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Crimes of Finance – Open Thread

April 29, 2009

Headliners:

Fed Is Said to Seek Capital for at Least Six Banks

Economy in U.S. Shrank at 6.1% Rate in First Quarter

US still deep in recession – green shoots crushed

U.S. Treasury to Sell $71 Billion in Long-Term Debt

Ken Lewis’s head on the chopping block?

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34 Comments leave one →
  1. Stemella permalink*
    April 29, 2009 7:17 am

    Head of U.S. bank rescue program prepares to exit

    Holy crap! Neel Kashkari is out the door! One rat down, how many to go?

    he head of the $700 billion rescue fund created to restore the U.S. financial system will likely make Friday his last day on the job, The Washington Post reported.

    Neel Kashkari has taken the brunt of Congress’ criticism of the bailout program but is credited with helping keep the country out of a complete financial meltdown.

    Former Treasury Secretary Henry Paulson tasked him with heading the $700 billion program to bring the country out of the biggest financial crisis in generations after Congress approved the bailout package in October.

    He was asked to stay on as the Treasury Department’s interim assistant secretary for financial stability to ensure a smooth transition when the Obama administration took over.

    The Post reported his last day would likely be Friday.

    Herb Allison, who has been chief executive of Fannie Mae since it was seized by the government in September, has been tapped to take over the position and is awaiting confirmation by the U.S. Senate.

    • cometman permalink*
      April 29, 2009 7:45 am

      Nice pic today!

      Kashkari gone can’t be a bad thing but the fact that he may be replaced by another rat from Fannie Mae doesn’t sound reassuring. Looks like he got there after the disaster was created though so it may not be quite so bad. We’ll have to wait and see what info starts coming out about Allison’s history but at this point it’s probably safe to assume that if he’s being asked to “help”, he’s probably cut from the same cloth as Geithner et al.

      I was going to post a link to the article I just read about the bad report on last quarter’s GDP but it looks like the automatic link generator already has it up there. The numbers were not good.

      • Stemella permalink*
        April 29, 2009 8:01 am

        Here’s his bio from Wiki below. His work for John McCain is a bit disturbing, may be a Navy connection more than anything. The rest of his background screams ruling class and Wall St insider. He will, like Kashkari, be good to Wall Street and to the banks.

        Herbert M. Allison, Jr. (born 1943) was appointed as President and Chief Executive Officer of Fannie Mae in September 2008 by Director James Lockhart of Federal Housing Finance Agency, as conservator of Fannie Mae.

        Prior to being appointed to Fannie Mae, he was Chairman, President and Chief Executive Officer of TIAA-CREF from 2002 until his retirement in 2008.

        He began his professional career in 1971 as an associate in the investment banking division of Merrill Lynch in New York. After postings in Paris, Tehran and London, Mr. Allison served at various times as Treasurer, Director of Human Resources, Chief Financial Officer and Executive Vice President for the Investment Banking, Equity and Debt Divisions before being elected President, Chief Operating Officer and a member of the Board of Merrill Lynch & Co., Inc., in 1997.

        After leaving Merrill Lynch in mid-1999, he served as National Finance Chairman for U.S. Senator John McCain’s first Presidential Campaign.

        From 2000 to 2002, Mr. Allison was President and Chief Executive Officer of the Alliance for Lifelong Learning, Inc., a joint venture of Oxford, Stanford and Yale Universities, offering online, college-level courses to adults.

        Allison is a director of Time Warner Inc., and a member of the Advisory Board of the Yale School of Management, the Advisory Council of the Stanford Graduate School of Business, and the Federal Reserve Bank of New York’s International Advisory Committee.

        He was a director of the New York Stock Exchange from 2003-2005. In recent years Mr. Allison also chaired the Business-Higher Education Forum and the Vietnam Education Foundation and served on the Business Roundtable, the Financial Services Roundtable, recently served on the Board of Directors of The Conference Board, the Board of Trustees of The Economic Club of New York, the New York State Commission to Modernize the Regulation of Financial Services, the New York State Commission on Education Reform and the Council of Graduate Schools Advisory Committee.

        Allison earned a B.A. in philosophy from Yale University. Following four years as an officer in the U.S. Navy, including a year in Vietnam, he received an M.B.A. from Stanford University.

        • cometman permalink*
          April 29, 2009 8:08 am

          Ha! Looks like our vast readership will get the full rundown on Allison now ;) I had a feeling you might be looking into it at the same time I was but I didn’t check before I hit post.

    • cometman permalink*
      April 29, 2009 8:05 am

      Here’s more on Allison. Just a wiki link but it has more info than other bios I found with a quick search like this one. He worked for Merrill Lynch for a long time and was president and COO of the company before he left. He was gone before Merrill was slapped with a $100 million fine by Eliot Spitzer for misleading investors but I suspect that he was there at the time some of the shenanigans were going on because the fine wasn’t for a single instance and came after a lengthy investigation. The wiki link mentions that after leaving Merrill he served as the Finance Chairman for John McCain’s first presidential campaign. Evidently not much of Allison’s financial knowledge rubbed off on Johnny Mac since he still claimed to know next to nothing about economics last year. Also says he is a member of something called the New York State Commission to Modernize the Regulation of Financial Services. Seeing as he is evidently a republican, I highly doubt his purpose on that commission was to advocate for new regulations.

      Also says he got a BA in philosophy. I wonder if he prefers Bertrand Russell? Somehow I doubt it. All in all I smell another rattus.

      • Stemella permalink*
        April 29, 2009 8:23 am

        Yes, great minds! Our vast readership will be stunned and amazed, I’m sure ;)

        Yeah, he’s a rattus of the first order. I saw another link on his campaign contributions over the years. Heavily Republican, Grassley even, p’tui, though he saw the winds of McChangerton blowing and gave to Obama instead of McCain this last election.

        I checked to see if he was Skull and Bones at Yale, and he wasn’t. He was though there at the same time as one Robert Rubin.

  2. cometman permalink*
    April 29, 2009 8:51 am

    Some encouraging news on the torture front yesterday as the appellate court ruled against the Bush/Obama position and said the lawsuit brought by 5 victims of rendition could not be simply thrown out on state secrets grounds. Glenn Greenwald has a very good rundown. He mentions that the Obama Justice Dept may likely appeal this decision up to the Supreme Court but for now at least we may get a little sunlight shed on these policies.

  3. cometman permalink*
    April 29, 2009 9:40 am

    Micheal Hudson has more on recent developments in Iceland. After the ruling party was thrown out in the recent election, there is some question about what to do next to fix the mess they created. Some favor joining the EU and adopting the euro in the hopes of stabilizing their currency. Hudson mentions that for many in Iceland there is a sense of honor that they should repay the debts the nation incurred even though those debts were brought about by the awful policies of relatively few freemarketeers. After reading several articles about Iceland recently like this one from Michael Lewis and one from Harpers a few months ago, I have to say the population there has some very odd but likable notions. Polite almost to a fault, but they did show they can get pretty riled when pushed, although also in a fairly polite way.

    Anyhow, Hudson cautions against Iceland being too quick to look to the EU for help since that may be just exchanging one group of predatory freemarketeers for another.

    The case of Latvia and its Baltic neighbors is instructive. Much like Iceland, they were burdened with a debt overhead far beyond their ability to pay – mortgage debts denominated in foreign currency, so that they cannot avail themselves of the time-honored policy of inflating their way out of debt. Nor will it help for the government to borrow from the IMF and EU to pay the debts of its insolvent real estate to Swedish and other foreign banks. Public-sector borrowing to bail out bad private-sector debts involves squeezing the money out of the domestic population by even higher taxes on labor, pricing it (and hence, domestic industry) out of world markets. In this condition the economy is unable to earn enough to cover its import dependency and the debt service with which it has been burdened.

    He suggests that Icelanders stay independent and make their own reforms, especially as the EU and the euro aren’t doing so hot themselves these days.

    • Stemella permalink*
      April 29, 2009 10:54 am

      Yes, this person at the Financial Times, concurs about the EU: EU faces year of tough challenges

      For European Union policymakers, a combination of soaring budget deficits and feeble economic recovery threatens to make 2010 a year of challenges no less demanding than those of the past 12 months.

      EU governments are increasingly recognising that the boost to their economies from fiscal stimulus programmes adopted since last November is likely to fade in the course of next year. But a second round of stimulus packages, apart from being politically controversial in many EU countries, would not be easy to justify from an economic point of view.

  4. cometman permalink*
    April 29, 2009 12:46 pm

    I find the whole Arlen Specter party switch to be fairly ridiculous and simply another example of how the corporate media will discuss insignificant issues for hours or days on end to try to make them seem important. William Rivers Pitt has a nice take on the Specter flip-flop (flailing around like a cuttlefish on a caique – is that a better metaphor? :P) where he also quotes from Glenn Greenwald’s excellent article on the subject which you can see in its entirety here.

    Pitt describes the false meme that one party needs 60 votes to do anything in the Senate – something that has only become “common knowledge” to give cover to Democrats as they repeatedly cave in to republican demands. Here’s a lengthy quote that describes the situation quite well:

    The supposedly big deal for Democrats is the fact that, once Al Franken finally wends his way past Republican roadblocks and takes his Minnesota Senate seat, the addition of Specter to the Democratic caucus lifts their majority to the much-ballyhooed number 60, which is the number of votes needed to thwart GOP filibusters and pass legislation unimpeded. This would seem to be an important victory for the Democrats – for the first time in 30 years, one party controls the White House and Congress with a supermajority in the Senate – but really, it’s just a little more theater for the masses to enjoy and the media to misinterpret.

    “While the move would create what is likely to be the Senate’s 60th Democratic vote, potentially enough to withstand Republican filibusters,” reported The Boston Globe on Wednesday, “it would not necessarily change the chamber’s legislative dynamics. Democratic successes at expanding their caucus have made it less unified ideologically, and Specter – one of only three Republicans in Congress to back Obama’s $787 billion economic stimulus bill – said he expected to defy his new party as readily as he did his old one.”

    Thus, the idea that Democrats have achieved some lofty threshold of power is almost entirely chimerical; Specter is no more likely to caucus with the Democrats just because he is one than he was likely to caucus with the GOP back when he had an “R” after his last name. Even if Specter took some kind of blood oath to always provide that 60th vote for the Democratic caucus, the threshold itself is largely a media/right-wing confabulation.

    For decades, the filibuster was considered a weapon of last resort; the use or threatened use usually only came into play when the Senate had a controversial Supreme Court nominee up for consideration. During George W. Bush’s reign of error, the Republican-controlled Congress was able to pass all kinds of insanely anti-constitutional legislation between 2002 and 2006 needing just a simple majority to win, because the Democrats never took the filibuster club out of their bag.

    Only when majority power in Congress changed hands after the ’06 midterms did the filibuster become a daily part of governance on Capitol Hill, because the GOP used it against everything that moved. The news media, with its absolute lack of context and inability to remember anything more than a day old, has acted and spoken ever since with the incorrect idea that only a 60-vote majority can get anything done in the Senate. This is simply nonsense.

    No, the Democrats have had the power to pass just about whatever they want with 51 votes ever since 2006, but have only recently begun to make noises about doing so now that health care reform is on the table. President Obama, unwilling to deal with the 60-vote-threshold fiction, is pushing his allies in the Senate to do away with the rules that give a 41-member minority the power to gum up the works. Senate Democrats could have done this three years ago, and adding Specter to the equation does not change that arithmetic one bit.

    If anything good does come of this, it will be when the Dems do have the 60 vote margin and still can’t pass anything meaningful. Then maybe we can finally put to rest the tired old “We don’t have the votes” excuse for the inability to get anything important passed and maybe more people will begin to realize that despite the “D” or “R” these clowns put after their names, they still all belong to the same little club. And that club doesn’t let people like the rest of us in.

    • triv33 permalink
      April 29, 2009 1:16 pm

      I have to admit to having a hearty chuckle when Specter pulled the switcheroo yesterday, having jokingly predicted it the day before. I had just seen how bad Toomey was beating him in the polls and I said to my mom, “Old Arlen could always go democrat and that would blow Toomeys’ ass right out of the water…” Never, for one second, dreaming he’d do it. It was a joke, Arlen, I didn’t mean it.

      • Stemella permalink*
        April 29, 2009 2:48 pm

        I’m impressed with your powers of suggestion. Could you please make a suggestion or two to Santorum? I saw him in the news again recently and I’d rather that not happen again. I’ve seen quite enough of Santorum for one lifetime. ;)

    • Stemella permalink*
      April 29, 2009 2:55 pm

      Flailing cuttlefish, eh? nein, nein, nein….

      Though it is a pretty good description of all of Congress. I think you make a great point about the 60 vote excuse. It’s crapola. They are of one club with minor shades of variation in the window dressing, but for all intents and purposes they are all equally worthless. Before Obama was elected one of my greatest political desires was to see balance of power returned to government. I wanted the Executive Office deflated and Legislative and Judicial to resume greater power to balance it again. With this Congress, the current Congress, I’m not so sure. The whole damn thing is broken. I hope at least the 4th branch ended with the departure of Cheney, but probably not.

  5. triv33 permalink
    April 29, 2009 2:57 pm

    Oh, try having that for your Senator. Rudest staff, ever. If I really had power of suggestion something awful would have befallen Sticky Ricky long ago. I blame him for The Inky being in trouble…

    • Stemella permalink*
      April 29, 2009 3:00 pm

      The best fate for Icky Ricky would be to be trapped in a zoo during mating season. He’d lose his friggin mind! haha

    • cometman permalink*
      April 29, 2009 3:57 pm

      Sticky Ricky! haHa! I haven’t heard that one before but it’s very apt.

      • triv33 permalink
        April 29, 2009 4:02 pm

        Oh, come on, tell me you’ve never typed santorum into the google and come up with Dan Savages’ result? You can’t work frothy mix etc. into a sentence so, Sticky Ricky has to do.

        • cometman permalink*
          April 29, 2009 4:45 pm

          Well I hadn’t until you suggested it. Appropriately enough the Dan Savage definition is Number Two on the list :P

          • triv33 permalink
            April 29, 2009 5:00 pm

            Oh, man…I’m sorry. That might come back to you at odd moments now. I know it does to me. ;-}

  6. triv33 permalink
    April 29, 2009 3:55 pm

    No animal deserves that.

  7. Stemella permalink*
    April 29, 2009 5:32 pm

    While you guys are delving into the santorum ;P I changed my gravitational photo. Testing to see if it worked.

    • triv33 permalink
      April 29, 2009 5:58 pm

      Delving into the santorum? Oh, that is so wrong.

  8. Stemella permalink*
    April 29, 2009 5:32 pm

    shit

    • Stemella permalink*
      April 29, 2009 6:02 pm

      Since my new photo didn’t take, I decided to change the language of this blog to Greek! Why? Why not!? ;-)

      Είστε ο συγγραφέας αυτού του άρθρου???

  9. triv33 permalink
    April 29, 2009 6:09 pm

    Well..it looks nice. Do you mean to tell me I’m stuck with my hastily chosen gravatar?

    • Stemella permalink*
      April 29, 2009 6:17 pm

      I had to go to the actual gravitar site to change it, as it wouldn’t work through the profile page. My new image does show up there and in the admin pages. Maybe it just takes a little longer to show up here.

      Here’s the gravitar site in case you want to try changing yours sometime: http://en.gravatar.com/

  10. Stemella permalink*
    April 30, 2009 6:31 am

    Thomas Frank, the Wrecking Crew author, has another piece in the WSJ today, Why Congress Won’t Investigate Wall Street

    The famous Pecora Commission of 1933 and 1934 was one of the most successful congressional investigations of all time, an instance when oversight worked exactly as it should. The subject was the massively corrupt investment practices of the 1920s. In the course of its investigation, the Senate Banking Committee, which brought on as its counsel a former New York assistant district attorney named Ferdinand Pecora, heard testimony from the lords of finance that cemented public suspicion of Wall Street. Along the way, the investigations formed the rationale for the Glass-Steagall Act, the Securities Exchange Act, and other financial regulations of the Roosevelt era.

    A new round of regulation is clearly in order these days, and a Pecora-style investigation seems like a good way to jolt the Obama administration into action. After all, the financial revelations of today bear a striking resemblance to those of 1933. In his own account of his investigation, Pecora described bond issues that were almost certainly worthless, but which 1920s bankers sold to uncomprehending investors anyway. He told of the bonuses which the bankers thereby won for themselves. He also told of the lucrative gifts banks gave to lawmakers from both political parties. And then he told of the banking industry’s indignation at being made to account for itself. It regarded the outraged public, in Pecora’s shorthand, as a “howling mob.”

    ~snip~

    It’s probably not going to happen, though, in the comprehensive way that it should. The reason is that understanding our problems, this time around, would require our political leaders to examine themselves.

    The crisis today is not solely one of bank misbehavior. This is also about the failure of the regulators — the Wall Street policemen who dozed peacefully as the crime of the century went off beneath the window.

    • cometman permalink*
      April 30, 2009 7:17 am

      Nice article. I thought this part summed up nicely why our current crop of crooks in Congress is in no hurry to investigate:

      Launching Pecora II would automatically raise this question: Whatever happened to the reforms put in place after the first go-round?

  11. cometman permalink*
    April 30, 2009 7:39 am

    More on Chrysler. Looks like the deal that I mentioned a couple days ago is on hold because the hedge funds who hold a lot of the company’s debt don’t like it. Talks had been ongoing between Fiat, the UAW and the company’s creditors.

    Along with the Fiat deal, the United Auto Workers ratified a cost-cutting pact Wednesday night. Treasury reached a deal earlier this week with four banks that hold the majority of Chrsyler’s debt in return for $2 billion in cash.

    ~snip~

    …the administration said about 40 hedge funds that hold roughly 30 percent of that debt also needed to sign on for the deal to go through. Those creditors said the proposal was unfair and were holding out for a better deal.

    “While the administration was willing to give the holdout creditors a final opportunity to do the right thing, the agreement of all other key stakeholders ensured that no hedge fund could have a veto over Chrysler’s future success,” said one of the administration officials.

    A third person briefed on Wednesday night’s events said the Treasury Department and the four banks tried to persuade the hedge funds to take a sweetened deal of $2.25 billion in cash. But in the end, this person said most thought they could recover more if Chrysler went into bankruptcy and some of its assets were sold to satisfy creditors. This person asked not to be identified because details of the negotiations have not been made public.

    So first all we get to hear are reports from anonymous sources again, so who the hell knows what is really going on. Our news sucks. And then it looks like unregulated hedge funds are being allowed to call the shots because they can get more money by throwing people out of work and selling off the assets in a bankruptcy. Is there any question at all anymore who really calls the shots in this country? Sure as hell doesn’t seem to be our elected officials who are unwilling to stand up to the bankers. If the government had any real clout, they’d simply tell these hedgies that if they didn’t sign on then regulatory legislation requiring full disclosure of their risky practices would be heading through Congress tout de suite. And then if they agreed the Feds would regulate them anyway.

    Instead they let the hedgies give them a wedgie.

    • Stemella permalink*
      April 30, 2009 7:52 am

      Looks like they are going ahead with Chapter 11 Bankruptcy according to this article from Reuters

      The Chapter 11 filing, which sources said would be done in U.S. Bankruptcy Court in Manhattan, will send shockwaves through the entire auto industry — including Chrysler’s rivals, suppliers, dealers and the many hundreds of thousands who rely on the industry for their livelihoods.

      A statement from President Barack Obama on Chrysler’s situation and the auto industry is scheduled for noon EDT.

      The filing does not preclude a deal with Fiat. Chrysler has been seeking a rescue deal from the Italian automaker while also trying to finalize a debt forgiveness agreement from its lenders.

      Hedgie wedgie! More like a reaming in the long run.

      • cometman permalink*
        April 30, 2009 8:02 am

        I’d still like to find out if this means the UAW has no way of getting a majority stake at this point. Sure seems like they won’t though. But if it goes into bankruptcy, what’s to stop the UAW from buying Chrysler’s assets themselves and starting it back up on their own terms? The banks are being handed money to start lending again, so why not to the UAW?

  12. cometman permalink*
    April 30, 2009 9:12 am

    Very good article from Chris Floyd at Empire Burlesque about how the media frenzy over Specter is but another distraction from more important news, this time the fact that Obama has given the OK to start killing lots more people in Afghanistan.

    As the New York Times reports, the Progressive Commander is about to pour thousands of troops into Afghanistan’s heavily populated opium-growing regions, using a military sledgehammer to destroy the only source of income for large portions of the poverty-wracked nation.

    This is criminal folly on a monumental scale, worthy in every respect of Obama’s “continuity” with Bush’s military policies (and personnel). The result will inevitably be an even larger number of civilian casualties than are now being harvested on a regular basis in the “good war,” with an even more embittered — and more poverty-stricken — population.

    The idea behind the new push — which will involve some 20,000 soldiers, operating in many cases in areas that few if any Western forces have seen — is “to cut off the Taliban’s main source of money,” the Pentagon tells the New York Times. But opium is also the “main source of money” for millions of ordinary Afghan farmers — not to mention the warlords and druglords whom the United States enthroned on high after invading the country in 2001. And one can only assume that one of the great protectors and promoters and profiteers of the international drug trade over the course of the past half-century — the American security services, led by the CIA — are also taking a cut in that shadowland world where criminal gangs and covert operators mix and mingle.

    And of course “the Taliban” is not a single, monolithic entity, but is instead a propaganda tag applied to a shifting conglomeration of various armed groups of various stripes whose various agendas often clash with one another. If a particular criminal gang or sectarian militia decides to cooperate or collude with the Anglo-American occupiers at some point, for a certain period, they are no longer “Taliban,” but “Concerned Local Citizens.” Likewise, anyone who resists the foreign military presence in their country — for whatever reason — is automatically “Taliban,” and thus marked for death.

    Thus any opium farmer who reaches for his ancient Lee-Enfield when he sees a squad of foreign troops stomping through his crops will not be regarded as, say, a hardy patriot defending hearth and home — “freedom fighters” as Ronald Reagan used to call these same poppy-growers when they were resisting the Soviet military presence in their country. No, they will be “terrorists,” a dagger aimed at the very heart of Homeland.

    Don’t believe that? Think it’s an exaggeration? Here’s the Times:

    The presence of poppy and opium here has injected a huge measure of uncertainly into the war. Under NATO rules of engagement, American or other forces are prohibited from attacking targets or people related only to narcotics production. Those people are not considered combatants.

    But American and other forces are allowed to attack drug smugglers or facilities that are assisting the Taliban. In an interview, General Nicholson said that opium production and the Taliban are so often intertwined that the rules do not usually inhibit American operations.

    “We often come across a compound that has opium and I.E.D. materials side by side, and opium and explosive materials and weapons,” General Nicholson said, referring to improvised explosive devices. “It’s very common — more common than not.”

    All you have to do is say “Taliban,” and any attack (and any death) in the opium regions will be justified. Of course, if really pushed, you can always find some handy “I.E.D materials” lying around: nails, maybe, or pipe, or shovels — the kind of thing that some American troops in Iraq carried with them on patrol to plant on anyone they killed along the way.

    Now it was widely reported that the Taliban was responsible for nearly wiping out opium production and it was only after the US invaded that harvests skyrocketed to record levels. If you scroll down a bit through this UN report on opium production in Afghanistan from 2007 you’ll find the following:

    Third, the Taliban are again using opium to suit their interests. Between 1996 and 2000, in Taliban-controlled areas 15,000 tons of opium were produced and exported – the regime’s sole source of foreign exchange at that time. In July 2000, the Taliban leader, Mullah Omar, argued that opium was against Islam and banned its cultivation (but not its export). In recent months, the Taliban have reversed their position once again and started to extract from the drug economy resources for arms, logistics, and militia pay.

    Now they are admitting here that production had been drastically reduced until the US invaded and scattered the Taliban and Omar. They don’t mention how there was any opium to export if there was no opium produced. And like Floyd says, who exactly are these Taliban right now? Doesn’t seem like the US has a clue or maybe they would have captured Omar sometime during the last 7 years. The so-called Northern Alliance who were our “allies” when we first invaded were a bunch of rival warlords with their own territories and the Taliban had stopped them from producing opium. The US has little control in the country except around the capital and the warlords have benefited in the Taliban’s absence.

    The Taliban, or the warlords, or whoever they are, may very well use opium to finance certain enterprises when it suits them. But the US and NATO also seem to label anyone with brown skin over there “Taliban'” when it suits their purposes too. Shoot first and let gawd sort them out seems to be the reasoning, just as long as it makes the US look like the biggest swinging dick on the block. The hypocrisy is mind boggling. We have learned nothing from the blowback that occurred from funding Osama bin Laden against the Soviet Union 20 years ago.

    • Stemella permalink*
      April 30, 2009 4:20 pm

      I had saved my very first diary I wrote at pff on the topic of Poppy policy, which I posted as a comment under your crossposting. It’s long. But it was interesting to look back to two years ago to see the continuance of bad US policy in Afghanistan. I think just like with the economic crash, they don’t know what the fuck to do about Afghanistan. Bush kicked the can down the road to go into Iraq. Obama is probably going to go into Pakistan ultimately, which is directly connected now via the Taliban and other clusterfuckage of massive proportion. The thing I asked in my original diary that I still haven’t seen the answer for is, how much of that O-Pop biz is funding our war operations and back channel action, just as Iran Contra did and the Golden Triangle before it, and for that matter the Coca trade right now in Latin America…. ?

      • cometman permalink*
        April 30, 2009 9:48 pm

        That’s the thing – if we wanted to get rid of opium production while we were occupying the country anyway, I’m sure it could have been done. The fact that they began producing bumper crops was IMO at least because somebody wanted it to happen, quite possibly like you said to fund war related back channel deals. I’m sure there are a lot of different parties besides the Taliban involved with the opium trade.

        I really don’t think the US has a clue what is going on in that country. Or if they do, they sure as hell aren’t using the intelligence they’ve gathered to do what they tell the public they’re trying to do. Allowing bin Laden to escape comes to mind. Installing a UNOCAL puppet as president does too.

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