.

In January 2007, Ohio's Department of Taxation filed a claim on his property until he pays the debt, according to the records. The lien remains active.

At the debate, McCain cited Wurzelbacher as an example of someone who wants to buy a plumbing business but would be hurt by Obama's tax plans.

Wurzelbacher, a self-described conservative, had spoken to Obama at a rally Sunday near his home and asked him whether his tax plan would keep him from buying the business that currently employs him, which earns more than $250,000 a year.

"Your new tax plan is going to tax me more, isn't it?" Wurzelbacher asked.

Obama said that under his proposal taxes on any revenue from $250,000 on down would stay the same, but that amounts above that level would be subject to a 39 percent tax, instead of the current 36 percent rate.

McCain said Obama's plan would stop entrepreneurs such as Wurzelbacher from investing in new small businesses and keep existing ones from growing.

The McCain campaign posted a Web ad featuring the exchange between Wurzelbacher and Obama.

During an afternoon taping of "Late Show with David Letterman," McCain said he had not yet spoken to Wurzelbacher, and apologized for the press attention he had received.

"Joe, if you're watching, I'm sorry," McCain said.

Wurzelbacher had to deal with a clog of two dozen reporters outside his home on a narrow street lined with ranch- and split-level homes Thursday morning. No detail about the divorced father of a 13-year-old boy was too small: Was he a registered voter? Did he have a plumbing license? Whom will he vote for?

Leaning against his black Dodge Durango SUV, Wurzelbacher at first was amused by it all, then overwhelmed and finally a little annoyed.

"I don't have a lot of pull. It's not like I'm Matt Damon," he said "I just hope I'm not making too much of a fool of myself."

He indicated he was a fan of the military and McCain but wouldn't say who will get his vote. He is registered as a Republican, the county elections board said, because he voted in the GOP primary in March.

Wurzelbacher said a McCain campaign official contacted him several days before the debate to ask him to appear with the candidate at a Toledo rally scheduled for Sunday.

He told reporters he's unsure if he'll attend, since he's now scheduled to be in New York for TV interviews.

On Thursday in New Hampshire, Obama said McCain was misleading voters by proposing tax plans that favor the rich while criticizing an Obama tax plan that would raise taxes only on people making more than $250,000 a year, just 5 percent of all taxpayers.

"He's trying to suggest that a plumber is the guy he's fighting for," Obama said. "How many plumbers you know that are making a quarter-million dollars a year?"

Wurzelbacher said he felt a bit overwhelmed by all the attention.

"I'm kind of like Britney Spears having a headache. Everybody wants to know about it," he joked.

___
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/16/AR2008101600728.html?sub=AR

Associated Press writer Sharon Theimer in Washington contributed to this report.

© 2008 The Associated Press

Joe the Plumber was once Joe the Alaskan





By Kyle Hopkins / McClatchy Newspapers | Friday, October 17, 2008 |

ANCHORAGE, Alaska - The star of Wednesday night’s presidential debate used to live in Alaska.

And for once we’re not talking about Gov. Sarah Palin.

Long before he was "Joe the Plumber," Joe Wurzelbacher lived in North Pole and Eielson Air Force Base outside Fairbanks, according to Alaska public records. A family member says Wurzelbacher came to the state in the mid-1990s and stayed about four years - long enough to have the son who can be seen standing next to him in the now famous YouTube clip of Wurzelbacher grilling Sen. Barack Obama about taxes.

Kelly Morrison watched the debate with her husband in Anchorage. As the candidates sparred over someone named Joe the Plumber, her husband kept telling Morrison that it had to be the Joe they know.

Morrison’s sister, Jennifer, is Wurzelbacher’s ex-wife. They’ve known him for years. At one point, Joe worked as Morrison’s plumber when they both lived in Arizona.

Then someone on TV said Joe’s last name.

"I’m like, ’That’s Joe!’ And (my husband) said, ’I’ve been trying to tell you that the whole time," Morrison said.

Alaska records show Wurzelbacher listed a North Pole address in 1992 and 1993, and Eielson Air Force Base address in ’94 and ’95. He applied for hunting permits, owned an old Ford and a new Dodge, and paid a $76 fine in Fairbanks court for speeding.

It was unclear Thursday afternoon whether Wurzelbacher registered to vote while living in Alaska, and if so with which party, Division of Elections Director Gail Fenumiai wrote in an e-mail.

Wurzelbacher’s son was born in the Fairbanks area in 1995, Morrison said.

"Jennifer had called up to Joe to tell him that she was in labor and Joe made it down the stairs just in time, his baby was delivered on the wooden floor in their home," Morrison said.

"That was a huge thing for us. ... We joked with them and said, ’OK, you did it the Alaskan way,’" Morrison said.

"I met (Joe) when he was working for Roto-Rooter," said her husband, John.

Morrison said Wurzelbacher served in the Air Force and that as far as she knows, he and her sister never met Gov. Sarah Palin, who is now Sen. John McCain’s running mate.

Obama and McCain argued again and again over which candidate would be a better president for "Joe the Plumber" during the debate. All those shout-outs made Joe a media superstar overnight.

Even Wurzelbachers who have nothing to do with Joe started fielding questions.

Doug Wurzelbacher, a California dog musher who lived in Palin’s own stomping grounds - the Mat-Su Valley - in 2001 and 2002, said his phone started ringing Thursday from friends, and some strangers.

They wanted to know: Where the two related?

Meanwhile, bloggers discovered the Wurzelbacher name in sled-dog race results online - and that the musher was from Palin’s part of Alaska - and questions began flying about a possible Doug-and-Joe connection and whether Joe, who confronted Obama in front of television cameras in Ohio, was a plant.

"There’s something smelly about the plumbing in this story," someone wrote on the Daily Kos.

Doug said he’s never met Palin and that while his last name is a rare one, he’d never heard of Joe before the debate.

"Somewhere along the line, I got to be related to him, but I don’t know him," Doug said

Morrison first met Joe Wurzelbacher in Ohio in the late ’80s, when he was dating her sister.

"She said, ’I’m going to bring my boyfriend home and I think he’s the one. You’re my older sister and I want you to tell me what you think and here comes this big guy walking through the front door," Morrison said.

The Wurzelbachers married and moved to Fairbanks, then left the state about four years later to be closer to family, she said. Jennifer now lives in Michigan and declined to be interviewed. The couple’s son, Joey, lives with his father, Morrison said.

Morrison said she last talked to Wurzelbacher maybe two years ago. "He wanted to actually come up here and do some hunting and fishing."

___

© 2008, Anchorage Daily News (Anchorage, Alaska).

Visit the Anchorage Daily News online at http://www.adn.com/
Article URL: http://www.bostonherald.com/news/politics/2008/view.bg?articleid=1126197

U.S. Economy: Sentiment Drops by Record; Housing Starts Decline





By Shobhana Chandra and Bob Willis

Oct. 17 (Bloomberg) -- Confidence among Americans fell by the most on record and single-family housing starts hit a 26- year low, posing an increasing threat to consumer spending that accounts for more than two-thirds of the economy.

The Reuters/University of Michigan preliminary index of consumer sentiment fell to 57.5 this month from 70.3 in September. The measure averaged 85.6 last year. Construction of single-family homes dropped 12 percent last month to a 544,000 annual rate, the Commerce Department said in Washington.

Today's figures show that the tightening credit crunch has spurred a further step down in the three-year real-estate recession. Falling property values, along with the crash in stocks, threaten to cause the first decline in consumer spending since 1991, and put pressure on the Federal Reserve to cut interest rates again this month.

"Even gasoline-price decreases were overpowered by the massive destruction of wealth," said Michael Feroli, an economist at JPMorgan Chase & Co. in New York who used to work at the Fed. "Things are pretty awful in the economy and that should make itself felt through weaker consumer spending."

Economists' Forecasts

The confidence index was forecast to fall to 65, according to the median of 61 economists surveyed by Bloomberg News.

Starts on all residential properties, including condominiums, slid to 817,000, below all 74 forecasts in a Bloomberg News survey.

Builders will find it difficult to lure buyers into the market after stock prices plunged this month and banks made it harder to qualify for a mortgage. Declines in construction are likely to continue to hurt economic growth well into 2009, extending the housing slump into a fourth year.

"Builders have stopped building in large measure, but they waited too long to stop building," Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University, said in a Bloomberg Television interview. "At this point they've got to clear the inventory."

Recovery Delayed

The biggest housing slump in a generation was showing signs of nearing a bottom when financial markets began to implode in September, leading to the government takeover of mortgage finance companies Freddie Mac and Fannie Mae, the failure of banks and a $700 billion government rescue plan this month.

"These things are putting a new nail" in the real-estate market's coffin, David Seiders, chief economist at the National Association of Homebuilders, said in an interview on Bloomberg Television yesterday. "This sort of vicious feedback loop is still in play."

Building permits, a sign of future construction, dropped 8.3 percent to a 786,000 pace, matching the lowest level since November 1981.

Starts of single-family homes dropped to record lows in three of four regions in September, led by a 24 percent slump in the Midwest.

The University of Michigan's index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, dropped to 56.7 from 67.2.

Record Low

Its gauge of current conditions, which reflects Americans' perceptions of their financial situations and whether it is a good time to buy big-ticket items like cars, slumped to 58.9, the lowest level ever, from 75.

There was mixed news on price expectations. Consumers said they projected an inflation rate of 4.5 percent over the next 12 months, compared with 4.3 percent in the September survey. Over the next five years, the figures tracked by Fed policy makers, Americans expected a 2.8 percent rate of inflation, down from the prior month and the slowest estimate in a year.

Shoppers are paring expenses. Sales at U.S. stores open at least a year rose 1 percent last week from a year earlier, slowing for the eighth time in nine weeks, the International Council of Shopping Centers and Goldman Sachs Group Inc. said in a statement on Oct. 14.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDdPW6jDDSsQ&refer=home

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

GET OVER IT, ALREADY

The Republican party, John McCain, and Sarah Palin need to get over themselves. We've heard all too much about ACORN and alleged voter registration fraud. We've heard all too much about William Ayers and the lack of a relationship with Barack Obama. We've heard enough about the aforementioned parties' lies about the Obama tax plan raising taxes on the middle class.


We've heard enough about McCain's reckless proposal for the government - taxpayers - to purchase hundreds of billions of dollars of depreciated mortgages, bailing out banks while we take the losses.

We've heard enough about McCain's ridiculous health care plan. Taxing employer-paid health benefits and giving a family a $5,000 tax credit so they can purchase their own insurance? Analysis after analysis has definitively shown that the plan will collapse the nation's employer-based health benefits structure. They show that unless you want a truly bare-bones, negligible benefits health insurance plan, no one can purchase insurance for $5,000 for a family.

We've heard enough of the lies about Obama's proposal to give people access to the FEHBP, Federal Employees Health Benefits Plan, wherein federal employees get to select from a menu of insurance plans managed by private health insurance companies. It is clearly not a government run health plan; far from it. John McCain lies when he continually repeats his rants on this important subject.

We've heard enough about "drill, baby, drill" when major oil companies sit on tens of millions of acreage without having drilled for years.

We've heard enough about how John McCain has a record of supporting veterans causes when every major veterans organization gives McCain repeated low and even failing grades.

We've heard enough about Colombia being our largest agricultural products trading partner when we clearly know from government data that Canada is our largest partner.

McCain wants to freeze government spending, a huge error that Herbert Hoover made. He failed to stimulate the economy. Yet McCain denies the facts of history when he suggests that Obama's plans to spend and invest are the same as Hoover's record.

John McCain has nothing to say, nothing. He can't even accurately read national polls. He claims that Obama wants to see us defeated in Iraq, yet another lie.

Perhaps worst of all, McCain and Palin rallies seem to bring out the worst in attendees, with crowd calls for killing Obama, calling him a traitor, etc.

McCain has spent too many years in Washington. He has accomplished little.

Let's continue the momentum of the Obama campaign until the hour of voting on November

HAVE WE HIT BOTTOM?

Has the stock market hit bottom? Rock bottom?

This month, we have seen the DJIA hit 7900, a level not seen since 2003. The S&P500 Index hit a low of 830, also not seen since 2003.

* Since the market hit those intraday lows, we have seen enormous worldwide government interventions in the financial system.

* We have begun to see evidence of credit markets unfreezing.

* Construction of new homes dwindled to a 17-year low in September as home builders sought to reduce the number of unsold homes. Housing starts fell 6.3% in September to a seasonally adjusted annual rate of 817,000, the lowest since January 1991, the Commerce Department estimated Friday. Starts of single-family homes tumbled 12% to 544,000, the lowest since February 1982. The September estimates were much worse than the annual rate of 870,000 that was expected by economists. Building permits fell 8.3% to 786,000, a 27-year low. Permits for single-family houses fell 3.8% to 532,000, the lowest in 26 years.

* While investors wait for absolute bottoms on individual stocks, or an absolute cycle low for the general market, dividend yields on financially strong, high quality companies have increased to historic highs.

* Price/earnings valuations on many solid companies have fallen to at or close to single digits, a far cry from the multiples of the 20s and more that "historically-impaired" investors had grown accustomed to since 1995.

Some examples - again, read my disclaimer on this site and do not take this information as an investment recommendation. All of these stocks are representative of high dividend yields, consistent dividend growth, and low price/earnings ratio values based on last year's earnings.


Pfizer (PFE) - 7.54% P/E below 10
Bristol-Myers Squibb (BMY) - 7.18%
Dow Chemical (DOW) - 6.92% P/E below 10
Verizon Communications (VZ) - 6.71%
AT&T (T) - 6.28% P/E below 10
General Electric (GE) - 6.23% P/E below 10
International Paper (IP) - 5.58% P/E below 10
Eli Lilly & Co. (LLY) - 5.47% P/E below 10
Glaxosmithkline (GSK) - 5.42%
Merck & Co. (MRK) - 5.39% P/E below 10
DuPont (DD) - 4.85% P/E below 10
Kraft Foods (KFT) - 4.22%
Intel (INTC) - 3.53%

The stocks mentioned here are not necessarily selling at the lowest prices that we may see in coming days, weeks, or even months. However, if you are an accumulator over time, they are typical of the kinds of values that you might look for. You may do better, faster, if you are a trader, with high growth oriented stocks such as technologies. You may even benefit from any recovery in traditional energy.

However, given the high risks of a steep recession that the worldwide economy still face, better to be prudent than piggy?

Between now and yearend, we are likely to see continued volatility. You may see individual investors, mutual funds, pension funds, and hedge funds decide to take additional end-of-year losses - or profits.

So if you are inclined to put some of your cash back to work in stocks, be forewarned, understand the ongoing risks. But when we begin to see historically low price/earnings ratios and high dividend yields in financially sound companies, perhaps it is time to return.

Thursday, October 16, 2008

CHANGES to CLEAR THE MIST

Please note: Clear The Mist has made some changes. Under "RESOURCES," you will find numerous videos of interest.

You can also access CLEAR THE MIST'S favorite videos at:
http://tinyurl.com/5nmneu

Verizon and AT&T Provided Cell Towers for McCain Ranch Senator's Wife Did Not Receive Favors, Campaign Says



The following story appeared in the Washington Post. You know, I am outraged, aren't you? I get lousy cellphone reception our home. I'd like Verizon to install a free cellphone tower on the roof of our home.

And if that wasn't enough, don't you think that Cindy and John McCain could afford to have actually paid for the portable cellphone tower?

By James V. Grimaldi
Washington Post Staff Writer
Thursday, October 16, 2008

Early in 2007, just as her husband launched his presidential bid, Cindy McCain sought to resolve an old problem -- the lack of cellphone coverage on her remote 15-acre ranch near Sedona, Ariz., nestled deep in a tree-lined canyon called Hidden Valley.

Over the past year, she offered land for a permanent cell tower, and Verizon Wireless embarked on an expensive public process to meet her needs, hiring contractors and seeking county land-use permits.

Verizon ultimately abandoned its effort to install a permanent tower in August. Company spokesman Jeffrey Nelson said the project would be "an inappropriate way" to build its network. "It doesn't make business sense for us to do that," he added.

Instead, Verizon delivered a portable tower known as a "cell site on wheels" -- free of charge -- to the McCain property in June, after the Secret Service began inquiring about improving coverage in the area. Such devices are used for providing temporary capacity where coverage is lacking or has been knocked out, in circumstances ranging from the Super Bowl to hurricanes.

In July, AT&T followed suit, wheeling in a portable tower for free to match Verizon's offer. "This is an unusual situation," AT&T spokeswoman Claudia B. Jones said. "You can't have a presidential nominee in an area where there is not cell coverage."

Ethics lawyers said Cindy McCain's dealings with the wireless companies stand out because her husband, Sen. John McCain (R-Ariz.), is a senior member of the Senate commerce committee, which oversees the Federal Communications Commission and the telecommunications industry. He has been a leading advocate for industry-backed legislation, fighting regulations and taxes on telecommunication services.

McCain and his campaign have close ties to Verizon and AT&T. Five campaign officials, including manager Rick Davis, have worked as lobbyists for Verizon. Former McCain staff member Robert Fisher is an in-house lobbyist for Verizon and is volunteering for the campaign. Fisher, Verizon chief executive Ivan G. Seidenberg and company lobbyists have raised more than $1.3 million for McCain's presidential effort, and Verizon employees are among the top 20 corporate donors over McCain's political career, giving his campaigns more than $155,000.

McCain's Senate chief of staff Mark Buse, senior strategist Charles R. Black Jr. and several other campaign staff members have registered as AT&T lobbyists in the past. AT&T Executive Vice President Timothy McKone and AT&T lobbyists have raised more than $2.3 million for McCain. AT&T employees have donated more than $325,000 to the Republican's campaigns, putting the company in the No. 3 spot for career donations to McCain, according to the nonpartisan Center for Responsive Politics.

"It raises the aura of special consideration for somebody because he is a member of the Senate," said Stanley Brand, a former House counsel for Democrats and an ethics lawyer who represents politicians in both parties.

McCain campaign spokesman Brian Rogers said that the senator is not a regulator and that Cindy McCain received no favors from Verizon or AT&T.

"Mrs. McCain's staff went through the Web site as any member of the general public would -- no string-pulling, no phone calls, no involvement of Senate staff," Rogers said. "Just because she is married to a senator doesn't mean she forfeits her right to ask for cell service as any other Verizon customer can."

Verizon spokesman Nelson said: "I am not going to talk about individual customers and their requests."

The company navigated a lengthy county regulatory process that hit a snag on environmental concerns. The request ultimately prevailed when a contractor for the company invoked the Secret Service after John McCain secured the Republican nomination.

After checking with Verizon and the McCain campaign, Secret Service spokesman Eric Zahren said an e-mail sent in May by the service's technology manager could be perceived as a request for temporary coverage under the service's contract with Verizon.

"This was something that was being addressed before we were out there," Zahren said. The agency could have made do with existing cell coverage in the area, he said, because it uses multiple layers of communication, including a secure land radio network. Zahren said the contractor was not authorized to invoke the Secret Service in dealings with the county.

Documents that The Washington Post obtained from Arizona's Yavapai County under state public records law show how Verizon hired contractors to put a tower on the property. At that point, many counted McCain out of the race.

On Sept. 18, 2007, a contractor in Mesa, Ariz., working for Verizon surveyed the McCain property. Another contractor drafted blueprints that called for moving a utility shed and installing a 40-foot tower with two antennas and a microwave dish, surrounded by a six-foot wooden fence.

Construction costs would be $22,000, records show. Industry specialists said the figure probably covers only the tower and fence because the antennas, dish and power source would run the cost into the six figures. On Dec. 4, Cindy McCain signed a letter authorizing Verizon Wireless to act on her behalf to seek county land-use permits.

Coverage maps that a Verizon contractor submitted to the county show that the tower would fill gaps in unpopulated parts of Coconino National Forest and on about 20 parcels of land, including a handful of residences, and two small businesses open by appointment only.

"It is fairly sparsely populated in that pocket along Oak Creek," said Kathy Houchin, the Yavapai County permitting manager.

Three telecommunications specialists The Post consulted said the proposed site covers so few users that it would be unlikely to generate enough traffic to justify the investment. Robb Alarcon, an industry specialist who helps plan tower placement, said the proposed location appears to be a "strategic build," free-of-charge coverage to high-priority customers. A former Verizon executive vice president, who spoke on the condition of anonymity because he worked for the company, agreed with Alarcon, saying, "It was a VIP kind of thing."

Verizon spokesman Nelson declined to comment when asked whether this had been considered a "strategic build."

Cindy McCain signed a contract with Verizon on May 6, granting free use of her property for a year in exchange for "the benefits of enhanced wireless communications arising from operation of the Facility."

Over Memorial Day, McCain hosted potential vice presidential running mates at the ranch, but the area still lacked coverage. Richard Klenner, then the wireless communications chief of the Secret Service, which had recently started providing protection, sent an e-mail to Verizon.

"Is there any way of speeding up the process?" he asked, adding that he wanted Verizon to "explore every possible means of providing an alternative cellular or data communications source in the referenced area and provide any short-term implementation of any type as a solution in the interim."

Staff researcher Madonna Lebling contributed to this report.

© 2008 The Washington Post Company


http://www.washingtonpost.com/wp-dyn/content/article/2008/10/15/AR2008101503575.html

Wednesday, October 15, 2008

RESCUE ME!

For those investors, or simply those Americans and others that are concerned about the stock market's back-pedaling subsequent to virtually every Treasury and federal government pronouncement regarding the enormous steps they are undertaking on order to save the western world's financial system, times they must be a puzzlin'.

After the DJIA recovered to an intraday high of about 9,800 on Tuesday, and the S&P500 Index's 1,040, we have been witness to declines of 8.6 percent and 12.7 percent, respectively. Or 1,220 DJIA points and 132 S&P500 points. Ouch!

So much for any market pundits and professionals that thought stocks had hit bottom, or that it was time to jump back into the pond with your life's savings.

Positive: governments around the world, including the U.S., have stepped in with literally trillions of dollars (read inflation) in order to buy interests in banks, guarantee bank-to-bank transactions, increase insurance on bank deposits, propose to buy mortgage-backed securities. So why does the market seem so skeptical? Or does it?

It is more likely than not that the banking system will be saved from collapse. For that, you can breath easier about ATM access, etc. And governments will not stop at implementing any other measures that they can create or expand upon in order to maintain the system. No one wants to endure another Great Depression!

But what seemed to suddenly dawn on many stupified and sophisticated investors over the past two days is that, DUH!, we are in some kind of recession, and it is likely to be very very painful.

OK, this is news to some and not to others. I hate beating dead horses, even if their souls have already moved on.

So if we are in a recession, and if we will continue to be in a recession for an as yet undetermined period, how do you estimate the earnings of public companies? And assuming that you can make a reasonable stab at that, what value do you place on them?

In prior posts, I've laid out the case for current and lower levels of stock prices. We could still see last week's lows tested, perhaps even taken out (that means even lower lows). Given all the uncertainty, it truly is risky business to be investing right now.

Now some pundits and "professionals" are trying to make the case for buying small amounts of stock, the old "averaging down your costs" philosophy. Ultimately, depending on your time horizon, this will likely work - so long as you are not averaging down to zero.

I expect that we will see lower prices in the stock indices, and certainly in many individual stocks. But smart investors that do their work will find bargains at this level and as the market tests its prior lows. This all assumes, of course, that the wunderkids that are working frantically to save us financially get the job done. That's not yet a foregone conclusion, particularly because we do not know what inflation will look like in a year or two. Do I see some shimmering gold, I mean metal gold?

We typically fight inflation by raising interest rates in order to curb economic activity. After all, we wouldn't want there to be a housing price bubble or Internet bubble or tulip bubble or anything like that! But we are caught between the proverbial rock and hard place.

Raise interest rates? Well, we can't do that; after all we are encouraging nations worldwide to LOWER them. Ours are already at historic lows. Can't get much closer to zero. No, I'm afraid that it will take years to wind all of this mess down.

Stock markets may likely find decent value levels and we will once again find interest in growth companies, value companies, high dividend yield companies, whatever flavor suits you.

Thanks to years of non-regulation, deregulation, anti-regulation, systemic damage has been done to confidence. And without confidence, people are hard-pressed to invest very much. They feel that the deck is too heavily stacked against them. Right now, it sadly is.

LET'S JUST TELL THE TRUTH, OK?

On October 3, I posted a story titled "The Reckoning." It appeared that day in The New York Times and was written by Stephen Labaton.

Essentially, it was a narrative regarding an April 2004 meeting that underscored the Bush administration anti-regulatory policies, gutting regulatory oversight and competence, and the incompetence of the S.E.C. under Bush. That meeting opened the floodgates to bank deregulation and the mortgage-backed securities profiteering that has gutted our economy.

Today - October 15 - an anonymous reader posted the following comment:

"All the commissioners present at that meeting, were appointed by President Clinton."

Sadly, this is just another example of how the right-wing finds it easy to simply ignore FACTS.

The "anonymous reader's" claim is entirely false, kinda like alleging that Barack Obama is a Muslim terrorist, etc. Honestly, I love to receive comments. But PLEASE PLEASE PLEASE check your facts.

The aforesaid claim/comment is entirely FALSE. It is either a simple fabrication, for which the right-wing Bush/McCain policy apologists are reknowned, or a simple error in researching facts.

Actually, every single commissioner on the Securities & Exchange Commission in April 2004 were President George W. Bush appointees. Every single member that was appointed by President Clinton had been replaced no later than 2002.

Let's keep facts straight.

source: http://www.sec.gov/about/annrep03.shtml

WHIPPIN' BUTT

I don't know about you, but someone might infer a slight hint of racism in John McCain's comments to one of his overstated crowds the other day.

"We're a couple points down, OK, nationally, but we're right in this game," McCain said to cheers. "The economy has hurt us a little bit in the last week or two, but in the last few days we've seen it come back up because they want experience, they want knowledge and they want vision. We'll give that to America."

"We're going to spend a lot of time and after I whip his you-know-what in this debate, we're going to be going out 24/7," McCain said.

After that comment, McCain added, "I respect Senator Obama, we will conduct a respectful race and be sure everyone else does too."

WHIP HIS "YOU-KNOW-WHAT?"

Now that's what I call respectful! The McCain/Palin dynamic duo continue to foment sad right-wing anger in their crowds. On their crowds, it is sad that they have to resort to exaggerating the size of their crowds. You can be sure, usually based on factual things such as fire marshal estimates, that anytime they claim a crowd of tens of thousands, it's usually something well below 10,000.

But back to the point. The Republican team is tone-deaf to the noise emanating from their crowds - "kill him," "traitor," "off with his head." Personally, I have nightmares about what this says about the safety of Barack Obama after he wins the election. And every American, every person that is aware of their soul, that holds Christian, Jewish, Muslim or any other spiritual value set should shudder and condemn McCain, Palin, and the entire cadre of Republican denialists that embrace them.

Weeks ago, we all remember McCain's stated "turning of the page" with their campaign, essentially abandoning a dialogue of issues in exchange for personal attack.

A couple of points down in the race. Really. It's never over until it's over, as they say. But it sure seems like recent polls, both nationally and in so-called battleground states shows Obama extending double-digit leads. I wonder if McCain reads the same newspapers and magazines that Sarah Palin DOESN'T?

John McCain unveiled his clearly hurried economic stimulus plan yesterday, encouraging senior citizens to divest themselves of their retirement accounts at an accelerated rate, demanding that the federal government buy up BAD mortgages at face value and then renegotiate them, causing taxpayers to incur potentially huge losses. And last but not least, proposing to slash the capital gains tax in half. Now that's a winner! As Obama said after hearing about McCain's plan, who has capital gains? And it turns out that some 60 percent of capital gains taxes are paid by guess who? People that earn over $1 million a year. Now THAT'S real help for the middle class.

I doubt that Obama will take anything for granted in tonight's debate. It just doesn't seem to be in him. Will McCain toss in the towel and bring up scary names and the Republican's favorite card, the fear factor? And how would Obama respond? Issues, issues, issues, That is what is capturing American voters - solutions to real issues.

Tonight's debate will surely be "must watch TV."

Monday, October 13, 2008

END OR BEGINNING? Part Deux

Recalling the post of October 12: "So what's next this coming week? At this writing, Sunday afternoon, it remains unclear if statements by Henry Paulson at Treasury, and negotiations with our European and Asian partners will be sufficient to calm markets and free up the credit markets. If there is a solid glimmer of sunshine before Monday's opening of New York trading, we may very well see the markets continue its bounce off Friday's lows. But few bear markets end so spectacularly. And we still have a major recession to account for, increasing unemployment, slowing or declining exports, and a continued slide in home values. So once worldwide credit markets begin to stabilize, all eyes will focus on the future, and it does not look very bright for the next year or two from where this person sits."


So here we sit:

The DJIA exploded up more than 936 points, or more than 11.1 percent.
The S&P 500 Index soared by 104.13, or 11.6 percent.
Even the technology-heavy NASDAQ Composite soared by 194.74, or 11.8 percent.

General Motors was up by a third, Ford up more than 20 percent. Microsoft up nearly 20 percent. One would think that we had missed the RECESSION. OOPS!

While anyone that owns stocks, in a retirement account or mutual fund, etc. has to cheer the market's performance, keep some things in mind:

Because of the Columbus Day holiday, the all-critical credit markets were closed today. A very large chunk of today's "buying" was short covering. After all, after last week's debacle, who would not have not expected some rally?

Yes, the rallies began last night, in Asia and European markets, setting New York's stage. Yes, as was "hoped for" on Sunday, world economic leaders did seem to come together with a commitment to support the financial markets - and at unbelievable cost. Collectively, we are talking about a rescue plan worldwide that will cost well over $2 Trillion! That's, at least, what we know now. And, as we've said, we still do not know where all the bodies are buried.


NEXT?

So what's next? Personally, I'd love to believe that we've experienced all the carnage, I really would. Have we seen the lowest of the lows? Perhaps, but we cannot yet be certain. History tells us that large rallies, be they one day wonders or one's that take days, weeks, months, always occur in the midst of bear markets.

* We still have to see if the credit markets "unfreeze."

* We still have to recalibrate economic growth expectations and earnings potential for a recession. No one yet really knows how big this recession will end up being, let alone how long it will take to recover.

* Of course, now that we are really beginning to understand the magnitude of government interventions in trying to prevent a Depression, it is more than likely that a tsunami of inflation is waiting out there - somewhere down the road. How will we deal with that? Well, typically by increasing interest rates, trying to slow economic growth.

But that's not the problem we are facing, is it? We are faced with central bank treasuries, worldwide, gone mad in printing money. It's not just the good ole' USA, now.

And we may not yet be finished with the deflation of commodities prices worldwide. Sure oil may not entirely collapse. Vested interests will try to cut production in an attempt to stabilize prices. But demand for oil may fall off so sharply that even that manipulative effort may not work. Then there's demand for everything else - metals, food, building materials, etc. Governments will attempt, in some cases, to stimulate demand with new stimulative measures. We're speedily talking about it in the U.S. already - more printing presses please.

I am not saying that we shouldn't stimulate demand. One of the major failings of good ole' Herbert Hoover in the early Great Depression years was to NOT stimulate demand. You know, the core value of good old Republican conservative economic theory: slash spending in the midst of an economic crisis that is partly based on falling demand - for employees, for goods and services. Surely the free market will save the day. Didn't work in the 1930s, won't ever work.

Today Barack Obama unveiled his own short-term stimulus plan that included tax credits for businesses that hire new employees, limited tax-free withdrawals from retirement plans, a 90-day foreclosure moratorium, a doubling of the $25 billion in loan guarantees for the U.S. auto industry, among other middle-class friendly recommendations. And he is calling for them now, not in January.

Today's John McCain plan: "The campaign for Republican presidential candidate John McCain on Monday criticized an economic rescue plan suggested by Democratic rival Barack Obama, saying that it focused too much on new government spending."

"Americans were hoping today that Sen. Obama would now tell us that he has decided that the economy is bad enough that he is not going to move forward with his tax increases," former Ohio Republican Congressman Ron Portman said in a conference call with reporters.

"We've heard a lot of promises for new spending…and that's not the way we are going to get ourselves back on track," he added.

Portman cited mounting deficits as one of the reasons for the troubled economy, and said that McCain's "pro-growth and pro-jobs" plan will "offer tax relief by keeping spending under control."

Hmmm. Just like he and his associates kept spending under control for the past eight years. And more tax cuts for the most affluent, trickling down their benefits just like they have since the Republicans' beloved Ronald Reagan came to office.



The stock market bear isn't dead. No doubt, we will see lots of folks taking tax losses before December 31. We'll see several more job loss reports in the months to come, lower corporate profits, more people struggling to stay in their homes. The good news for those folks that the Republicans left behind? (sounds biblical doesn't it?) Lower gasoline prices, perhaps; kinda like a tax cut.

But it remains to be seen if there will be any home heating relief this winter. Forecasts are already calling for higher bills. Will credit free up so that people can buy automobiles or new homes? Will their home values stabilize?

Will people once again vote against their own interests?

Three weeks to go. Hold onto your wallets and purses.

The Post-Binge World





October 12, 2008
Op-Ed Columnist

By THOMAS L. FRIEDMAN

My friend Rob Watson, the head of EcoTech International, has a saying about Mother Nature that goes like this: “Mother Nature is just chemistry, biology and physics. That’s all she is.” And because of that, says Rob, you cannot spin Mother Nature. You cannot bribe Mother Nature. You cannot sweet talk her, and you cannot ignore her. She’s going to do with the climate whatever chemistry, biology and physics dictate. And Mother Nature always bats last, and she always bats a thousand.

There is a parallel with markets. At their core, markets are propelled by fear and greed. They’re just the balance at any given moment of those two impulses. Over the long run, you cannot spin the market. You cannot sweet talk it into going up or beg it not to go down. It’s going to do whatever it’s going to do — whichever way greed and fear tug it. And the market always bats last and it always bats a thousand.

What am I saying? We are where we are today because we went on a credit binge and we’re now paying the price. Because it was the biggest credit binge the world has ever been on, a lot of wealth is going to be wiped out. Now what you’re witnessing is the market re-evaluating and re-pricing every asset in the world, without mercy, telling each stock, bond and bank what its value is in a post-credit binge world.

So why, despite the Congressional bailout, haven’t banks started lending again?

You have to go back to the beginning of the problem. After the fall of the Berlin Wall, virtually every economy in the world moved to a capitalist system, which eventually made the world awash with money looking for investments. It didn’t take long for financial engineers to figure out how to move home mortgages and commercial loans from a transaction between you and your local bank — or between your company and a syndicate of banks — to something much more diffused and fragmented. While your bank may have initiated the mortgage or the corporate loan, it was quickly sold to an aggregator who turned these different loans into bonds and then sold them all over the world in small pieces to banks and money market and pension funds.

The good news about this democratization of finance is that it powered enormous growth around the world. More people than ever grew out of poverty faster — or got rich faster. But the process became so lucrative that people — imbeciles — who should not have been selling these things got into the food chain of selling them. Banks and insurance companies that should not have even nibbled on them, gorged on them. And companies that should not have been dependent on raising capital through them became dependent.

So when some of these loans inevitably turned bad, the whole financial system got infected. Eventually everyone stopped lending to everyone else because no one knew what the other bank’s assets were worth. Indeed, if all the banks were really honest about the value of these toxic assets on their balance sheets, many of them would be under water.

The whole story of the last few months has been about different government plans to get the banks lending again. But the market is not waiting. It just keeps saying to the big banks and insurance companies: “We think you’re carrying a lot of junk on your books, and if you don’t mark it all the way down and re-price it to what it is really worth today, we will re-price you — fairly or not.” The market is going to do what it is going to do.

So what could ease this crisis? “There is going to have to be a workout,” said the financial strategist David Smick, author of “The World Is Curved,” a book about the hidden dangers in today’s global economy. “There will have to be a restructuring of all these institutions to clean up their balance sheets and recapitalize them.” Banks and insurance companies will have to be reconstituted, merged or left to die, until these toxic assets are properly priced and off the books.

The government’s job — which it is still trying to figure out exactly how to do — will be to provide a safety net of guarantees for the surviving banks, so they will be honest about pricing their assets, and then, once they have been, to help recapitalize them. “Government’s other job,” added Smick, “is to quickly establish the new rules of the road for truth-in-lending on a global basis. We still need these kind of lending facilities if the economy is going to grow again.”

This workout promises to be painful, complicated and protracted. Government will have to do its part. But it must regulate the excesses without smothering the underlying innovative, entrepreneurial and risk-taking attributes of our economy, which are what will ultimately bail us out — as they always have.

“I have no idea what the stock market is going to do next month or six months from now,” Warren Buffett told CNBC on Friday. “I do know that the American economy, over a period of time, will do very well, and people who own a piece of it will do well.”

http://www.nytimes.com/2008/10/12/opinion/12friedman.html?ei=5070&emc=eta-1

Copyright 2008 The New York Times Company

Insider’s Projects Drained Missile-Defense Millions

October 12, 2008
Insider’s Projects Drained Missile-Defense Millions
By ERIC LIPTON

WASHINGTON — They huddled in a quiet corner at the US Airways lounge at Ronald Reagan National Airport, sipping bottomless cups of coffee as they plotted to turn America’s missile defense program into a personal cash machine.

Michael Cantrell, an engineer at the Army Space and Missile Defense Command headquarters in Huntsville, Ala., along with his deputy, Doug Ennis, had lined up millions of dollars from Congress for defense companies. Now, Mr. Cantrell decided, it was time to take a cut.

“The contractors are making a killing,” Mr. Cantrell recalled thinking at the meeting, in 2000. “The lobbyists are getting their fees, and the contractors and lobbyists are writing out campaign checks to the politicians. Everybody is making money here — except us.”

Within months, Mr. Cantrell began getting personal checks from contractors and later returned to the airport with Mr. Ennis to pick up a briefcase stuffed with $75,000. The two men eventually collected more than $1.6 million in kickbacks, through 2007, prompting them to plead guilty this year to corruption charges.

Mr. Cantrell readily acknowledges concocting the crime. But what has drawn little scrutiny are his activities leading up to it. Thanks to important allies in Congress, he extracted nearly $350 million for projects the Pentagon did not want, wasting taxpayer money on what would become dead-end ventures.

Recent scandals involving former Representative Randy Cunningham, Republican of California, and the lobbyist Jack Abramoff, both now in prison, provided a glimpse into how special interests manipulate the federal government.

Mr. Cantrell’s story, by contrast, pieced together from federal documents and dozens of interviews, is a remarkable account of how a little-known, midlevel Defense Department insider who spent his entire career in Alabama skillfully gamed the system.

Mr. Cantrell worked in a division that was a small part of the national missile defense program. Determined to save his job, he often bypassed his bosses and broke department rules to make his case on Capitol Hill. He enlisted contractors to pitch projects that would keep the dollars flowing and paid lobbyists to ease them through. He cultivated lawmakers, who were eager to send money back home or to favored contractors and did not ask many questions. And when he ran into trouble, he could count on his powerful friends for protection from Pentagon officials who provided little oversight and were afraid of alienating lawmakers.

Senator Ted Stevens, the Alaska Republican, for example, chewed out Pentagon officials who opposed a missile range Mr. Cantrell and his contractor allies were seeking to build in Alaska, prompting them to back off, while a staffer for former Senator Trent Lott, Republican of Mississippi, intervened when the Pentagon threatened to discipline Mr. Cantrell for lobbying, a banned activity for civil servants.

“I could go over to the Hill and put pressure on people above me and get something done,” Mr. Cantrell explained about his success in Washington. “With the Army, as long as the senator is not calling over and complaining, everything is O.K. And the senator will not call over and complain unless the contractor you’re working with does not get his money. So you just have to keep the players happy and it works.”

The national missile defense program has cost the United States more than $110 billion since President Ronald Reagan unveiled his Star Wars plan 25 years ago. Today, the missile defense effort is the Pentagon’s single biggest procurement program.

The Army declined to discuss the Cantrell case, other than to say it had taken steps to try to prevent similar crimes from happening again.

But some current and former Defense Department officials say the exploiting of the system that preceded Mr. Cantrell’s kickback scheme has had a damaging impact, slowing progress toward building a viable missile defense system by diverting money to unnecessary or wasteful endeavors. That pattern of larding up the defense budget with pet projects pushed by lawmakers and lobbyists is a familiar one.

“What they did may have been a scandal,” said Walter E. Braswell, Mr. Ennis’s lawyer, referring to the actions of his client and Mr. Cantrell. “But even more grotesque is the way defense procurement has disintegrated into an incestuous relationship between the military, politicians and contractors.”

Dr. J. Richard Fisher, one of Mr. Cantrell’s former bosses, said: “The system needs to change. But it is not likely to do that. There is just too much inertia — and too much self-interest.”

Getting Around the System

Towering over the highway near the entrance to Huntsville is a replica of the Saturn V rocket, the powerful missile that lifted the first man to the moon.

Created in Huntsville, it is a fitting icon for this once-sleepy cotton mill town, now so dominated by the aerospace industry that it is nicknamed Rocket City. An estimated 18,000 uniformed and civilian federal employees work in the aerospace industry in the Huntsville area today, augmented by about 40,000 others, who work for federal contractors.

Michael Cantrell grew up on a dairy farm nearby, listening to the rumble of rocket test flights. As a young engineer, he became a civilian employee of the Army and quickly impressed his bosses. “Mike moved at the speed of sound,” said Lt. Gen. Jay Garner, who briefly headed the missile command.

By 1990, Mr. Cantrell, then 35, took over an experimental program to develop faster, cheaper and lighter missiles that could intercept and knock out enemy missiles flying within the atmosphere. Under the Reagan administration, money was plentiful for such research, but with the fall of the Soviet Union and the arrival of the Clinton administration, Pentagon bosses were forced to make budget cuts.

Like other Army employees, Mr. Cantrell was prohibited from lobbying or even visiting Capitol Hill unless he had permission from his agency’s Congressional liaison, a prohibition intended to block employees from promoting initiatives that Pentagon leaders did not see as a priority.

But General Garner said it was obvious to his managers what they had to do if they did not want their programs — and jobs — eliminated.

“If the money does not end up in the palm and you need it,” he said in an interview, “the only other place you can go to get it is the Congress.”

Soon enough, Army missile program managers started opening what amounted to their own lobbying shops in Washington, according to Mr. Cantrell and his former supervisors.

Mr. Cantrell became a regular on Capitol Hill, both in the halls of Congress and in the bars and restaurants where Hill staffers gather after hours. He set up a makeshift office in the US Airways lounge at Reagan National Airport, where he followed up on pitches for money to lawmakers and hid out from his Defense Department bosses. He identified lobbyists who could prove useful and contractors — many of them campaign donors — with projects that needed nurturing.

With the backing of the New York Congressional delegation, for example, he blocked cuts in financing for a sophisticated wind tunnel in Buffalo, where he promised to test his missile components. With help from then Representative Curt Weldon, Republican of Pennsylvania, who wanted Army assistance for a “technology corridor” in his district, Mr. Cantrell managed to get millions more for his program. Eventually, a dozen or so lawmakers helped him.

“It was like I was going hunting in Washington,” Mr. Cantrell said. “And I would always come up with money.” One colleague was so impressed with Mr. Cantrell’s record that she gave him a bobblehead doll carrying a briefcase marked with dollar signs.

The Pentagon had objected to Mr. Cantrell’s financing requests, but he was not discouraged. “He kept trying to kill our programs,” Mr. Cantrell said of one supervisor. But “we would go around” and get a lawmaker “to whack him.”

Inspired by his successes, Mr. Cantrell soon embarked on a more ambitious project that would all but guarantee sustained financing.

His proposal, which was based on the premise that Congress would significantly increase annual financing for his experimental missile defense work, involved not just five test launchings, but the construction of a new launching site on a remote Alaskan island and the lease of a mothballed Navy helicopter carrier, which would be used to send the simulated attack missile.

The Launching Project

It was easy to find willing partners.

The program’s main contractors, including the defense giant Lockheed Martin, prepared presentations for Congress making the case for an extra $25 million to $50 million a year for the project.

Officials in Alaska, who had been seeking money for a spaceport on Kodiak Island to launch commercial satellites, eagerly chimed in. And nearly a dozen lawmakers also did their part, Mr. Cantrell said, including Senator Stevens of Alaska; Senator Richard C. Shelby, Republican of Alabama; Senator Olympia J. Snowe, Republican of Maine; and Representative C. W. Bill Young, Republican of Florida, all members of the Appropriations or Armed Services committees with missile defense contractors in their districts.

But the military already had rocket launching sites around the globe, and Gen. Lester L. Lyles of the Air Force, who then ran the missile defense program, had no intention of spending money on another one.

General Lyles and his deputy, Rear Adm. Richard D. West of the Navy, were particularly incensed when they learned of the plans to lease the helicopter carrier, the Tripoli, and spend several million dollars renovating it.

Summoned to Washington in 1997 to explain the project, Mr. Cantrell offered little information. That only further infuriated his bosses.

“Who in the hell is in charge of this program?” Admiral West finally demanded in an exchange both men recall.

Mr. Cantrell was ordered to remove his experimental equipment from the planned launching. But the money kept coming. Mr. Stevens’s office had called to insist that the Kodiak project proceed, Admiral West and Lt. Gen. Edward G. Anderson, then the head of Army Space and Missile Defense Command, said in interviews.

“I got hammered pretty hard,” Admiral West recalled. The military men backed off, and the construction at Kodiak continued.

Mr. Cantrell said he knew that building a new launching facility was wasteful. “It doesn’t make sense,” he said. “The economics of it, they just don’t work.”

But he did not care.

“I went up there to get the money,” Mr. Cantrell said of his dealings on Capitol Hill. “And we got what we needed.”

Mr. Cantrell and his deputy, Mr. Ennis, visited Kodiak Island on the afternoon of the inaugural test launching in November 1998. The Air Force had substituted other equipment for Mr. Cantrell’s payload.

The two men, armed with a cooler filled with Miller Lite beer, watched the launching from a trailer, emerging just in time to see the missile burn an orange streak into the sky. They had hidden out to avoid any local newspaper reporters who might discover that Mr. Cantrell’s missile parts — the justification for millions of dollars in spending — were not even being tested. “There is no way we can explain this,” Mr. Cantrell remembered telling Mr. Ennis.

Fearless

The hand that grabbed Mr. Cantrell by the shoulder startled him.

It was General Lyles, who happened to be on Capitol Hill when he spotted Mr. Cantrell outside Mr. Lott’s office. It was February 1998, even before the dispute over the Alaska project had played out. But the general said he immediately suspected Mr. Cantrell was up to no good.

“Are you over here lobbying?” General Lyles asked in an exchange the two men recalled.

Mr. Cantrell had been working with Mr. Lott, then Senate majority leader, for several years. The lawmaker included several million dollars in the defense budget for an acoustics research center in his home state, and Mr. Cantrell made sure it went to the intended recipients: the University of Mississippi in Oxford and a Huntsville defense contractor that had a branch office in Oxford. In turn, Mr. Lott’s office helped get extra financing — $25 million or so every year — for Mr. Cantrell’s program.

It was an arrangement that Mr. Cantrell did not want to discuss with General Lyles. While he did not consider himself to have been lobbying that day, he readily acknowledges that he often did.

“I just mumbled a lot,” he recalled of his response to the general.

By then, Mr. Cantrell felt confident that he could find his way out of any trouble with the help of his many friends in Washington. Several were lobbyists or consultants working on his behalf; he had /placed them with friendly contractors, allowing them to bill the government for the costs, even though federal law prohibits paying any expenses associated with lobbying.

For example, Mr. Cantrell arranged for James Longley, a former Republican congressman from Maine who started his own consulting firm, to be hired as an employee by Computer Systems Technology, a missile defense contractor.

“The man could put ‘honorable’ in front of his name and go places with that,” Mr. Cantrell explained, saying that Mr. Longley introduced him to lawmakers and appealed to senior Pentagon officials to protect Mr. Cantrell’s program.

Mr. Longley, in an interview, insisted that he never sought money from Congress, but simply provided strategic advice to Mr. Cantrell.

But several people, including Dr. Fisher, one of Mr. Cantrell’s bosses, thought the arrangement improper.

“Here is an ex-congressman out there promoting Mike’s programs,” Dr. Fisher said. “He can call himself what he wants, but he is basically a lobbyist.”

The incident with General Lyles prompted a formal investigation into Mr. Cantrell’s activities that same year.

But Mr. Cantrell got Mr. Longley to call Army officials. Then Mr. Lott’s office requested that the case be closed, Mr. Cantrell said. Eric Womble, a former aide to Mr. Lott, said he could not remember taking such a step, but added that it would not have been surprising.

“Senator Lott’s staff protects people who are trying to help us and help the nation,” Mr. Womble said.

Soon, the investigation of Mr. Cantrell came to a close. He got only an oral warning from his boss.

That episode would embolden Mr. Cantrell. On several occasions, he would again be caught violating Pentagon rules and each time escape with nothing more than a reprimand.

“If you have the Senate majority leader’s office calling over to get you out of trouble, you can’t help but get a little cocky,” Mr. Cantrell said.

The Fallout

From the US Airways club, Mr. Cantrell could see the symphony of the arriving and departing planes, the Potomac River and off in the distance, the Capitol dome.

One day in 2000, Mr. Cantrell met in the airport lounge with Mr. Ennis, his deputy, and a Maine contractor to figure out how to pocket some of the government’s money.

There were easy ways to cheat. The prototype missile nose cone and heat shields that the Army had paid the Maine company to design for the Alaska tests. Why not hire the business to pretend to design them again? Mr. Cantrell asked.

The ballute — an odd cross between a balloon and a parachute — had been rejected by experts as a tool to strike an enemy missile. But why not pay the Maine company to develop them anyway? Mr. Cantrell suggested.

He could pull off such shenanigans because, by then, he had an extraordinary degree of independence. Mr. Cantrell’s experimental missile program, which had cost nearly $250 million, was about to be canceled. No working missile system had been built — and almost none of the components had ended up being tested in real launchings as planned. The effort had produced some benefits for the players involved: Congress sent an annual allotment of extra money to the Alaska launching site now totaling more than $40 million, and one of the contractors that had worked with Mr. Cantrell initially to pitch the space port, Aero Thermo Technology, had secured a no-bid federal contract to provide launching services.

Now Mr. Cantrell was on to another assignment overseeing missile defense research in Huntsville, and through his friends on the Hill, he was once again getting money for projects that the Pentagon did not want.

Mr. Cantrell, who by now was helping to oversee 160 or so contractors and managing a $120 million a year contracting budget, said he knew that if he only requested a few million dollars at a time for his scheme, there would be little scrutiny of his requests or demands that he prove that the work was actually done.

For example, the missile nose cones and other parts now made round trips from Huntsville to Maine with little or no change. Mr. Cantrell or his deputy simply marked off the work as complete, and that was the end of it.

For nearly six years, from 2001 to 2007, the men collected kickbacks from contractors. During one visit to the US Airways Club, Mr. Ennis picked up a briefcase stuffed with $75,000 in cash, according to federal court records. Mr. Cantrell also got checks, ranging from $5,000 to $60,000, once or twice a month, court records show.

The Maine contractor, Maurice H. Subilia, is under investigation; his lawyer, Toby Dilworth, a former federal prosecutor, declined to comment. Dennis A. Darling, a Florida contractor who got government research grants and then divvied them up with Mr. Cantrell, was indicted last month on a charge of paying Mr. Cantrell $400,000 in bribes from 2005 to 2007.

With his new wealth, Mr. Cantrell, now 52, built himself a $1.25 million home in an exclusive Huntsville neighborhood called the Ledges.

Mr. Cantrell, who received the bulk of the kickbacks, acknowledges his crime but he ticks off the failings of the system that he exploited: lawmakers who are eager to please contractors and campaign donors; unwillingness by the Army to push back against members of Congress whose agendas were at odds with those of the military; and little scrutiny.

“We just paid for meaningless work,” he said. “And there was so little oversight that no one noticed.”

Admiral West, the former deputy director of the Pentagon missile defense program, faults Mr. Cantrell for wrongdoing, but says there were multiple missed opportunities to investigate his activities.

“The blame needs to go around widely here,” he said. “Congress should know better; the contractors, too.”

Mr. Cantrell, who is awaiting sentencing on conspiracy and bribery charges, now spends his days sitting in the kitchen of his father-in-law’s house; his dream home was seized by the federal government.

On top of the kitchen table, next to a King James Version of the Bible and bottle of Extra Strength Excedrin, is a stack of books on how to master poker. Mr. Cantrell has reduced them to mathematical formulas pinned onto a bulletin board in front of a computer terminal, where he plays Internet poker for hours at a time. Even now, he is trying to beat the system.

http://www.nytimes.com/2008/10/12/washington/12missile.html?pagewanted=1&ei=5070&emc=eta-1

Copyright 2008 The New York Times Company

How McCain Will Steal the Election from Obama (Sort Of)

Torn from today's Huffington Post

Tom Matzzie
Posted October 12, 2008 | 01:53 PM (EST)

How McCain Will Steal the Election from Obama (Sort Of)

http://www.huffingtonpost.com/tom-matzzie/how-mccain-will-steal-the_b_133989.html

Imagine an election where one of the participants calls foul. Investigations are launched or at least called for. Prosecutors raise the specter of charges, the U.S. attorney and FBI get involved. No voter fraud is ever actually found. But by the time that conclusion is reached, the myth has been solidified both to soothe the loser's supporters and condemn the winner.

Sound familiar? Sound like the recent ACORN scandal?

Well, actually I'm talking about the 1960 election between John F. Kennedy and Richard M. Nixon. That Nixon was cheated out of a win is the stuff of legend on the Right. The allegations say that Kennedy loyalists fixed the vote counts in Illinois and Texas--swinging 51 electoral votes and a majority in the Electoral College to Kennedy. In more hyperbolic versions there is alleged involvement by the mob, the Teamsters Union or legendary Chicago mayor Richard Daley.

The story goes on that Nixon, "for the good of the country," conceded honorably and exited the scene. No matter that Nixon was later chased out of the White House for cheating in an election. The myth endures.

This whole story--maybe to be replayed with Obama playing Kennedy and McCain playing Nixon--is a canard. It is a fable. A lie made up by the conservative movement to hold together their fraying coalition.

In 2008 the stakes are bigger than they've ever been before for conservatives and the canard is that much more important to them.

In the case of Obama the conservative movement is lining up a serious of story elements. They are:

• Obama was a community organizer.
• ACORN, a group that does community organizing, has committed voter fraud.
• Obama is from Chicago.
• You know what happens in elections in Chicago. Remember the 1960 election.

The story is half true and half lies. As we all know, Barack Obama is from Chicago and was a community organizer. Those are the only true parts of the conservative story. But the other two facts are myths: the 1960 election wasn't stolen (says the conclusion of recounts and investigations in 1960 and numerous academic studies since). And, ACORN has not committed voter fraud. Not one bit.

The facts about ACORN are worth getting out. ACORN is an organization that, among other things, registers low-income people to vote. One of the ways they do this is to hire door-to-door canvassers from the neighborhoods they are working in. This sort of work is tightly regulated. So, when one of the thousands of people they give jobs to doesn't do their work right and brings back bogus or phony voter registration cards, the law REQUIRES that ACORN turn the forms in to the voter registration office. The law, rightly, doesn't want anybody throwing out voter registration forms for any reason.

But ACORN goes a step farther. They have people assigned to do quality control on all the cards--calling people on the forms after they fill them out. When they find bad information on the cards they attach a cover sheet to the card but, as mentioned above, they turn in the cards as required by law. The effect is that a few bad canvassers or a poorly run office will mean that bad cards are submitted as part of the normal process. But ACORN has done everything possible to make sure voting officials know to check the forms.

The sad fact is that in at least one state--Nevada--the voting officials disregarded ACORN's cover sheets flagging the voter registration forms. That should have never happened. The resulting blowup was a scandal in search of a scandal.

The stunning con of this whole thing is the assumption that bad voter registration cards being submitted will lead to vote fraud. If somebody submits a card for Mickey Mouse it isn't like Mr. Mouse is going to show up to vote. There is no voter fraud if nobody votes.

But the big story here is what the Right is doing. Their attacks on ACORN open up the door for two things.

First, the ACORN myth allows the Republicans to do more purging of the voter rolls--the process of removing people from the voter rolls because of arbitrary anomalies in the voter registration databases. Richard L Hasen, author of the Election Law Blog and a distinguished law professor at Loyola Law School in Los Angeles recently wrote, "Careless purging--driven by unsubstantiated fears about voter fraud--can lead to many eligible voters being incorrectly removed from the polls." Already in Ohio the Republican Party is pushing for more purging and they found a federal judge who agreed citing ACORN's activities.

Second, in the event that campaigning, purging and intimidating voters doesn't work, the Right is creating a myth like they did in 1960. They are creating the myth of a stolen election. Conservatives plan to claim that ACORN and Barack Obama stole the election. Their hope is to steal the legitimacy of what is looking like a massive repudiation of Bush, conservatives and the Republican Party. The Right plans to steal the election by trying to steal the legitimate defeat of them by progressive forces.

And why wouldn't they? The entire Republican coalition could be shattered with this election. White suburban voters who once voted Republican on tax issues are running away from Republicans on a host of issues--including taxes. Independent are looking more and more like Democratic voters. Barack Obama may even win a majority of male voters. All of them are joining with urban votes, voters of color, young people, working class union members and others to form a long-term governing majority for progressives--a progressive majority.

Conservatives are scared of a progressive majority. And they're going to lie, cheat and steal to prevent it from happening. But they can only be successful if we let them.

The best way to deflate the conservative fable is to win with an overwhelming landslide that guarantees there won't be a dispute of the results.

We also need to confront the Republican vote purging and suppression. Already big efforts by the Obama campaign, the DNC and independent groups are working on this. Progressives and Democrats are united in this effort.

But we also need to make sure the ACORN canard doesn't get to live in daylight. It is time to circle the wagons and make sure John McCain and the Right can't steal the election...even if we win.

For progressives, the ball is in our court.

Sunday, October 12, 2008

END OR BEGINNING?

Let's review some scary stock market history - of 2008 - shall we?

Prior to restarting "Clear The Mist" on September 22, 2008, this commentator had a history of increasing concern about the potential for a major bear market, particularly after the failure of investment bank behemoth Bear Stearns.


I'd like to quickly review this record:

July 15 - With the Standard & Poor's 500 Index (S&P500) closing at about 1,500, due to various factors, I cautioned that we could see the S&P500 decline to the 1,080 area, or market drop of about 28 percent. On the Dow Jones Industrials Average (DJIA), this suggested a decline to about 10,080. What largely drove this analysis was the combination of unknowns surrounding what we knew and did not know about the quality of mortgage-backed securities, plus the fact that it seemed pretty clear that we were already in a recession and likely headed to a substantial and sustained one.

September 8 - After the conservatorship of Fannie Mae and Freddie Mac, plus observing the months' long steep deterioration of stock markets in Asia and Europe, I lowered my potential downside target for the U.S. stock market to 9,500 DJIA and 1,018 S&P500.

October 3 - The case for a very steep recession increased substantially. Based on the possibility that corporate profits could possibly decline to levels not seen since the 2001-2002 recession period, targets for the DJI and S&P500 were revised downward to 8,000 and 800, respectively. Also posted here at "Clear The Mist."

October 8 - Based on various technical and fundamental indicators of the stock market, and looking more closely at the 1973-74 bear market, this commentary began settling on a DJIA of about 8,300 and S&P500 of about 830. The 1973-74 market decline began to look more comparable based not only on various indicators - which are not important to go into here - but also on the kind of trigger that we experienced back then. You may or may not recall the OPEC oil shock, long gas lines and shortages, and resultant spiraling inflation and interest rates. The effects of the oil shock rapidly rippled through the economy worldwide. Governments were hard-pressed to devise solutions and countermeasures. Does it all sound familiar?

During the day on October 10, we hit intraday lows of DJIA 7,900 and S&P500 830.

October 10
- The potential downside was revised to a possibility of 7,200 DJIA and 700 S&P500. Barring a Great Depression-type scenario, this forecast, essentially another 15 percent on the DJIA and 22 percent on the S&P500 based on Friday's close, would clearly mark the steepest percentage decline in stock prices since the 1930s.

Why such a pessimistic scenario? First, let me caveat two items: 1) please note that these are only my opinions and should not be relied upon as recommendations, advice or bets (as clearly stated elsewhere on this site); 2) this commentator sees this, based on what we know at this time, as clearly a worst-case type scenario - barring a Depression, once again.

In my opinion, any analyst or pundit or "guru" that suggests they can reasonably estimate valuation of stocks in this market based on future near-term earnings is smoking something that I'd like to try. And even if they can successfully model what corporate earnings might be over the next year or two, they other key is this: what valuation will be placed on those earnings, either estimated or actual? I, for one, believe that valuation models, at least for the time being, are out the window.

If the international community is not successful - and that includes the U.S. - in immediately taking necessary action to free up the credit markets, bring worldwide interest rates down considerably, and taking other critical steps, all prognostications go by the wayside.

NEXT?

So what's next this coming week? At this writing, Sunday afternoon, it remains unclear if statements by Henry Paulson at Treasury, and negotiations with our European and Asian partners will be sufficient to calm markets and free up the credit markets. If there is a solid glimmer of sunshine before Monday's opening of New York trading, we may very well see the markets continue its bounce off Friday's lows. But few bear markets end so spectacularly. And we still have a major recession to account for, increasing unemployment, slowing or declining exports, and a continued slide in home values. So once worldwide credit markets begin to stabilize, all eyes will focus on the future, and it does not look very bright for the next year or two from where this person sits.

Secretary Paulson has announced that he will begin a program of investing a portion of the $700 billion in EESA authorization in banks and perhaps other financial institutions, as has the UK. This is a positive step, initially proposed by Barack Obama and Senate/Congressional Democrats. It would be easy and simple to stand on "free market" principles and suggest that government has no right to buy chunks of the private economy. But in this instance, at this time, it is because the private sector has failed us that free market folks must support government involvement.

Today, it was reported that insurance giant AIG, now effectively owned/controlled by taxpayers, knew a year or more ago that they had serious problems in the credit default swaps business. According to reports, not only did they know, but they decided to go the extra mile and attempt to hide it from their auditors. I'm sure we'll hear a lot more on this subject in the days and weeks to come.

November's election is no longer about party loyalties, Republican or Democrat. It's about "Country First," as one of the candidates is fond of saying. But in this case, putting "Country First" is about the middle-class, it is about standing up for the least among us, and yes, it is about assuring that we have a fully functioning banking system - even if that requires government intervention and ownership.

From the mid-'90s through 2006, Republicans controlled Congress and pushed an agenda of deregulation. It actually began under Ronald Reagan. For the past two years, since Democrats gained majorities, Republicans have been there every step of the way to block any piece of legislation that could have mitigated our current situation.

If voters do not get it done on November 4, when will we have another opportunity? Can the U.S. really risk waiting yet another four years? Can your 401(k) or 403(b) or IRA or your home equity?