The Militant Libertarian

I'm pissed off and I'm a libertarian. What else you wanna know?

Saturday, October 03, 2009

Montana Gun Suit Challenges Federal Authority

by Declan McCullagh, CBS News

A Montana lawsuit filed on Thursday challenges federal authority to regulate guns manufactured and sold within the state, an argument that would effectively invalidate federal firearm laws in Big Sky Country if adopted by the courts.

The lawsuit arose out of a state law signed by Democratic Gov. Brian Schweitzer that took effect on October 1. It says that firearms, ammunition, and accessories manufactured entirely inside Montana are not subject to federal regulation, including background checks for buyers and record-keeping requirements for sellers. They would remain subject to state regulation, and machine gun manufacturing is not permitted.

This is part of a new grassroots movement that's seeking to invoke the principle of states' rights -- including states' authority to regulate firearms within their borders -- to thwart what backers view as an increasingly overreaching federal government.

One of the plaintiffs is Gary Marbut, president of the Montana Shooting Sports Association. The complaint (PDF) says Marbut "wishes to manufacture and sell small arms and small arms ammunition to customers exclusively in Montana" without complying with federal laws but has been told by the Bureau of Alcohol, Tobacco, Firearms, and Explosives that the federal laws "continue to apply." (See related story about the Obama administration's position.)

While this federalism-inspired revolt has coalesced around gun rights, the broader goal is to dust off a section of the Bill of Rights that most Americans probably have paid scant attention to: the Tenth Amendment. It says that "powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

"We feel very strongly that the federal government has gone way too far in attempting to regulate a lot of activity that occurs only in-state," said Marbut. "It's time for Montana and her sister states to take a stand against the bullying federal government, which the legislature and governor have done and we are doing with this lawsuit."

The case was filed by Quentin Rhoades of Sullivan, Tabaracci, and Rhoades in Missoula, Mont., with the support of the Second Amendment Foundation. The U.S. Justice Department, which will be defending the suit in court, did not immediately respond to a request for comment on Thursday.

Read literally, the Tenth Amendment seems to suggest that the federal government's powers are limited only to what it has been "delegated," and the U.S. Supreme Court in 1918 confirmed that the amendment "carefully reserved" some authority "to the states." That view is echoed by statements made at the time the Constitution was adopted; New Hampshire explicitly said that states kept "all powers not expressly and particularly delegated" to the federal government.

More recently, federal courts have interpreted the Tenth Amendment narrowly, in a way that justifies almost any law on grounds that it intends to regulate interstate commerce. In the 2005 case of Gonzales v. Raich, for instance, the Supreme Court ruled that a person growing marijuana for her own medicinal use could have a "substantial effect on interstate commerce." (In an pointed dissent, Justice Clarence Thomas wrote: "If Congress can regulate this under the Commerce Clause, then it can regulate virtually anything -- and the federal government is no longer one of limited and enumerated powers.")

One possibility is is that the composition of the U.S. Supreme Court has changed enough in the last four years to make a repeat of Gonzales v. Raich unlikely; on the other hand, some justices that might have been sympathetic to a sick mother using medical marijuana may not be as willing to embrace federalism if it means zapping gun laws that have been around for over a generation.

Another possibility is that proponents can argue -- as Marbut plans to do -- that this case is different. In Gonzales v. Raich, the Supreme Court noted "it is not feasible to distinguish" marijuana that's "manufactured and distributed interstate and controlled substances manufactured and distributed intrastate." The Montana law, by contrast, says that all state-made firearms "must have the words 'Made in Montana' clearly stamped on a central metallic part, such as the receiver or frame."

Still, the case amounts to a long shot squared. Perhaps, in a slightly different universe where the Tenth Amendment were not virtually ignored by courts, the plaintiffs would stand a good chance of winning. In this post-Raich reality, even pro-Second Amendment types are skeptical.

"I think they probably should succeed and I think they probably won't," Nelson Lund, a professor of constitutional law at George Mason University who specializes in the Second Amendment, told me over the summer. "The Supreme Court has strong precedents that would render this statute invalid."

But this is as much as political maneuver as it is a legal one. Even a courtroom defeat would galvanize the burgeoning federalist movement and could lead to more states adopting sovereignty and Tenth Amendment resolutions, a trend that has been documented by the Tenth Amendment Center (and anticipated by forecaster Gerald Celente). If enough state governments vote to resuscitate the Tenth Amendment, even federal courts eventually may pay attention.

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Exit Afghanistan and Leave Iran Alone

by Sheldon Richman

The Obama administration’s quest to control the health-insurance industry has dominated the headlines for months, but finally — with the news out of Iran and Afghanistan —foreign policy has again asserted itself. It was almost easy to forget that the United States maintains a worldwide empire, but the reminders came leaping off the front pages and the television screens.

Word that the U.S. commander in Afghanistan wants 40,000 more troops and that Iran has a hitherto undisclosed uranium-enrichment facility gave the empire enthusiasts something to get excited about. The advocates of Pax Americana tell us that we must “win” in Afghanistan and be ready to bomb Iran if the leaders there don’t prostrate themselves to the U.S. government forthwith.

For Afghanistan President Obama is deciding between a stepped-up war on the surging Taliban or a smaller-scale campaign against al Qaeda. In Iran he refused to take military action off the table while he gives the Iranians a chance to come clean in head-to-head talks.

Few voices can be found in the mainstream media criticizing the continuation of the Afghan occupation or the rush to confront Iran. Virtually everyone thinks it is America’s duty to police the world and mete out punishment whenever it decides it is justified in doing so.

Some contrarian thoughts are in order. The United States has occupied Afghanistan for eight years. What does it have to show for it? It’s backing a corrupt central government that has almost no legitimacy, while warlords and the deposed Taliban rule beyond the capital. The integrity of the last election is widely doubted. The violence intensifies.

Who’s surprised? Don’t they call Afghanistan the “graveyard of empires”? Didn’t the Soviets, British, Mongols, and many others meet nasty fates there? Do “our leaders” learn nothing from history? Don’t be fooled by the line that Afghanistan is a big enough threat to justify the United States tempting fate. The Bush administration erred in not treating the 9/11 attacks as crimes instead of as acts of war. Invasion, regime change, occupation, and nation-building were absurd responses, especially when you consider that we can best protect ourselves from terrorism by not behaving like an empire. Terrorism is the tactic the weak uses against the strong, particularly imperial forces. Forswearing empire is a far better way to prevent future attacks.

Adding an attack on Iran to the list of U.S. provocations would be crazy. Even with a nuclear arsenal, Iran is not going to attack the United States or Israel (a nuclear state that unlike Iran has not signed the Nonproliferation Treaty). Why would it want a nuke? It might have something to do with the fact that U.S. presidents have threatened Iran in word and deed repeatedly since 1979, when the Islamic revolution dumped the U.S.-backed dictator the Eisenhower administration installed in power a quarter-century earlier. Since the revolution U.S. governments have tried to subvert the Iranian regime, conducted threatening war exercises off its shores, and helped Saddam Hussein — yes, the same one — when Iraq launched a war against Iran in the 1980s. Now the United States occupies Muslim countries to the east and west of Iran.

Now why would Iran wish to have a military deterrent?

Obama and others say that if diplomacy doesn’t tame Iran, stiff sanctions would be the next step. Under international law that is an act of war. Sanctions harm — even kill — innocent people in the targeted nation. And they provoke others to attack the perpetrators, that is, terrorism. Do we really need reminding that Osama bin Laden specified the decade-long embargo against Iraq as one of the reasons for the 9/11 attacks? That embargo killed hundreds of thousands of children by prohibiting the importation of needed sanitation equipment and other vital goods. But it did not drive Saddam Hussein from power.

So if the United States spearheads sanctions against Iran, let’s not be surprised when some Iranian sympathizer attacks Americans “out of the blue.” We’ll have the Obama administration to thank.

And when sanctions fail, will war follow? It should be needless to say that bombing Iran would destroy many innocent lives while strengthening the Iranian regime, putting us into another quagmire, and further bankrupting ourselves. Will we ever learn that imperial foreign policy is self-defeating?

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Friday, October 02, 2009

Capitalism is Evil

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The Day ObamaCare Died - Sung by Barack Obama

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The Takeover of Hardin: Tragedy, or Farce?

by Will Grigg

Courtesy of the AP by way of the “Piglipstick” blog we learn some important things about “Captain Michael Hilton,” who may be the “Professor Harold Hill” behind the peculiar events in Hardin, Montana:

[...] [W]hen Hilton came to town last week — wearing a military-style uniform and offering three Mercedes SUVs for use by local law enforcement — he was greeted with hugs by some grateful residents. The promise of more than 200 new jobs for a community struggling long before the recession hit had won them over.

But public documents and interviews with Hilton’s associates and legal adversaries offer a different picture, that of a convicted felon with a number of aliases, a string of legal judgments against him, two bankruptcies and a decades-long reputation for deals gone bad.

American Police Force is the company Hilton formed in March to take over the Hardin jail.

“Such schemes you cannot believe,” said Joseph Carella, an Orange County, Calif. doctor and co-defendant with Hilton in a real estate fraud case that resulted in a civil judgment against Hilton and several others.

“The guy’s brilliant. If he had been able to do honest work, he probably would have been a gazillionaire,” Carella said.

Court documents show Hilton has outstanding judgments against him in three civil cases totaling more than $1.1 million.

As for Hilton’s military expertise, including his claim to have advised forces in Iraq and Afghanistan, those interviewed knew of no such feats. Instead, Hilton was described alternately by those who know him as an arts dealer, cook, restaurant owner, land developer, loan broker and car salesman — always with a moneymaking scheme in the works.

Hilton did not return several calls seeking comment. American Police Force attorney Maziar Mafi referred questions to company spokeswoman Becky Shay.

When asked about court records detailing Hilton’s past, Shay replied, “The documents speak for themselves. If anyone has found public documents, the documents are what they are.”

Shay declined comment on Hilton’s military experience….

Hilton, 55, uses the title “captain” when introducing himself and on his business cards. But he acknowledged it was not a military rank.

He said he is naturalized U.S. citizen and native of Montenegro. Aliases for Hilton that appear in court documents include Miodrag Dokovich, Michael Hamilton, Hristian Djokich and Michael Djokovich.

One attorney who dealt with Hilton in a fraud lawsuit referred to him as a “chameleon” and he has a reputation for winning people over with his charm.

His criminal record goes back to at least 1988, when Hilton was arrested in Santa Ana, Calif. for writing bad checks.

Beginning in 1993, Hilton spent six years in prison in California on a dozen counts of grand theft and other charges including illegal diversion of construction funds.

The charges included stealing $20,000 in a real estate swindle in which Hilton convinced an associate to give him a deed on property in Long Beach, Calif., ostensibly as collateral on a loan. Hilton turned around and sold the property to another party but was caught when the buyer contacted the original owner.

> After his release, he got entangled in at least three civil lawsuits alleging fraud or misrepresentation. Those included luring investors to sink money into gold and silver collectible coins; posing as a fine arts dealer in Utah in order to convince a co uple to give him a $100,000 silver statue; and, in the case involving co-defendant Carella, seeking investors for an assisted living complex in Southern California that was never built.

Carella said he was duped into becoming a partner in the development project and that Hilton used Carella’s status as a physician to lure others into the scheme. He was described in court testimony as a “pawn” used by Hilton to lure investors.

Those involved with Hilton say he is an accomplished cook with a flair for the extravagant — wining and dining potential partners, showing up at the Utah couple’s house to negotiate for the silver statue in a chauffeur-driven Mercedes.

“This is the way we got taken,” said Carolyn Call of Provo, Utah, who said she gave Hilton her family’s silver statue to sell on the open market.

According to court documents, Hilton turned around and gave the statue to an attorney to pay for his services.

Two California attorneys said Wednesday that after learning of Hilton’s latest activities they planned to follow him to Montana to seek payment on the outstanding judgments against him.

“Once I know that there is an asset or some sort of funds to go after, we’ll go after it,” said Call’s attorney, Roger Naghash.

This doesn’t answer everything, but it does suggest that we can stand down from General Quarters — even though we should still keep our powder dry, as it were.

For what it’s worth, here’s a link to my radio program from Monday night in which I first discussed events in Hardin.

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Thursday, October 01, 2009

Myth of the underpaid public employee

by Jeff Jacoby

THOUGH it hasn’t been true for years, many people believe that government employees receive lavish employment and retirement benefits in order to compensate for their meager paychecks. The reality is that their paychecks aren’t meager at all: Government jobs often pay more than those in the private sector, and the difference between the two is growing.

Consider the lucrative lot of the men and women who work for Uncle Sam. In 2008, according to data from the Commerce Department’s Bureau of Economic Analysis, the 1.9 million civilian employees of the federal government earned an average salary of $79,197. The average private employee, by contrast, earned just $49,935. The difference between them came to more than $29,000 - a differential that has more than doubled since 2000.

Take account of total compensation - wages plus benefits - and the disparity is even more striking. In 2008, total federal civilian compensation averaged $119,982 - more than twice the $59,908 in wages and benefits earned by the average private-sector employee. Chris Edwards, a scholar at the Cato Institute, has documented the steady widening of the gap: In 1960, federal workers averaged $1.24 for every $1 earned by a private employee. By 1980, the federal advantage was up to $1.51; in 2000 it was $1.66. Now it is $2 - and climbing. When ranked alongside 72 industries that span the US economy, federal employees take home the seventh-highest average compensation. Among the workers they outearn, Edwards shows, are those in such fields as computer systems design, chemical products, and legal services.

It isn’t only at the federal level that the political class so handsomely takes care of its own. “State and local government workers get paid an average of $25.30 an hour, which is 33 percent higher that the private sector’s $19,’’ Forbes magazine reports. “Throw in pensions and other benefits and the gap widens to 42 percent.’’ The Tax Foundation calculates that “non-wage compensation’’ for the average state and local government employee worked out to $12,362 in 2007. For the average employee in the private sector, the comparable figure was just $8,784.

Americans increasingly fall into one of two camps. Those who work for the government - about 15 percent of the labor force - tend to enjoy sumptuous perks, virtually indestructible job security, and pensions that are guaranteed for life. The rest of us work in the private economy, where millions of jobs can be wiped out by a recession, defined-benefit pensions are disappearing, and competition and downsizing are facts of life.

There is a backlash coming, and it gets closer with each new revelation of public employees enriching themselves at taxpayer expense. Employees like the double-dipping Florida college president who took a lump sum “retirement’’ benefit of $893,286 and receives a $14,631/month pension, yet continues to collect an annual salary of $441,538. Or like the former Massachusetts lawmakers who qualified for tens of thousands of dollars in enhanced pensions - many while still in their 40s - merely by resigning from the Legislature. Or like the Buffalo, N.Y., police detective who is serving a 45-year sentence for setting up drug raids in order to steal money and jewelry, but still receives an annual pension of more than $40,000.

A full-page ad in The Wall Street Journal last week was the clearest evidence yet of the approaching showdown. “We are the Private Sector. And we’ve had enough,’’ the ad proclaimed. It announced the launch of The Free Enterprise Nation, which describes itself as the first national organization intended to represent the interests of the majority of Americans who work in the private economy. Its message was blunt: “The private sector provides pay and benefits for public-sector workers that we cannot afford to provide for ourselves . . . We need to change public policy.’’

The Free Enterprise Nation is headed by James MacDougald, a successful Florida businessman who has invested more than $1 million in the organization. Already he has assembled a staff of 65, including 10 researchers. He foresees the day when the group will be as influential as the AFL-CIO, and when government officials never make a move without considering its impact on the private sector.

“We’re going to generate enough noise that government can’t ignore us,’’ he told me yesterday. “We aren’t going away.’’ Stay tuned.

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Dickipedia - the New Wiki for Political Dickheads

This is hilarious and I hate to share it. Prepare to be entertained and possibly offended.


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Placebo Effect Regularly Beats Pharmaceutical Drugs

by Kim Evans

(NaturalNews) A Wired UK article just told us a dirty little secret that the pharmaceutical drug world would rather keep quiet. That fact is: drugs are having a difficult time beating the placebo effect, and increasingly so. In fact, they're finding the placebo effect is getting stronger in people, making it more difficult for drugs to show any improvement over it. The credit for the increased placebo effect has been attributed to the increase in consumer advertising, which makes many consumers "believe" more in the drugs and their effects.

Because the placebo effect is getting stronger, many widely distributed drugs would have had a hard time getting approval to begin with, if they were tested against today's placebo effect. Many drugs, notably Prozac, have also been shown to falter when compared to placebo - after they're already on the market.

A Saatchi & Saatchi advertising executive explains the key to producing a good pharmaceutical ad: it's in making the association between the drug and other aspects of life that promote peace of mind, like playing with your kids or reading a good book.

It's Madison Avenue type stuff, designed to play on your emotions and specifically, to boost sales. These messages appear to be working because many people keep calling on doctors for more drugs, which is the drug company's number one goal. But, interestingly, the same mechanism also seems to be messing up the new drug approval process for drug companies.

Wired tells us, "The fact that an increasing number of medications are unable to beat sugar pills has thrown the industry into crisis" and that "half of all drugs that fail in late-stage trials drop out because of their inability to beat sugar pills." Eli Lilly's next-generation antidepressants haven't been doing better than a placebo in seven out of ten trials. It wasn't long ago that Merck withdrew its "highly anticipated medical breakthrough" antidepressant for the same reason; it didn't beat sugar pills.

It's interesting because placebo pills are often sugar pills, and sugar is known to depress the immune system for hours after it's taken. So, in truth, drug companies are having a difficult time competing against an immune system depressant.

William Potter, psychiatrist turned Eli Lilly drug developer, found himself baffled by the evidence that drugs he'd long been prescribing were now failing against placebos. So, he started digging around in Eli Lilly's trial database, a database that included trials the company didn't make public and preferred to keep quiet.

Read the rest at this link.

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Wednesday, September 30, 2009

Porn surfing rampant at U.S. science foundation

Our government bureaucrats at work, folks...

by Jim McElhatton

Employee misconduct investigations, often involving workers accessing pornography from their government computers, grew sixfold last year inside the taxpayer-funded foundation that doles out billions of dollars of scientific research grants, according to budget documents and other records obtained by The Washington Times.

The problems at the National Science Foundation (NSF) were so pervasive they swamped the agency's inspector general and forced the internal watchdog to cut back on its primary mission of investigating grant fraud and recovering misspent tax dollars.

"To manage this dramatic increase without an increase in staff required us to significantly reduce our efforts to investigate grant fraud," the inspector general recently told Congress in a budget request. "We anticipate a significant decline in investigative recoveries and prosecutions in coming years as a direct result."

The budget request doesn't state the nature or number of the misconduct cases, but records obtained by The Times through the Freedom of Information Act laid bare the extent of the well-publicized porn problem inside the government-backed foundation.

For instance, one senior executive spent at least 331 days looking at pornography on his government computer and chatting online with nude or partially clad women without being detected, the records show.

When finally caught, the NSF official retired. He even offered, among other explanations, a humanitarian defense, suggesting that he frequented the porn sites to provide a living to the poor overseas women. Investigators put the cost to taxpayers of the senior official's porn surfing at between $13,800 and about $58,000.

"He explained that these young women are from poor countries and need to make money to help their parents and this site helps them do that," investigators wrote in a memo.

The independent foundation, funded by taxpayers to the tune of $6 billion in 2008, is tasked with handing out scientific grants to colleges, universities and research institutions nationwide. The projects it funds ranges from mapping the genome of the potato to exploring outer space with powerful new telescopes. It has a total of 1,200 career employees.

Recent budget documents for the inspector general cite a "6-fold increase in employee misconduct cases and associated proactive management implication report activities." The document doesn't say how many cases were involved in the increase, and officials could not immediately provide a figure.

Read the rest here.

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Infant Hepatitis B Vaccine Triples Risk of Autism in Boys, Study Says

by Aaron Turpen

While the mainstream media is touting the latest study showing that the Hepatitis B vaccine they routinely hit newborns with (literally, in the birthing room) reduces liver cancer, they are ignoring a new study published (as an abstract) in the September issue of Annals of Epidemiology.1

That study, conducted by Carolyn Gallagher and Melody Goodman of the Graduate Program in Public Health at Stony Brook University Medical Center, New York, found that newborn boys who received the Hepatitis B vaccine had a higher chance of getting ASD (autism spectrum disorder). On the order of 2.94 times higher.

The study, published in abstract in the Annals of Epidemiology, is awaiting full publication in a peer-reviewed journal. The study is under review.

The study surveyed infant boys who received a Hepatitis B vaccine within one month of birth and compared them to another survey of non-vaccinated boys. The results were compared to overall information found using probability samples from the National Health Interview Survey (NHIS) from 1997-2002 data sets (the latest available).

The conclusion?

"Findings suggest that U.S. male neonates vaccinated with hepatitis B vaccine had a 3-fold greater risk of ASD; risk was greatest for non-white boys."

An earlier study by the same authors found that the Hepatitis B vaccination was associated with those children having higher instances of needing early intervention/special education services compared to other probability samples of U.S. children.2 That earlier study used an NHIS data set different from the one used in the current study, further confirming results of both studies.

It's of note that any causation proven to have a relative risk factor of 2.0 or higher (in magnitude) is considered enough proof for causation in a court of law in the United States.

It's also worth noting that the Hepatitis B vaccine contained Thimerosal until 2002. The vaccine was originally introduced in 1991 and is the first (and only) vaccination routinely given to newborn babies.

The data from the Gallagher-Goodman study (obtained from NHIS) shows autism rates have increased many-fold since the use of the Hepatitis B vaccine began in 1992 and that today, the vaccine is given to nearly 90% of American-born babies.

In fact, the Centers for Disease Control recommends that no less than 28 injections be given for 11 vaccinations between the ages of birth and 2 years. That is as of the June, 2009 recommendations the CDC released.3

The first of those, of course, is the Hepatitis B inoculation, to be given at birth (or very soon thereafter).

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Another War in the Works

by Paul Craig Roberts

Does anyone remember all the lies that they were told by President Bush and the “Main Stream Media” about the grave threat to America from weapons of mass destruction in Iraq? These lies were repeated endlessly in the print and TV media despite the reports from the weapons inspectors, who had been sent to Iraq, that no such weapons existed.

The weapons inspectors did an honest job in Iraq and told the truth, but the mainstream media did not emphasize their findings. Instead, the media served as a Ministry of Propaganda, beating the war drums for the US government.

Now the whole process is repeating itself. This time the target is Iran.

As there is no real case against Iran, Obama took a script from Bush’s playbook and fabricated one.

First the facts: As a signatory to the non-proliferation treaty, Iran’s nuclear facilities are open to inspection by the International Atomic Energy Agency, which carefully monitors Iran’s nuclear energy program to make certain that no material is diverted to nuclear weapons.

The IAEA has monitored Iran’s nuclear energy program and has announced repeatedly that it has found no diversion of nuclear material to a weapons program. All 16 US intelligence agencies have affirmed and reaffirmed that Iran abandoned interest in nuclear weapons years ago.

In keeping with the safeguard agreement that the IAEA be informed before an enrichment facility comes online, Iran informed the IAEA on September 21 that it had a new nuclear facility under construction. By informing the IAEA, Iran fulfilled its obligations under the safeguards agreement. The IAEA will inspect the facility and monitor the nuclear material produced to make sure it is not diverted to a weapons program.

Despite these unequivocal facts, Obama announced on September 25 that Iran has been caught with a “secret nuclear facility” with which to produce a bomb that would threaten the world.

The Obama regime’s claim that Iran is not in compliance with the safeguards agreement is disinformation. Between the end of 2004 and early 2007, Iran voluntarily complied with an additional protocol (Code 3.1) that was never ratified and never became a legal part of the safeguards agreement. The additional protocol would have required Iran to notify the IAEA prior to beginning construction of a new facility, whereas the safeguards agreement in force requires notification prior to completion of a new facility. Iran ceased its voluntary compliance with the unratified additional protocol in March 2007, most likely because of the American and Israeli misrepresentations of Iran’s existing facilities and military threats against them.

By accusing Iran of having a secret “nuclear weapons program” and demanding that Iran “come clean” about the nonexistent program, adding that he does not rule out a military attack on Iran, Obama mimics the discredited Bush regime’s use of nonexistent Iraqi “weapons of mass destruction” to set up Iraq for invasion.

The US media, even the “liberal” National Public Radio, quickly fell in with the Obama lie machine. Steven Thomma of the McClatchy Newspapers declared the non-operational facility under construction, which Iran reported to the IAEA, to be “a secret nuclear facility.”

Thomma, reported incorrectly that the world didn’t learn of Iran’s “secret” facility, the one that Iran reported to the IAEA the previous Monday, until Obama announced it in a joint appearance in Pittsburgh the following Friday with British Prime Minister Gordon Brown and French President Nicolas Sarkozy.

Obviously, Thomma has no command over the facts, a routine inadequacy of “mainstream media” reporters. The new facility was revealed when Iran voluntarily reported the facility to the IAEA on September 21.

Ali Akbar Dareini, an Associated Press writer, reported, incorrectly, over AP: “The presence of a second uranium-enrichment site that could potentially produce material for a nuclear weapon has provided one of the strongest indications yet that Iran has something to hide.”

Dareini goes on to write that “the existence of the secret site was first revealed by Western intelligence officials and diplomats on Friday.”

Dareini is mistaken. We learned of the facility when the IAEA announced that Iran had reported the facility the previous Monday in keeping with the safeguards agreement.

Dareini’s untruthful report of “a secret underground uranium enrichment facility whose existence has been hidden from international inspectors for years” helped to heighten the orchestrated alarm.

There you have it. The president of the United States and his European puppets are doing what they do best–lying through their teeth. The US “mainstream media” repeats the lies as if they were facts. The US “media” is again making itself an accomplice to wars based on fabrications. Apparently, the media’s main interest is to please the US government and hopefully obtain a taxpayer bailout of its failing print operations.

Dr. Mohamed ElBaradei, Director General of the International Atomic Energy Agency, a rare man of principle who has not sold his integrity to the US and Israeli governments, refuted in his report (September 7, 2009) the baseless

“accusations that information has been withheld from the Board of Governors about Iran’s nuclear programme. I am dismayed by the allegations of some Member states, which have been fed to the media, that information has been withheld from the Board. These allegations are politically motivated and totally baseless. Such attempts to influence the work of the Secretariat and undermine its independence and objectivity are in violation of Article VII.F. of the IAEA Statute and should cease forthwith.”

As there is no legal basis for action against Iran, the Obama regime is creating another hoax, like the non-existent “Iraqi weapons of mass destruction.” The hoax is that a facility, reported to the IAEA by Iran, is a secret facility for making nuclear weapons.

Just as the factual reports from the weapons inspectors in Iraq were ignored by the Bush Regime, the factual reports from the IAEA are ignored by the Obama Regime.

Like the Bush Regime, the Middle East policy of the Obama Regime is based in lies and deception.

Who is the worst enemy of the American people, Iran or the government in Washington and the media whores who serve it?

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Tuesday, September 29, 2009

Attorney: OKC bombing tapes appear edited

by Tim Tally
Attorney: Long-secret security tapes of 1995 Oklahoma City bombing appear edited

Long-secret security tapes showing the chaos immediately after the 1995 bombing of the Oklahoma City federal building are blank in the minutes before the blast and appear to have been edited, an attorney who obtained the recordings said Sunday.

"The real story is what's missing," said Jesse Trentadue, a Salt Lake City attorney who obtained the recordings through the federal Freedom of Information Act as part of an unofficial inquiry he is conducting into the April 19, 1995, bombing that killed 168 people and injured hundreds more.

Trentadue gave copies of the tapes to The Oklahoman newspaper, which posted them online and provided copies to The Associated Press.

The tapes turned over by the FBI came from security cameras various companies had mounted outside office buildings near the Alfred P. Murrah Federal Building. They are blank at points before 9:02 a.m., when a truck bomb carrying a 4,000 pound fertilizer-and-fuel-oil bomb detonated in front of the building, Trentadue said.

"Four cameras in four different locations going blank at basically the same time on the morning of April 19, 1995. There ain't no such thing as a coincidence," Trentadue said.

He said government officials claim the security cameras did not record the minutes before the bombing because "they had run out of tape" or "the tape was being replaced."

"The interesting thing is they spring back on after 9:02," he said. "The absence of footage from these crucial time intervals is evidence that there is something there that the FBI doesn't want anybody to see."

A spokesman for the FBI in Oklahoma City, Gary Johnson, declined to comment and referred inquiries about the tapes to FBI officials in Washington, who were not immediately available for comment Sunday.

The soundless recordings show people rushing from nearby buildings after the bomb went off. Some show people fleeing through corridors cluttered with debris. None show the actual explosion that ripped through the federal building.

FBI agents did not report finding any security tapes from the federal building itself.

The FBI in the past refused to release the security camera recordings, leading Trentadue and others to contend the government was hiding evidence that others were involved in the attack.

"It's taken a lawsuit and years to get the tapes," Trentadue said.

He received the latest batch of tapes over the summer in response to an April request for video from security cameras in 11 different locations. Nothing on the tapes was unexpected.

"The more important thing they show is what they don't show," Trentadue said. "These cameras would have shown the various roads and approaches to the Murrah Building."

Trentadue began looking into the bombing after his brother, Kenneth Trentadue, died at the Oklahoma City Federal Transfer Center in August 1995. Kenneth Trentadue was a convicted bank robber who was held at the federal prison after being picked up as a parole violator at his home in San Diego in June 1995.

He was never a bombing suspect, but Jesse Trentadue alleges guards mistook his brother for one and beat him to death during an interrogation. The official cause of Kenneth Trentadue's death is listed as suicide, but his body had 41 wounds and bruises that Jesse Trentadue believes could have come only from a beating.

A judge in 2001 awarded Kenneth Trentadue's family $1.1 million for extreme emotional distress in the government's handling of his death.

Jesse Trentadue said he has received about 30 security tapes, including some images that were used as evidence at bomber Timothy McVeigh's trial. McVeigh was convicted on federal murder and conspiracy charges and executed in 2001. Coconspirator Terry Nichols is serving life in prison on federal and state bombing convictions.

Trentadue said he is seeking more tapes along with a variety of bombing-related documents from the FBI and the CIA. An FOIA request by Trentadue for 26 CIA documents was rejected in June. A letter from the National Geospatial-Intelligence Agency, which reviewed the documents, said their release "could cause grave damage to our national security."

Trentadue said he gave the latest set of tapes to The Oklahoman because of their historical value. The newspaper has agreed to provide copies to the Oklahoma City National Memorial & Museum.

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The Common Good = Collectivism

by Butler Shaffer

In recent weeks – as the present administration and most of congress continue to propose the expansion of state power over people’s lives – more balloon juice has been released endeavoring to justify such programs on the grounds of fostering "the common good." Any inquisitive mind should see, at once, that the idea of a "common good" is almost entirely that: an idea, a fiction. Those who have completed a course in microeconomics can attest to the fact that our tastes, values, and preferences vary from one person to another and, further, fluctuate within individuals. What you and I consider to be in our respective interests will sometimes coalesce and other times deviate from one another. What is to my immediate interest when I am starving becomes far less important to me after I have had a filling dinner. Add to all of this variability and uncertainty the fact that the entire notion of "good" is purely subjective, and it can be seen that the insistent chanting of this phrase has no more intellectual respectability to it than does the stomping of one’s feet.

Is an alleged "common good" intended to convey the idea of a universal good, one that is applicable to everyone? If so, the only value I have found to which all persons would seem to subscribe, is this: no one wants to be victimized. I have yet to find an individual to which this proposition would not apply. No one chooses to have his or her person or other property interests trespassed upon by another. The failure to recognize both this fact and the fact that all of our values are subjective in nature, has given rise to the silly notion of altruism, the idea that one could choose to act contrary to his or her perceived interests. However we act is motivated by a desire to be better off after we have acted than if we had chosen a different course. I have a long-standing challenge to one of my colleagues to present me with an example – real or hypothetical – in which an individual chose to act contrary to his highest value. Even acts of charity are driven by a desire to satisfy some inner need which, to outsiders with contrary preferences, appear to be acts of self-sacrifice. Such thinking amounts to little more than this: "I wouldn’t have done what he just did, therefore, he is being altruistic." The idea of altruism is grounded in the belief that values have an objective quality to them, a bit of nonsense perpetuated by Ayn Rand.

Transactions in a free market occur because people do not have a commonly shared sense of the value of things. If I agree to sell you my car for $5,000, and you agree to pay $5,000 for it, each of us places a different value upon it. To me, the car is worth less than $5,000 (i.e., I’d rather have the money than the car) while to you it is worth more than that amount. The price of the car is objectively defined ($5,000) but its value can never be known to either of us. A condition of liberty – in which property interests are respected – is inherently diverse and in constant flux, as men and women pursue their varied self-interests.

In an effort to overcome the motivation of people to pursue their individual interests, and to accept the purposes of institutions as their own, humans have been indoctrinated in the idea that there is a "common good" that expresses a more fulfilling sense of self. When we have learned to suppress our individual values and interests in favor of an institution, we have become part of the collective mindset upon which all political systems depend for their existence. With our thinking so transformed, we are easily duped into believing that what we might otherwise see as our victimization is the essence of our self-fulfillment. In this way are young men and women seduced to "be all you can be" by joining the Army and having their lives destroyed in state-serving foreign adventures.

The doctrine of egalitarianism has proven useful to the established order as a catalyst for this psychic metamorphosis. Otherwise intelligent men and women internalize the proposition that being victimized by the suppression of one’s personal interests in favor of an alleged "common good" is acceptable, as long as their neighbors are being equally victimized. There is a pro-liberty sentiment in e.e. cummings’ observation that "equality is what does not exist among equals." The statists, however, have a far different meaning for the word: that being coerced by the state can be justified if the compulsion is shared equally by all. So considered, victimization by the state is simply a cost people must bear to bring about their allegedly "greater" personal interest in the "common good."

Such reasoning is generally good enough to entrap those who don’t bother to think through the proposition. Anyone who examined the "equal protection of the laws" concept in practice would quickly realize that no law applies with equal force to people. Laws are enacted for the purpose of imposing restraints on some people for the benefit of others. Proposed legislation requiring everyone to pursue their self-interests would never be enacted because it would not differentiate one group from another and, in the process, provide its advocates with a comparative advantage.

But even if the "equality" principle was given its purported meaning (i.e., to have government restraints operate equally upon all), the absurdity of such an idea would at once become evident: people would be understood to have organized the state for the purpose of assuring their mutual victimization! The nonsensical nature of such thinking would become, in the words of H.L. Mencken, "so obvious that even clergymen and editorial writers [would] sometimes notice it."

Nor can the case for a "common good" be rescued by an appeal to the utilitarian doctrine of the "greatest good for the greatest number." My jurisprudence professor, Karl Llewellyn, responded to this proposition in class one day by asking "what about the greatest good for the greatest guy?" Utilitarianism is just another variation on the collectivist theme that some may be victimized in order to benefit the group. "The greatest good for the greatest number" is the mantra of every cannibal and socialist (or am I being redundant?).

The utilitarian premise has never been the operating principal in politics. It has been used as yet another diversion – like "common good," "general welfare," etc. – to mask the promotion of special interests behind the façade of collective interests. Thus have such ideas been used to advance such corporate interests as defense contractors, banks, insurance companies, auto manufacturers, pharmaceutical companies, et al., in their efforts to obtain, through state power, what they cannot obtain in a free market. Major corporations have never been advocates of a free society, preferring to side with the forces of state power to stabilize their interests against the forces of change that attend conditions of liberty. The lyrics to a song from the musical Li’l Abner – paraphrased from former General Motors president Charles Wilson – express the modern corporate mindset: "what’s good for General Bullmoose, is good for the USA."

Politically-structured collectivism, in whatever form it manifests itself, debilitates and disables individuals, depriving each of us of our biological and experiential uniqueness. This, of course, is its purpose. As long as men and women think of themselves as little more than fungible units in a group-think monolith, they and their children will continue to be ground down into a common pulp useful only to their masters. Collectivism is a religion for losers; a belief system that allows the state to marshal the wealth and energies of people for a coerced redistribution to those it favors.

Barack Obama did not invent this vulgar, anti-life concept that he works so assiduously to expand. The collectivist proposition had long been in place when George W. Bush echoed its sentiments in the phrase "if you’re not with us, you’re against us." Nor are the protoplasmic units (i.e., you and I) to be heard questioning the purposes or the costs of our subordination to what is the basic premise of every political system. The state shields itself from such inquiries under the pretense that "national security" would be threatened thereby. Efforts by Ron Paul and others to "audit the Federal Reserve" are met with the most arrogant of all pleas for governmental secrecy (i.e., that revealing to the public the nature of the racket being run by the Fed would jeopardize its "independence"). To the statists, such questions are no more to be tolerated than would a plantation owner feel obliged to entertain inquiries from his slaves about cotton prices!

One of my students recently asked me that most frequent of all questions: "what can I do to change all of this?" My response was this: "are you able to change anything that is beyond your control? Is the content of your thinking within your power to control? Can you become aware of the conditioned nature of your mind?"

Our problems do not have their origins in Washington, D.C., nor will their solutions be found there. We are the authors of our own dystopian worlds, and it is to our minds that we must repair if we are to save ourselves from the playing out of the ugly and destructive premises we have planted there. We might begin by acknowledging that our individuality is about all that we have in common with one another; and that the suppression of this quality in the name of some alleged collective purpose is essential to the creation of every political system.

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September ‘Surprise’

by Justin Raimondo

What did the U.S. government know about the "secret" Iranian nuclear research facility at Qom and when did it know it? That’s the question that isn’t on everyone’s lips, as the chatter about Iranian "intransigence" on nuclear issues reaches a crescendo in the run-up to Oct. 1, the date negotiations with Tehran are scheduled to start. Practically no one wants to ask let alone answer this question, because it torpedoes the American narrative that is being carefully constructed by the Obama administration and its media fan club, which runs something like this: the Iranians have been actively deceiving us all along and simply can’t be trusted – the only solution, therefore, is to initiate a series of escalating sanctions, up to and including military action.

The Obama-worshippers in the punditocracy are telling us that this is an example of the Dear Leader’s genius: unlike George W. Bush and the neocons, whose crude unilateralism and unmitigated arrogance was a turnoff to our allies and a boon to our enemies, Obama wisely held back and waited until he had the Iranians just where he wanted them, and then, as one of the more unhinged Obama maniacs put it, "Ka-pow!"

"And so you see the Obama mojo again. Look at the moves of the last month. He scraps the missile defense in Eastern Europe, pleasing Russia, and moves the focus of defense to the Mediterranean, pleasing Israel.

"He pwns [sic] Ahmadinejad at the UN by being the first president of the U.S. to preside over the resolution to enforce nuclear non-proliferation.

"He corrals the rhetorical support of the developing world, isolating Tehran still further. He hangs back a little and allows Brown and Sarkozy to do the heavy hitting on NoKo and Iran this past week, again revealing that the desire to curtail Ahmadinejad’s nukes is not only an American project.

"And then, this morning… kapow!"

This tale of heroic cunning and diplomatic derring-do is largely a product of Sullivan’s hero-worshipping imagination – the same tendency to idolatry that moved him to praise George W. Bush as little short of the second coming of Winston Churchill back in the day. It is, however, based on even less substance this time around, for it turns out that the U.S. has known about this "secret" facility for years, as CNN reports:

"The United States was aware of Iran’s unfinished uranium enrichment site for several years, senior U.S. officials told CNN on Friday. U.S. officials have known about the facility since President George W. Bush’s administration, according to the officials who declined to be identified because of the sensitive nature of the negotiations."

Yes, the Bushies knew about it, too, and said nothing – but why not? After all, George W. was not exactly known as an apologist for the Iranian regime, and he was no less eager than his successor to tag Tehran as a serial deceiver. The CIA knew about it when they issued that now inconvenient National Intelligence Estimate [.pdf] averring that Iran had abandoned all efforts to militarize its nuclear research in 2003. Were they trying to protect the Iranians, too? And, of course, Obama knew all about it – and decided to make use of it, in spite of the fact that (a) the Qom facility is not operational and (b) there is no evidence it is being used to create a nuclear weapon.

We are told the Iranians only recently discovered that we knew about Qom, which is why they chose to reveal its existence in a letter to the International Atomic Energy Agency (IAEA) – but, really, since the Iranians had a direct line to our most closely guarded secrets, via Ahmed Chalabi, in the days of the Bush administration, it’s hard to make that case with absolute assurance. In any case, they did admit the existence of the Qom facility and have now invited in the inspectors – and all of Obama’s stern admonitions to the Iranians to "come clean" cannot obfuscate Tehran’s transparency in this matter.

In his UN oration, Obama declared “Iran is breaking rules that all nations must follow," a manifestly untrue statement that nonetheless went largely unchallenged. Because "all nations" apparently doesn’t include the state of Israel, which has as many as 200 nuclear weapons and is no doubt developing more.

Obama hailed efforts to strengthen the Nuclear Nonproliferation Treaty (NPT) and singled out Iran and North Korea as two examples of nations that "choose to ignore international standards" and "put the pursuit of nuclear weapons ahead of regional stability and the security and opportunity of their own people." These two miscreants, he intoned, "must be held accountable."

There is one other miscreant, however, that is never to be held accountable, either by the president of the United States or by anyone who works in "mainstream" journalism, on pain of being charged with a hate crime. Israel’s nukes are common knowledge. Yet the Jewish state not only refuses to acknowledge its possession of weapons of mass destruction, it also disdains efforts by the international community to monitor their development and placement.

Israel has always steadfastly refused to join the NPT, and when the possibility that they could be pressured to do so was raised as the Obamaites were flocking to Washington to take power, the idea was quickly shot down. That a U.S. government official had even mentioned Israel in relation to its well-known possession of nukes was denounced by the Israelis and their American amen corner as a "violation" of a supposedly 40-year agreement between the U.S. and Israel that Washington would not only give the Israelis a pass, but would refrain from even referring to the existence of Israel’s nuclear arsenal.

Which means: quite apart from evidence – or the absence of it – that the Iranians are actively trying to acquire nuclear weapons, we aren’t allowed to even talk about why they would possibly want them.

Israel has been threatening Iran with military action for quite some time, and, armed as the former is with a formidable nuclear arsenal, the Iranians would be foolish not to take the Israelis seriously. However, the biggest weapon in the Israeli quiver isn’t nukes, it’s their "special relationship" with the U.S., and the Iranians know it.

The devastation and occupation of Iraq had barely begun when Ariel Sharon publicly stated that America’s next target must be Iran, and the U.S. has dutifully taken up this charge, in spite of Obama’s guff about engaging in "dialogue" with Tehran. That’s just window-dressing for the liberals who supported him on account of his antiwar credentials.

And so it begins: phase two of the American project for the transformation of the Middle East into an environment that guarantees "security" for Israel as she represses her Palestinian helots [.pdf], expands her borders willy-nilly, and defies the standards and benchmarks that all civilized nations are expected to adhere to.

Change? You’ve got to be kidding! What we’re getting from this administration in the foreign policy department is an uncanny repetition of the same folly engaged in by the Bush administration, complete with "weapons of mass destruction" and the hosannas of the Establishment pundits as they march in lockstep to war. The only difference is that many of these very same pundits were singing a far different tune when it was Republicans doing the warmongering.

We are told by the pro-Obama foreign policy analysts that the president’s efforts to negotiate with Tehran have put the military option "on the back burner." Really? What’s on the front burner is a proposal – guaranteed to sail through the U.S. Congress – to impose draconian sanctions on Iran, including petroleum products. What this would amount to is a blockade of Iranian ports, i.e., an act of war.

Iran has the right to the production of peaceful nuclear power under the terms of the NPT, a treaty the Israelis refuse to sign. Why are they being held "accountable," and not the Israelis? Everybody in the Middle East knows the answer to this question – as they do in Washington, although the rules of political correctness won’t permit them to utter it.

This whole campaign against Iran for supposedly harboring a desire to nuke Israel is absurd from beginning to end. A nuclear attack on Israel would not only annihilate the Israelis, but also the Palestinians – which one has to assume the Iranians have no desire to do. It would also invite massive retaliation from the U.S. and universal condemnation. The myth that Israel is going to be the site of a second Holocaust if we don’t stop the Iranians first is one that is being energetically pushed by Israel and her American lobby – and it is a very crude and easily refutable lie. Which doesn’t mean they won’t try to pull it off. After all, the idea that Saddam Hussein was behind the 9/11 terrorist attacks, although absurd on its face, was relentlessly repeated by the Bushies during the run-up to the Iraq war, and there’s no reason, at this point, to suspect that the new guys in charge are above such tactics.

Indeed, we are fast learning that they aren’t – that’s what the Qom kerfuffle shows us, and we ought to be prepared for more, and much worse, in the coming months. The Obamaites are going into the October talks guns blazing, and you can be sure that, although this process of baiting Iran is going to go on for many months, if not years, this first phase will be relatively short-lived: the War Party is hoping for an Iranian walkout, and I suspect they’ll get their wish.

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Monday, September 28, 2009

The Infallible Prosecutor

by Radley Balko, Reasononline

A prosecutor manufactures evidence in order to win a conviction. After the convicted serves 25 years in prison, exculpatory evidence pointing to another perpetrator surfaces. The convicted is released. Should he be able to sue the prosecutor who concocted the false evidence used to convict him?

Believe it or not, it's still an open question. In November, the Supreme Court will hear arguments on Pottawattamie v. McGhee in order to resolve it. The facts of the case aren't in dispute. In 1978, a retired Iowa police captain was killed by a shotgun blast while working as a private security guard. Prosecutors Joseph Hrvol and David Richter then worked with local police to manufacture evidence against the two chief suspects, Terry Harrington and Curtis McGhee, Jr. The two men were convicted of the murder in separate trials, and each was sentenced to life without parole.

The Iowa Supreme Court set aside both convictions in 2003, citing exculpatory evidence pointing to another suspect that was withheld from defense counsel in both trials. Both men were eventually released from prison. Seeking damages for losing 25 years of their lives, they brought a civil rights suit against the police, prosecutors, and county that convicted them. Hrvol and Richter maintain that under the Supreme Court's decision in the 1976 case Imbler v. Pacthman, they have absolute immunity against such a suit.

In Imbler, the Supreme Court determined that a prosecutor who knowingly uses false testimony and withholds exculpatory evidence is immune from damages, even in cases where his misdeeds result in a wrongful conviction. The Court determined that subjecting prosecutors to the possibility of such suits would affect their judgment in determining what cases to bring. In another case involving a falsely convicted man attempting to bring a lawsuit, the Court extended absolute immunity to include district attorneys who poorly supervise their subordinates.

Hrvol and Richter contend that prosecutorial immunity gives government officials the right to coerce witnesses to lie, withhold evidence pointing to a suspect's innocence, and work with police to manufacture false evidence of guilt, then use that evidence to win false convictions that send two men to prison for 25 years. Their motivation for making this argument is obvious; they'd rather not pay for their misconduct. But they're supported in amicus briefs filed by the U.S. Solicitor General, the National District Attorneys Association, and the attorneys general of 27 states and the District of Columbia. Notably, Cook County, Illinois, home to a number of wrongful convictions, also filed its own brief in support of the prosecutors.

The Court has put one small dent in the absolute immunity shield enjoyed by prosecutors. In the 1993 case Buckley v. Fitzsimmons, it ruled that prosecutors who act as investigators in a case are subject to the more limited qualified immunity afforded to police officers with respect to the actions they take as investigators. Qualified immunity is still a high hurdle; it doesn't exactly open prosecutors up to a barrage of lawsuits. A claimant must show that a state actor violated his "clearly established statutory or constitutional rights," as those rights are understood by a "reasonable person" (as distinguished from a legal professional). Under Buckley, prosecutors who violate the clear constitutional rights of a defendant while serving an investigatory role can be sued, but once they assume the role of a prosecutor, they're immune.

In Buckley, the defendant was incarcerated for three years while the state attorney concocted forensic evidence against him. But by the time he was tried, a new state attorney had been elected. The first jury was unable to reach a verdict. Buckley was eventually released and all charges against him were dropped. He then filed suit against multiple parties. It was his suit against the state attorney that made it to the U.S. Supreme Court. Hrvol, Richter, and the government entities supporting them split hairs to distinguish their case from Buckley: In Buckley, they point out, the prosecutor who tried the case wasn't the same person who manufactured the evidence. Since Hrvol and Richter were a full-service operation—manufacturing evidence and trying the case—they argue that they should be immune from a lawsuit. They say that the rights of Ghee and Harrington were violated when they were convicted based on the false evidence, not when the evidence was actually manufactured. Under that interpretation, Hrvol and Richter were acting as prosectors when the civil rights violations occurred, so they have absolute immunity.

It's a stunner of an argument. If the Supreme Court buys it, it would mean that prosecutors who invent evidence to convict innocent people would only be susceptible to a lawsuit if a prosecutor other than themslves ends up using that evidence in court. If they argue the evidence, they can't be touched. Among other things, these rules create a double standard: Prosecutors acting as police investigators would enjoy more protection than actual police investigators. In fact, the argument removes prosecutors from virtually all civil accountability or liability.

Supporters of extending absolute immunity argue that prosecutors are held accountable in other ways—by appellate courts, bar associations, and legal disciplinary boards. But an amicus brief filed by the Cato Institute, the American Civil Liberties Union, and the National Association of Criminal Defense Attorneys cites studies of wrongful convictions in California, New York, and Chicago, all of which found that though prosecutorial misconduct contributed to a sizable majority of cases that sent innocent people to prison in those states, the misbehaving prosecutors were almost never sanctioned.

If the Supreme Court rules for Hrvol and Richter, it would essentially overturn Buckley and give prosecutors complete immunity, even when they conspire to convict an innocent person from the earliest stages of an investigation. The vast majority of prosecutors would never engage in such reprehensible conduct, of course. But it's curious why professional district attorney organizations and government agencies want to protect the lowly few who would.

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Sunday, September 27, 2009

Right's Czar Mania Is a Distraction

by Gene Healy, CATO

o more czars!" is the new tea party rallying cry, as conservatives across the country fear that President Obama has unleashed a legion of unaccountable bureaucratic overlords on the body politic.

Having helped oust Van Jones, Obama's "green jobs" czar, Fox News' Sean Hannity swears that he won't rest until he's gotten "rid of every other one." But if he succeeds, will the country be appreciably freer, or the government noticeably smaller?

No, it won't, because the conservatives' current bout of czar mania elevates symbolism over substance. All the focus on a scary moniker for certain executive officials misses the real problem: Unconstitutional delegation of power to the executive branch. Whether those illegitimate powers are exercised by unconfirmed presidential advisers or the president himself is quite beside the point.

Rep. Mike Pence, R-Ind., notes that you won't find the word "czar" in the Constitution; but you won't find it in federal law either. That's because "czar" is a media-coined, catchall term for presidential assistants tasked with coordinating policy on issues that cut across departmental lines.

Officials dubbed "czars" range from the truly powerful, like Nixon's National Security Adviser Henry Kissinger, to the ineffectual such as cybersecurity czar Melissa Hathaway, who quit last month because she lacked real authority.

Often, czars are mere figureheads, appointed to signal concern over the latest hot-button issue. As one presidential scholar puts it, "when in doubt, create a czar."

True, it's problematic that some of these appointees aren't vetted by the Senate, and that presidents claim czars don't have to answer to Congress — as when the Bush administration asserted in 2002 that executive privilege shielded then-homeland security czar Tom Ridge from testifying on the Hill.

But as the Washington Independent's Dave Weigel has pointed out, many of the "czars" who appear on the conservative target list already have to be confirmed by the Senate. Others don't, but when Obama is hell-bent on taking over the health care sector — one-sixth of the U.S. economy — it's bizarre to agonize over the allegedly unchecked power exercised by the likes of the AIDS and urban affairs czars.

Similarly, while it's great to see a 9/11 "Truther" like Van Jones denied a federal salary, few of those cheering Jones' defenestration can coherently explain what the green jobs czar actually does, or the threat he was supposed to represent.

What, was Jones going to give 9/11 "Truthers" and black nationalists jobs weatherizing homes? Will we stop wasting money on such projects now that he's gone?

In contrast, the "pay czar" and the "car czar" have considerable power, and such offices have no place in a free country. But it was Obama himself, not his car czar, who summarily fired the chief executive officer of General Motors. Is that power less disturbing when it's exercised directly by the president, rather than delegated to a so-called "czar"?

Blame Congress. The "pay czar" grew out of a provision Congress passed with the stimulus package, ordering the Treasury Department to come up with rules on executive compensation for firms taking Troubled Assets Relief Program money.

The auto bailout itself is a result of congressional fecklessness. Many in Congress protested when President George W. Bush used the TARP statute to lend billions to Chrysler and GM. How, they asked, could that possibly be authorized by a law allowing the purchase of "troubled assets" from "financial institutions"?

If they'd bothered to read the bill, they'd know. Those terms were so loosely defined in the statute that they gave Bush and Obama a colorable argument for reshaping the bailout as they saw fit. Here congressional outrage was more than a day late and $700 billion short.

There's plenty Congress can and should do to enhance oversight over executive branch officials. Yale Law's Bruce Ackerman argues that "we need to seriously consider requiring Senate approval of senior White House staff positions." But as long as Congress continues to write blank checks to the executive branch, it's the height of hypocrisy for them to complain about that branch's unchecked power.

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How the New York Stock Exchange really works

by Michael Templain

Richard Ney on the Role of the Specialist

“The story is told that after he had been deported to Italy, Lucky Luciano granted an interview in which he described a visit to the floor of the New York Stock Exchange. When the operations of floor specialists had been explained to him, he said, ‘A terrible thing happened. I realized I’d joined the wrong mob’” (1Ney, 8).

It was with these words that Richard Ney began his first of three books on the nature of the New York Stock Exchange. Ney wrote over 20 years ago, a time when a 750 Dow was high and today’s volumes were beyond imagining. Some of his material is dated, and must be read in the light in which it was written. But the main premise of his books is still true: that the specialist exists not to ensure the free and orderly trade of stock in a particular company, but to fatten upon the innocence and ignorance of the small investor.

The New York Stock Exchange is not an auction market (2Ney, 86), though many investors still hold onto that image. It is a rigged market. Volume is an effect of price. Prices are controlled absolutely by the specialists, the ‘market makers’ in individual stocks. It was this discovery that led Mr. Ney to eventually give us small investors a priceless gift: enlightenment.

“Studying the transactions in each stock, I became immediately conscious that, on too many occasion to be a coincidence, a stock would advance from its morning low and then, often during the afternoon, would show an up-tick of a half-point or more on a large block of anywhere from 1,500 to 5,000 or more shares. This transaction seemed to herald a transformation in what was taking place, for immediately thereafter the stock would begin to drop like Newton’s apple. Before I could find out what caused this, another question presented itself: What caused the same thing to happen at the low point in that stock’s decline? For it was also apparent that a block of stock of the same size often appeared on a down-tick of a half-point or more, after which the stock quickly rallied. Together these two facts seemed to give a stock’s pattern continuity. At the end of several days of investigation, I discovered that these transactions at the top and bottom of a stock’s price pattern were for the specialist’s own account. … Clod that I was, I had at last recognized that, although the study of human nature may not be fashionable among economists, it is never out of season” (2Ney, 9).

The specialist is part of a system. First, he is part of that rare fraternity of men who are all specialists in an exchange. It is a small private club, to whose membership one can only be born. The specialists of the Dow 30 exhibit the spirit of ‘all for one, and one for all’. If one of the 30 is having problems, the other 29 wait for him, before they move onto their next agreed upon campaign (2Ney, 172). The rest of the specialists take their lead from watching the Dow 30.

But the system is more extensive and more powerful than just the specialists. The specialists are the heart of the exchange. The exchange, in turn, has practical control of the major corporations, banks, insurance companies, and brokerage houses in this country. These, in turn, influence news reporting and the regulatory agencies.

The specialist has many advantages, many tools to use to pry dollars from unsuspecting investors and mutual funds. Chief among these advantages is his book. In his book he can see at a glance all the buy and sell orders from the public and the funds. His book tells him of potentially massive sales above and below his current price. This gives him a great advantage when he is trading on his own investment and omnibus accounts.

Because of his book, the specialist sees shifts in trends long before anyone else. This gives him a great advantage. The specialist will buy heavily at the bottom of a slide (at wholesale) then advance prices and sell, at heavy volume, at the peak of the rally (retail). He will then sell short and take prices down. The turning points of a rally will be marked by heavly volume in the Dow 30 (3Ney, 85-89).

When he desires he can even make large block trades without entering them into his book. In this way the public is never made aware of those trades. Should the specialist want to supply a buy or sell order from his own accounts, rather than from public orders on book, he can and will do so (1Ney, 156). Ney cites specific examples when his customers orders were ignored while the specialist completed orders for his own accounts.

When serving as the market maker, the broker’s broker, the specialist trades from his Trading Account, which is to be used to service the needs of the market. However, he also has Investment Accounts (plural). His Segregated Investment Accounts put him directly into competition with every other investor in his stock. The reason for he has segregated investment accounts is that they enable him to convert regular income into long-term capital gains (1Ney, 113).

In addition, he also trades on Omnibus accounts, taking orders from a friendly bank on behalf of friends, family, and himself (1Ney, 58). Although he is not allowed to be both long and short in his Trading account, he can take the opposite stance in his Investment or Omnibus accounts (3Ney, 130).

A Specialist will often not have any shares in his trading or omnibus accounts. If public demand for shares suddenly increases, the Specialist is more than happy to supply those shares to the public by short selling. This, of course, forces the Specialist to take the price down soon thereafter, so that he may cover his short sales at the lower price. Or, the Specialist may sell from his Investment Accounts, establishing a middle or long term high (1Ney, 61), and then take the price down. Whichever strategy he employs, a large public demand for stock ultimately drives the price of that stock down, not up.

Distribution of large amounts of stock can be done from the specialist’s trading account, usually as short sales. The trading account can then be covered by transferring stock from the long-term investment accounts into the trading account (1Ney, 64).

The existence of the specialist’s Investment and Omnibus Accounts is ultimately detrimental to the public. “In a stock with only a small capitalization or floating supply, the segregation of large blocks into long-term investment accounts for the specialist further decreases the supply of the stock available to the public” (1Ney, 61)

The specialist has absolute control over price. He can match the buys with the sells in any way he sees fit. He can raise the price of the stock 3 points in three trades, and open the next day down 5.

The seeming unpredictability of stock prices is due to the fact that prices exist at the whim of the specialist. A stock is only worth what the specialist is willing to pay for it at the moment. The fluctuations you see are, in fact, the evidence of how the specialist is working out his inventory problems to meet his short-term, intermediate-term, and long-term goals (2Ney, 172). The specialist will sometimes ‘leap frog’ his prices up or down, creating a gap. This is done to keep a group of investors from buying or selling at a particular price. ‘Leap Frogs’ show specialist intent.

Ney offers specific examples where specialists opened stocks considerably lower:
August 8, 1967 Chicago and Northwestern Railroad opened down 39 points.
October 21, 1968 one of the preferred stocks of TRW opened down 28 points.
February 4, 1970 Memorex opened down 29 1/2 points (1Ney, 15)

“With $8,000, you can buy $10,000 worth of stock, but with $8,000 in stock, any Stock Exchange member can buy $160,000 worth of stock for his own segregated investment account” (1Ney, 112).

Because most investors have margin accounts, and the margin account agreement allows their brokers to lend their shares, specialists have an unlimited number of shares to borrow and sell short (1Ney, 68).

Margin agreements also allow the broker to use their customer’s shares as collateral without the customer’s knowledge or permission. This practice is fraught with dangers. In November, 1963, the Ira Haupt brokerage firm (NYSE), which dealt in both stocks and commodities was caught unwittingly in a scheme by one of its commodities customers to leverage nonexistent salad oil. The failure wiped out the partners of the firm and left it owing some $37 million in debts. “To compound Haupt’s and the New York Stock Exchange’s problems, it was impossible to return the stock to customers because the stock (held by the brokerage firm for its customers) had been pledged to banks by Haupt” (1Ney, 122).

Margin accounts usually allow the broker to borrow any cash in the account to use for his own purposes at no interest, even to lend back to the customer for margin purchases, at interest (1Ney, 119).

At the bottom of a cycle of a stock, having panicked customers into selling, the brokers and specialist borrow the customers’ money to make their own long-term purchases; using their advantageous margin to acquire large amounts of stock. At the top of the cycle the process is reversed. Customers are paid back their money by the brokers and the specialist selling their shares to customers at a profit. The insiders even have extra cash to loan customers for margin purchases (1Ney, 136).

Another powerful tool for the specialist is the short sale. Though the specialist is responsible for 85 percent of the short selling done in a stock, the Exchanges are loathe to print any timely data on specialist short sales (2Ney, 94)(3Ney, 234). The specialist uses the short sale to control both downward and upward movements of stock (3Ney, 88).

The private investor or mutual fund can only sell short on an up- tick. The up-tick rules serves only to trap the public into selling short at the bottom, as the specialist drives the price down without a single up-tick for the public’s use (1Ney, 72). But the specialist need not even create an up-tick to sell short. The SEC has been careful not to publicize its rule 10a-1(d), in which sub-paragraphs (1) through (9) exempt the specialist from the up-tick rule (2Ney, 97)(3Ney, 126, 215).

The Securities Exchange Act of 1934 prohibits pegging, the act of artificially holding a stock’s price at a certain level for the advantage of the person or persons doing the pegging. However, SEC rule X-9A6 (1940) allows pegging by specialists in order to ‘maintain an orderly market’ while a large-block distribution of shares is taking place (2Ney, 117).

The specialists and brokers hold shares “in street name” for investors, and therefore can vote the proxies for those shares. Officers in a corporation must report to the SEC any trading they do in the shares of their own company. Yet the Specialist reports his profits in trading the shares in that same corporation to no one (1Ney, 54-55).

The specialist, one of his partners, a friendly broker, their lawyers, or their bankers, often sit on the company’s board of directors, which makes the specialist privy to information before the average trader. Where an officer of a corporation is held strictly accountable to the SEC for his use of ‘inside information’, the specialist and fellow brokers are accountable to no one (1Ney, 54-55).

“It is an ideal situation. When you control a corporation’s proxies, everyone is sympathetic to your point of view and your choice of directors. This is the other reason why nearly every major corporation listed with the Exchange (NYSE, M.T.) has a broker or a broker’s banker on its board. It gives the exchange a pipeline to that corporation” (1Ney, 90).

Large brokerage houses, large banks, and the New York Stock exchange use dummy corporations as fronts to hold large portions of stocks in corporations. A list from any large corporation of its largest stockholders will be a roll of these very dummy corporations, who show up on list after list of major stock holders in America’s largest corporations (2Ney, 19-23).

The intertwining of interests runs even deeper when the relations of Wall Steet’s top Law firms are examined. For example, in 1974 the New York Stock Exchange’s legal counsel also represented Chase Manhattan Bank. Both entities, through their dummy corporations, were large stockholders in scores of major U.S. corporations (2Ney, 26).


“The bankers’ man, Senator Carter Glass, who steered the Federal Reserve Act through Congress in 1913, had maintained that the Federal Reserve banks would be merely ‘lenders of money.’ The only collateral they were to accept was notes that could be paid when, in the course of business, goods and services had been manufactured and distributed. However, almost from the day of its inception, the Federal Reserve System set about making loans on common stocks” (1Ney, 103).

Who sits on the Federal Reserve Board? … Chief officers of banks and corporations, all of whose companies are controlled by the Exchange (1Ney, 103-105).

Billions, perhaps trillions of dollars worth of stocks are now held by banks as collateral for loans. This too works to the advantage of the specialists. For, to protect their interests, banks will issue stop orders to sell the stock before it falls below a certain price. The specialist holds those stop orders in his book and therefore knows exactly where a large number of shares can be had, and at what price they can be purchased. One quick sweep down those ranges of prices will deliver to the specialist the inventory he desires for short and mid-term purposes (1Ney, 101).

On June 30, 1934 President Roosevelt appointed Joseph Kennedy to be the first Chairman of the SEC. Only 4 months before, Kennedy, along with Mason Day, Harry Sinclair, Elisha Walker, and others were found to be responsible for operating ‘pools’ that were actively manipulating stock. When these, “poolsters withdrew and the boom collapsed the administration denounced the men who operated them” (1Ney, 215). But what’s a little denouncement between friends?

The stock markets had been headed downhill since December of 1968. On May 26, 1969 a party was held at the Nixon White House. In attendance were John Mitchell, Maurice Stans, Peter Flannigan, thirty five guests from Wall Street, fourteen industrialists, seven bankers, five heads of mutual and pension funds, and two heads of insurance companies. The next day a bull rally began on Wall Street. May 27th saw the Dow Jones 30 average rise by 5 per cent in one day (2Ney, 71).

On April 17, 1971, President Nixon, who along with Attorney General Mitchell had been a Wall Street lawyer (Maurice Stans was a broker), appeared for photographs with friends from the New York Stock Exchange. Nixon recommended the public to invest in the market. By April 28th the market was in a steep decline. Nixon circulated, “to 1,300 editors, editorial writers, broadcast news directors, and Washington bureau chiefs a list of the stocks of ten corporations that had advanced during the past year” (2Ney, 32).

There is a revolving door between the exchange and Washington. SEC Chairmen ‘retire’ to go to work for the Exchanges or major brokerage houses at many times their government salaries (2Ney, 50-63). SEC Chairman Hamer Budge was found by Senator Proxmire’s investigation to be making frequent trips to Minneapolis to confer with officials of IDS. IDS was under investigation at the time by the SEC. After leaving the SEC, Budge took the position of Chairman of the Board with IDS (2Ney, 56).

It is highly unlikely that we will see news reports critical of U.S. stock exchanges, or of the specialist system. There is a simple reason for this. All news organizations are corporations and do but reflect their management’s views. Corporations that own media have specialists influencing the choice of management. Newspapers, magazines, and television are but extensions of the corporate world.

When Richard Ney’s first book, The Wall Street Jungle, came out it was on the New York Times best seller list for 11 months. Yet the New York Times would not review it. The Wall Street Journal refused to take an ad from a New York bookstore that featured The Wall Street Jungle (2Ney, 30).

All three of the major networks were wary of having Ney appear. NBC banned only two people from appearing on the Tonight show with Johnny Carson: Ralph Nader and Richard Ney. Not only do large banks, brokerage firms, and corporations advertise on television, they also are the largest stock holders (2Ney, 33- 34).

The specialist should be thought of as a merchant with some rather unique inventory problems and opportunities. His goal, always, is to buy at wholesale prices and to sell at retail. This applies to his actions in the course of trading day as well as a year of trading.

At the bottom of a slide the specialist will buy heavily for his trading, investment, and omnibus accounts. His goal then becomes to raise the price of his stock with his wholesale inventory intact. In practice, though, he may have to sell shares to meet public demand. This will cause him, then, to lower the price to re-accumulate his inventory before he can proceed to higher levels.

A rally begins while the price of the average stock is still falling. “Major rallies begin and end with the unexpected,” (3Ney, 184).

To stimulate public demand for his stock, near the high the specialist will raise the angle of the rising prices dramatically for the stock. True to one of Ney’s axioms that prices beget volume, the public will rush into the market place at the rally high. The specialist can now sell his accumulated inventory to fill the increased demand. Heavy Dow 30 volume at the high is evidence of heavy short sales by the specialists (3Ney, 113).

When the specialist has sold all his inventory, and has sold short, he will then begin a downward slide of prices so necessary to his plans. Slides are a mirror of rallies. Near the bottom, the specialist will increase the angle of price decline, alarming investors, scaring them into selling their shares to the specialist who needs them to cover his short sales, and to build a new inventory at wholesale. The media will remain bullish, or cautiously optimistic throughout a slide, until the last two weeks, when they will turn suddenly bearish (3Ney, 158).

Specialists in the most active stocks will require more time than their fellow specialists to move stocks up or down, or to cover at the top of a rally or the bottom of a slide (2Ney, 84-85).

Specialists may use a rally as a ’stalking horse’ for a later rally. Price is used like a geiger counter to locate volume (3Ney, 149).

During the typical bear market, or slide, the specialists will usually bring prices up on Fridays, to keep investors hopes alive (2Ney, 92).

Leaders of the rally in the Dow 30 will often act as ’screens’ for the price declines of the other 24 or 25 Dow stocks.

Each stock exhibits its own distinct pattern or rhythm of price behavior (2Ney, 189).

How can you spot the nadir of each high and low? Ney says to look at volume very closely. In particular look at the volume of the individual Dow 30 Industrial stocks (2Ney, 171). Get to know these specialists’ habits. Follow what they do. Patterns of behavior will emerge.

Ney emphasized that a sense of timing was critical for survival in the market (2Ney, 149).

Ney was convinced that detecting Specialist short selling was a key. Specialist short selling at the peak of a rally should be detectable through increased volume.

Richard Ney used charts extensively. Ney was quick to point out that what is really being measured in his charts is not the behavior of the masses in the marketplace, but the techniques of the specialist in an individual stock as he maneuvers to solve short-term, intermediate-term, and long-term inventory problems (1NEY, 259).

Ney points to the gaps in prices that develop when a specialist is trying to ‘catch up’ with the market. These gaps, be they up or down, signal specialist intent (2Ney, 172).

“Investors assume that what happens in the economy or to the corporation in terms of earnings or sales determines the trend of stock prices. … The most misleading element in this type of analysis is that it ignores the basic needs and motivations of the specialist system” (2Ney, 150).

We, as consumers react to certain critical numbers. Specialists know this. Specialists use the 10’s (10, 20, 30, etc.) and 5’s (5, 15, 25, etc.) in their strategies. They will use these numbers to elicit heavier buying or selling from the public. Often too, though, they will avoid critical numbers to avoid buying or selling stock when they do not wish to do so (2Ney, 155-156 & 163).

1. Do not buy the acknowledged leader in a field. Buy the number 2 or 3 company. These companies are more likely to be subject to bull raids by the specialists (1Ney, 298).
2. “Nothing puzzles me more than an investor’s willingness to pay more than fifty dollars a share for stocks. Buy low priced stocks. It’s percentages you’re after and you’ll get them in these stocks in a bull market” (1Ney, 298).
3. Invest only in stocks listed on the NYSE.
4. Do not buy secondary offerings from your broker.
5. Buy only stocks whose prices have fallen at least 35 to 50 percent.
6. “The rule, ‘Cut your losses and let your profits ride,’ was invented by a broker” (1Ney, 298).
7. The average investor need not worry about tax brackets, so do not hesitate to sell at a profit. “A short-term gain is better than a long-term loss” (1Ney, 299).
8. Own your stock. Do not use margin.
9. Do not sell short.
10. Do not allow your stock to be borrowed (via a margin account; M.T.)
11. Credit balances should be immediately transferred to your bank.
12. Do not leave your stock with your broker in street name.
13. Invest only in growth oriented, not income, stocks.
14. 4 to 5 stocks in a portfolio is plenty.
15. Make arrangements with your bank to receive your stock.
16. If there has been a major advance from the summer lows, look for the public to begin selling 6 months hence.
17. Big block sales at the end of a run-up (usually marked by heavy volume) marks the imminent decline in price.
18. Look for bull raids in May, up from the April 15th tax low.
19. Never enter stop or limit orders.
20. If you are interested in a stock, learn its specialist’s habits.
21. Stocks that are ideal for bull raids are those that decline as close as possible to an angle of 45 degrees.

Works Cited:
1Ney, Richard. THE WALL STREET JUNGLE, fifth printing. New York: Grove Press, Inc., 1970.
2Ney, Richard. THE WALL STREET GANG, third printing. New York: Praeger Publishers, Inc., 1974.
3Ney, Richard. MAKING IT IN THE MARKET. New York: McGraw-Hill, 1975

[The source for this essay is here. I posted my version of the entire essay because I edited out comments that the author Michael Templain made that I disagreed with, i.e., I felt he didn't grasp fully what Ney had written. You can read the original essay for yourself in order to make up your own mind. If you decide to read the books, read them in chronological order. They are impossible to find in a library, and are very expensive to buy used.]

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