1 Boring Old Man

I guess I thought I could write about Dick Cheney’s obvious psychological deterioration [Cheney’s damned spot…] and lay things to rest, but that just didn’t happen. Since I read his F.B.I. Interview and wrote that bit, all the stuff from the Plame Leak days came flooding back. It was in 2005, rooting around about Judith Miller being threatened with imprisonment that my then inchoate feeling that we were not just in the hands of Republicans, but in the hands of crooks began to crystalize. Having once been threatened with jail for refusing to testify myself, I started off being sympathetic. But the more I read about Judith Miller, the worse I felt. Her prewar articles were shameful. By the time I read them, the New York Times had already apologized. But I could just tell that she was a player in the Administration’s War Plans, whether she knew it or not.

That was when I let myself know that the Invasion of Iraq was a fraud. I was still working when we invaded, closing my practice in preparation for retirement. But from the first mention of Iraq, I had thought they were wrong. I read Powell’s UN speech and thought the case was forced at best. But it was in 2005, around the time that Miller was in the news for refusing to divulge her sources, that I really let myself know that they had been lying. That phrase, let myself know, comes from years as a psychoanalyst. Over and over, I saw people struggle not to know things because the consequences of knowing might have a huge impact on their lives – often negative. Then one day, they would let themselves know – and find freedom from their previous tension. I thought of Freud’s comment, "… turning neurotic misery into everyday unhappiness" repeatedly over the years. I guess that like many of us, I resisted knowing that our two highest public officials were lying through their collective teeth – everyday unhappiness of the worst kind.

Now, years later, reading Cheney’s F.B.I. Interview [Cheney interview] brings it all back – the Niger Forgeries, the Wars, the Valerie Plame outing, the Libby Trial, the Military Contractors, the U.S. Attorney firings, the disappeared White House emails, Unwarranted Domestic Surveillance, Extraordinary Rendition, the OLC Memos, Torture, the list gets longer and longer. Nick Baumann at Mother Jones composed a list of all the things Cheney didn’t recall in that interview[22 Things Dick Cheney Can’t Recall About the Plame Case] – in and of itself, a stinging indictment. It was less than a year between the interview and the events – a year when something about all of this was in the papers almost daily. But by Cheney’s account, the Joseph Wilson editorial [What I didn’t find in Africa] was merely a blip in his day – nothing of consequence, nothing worth remembering.

What he says cannot possibly be true. But after all these years, the hardest thing for me to reconcile is that Cheney is a conscious liar. He says things he absolutely knows aren’t true, then acts indignant when he’s doubted. I think that’s why we all write about him so much. We need to "prove" that he’s not telling the truth over and over, because his demeanor suggests otherwise. He still seems like a Wise Old Man, in spite of the sea of evidence to the contrary.

Cheney refused to release the reporters he spoke with of confidentiality. Now, over the course of his interview, Cheney was asked and he denied speaking with Novak and Cooper [and claimed to have no knowledge of discussions with Judy]. The sole key journalist in question he didn’t deny any knowledge about was Woodward [and, though less important, Andrea Mitchell]. But he basically denied speaking to any journalist. And then he refused to sign a waiver of confidentiality over his conversations with journalists. Couple that with a few more data points.

1. When Libby was first asked to sign such a waiver, he too refused to sign it.
2. When Novak was first asked to testify, he refused to testify until he could limit his testimony to those who had signed such waivers [and he originally limited it to Armitage, Rove, and Harlow].
3. The only question Judy Miller refused to provide some answer to when I posed a bunch of questions about her involvement was about seeing Cheney in Jackson [Hole] when she saw Scooter [the Aspen comment].
4. After Novak was interviewed in September 2004, someone–presumably Fitzgerald–searched for records of contacts between Novak and the White House on a bunch of days, including July 7, 2003, the day before Novak spoke with Armitage.
5. Judy refused to testify about her conversations on this subject until she could limit her conversations to Libby.

If Cheney spoke to both Novak and Judy — and there’s reason to believe he might have — he refused to expose those conversations to the scrutiny of Fitzgerald.

… I told the grand jury about my last encounter with Mr. Libby. It came in August 2003, shortly after I attended a conference on national security issues held in Aspen, Colo. After the conference, I traveled to Jackson Hole, Wyo. At a rodeo one afternoon, a man in jeans, a cowboy hat and sunglasses approached me. He asked me how the Aspen conference had gone. I had no idea who he was.

"Judy," he said. "It’s Scooter Libby."

The grand jurors wanted to know what was on my mind, and I told them. The White House had done something it hardly ever does: it admitted a mistake. Shortly after Wilson’s piece appeared, the White House said that the African uranium claim, while probably still true, should not have been in the President’s State of the Union address because it hadn’t been proved well enough. That was big news as the media flocked to find out who had vetted the President’s speech. But at the same time, I was interested in an ancillary question about why government officials, publicly and privately, seemed to be disparaging Wilson. It struck me, as I told the grand jury, as odd and unnecessary, especially after their saying the President’s address should not have included the 16-word claim about Saddam and African uranium.

"The British Government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa."

"… For example, the declaration fails to account for or explain Iraq’s efforts to get uranium from abroad,…"

The 16 words in question, "the British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa," were cited by Bush in a January 28, 2003 State of the Union address and were widely seen as the single most important element that helped convince Congress and the public to back an invasion of Iraq.

… Robert Joseph is the official who suggested that the 16 words about Iraq’s supposed attempts to acquire uranium from Niger be included in the State of the Union address. Joseph, formerly the director of nonproliferation at the National Security Council, is now the under secretary of state for arms control – a position once held by John Bolton… Joseph fought to have the language included despite a telephone call he received from Alan Foley, director of the CIA’s nonproliferation, intelligence and arms control center, demanding the 16 words be taken out of Bush’s speech. Joseph has said he did not recall receiving a phone call from Foley…

Foley had revealed the details of his conversation with Joseph during a closed-door hearing before the Senate Select Committee on Intelligence back in July 2003 – just two weeks after Wilson wrote an op-ed in the New York Times documenting his role investigating whether Iraq tried to acquire uranium from Niger… Foley said he had spoken to Joseph a day or two before President Bush’s January 28, 2003 State of the Union address and told Joseph that detailed references to Iraq and Niger should be excluded from the final draft… Joseph had agreed to water down the language and would instead, he told Foley, attribute the intelligence to the British, which is exactly how Bush’s speech was worded.

Tenet wrote that he believes the administration was excited about the prospect of removing Saddam Hussein from power and ignored his previous warnings about the bogus intelligence in order to win support for the war. "The vision of a despot like Saddam getting his hands on nuclear weapons was galvanizing" and "provided an irresistible image for speechwriters, spokesmen, and politicians to seize on"…

The memo says: "On January 12, 2003," the State Department’s Bureau of Intelligence and Research (INR) "expressed concerns to the CIA that the documents pertaining to the Iraq-Niger deal were forgeries."

Iraq’s interest in the yellowcake caught the attention of Mohamed ElBaradei, the head of the International Atomic Energy Association. ElBaradei read a copy of the National Intelligence Estimate and personally contacted the State Department and the National Security Council in hopes of obtaining evidence so his agency could look into it.

ElBaradei sent a letter to the White House and the National Security Council (NSC) in December 2002, warning senior officials he thought the documents were forgeries and should not be cited by the administration as evidence that Iraq was actively trying to obtain WMDs. ElBaradei said he never received a written response to his letter, despite repeated follow-up calls he made to the White House, the NSC and the State Department.

Vice President Dick Cheney, who made the rounds on the cable news shows that month, tried to discredit ElBaradei’s conclusion that the documents were forged. "I think Mr. ElBaradei frankly is wrong," Cheney said. "[The IAEA] has consistently underestimated or missed what it was Saddam Hussein was doing. I don’t have any reason to believe they’re any more valid this time than they’ve been in the past."

… the memo’s author, Carl Ford, said in a previous interview that he has no doubt the State Department’s reservations about the Niger intelligence made their way to President Bush, Vice President Cheney, and Secretary of Defense Donald Rumsfeld. One high-ranking State Department official said that when the department’s analysts briefed Colin Powell about the Niger forgeries, Powell met with former Director of the CIA George Tenet and shared that information with him. Tenet then told Vice President Dick Cheney and then-National Security Adviser Condoleeza Rice and her former deputy, Stephen Hadley, that the uranium claims were "dubious," according to current and former State Department and CIA officials who have direct knowledge of what Tenet discussed with the White House at the time.

The White House has long maintained that they were never briefed about the State Department’s or the CIA’s concerns related to the Niger uranium claims.

"I refuse to believe that the findings of a four-star general and an envoy the CIA sent to Niger to personally investigate the accuracy of the intelligence, as well as our own research at the State Department, never got into the hands of President Bush or Vice President Cheney. I don’t buy it," said a high-ranking State Department official. "Saying that Iraq sought uranium from Niger was all it took, as far as I’m concerned, to convince the House to support the war. The American people too. I believe removing Saddam Hussein was right and just. But the intelligence that was used to state the case wasn’t."

A State Department official who has direct knowledge of the now declassified INR memo said when the request came from Cheney’s office for a report on Wilson’s Niger trip it was an opportunity to put in writing a document that would remind the White House that it had been warned about the Niger claims early on. Many other State Department officials believed that the existence of a memo that would, in essence, disagree with the White House’s own assessment on Niger would eventually hurt the administration.

"This was the very first time there was written evidence – not notes, but a request for a report – from the State Department that documented why the Niger intel was bullshit," said one retired State Department official. "It was the only thing in writing, and it had a certain value because it didn’t come from the IAEA. It came from State. It scared the heck out of a lot of people because it proved that this guy Wilson’s story was credible. I don’t think anybody wanted the media to know that the State Department disagreed with the intelligence used by the White House. That’s why Wilson had to be shut down."

They had spent a year trying to muster a reason to attack Iraq. Cheney and Addington wanted Bush to just do it using his powers as Commander-in-Chief, but he balked. So they embarked on a quest for reasons. Paul Wolfowitz and Douglas Feith built the case that Saddam Hussein was in cahoots with al Qaeda [a very shaky fabricated case] which they ultimately leaked to the Weekly Standard. They tortured prisoners to try to extract an admission that Iraq and al Qaeda were in league. One prisoner said it, then recanted [Ibn al-Shaykh al–Libi]. He was turned over to Lybia where he was imprisoned and recently either committed suicide or was killed. They had a shipment of Aluminum Tubes, but Bush was repeatedly warned that this was very shaky intelligence [Insulating Bush]. All they really had was the Niger Yellowcake Uranium story.

On September 8, 2002 they played their cards and began the campaign to Invade Iraq [smoke and mirrors: 09/08/2002…] with a New York Times piece by Judith Miller and appearances by Dick Cheney on Meet the Press and Condoleeza Rice on CNN. But over the next few months, their story began to crumble [as it should have]. So the "sixteen words" became the critical centerpiece. "Saying that Iraq sought uranium from Niger was all it took, as far as I’m concerned, to convince the House to support the war. The American people too." Thus spoke a high-ranking State Department official. …

"Based on my experience with the administration in the months leading up to the war, I have little choice but to conclude that some of the intelligence related to Iraq’s nuclear weapons program was twisted to exaggerate the Iraqi threat."

Cheney had spent his career wheeling and dealing in the background, but never really got himself into trouble. This time, he was already in trouble, and he became uncharacteristically careless. Back then, lots of people in the Administration didn’t care whether we had the facts right or not. They wanted to go after Hussein no matter what. I suppose had they gotten lucky and found a WMD or two, or had the war worked out [the advertised "open arms" greeting], things might have played out in his favor. But they found nothing and the war didn’t work. Nor did outing Valerie Plame, not in the long run. It just put Wilson’s confrontation on the front page. So, we know the answer to Cooper’s Conundrum now. They went after Joseph Wilson because he told the truth — the truth that they lied.

… that I really let myself know that they had been lying. That phrase, let myself know, comes from years as a psychoanalyst. Over and over, I saw people struggle not to know things because the consequences of knowing might have a huge impact on their lives – often negative. Then one day, they would let themselves know – and find freedom from their previous tension. I thought of Freud’s comment, "… turning neurotic misery into everyday unhappiness" repeatedly over the years. I guess that like many of us, I resisted knowing that our two highest public officials were lying through their collective teeth – everyday unhappiness of the worst kind.

Well, it’s that time of the month. The Bureau of Labor Statistics releases the monthly Unemployment Rate next Friday, November 6, 2009, at 8:30 AM EST. The above graph has the monthly change figures through September. And here’s the Unemployment Rate in percentage for this century:

KABUL — The top challenger to Afghan President Hamid Karzai announced Sunday that he would not take part in a runoff election scheduled for next Saturday, further clouding the country’s uncertain political picture and likely leaving Karzai in power without a strong mandate to rule in the middle of a war with Taliban insurgents.

Abdullah Abdullah, speaking at a mid-morning gathering of several thousand supporters, stopped short of calling for an electoral boycott, but he did not make clear what he expects his partisans to do if the vote is held. At a news conference afterward, he repeatedly declined to predict or suggest what should happen now, stressing that his only decision was "not to participate" in the Nov. 7 runoff.

Officials of the national independent election commission said they would consult with constitutional lawyers before deciding whether plans should go ahead for the poll, which was called after reports of widespread fraud in the August election. Some analysts questioned the wisdom of holding an election with only one candidate, especially amid fears that security forces will not be able to protect voters and election workers from Taliban attacks.

Karzai’s political campaign, in a statement late Sunday, said campaign officials had hoped Abdullah would participate in the runoff to "strengthen popular power" and constitutional rule. In light of his withdrawal, they said they would respect "whatever decision is made" by the election commission and other legal agencies. They refrained from criticizing Abdullah and said they hoped to "complete the election process with national unity"…

Abdullah said his decision to withdraw was "final," and that he had made it this week after Karzai refused to meet several conditions to ensure the poll would be fair. Abdullah’s major request was that Karzai remove the head of the electoral commission, Azizullah Lodin, whom Abdullah accused of bias and of engineering election fraud in August.

"The decision I have made was not easy. I made it not only for those who voted for me, but for everyone in Afghanistan," Abdullah said in a long, dramatic speech that was interrupted by supportive cheers. He said all Afghans "have the right" to participate in free and fair elections, but that some had been threatened with having their houses burned down if they voted for him on Nov. 7…

Didn’t we think this same way in Viet Nam? and in Iran? Support the corrupt ally so the bad meanies won’t take over. It seems insoluble to me. We fight for the corrupt ally; we lose; then the bad meanies don’t like us. And didn’t the Russians try something like this in Afghanistan [from 1979 through 1989], then give up and just go home? Right now, I’m trying to recall a situation where U.S. Evangelical Democracy has worked out in the long run. Nothing comes immediately to mind.

Cheney Blames Richard Clarke For 9/11: ‘He Missed It’
Think Progress
By Ali Frick
Jun 1st, 2009

Writing in Sunday’s Washington Post, Richard Clarke, the former counterterrorism chief under Presidents Clinton and Bush, slammed Dick Cheney and Condoleezza Rice for invoking what he called “the White House 9/11 trauma defense” — namely, the shock of 9/11 was so great as to justify all and any actions taken in the name of national defense…:

Cheney’s admission that 9/11 caused him to reassess the threats to the nation only underscores how, for months, top officials had ignored warnings from the CIA and the NSC staff that urgent action was needed to preempt a major al-Qaeda attack.

Speaking at the National Press Club today, Cheney struck back at Clarke…:

CHENEY: You know, Dick Clarke. Dick Clarke, who was the head of the counterterrorism program in the run-up to 9/11. He obviously missed it…

When the moderator reminded Cheney that Clarke had repeatedly warned the administration about al Qaeda’s determination to attack the U.S., Cheney snarkily replied, “That’s not my recollection, but I haven’t read his book.”

Which brings me to the winners of the 1boringoldman medal of freedom awards for 2009. Joseph Wilson and Richard Clarke were the two people who stood up and spoke out long before it was fashionable, long before the rest of us even knew there was something to speak out about. Richard Clarke lost his career, his reputation, and has had to endure "snark" for telling the truth. Joseph Wilson’s wife, Valerie Plame, lost her career, her reputation and her anonymity. They are two American heros, the real kind. I propose busts in the Rotunda of Congress to commemorate their service. Joseph Wilson’s words should be engraved below the statues: "Based on my experience with the administration in the months leading up to the war, I have little choice but to conclude that some of the intelligence related to Iraq’s nuclear weapons program was twisted to exaggerate the Iraqi threat." Followed by Richard Clarke’s introduction to his March 2004 appearance in front of the 9/11 Commission: "To the loved ones of the victims of 9/11, to them who are here in this room, to those who are watching on television, your government failed you. Those entrusted with protecting you failed you. And I failed you. We tried hard, but that doesn’t matter because we failed. And for that failure, I would ask, once all the facts are out, for your understanding and for your forgiveness."

But back to Cheney and the 2004 interview [see how I just took a detour?]. The foremost experts in the world on the Plame outing are also having the same trouble sticking to the task of dissecting the interview. Jason Leopold [t·r·u·t·h·o·u·t] and emptywheel [Anatomy of Deceit: How the Bush Administration Used the Media to Sell the Iraq War and Out a Spy] comment on aspects of it. Their loyal commenters WO, Mary, bmaz, Rayne, MadDog, etc. [all experts] pluck out pieces here and there. But they prefer reading the revolting new torture releases to focusing on the Cheney interview. I expect it will be a  good while before all the fact checking will be done to document Cheney’s fiction. I’ll limit my comments to a broad stroke and leave the thorough vetting to the masters when they can stand it enough to give it their full attention.

In this interview Cheney is irritated that he’s even being questioned. Although we know from the Libby Trial and the numerous detailed books and articles that this was a period of a flurry of activity in the OVP, Cheney claims to remember nothing. "I don’t recall." All the questions he does answer have the form "we may have discussed…" or "that sounds like something we would have talked about…" If there’s a solid, specific answer in there, "I don’t recall" reading it. The general theme of his answers was that this whole episode was of minor importance, hardly registering in his mind. If Scooter Libby did anything, he did it on his own rather than because I told him to is spread throughout his answers. Or I am too important to have anything to do with the Press. And, by the way, this interview is a waste of my precious time. He is even more arrogant in private than in public. emptywheel points out how completely Cheney throws poor loyal Scooter Libby under the bus – over and over.

I guess we can’t blame Cheney for lying through his teeth. Freud would’ve been right about him too. In fact, Cheney’s defense mechanisms have more reason to be there than our own. He really didn’t want to hear what Joseph Wilson had to say in that New York Times op-ed. Joe Wilson had publicly [and correctly] accused the Bush Administration [AKA Dick Cheney] of lying to the American people so he could invade another country at a cost of trillions of dollars and thousands of lives for his [Cheney’s] own reasons. Who would want to face up to something like that? It would feel unpleasant.

Most of us have a piece of this inside of us – something we did that worked out to have cataclysmic negative consequences – something done casually, selfishly, naively, or even stupidly. I sure do. I doubt there’s any physician who hasn’t made a fatal error. Such things happen in regular life too, but there are some places where they show in bas-relief. Medical practice is such a place. I’ll bet battlefield commanders have the same experience. Then there’s being Vice President, if you’ve inserted yourself into the decision-making process like Cheney did.

In his mind somewhere, he knows who really "missed it." He knows who really "twisted" the pre-war intelligence. He knows who really "outed" Valerie Plame. Probably he is genuinely not conscious of knowing, but is instead haunted in his dreams or driven to spread his defensive denials far and wide with his venomous attacks. But unconscious is only relative. The defenses don’t remove the "knowing," they just hold it at bay – and the truth finds its way into every crevice of the mind in one form or another. Dick Cheney is getting sicker. In the 2004 F.B.I. interview, he was just irritable, vague, and dismissive. These days, he’s vicious and contemptuous – poisoned inside…

Documents Detail Conditions Found at Secret C.I.A. Jails
New York Times
By SCOTT SHANE and CHARLIE SAVAGE
October 31, 2009

F.B.I. agents who arrived at a secret C.I.A. jail overseas in September 2002 found prisoners “manacled to the ceiling and subjected to blaring music around the clock,” and a C.I.A. official wrote a list of questions for interrogators including “How close is each technique to the ‘rack and screw,’ ” according to hundreds of pages of partly declassified documents released Friday by the Justice Department.

The documents include handwritten notes, apparently prepared by Justice Department officials, discussing the possibility of prosecuting some employees of the Central Intelligence Agency. The notes reveal that the Justice Department considered prosecuting a C.I.A. interrogator for a previously reported incident in which a detainee was threatened with a gun and a power drill, but it says department officials declined to prosecute the case.

The documents were released in the latest response to several Freedom of Information Act lawsuits filed by the American Civil Liberties Union and Judicial Watch, a Washington advocacy group. Some are new versions of documents previously released. Newly disclosed passages from a 2008 report by the Justice Department inspector general describe what agents of the Federal Bureau of Investigation saw at the C.I.A. jail where Ramzi bin al-Shibh, one of the plotters of the Sept. 11, 2001, terrorist attacks, was being questioned.

The F.B.I. agents helped C.I.A. officers prepare questions for Mr. Binalshibh but “were denied direct access to him for four or five days,” the report said. Then an F.B.I. agent, identified as “Thomas,” was allowed to see him and found him “naked and chained to the floor.” The agent told the inspector general that “he obtained valuable actionable intelligence in a short time but that the C.I.A. quickly shut down the interview,” the report said…

Documents Released by the Justice Department

1. A.C.L.U. vs. C.I.A. (SDNY)
2. A.C.L.U. vs. D.O.D. (DDC2)
3. Judicial Watch vs. C.I.A. (DDC)
4. A.C.L.U. vs. D.O.D. (SDNY)
5. A.C.L.U. vs. D.O.D. (DDC2)
6. A.C.L.U. vs. D.O.D.
7. Feinman vs. C.I.A. (DDC)
8. Judicial Watch vs. D.O.J. (DDC)

Cheney Refused to Release the Journalists
By: emptywheel
October 30, 2009

There is a lot in Cheney’s interview report – we’ll have a busy weekend. But for the moment, let’s start with this bit:

After the Vice President again mentioned that he was pressed for time, two separate requests were made to Vice President Cheney in an effort to assist the DOJ/FBI investigation into this matter. First, an FBI waiver form was presented to the Vice President and copies were given to his attorneys. It was explained to Vice President Cheney that his signature was being sought on the waiver form in order to release any reporters with whom the Vice President may have had conversations about the subject matter of this investigation, from promises of confidentiality arising from any such conversations. Vice President Cheney acknowledged receipt of the FBIs waiver form but declined to sign until his attorneys have had sufficient time to review it.

Cheney refused to release the reporters he spoke with of confidentiality. Now, over the course of his interview, Cheney was asked and he denied speaking with Novak and Cooper [and claimed to have no knowledge of discussions with Judy]. The sole key journalist in question he didn’t deny any knowledge about was Woodward [and, though less important, Andrea Mitchell]. But he basically denied speaking to any journalist. And then he refused to sign a waiver of confidentiality over his conversations with journalists. Couple that with a few more data points…

• When Novak was first asked to testify, he refused to testify until he could limit his testimony to those who had signed such waivers…
• The only question Judy Miller refused to provide some answer to when I posed a bunch of questions about her involvement was about seeing Cheney in Jackson when she saw Scooter…
• Judy refused to testify about her conversations on this subject until she could limit her conversations to Libby.

If Cheney spoke to both Novak and Judy – and there’s reason to believe he might have – he refused to expose those conversations to the scrutiny of Fitzgerald.

I certainly am never going to be a Bush/Cheney apologist. They just weren’t leaders or governors. They came into office with a couple of agendas, the unitary executive, invading Iraq, the ‘Bush Doctrine,’ and eight months later, the sky literally fell on top of them. They used that attack to help them along their chosen path rather than dealing with the radically different world they were handed. By the end of their reign, the bottom literally fell from beneath them. Again, they said "no one saw it coming," just like they said about 9/11. In both cases, they were very wrong about that. They weren’t paying attention. They weren’t doing their jobs, neither one of them.

But since I’ve been looking at our Managed Depression, I’ve been obsessed with the "why" there were no jobs added during their time in office. The worst case scenario is the one I mentioned in an earlier post – that our consumerism and outsourcing has finally caught up with us. That’s a pretty gloomy conclusion because there is no solution, at least no quick [or even medium quick] solution. So I started playing with a timeline of this last decade. I will end up with a graph that was never intended to be put on the blog, but in the end, it was comforting – so I put it there in all its garbled glory [there’s a saying, "some of us are sicker than others"]. The graph made me feel more hopeful…

We’ll never say the Bush years were boring. They started with the election controversy in 2000 and ended with our current Depression. In between, there was the nightmare of 9/11; two Middle Eastern Wars; enough dirty tricks for  a two week seminar; and unimaginable economic wheeling and dealing. How all of that lead us to a financial crisis is increasingly clear, but the path out disappears into an impenetrable fog bank. The question is most often framed as, "where are the jobs going to come from?" In my last several posts, I documented and wailed about the fact that the net gain in jobs during the entirety of the Bush Administration was nada – zipola – near zero. Is America out of "job juice?" or did the Administration do something to hinder job production? or is it because of some unfortunate confluence of forces [something we can rectify]?

Some of the economic gyrations had to do with financial "bubbles," situations where a market becomes irrationally inflated. There were three big ones:

The dot.com bubble "burst" around the time of the 2000 election [the graph is the NASDQ which paralleled the Internet stocks]. It likely precipitated the Recession of 2001-2003 – described as "shallow." As it turned out, the dot.com bubble was just the warm-up act for the housing bubble. We all know about it [the graph is a simplification of Shiller’s graph]. It "burst" in December 2005. And finally, there was an oil bubble that sent gasoline prices skyrocketing. It "burst" in the Fall of 2008 [along with everything else].

1boringoldman’s Crazy Graph:
I got to wondering about how the 9/11 attack, the Invasion of Afghanistan, the later Invasion of Iraq, the dot.com bubble, the housing bubble, and the oil bubble might have impacted the huge job deficit. Since jobs added come from expansion of existing businesses and the creation of new businesses, I started with the Consumer Confidence Index – reasoning that expansion or start-ups would occur during confident times. I’ll admit that I was curious about it anyway [because I haven’t personally felt confident for a single moment since Bush entered office]. That’s the blue line on the crazy graph [100 = the value in 1985]:

Then I added the arrows that marked the time the bubbles burst, 9/11, and the when we invaded Afghanistan and Iraq.  The high consumer confidence marks of the Clinton era fell when the Tech Stocks tanked and dipped some with 9/11 and our foreign wars, but recovered pretty nicely. What was happening in the Stock Market, I wondered, so I cut out the DOW Jones Average for the same period, stretched it to fit, and pasted it lightly in the background [upper part of the figure]. It looked to me like Consumer Confidence and the DOW walked hand in hand [which makes infinite sense].

The bursting of the housing bubble itself didn’t seem to have much immediate effect. There was a chain reaction that had to play out before the real pain started. House values began to fall and those ridiculous sub-prime mortgages started coming due. Selling the house for a profit wasn’t working any more. In fact selling at all became increasingly hard. As the foreclosures and defaulted loans mounted, the Mortgage-Backed Securities where they resided fell in value or became worthless. Finally, the Banks that had "insured" these packages with Derivative Contracts had to pay them off – and they just didn’t have the money. Looking at the graphs, that took about a year and a half to play itself out. Then down we went like a brick. But it was another year before Lehman Brothers went belly-up, and the jig was finally up. I guess I knew all of that, but it helped to see it on a timeline.

But the point of the crazy graph was about the job deficit – which was, for me, something of a new discovery. I knew we had unemployment from the layoffs associated with our Depression, but I had no idea job creation was so stunted for Bush’s whole tenure. So, I took my job graph from a couple of posts ago [mini-version above] and cut out the right period, resized it, and added it to the background. It kind of makes sense to me now.

Jobs aren’t created in a downturn. That’s the usual state of affairs, but the 2001 downturn was complicated by 9/11 and our wars. I doubt many people felt secure enough in those few years to expand or start something new. I wouldn’t have done it. Around 2004, things were looking up and the jobs began to be created. In Reagan’s reign, he had seven years when job creation was positive. Clinton’s era was producing jobs the whole time. But George W. Bush only got three years  [three lite years at that] before the consequences of the housing bubble made it to the front burner and we started the slide that ended in the cellar. I don’t know if the oil bubble bursting precipitated the Stock Market dive or vica versa. By then, it didn’t matter. The avalanche was unstoppable.

Why was I comforted by that goofy graph?:
There are reasons for the job deficit. It didn’t just happen because America had reached the end of her tether. Given that Bush had plunged us into two wars, and given that the housing bubble formed and was fed by Wall Street, and given that the insane Derivatives Market was available as a Casino for the speculators and large Banks, there wasn’t much Bush had to do with things [given that he and his advisers ignored the whole thing until it started screaming]. He’s not off the hook with me. Any competent President would’ve been looking into the housing bubble, the sub-prime mortgages, the credit default swaps, etc. long before it became malignant. To say, "we didn’t see it coming," is an admission of incompetence in my book.

But the economy was trying to grow in 2004-2006 in spite of things. It was creating jobs like it’s supposed to during the only time it could. The job deficit seems to be largely due to world events [9/11] and horrendous mistakes like Clinton going along with the  deregulaters, repealing Glass-Steagall, electing Bush in the first place, not impeaching the entire White House along the way,  invading Iraq – circumstantial rather than fundamental. I’m thinking that we have miles to go before we sleep, but at least there’s a road out there to find if we can deal with the fog.

It’s hard to fathom how a small group of people could take over our government with a lofty mission called The Project for the New American Century, and for us to now be in the shape we’re in heading into the only second decade of that self-same century. We’re all tired of hearing about how the Administration spent its time obsessed with foreign wars, with torture, with secret programs, with dirty tricks, and with their glorious surge. But the things they didn’t do are beginning to dawn on us – or maybe fall all over us would be more like it. They didn’t attend to a runaway financial industry that had received its green light at the end of the Clinton Presidency with the Gramm-Leach-Bliley Act of 1999 and the Commodity Futures Modernization Act of 2000. They ignored the Housing Bubble, the Sub-Prime Mortgages, the Oil Bubble, Derivatives, and countless other fiscal misbehaviors that should have been attended to. I’m not even sure they were looking.

But speaking of not looking, maybe the most egregious piece of it all is the neglect of the developing employment crisis that spans the whole decade. In evaluating children, active abuse and neglect are really the same – have an equally devastating on the child’s development. In a way, we can understand the Bush Administration ignoring the antics of the business/financial community during their tenure. It wasn’t right, but those people were their constituents. As Bush said, "the haves and the have mores", "I call you my base." But it’s hard to understand totally neglecting the statistics from the last post [our managed depression 2: ‘a lost employment decade’…] – that no jobs were being generated on his watch. They cut taxes for the rich [again] and embarked on their agenda to be the world’s Sole Superpower. Wall Street had a field day with the whole Sub-Prime scene with the Administration’s blessing. And meanwhile there was an erosion in the job base that will haunt us for decades in the best of circumstances. I don’t recall their even mentioning it until it became critical.

I’m not exactly sure why this happened during the Bush watch, but they weren’t looking at this either. I expect there’s a legitimate complaint to levy towards them about the why of this, but right now, I’m complaining about their ignoring it until it was beyond remediation. Throughout those eight years, we heard phrases like the unitary executive, signing statements, commander-in-chief, and the decider. They were obsessed with consolidating power in the Executive Branch. To what end?

This all feels like something we’ve all known about for years. We drive Japanese, German, and Korean cars, run them with Saudi Oil, use Japanese cameras, work with Chinese tools, wear Indonesian clothes, call India for help on our Taiwanese computers, eat South American fruits and vegetables, etc. It seems like we’d figure out that being part of the New World Economy would sooner or later require us to do something other than simply be the world’s customer. Maybe we ought to make some things ourselves so that the vast majority of Americans who aren’t living the good life might have something to do with their time – like work at a job.

This graph is from the School of Planning and Public Policy at Rutgers University titled, America’s New Post-Recession Employment Arithmetic [I’ve added the shading to identify the political party in charge]. For starters, it shows the magnitude of the job loss during this Managed Depression compared to recent Recessions [note they’re still calling it a recession – my renaming must’ve come after their report]. But their reason for constructing this graph is to show how weak our recovery was after Bush II’s first Recession. Bush II’s track record is indeed poor – the most downs, the biggest downs, the least ups, the lamest ups, barely breaking even during his terms and leaving with a big bang. Here’s their graph redrawn as cumulative jobs added:

Executive Summary

❒ The Great 2007–2009 recession is the worst employment setback in the United States since the Great Depression. In the twenty months from December 2007 (the start of the recession) to August 2009 (the last month of available data as of this analysis), the nation lost more than 7.0 million private-sector jobs.

❒ The recession followed a very much-below-normal economic expansion (November 2001–December 2007) that was characterized by relatively weak private-sector employment growth of approximately 1 million jobs per year. This was less than one-half of the job-growth gains of the two preceding  expansions (1982–1990 and 1991–2001), when average annual private-sector employment grew by 2.4 million jobs per year and 2.2 million jobs per year, respectively.

❒ This underperformance cannot be appreciably attributed to slower labor force growth, i.e., workforce shortfalls. In the preceding two expansions combined, private-sector employment growth per year was approximately 435,000 jobs higher than the annual growth in the number of people in the labor force. In contrast, in the 2001–2007 expansion, private-sector employment growth was 550,000 jobs lower than the growth in the number of people in the labor force.

❒ The combination of a weak economic expansion sandwiched between two recessions (2001, and 2007–2009) produced what will be a lost employment decade. As of August 2009, the nation had 1.3 million (1,256,000) fewer private sector jobs than in December 1999. This is the first time since the Great Depression of the 1930s that America will have an absolute loss of jobs over the course of a decade.

❒ To put this new millennium experience into perspective, during the final two decades of the twentieth century, the nation gained a total of 35.5 million private-sector jobs. During the current decade, America appears destined to lose more than 1.7 million private-sector jobs.

❒ Because of the severity of the 2007–2009 recession employment losses (–7.0 million private-sector jobs as of August 2009), the United States faces a significant employment deficit as it confronts the realities of a postrecession future.

❒ Unfortunately, the job deficit is actually larger than the recession employment loss since long-term, demographically driven labor force growth has continued, even though the pace of this growth may have been temporarily muted by people discouraged from entering or returning to the labor force because of the depth and duration of recent job losses.

❒ The U.S. Bureau of Labor Statistics projects the nation’s labor force to grow by approximately 1.3 million persons per year between 2006 and 2016. Therefore, the nation has to add 1.3 million total jobs per year— consisting of private-sector and government payroll employment as well as contract  (nonpayroll) payroll) employment—simply to accommodate a growing labor force.

❒ This 1.3 million annual increase in the labor force means that in terms of private-sector payroll employment, the nation has to create an estimated 920,000 jobs per year.2 Adding this to the actual private-sector job losses accumulated during the 20 months (to date) of recession equates to an August 2009 employment deficit of 8.6 million jobs. Given conservative estimates of further employment declines (even if the recession ends in the third quarter of 2009) and the continued increase in the labor force, the nation’s employment deficit could approach 9.4 million private-sector jobs by December 2009.

❒ Erasing this deficit will require substantial and sustained employment growth. Even if the nation could add 2.15 million private-sector jobs per year starting in January 2010, it would need to maintain this pace for more than 7 straight years (7.63 years), or until August 2017, to eliminate the jobs deficit! This is approximately 50 percent greater than the length of the average post–World War II expansion (58 months).

❒ Under these reasonable (and possibly even optimistic) conditions, it will take deep into the second decade of the new century for the labor market of the United States to return to where it was in December 2007, the start of the Great Recession. This basic post-recession arithmetic lesson is a very harsh one.