The Written Peace: Open Forum of March 16, 2007

Let us try this again.

Your host here at The Dark Wraith Forums has tried his best to publish a nice open thread while preparing this site for transition to a new publishing platform. Google has been working mightily to force users of its publishing platform to switch to its so-called "new" Blogger, something I will not do. Google has gone so far as to prevent me from publishing any further articles without signing its new "Terms of Agreement" and allowing their new Blogger to wreak havoc on the code I have been developing over the past two years and several months.

Yesterday, I circumvented the block Google had put into place and published a brief article here. It got deleted rather quickly.

This one won't be.

I have been awaiting the arrival of a more-or-less new computer to replace the poor beast that has labored terribly and with increasing difficulty under the strain I put on it. Fortunately, the new computer arrived yesterday, and I am bringing it up to full power tonight. It is quite a thing to behold, and now I can do things I have been unable to do for quite some time. I can also do a few things I was never able to do before.

As soon as possible, The Dark Wraith Forums will leave the less than competent hands of the folks at Google and go to the NucleusCMS platform, which is the one I use for Big Brass Blog. As I've noted before, a principal concern I have had in switching to Nucleus for this site is that commenters on Nucleus blogs have to use the old Bulletin Board Code (BBC) instead of HTML tags for mark-up. I had been hoping for the development of a module that would allow HTML tags in comments, but that hasn't happened yet.

A significant coding challenge with which I am still struggling is how to make the comments toggle from the main article in Nucleus like I've done here. One of the few good things about the old Blogger publishing platform was that it was so light-weight that I could deploy just about any coding trick I wanted in the so-called "template" (more accurately called the "index file"), and the publishing platform would have no issue with it. That's most decidedly not true of the new Blogger, as I have found out through helping others trying to make the transition. Several members of my blogScream News Wire syndicate have had fits trying to put something as straight-forward as one of the news screens into a new Blogger template. blogScream uses a very standard, harmless version of an object called an IFRAME, something that's been around for a long time; but the new Blogger is having emotional difficulties with it that are creating quite a challenge in maintaining syndicate membership levels.

And speaking of the blogScream News Wire service, it is two years old today, which means it stands as one of the longest running, continuously published news services featuring only blog headlines. Several other services like it have come and gone, but blogScream survives and will continue. Readers who see a blogScream screen on one of more than two dozen blogs across the Blogosphere are seeing headlines from some of the best progressive online writers. Click on a blogScream headline and discover a great blog.

Readers might, by the way, surmise from my two topics above that I am not currently in negotiations to sell blogScream to Google, even though it sometimes seems that every other online publisher of something even halfway interesting is. In the extraordinarily unlikely event that the bandwidth sucking, Chinese censorship enabling, technologically incompetent, wannabe monopolists at Google were to approach me on such a matter, I would be torn between the choices of telling them to bite me or to kiss my backside. Making not one dime of profit is far preferable to garnering a fortune from oafs.

Enough about that.

Over at Big Brass Blog, I published an editorial on what's happening with the stock markets. (That article was supposed to be part of the "Open Forum of March 13, 2007," which never got published here because Google was blocking me from access to the publishing platform).

My assessment of what's going on was typically dour, but let me assure readers here of this: it could get a whole lot worse than even I am describing. In my best judgment, the economic circumstances of many, many people will take a turn for the worse. Most of those people for at least a while will not get their minds around how bad it's getting for them personally. It will take time to sink in. People have been getting used to a modest version of this downward spiral for a few years now; but for most, it's been happening to someone else, and to the extent that it's been happening to them, they have not been making the connection between the world of large-scale financial, economic, and political policies and the consequentially adverse impact of those policies on their own lives.

The understanding of the deep connections will come, but it will come slowly, and it will never be a full understanding for most people. Even though I would like it otherwise, it isn't really all that important that most people will persistently lack a comprehensive grasp of the scope of the incompetence and mendacity that are the very cause of the bad times ahead.

As long as the average American finally figures out who is to blame, all is good. If that average American finally figures out who is to hang, all is even better than good.


Say what you have to say, here. This is an open thread. This post will not get deleted, and the comment facility is working (which it wasn't for my first attempt at this).

Once I've opened the espresso bar and put some snacks out for everyone, maybe we'll have a contest featuring people who try to impersonate a neo-con on the run from a noose. Or maybe we'll do one of those contests where we see who can hold out the longest from laughing when we say things like "The GOP is the party of fiscal restraint."

I did hint over on an open thread at Big Brass Blog that I might get some nude breakdancing going now that I've waxed the dance floor. I'll try to talk Peter of Lone Tree into doing a duo with me on that. If things turn rowdy, we might be able to get some kind of choreographed number going with Minstrel Boy, blackdog, Mr. Goat, and Father Tyme joining me for an interpretive dance to the music from some good, post-Apocalypse movie like Kevin Costner's, The Postman, all of this to the purpose, quite obviously, of ensuring that we still have a good time even as we descend into Hell.

Yes, indeed.



The Dark Wraith does his best to keep people from becoming too pessimistic about the misery, poverty, strife, and absence of acceptable feng shui that may be visited upon us as a nation.

Editorial: The Pardon Problem

I. Lewis "Scooter" Libby, formerly the Chief of Staff to Vice President Richard Cheney, was convicted last week on four counts of lying to FBI investigators and a grand jury about when he disclosed to outside sources that Valerie Plame was a non-official cover CIA operative. The most serious of the charges upon which he was convicted was obstruction of justice in the investigation of the circumstances that led to the outing of Ms. Plame, whose husband, Joseph Wilson, had investigated and publicly debunked claims by the Bush Administration that former Iraqi President Saddam Hussein had tried to procure partially processed uranium from Niger.

The White House had been using the mainstream media, particularly certain reporters like Judith Miller of The New York Times, to promote a largely false case for waging war on Iraq based upon claims by Administration officials that Saddam was seeking to procure, develop, and deploy nuclear, chemical, and biological weapons of mass destruction. Evidence put into the record at Mr. Libby's trial confirms long-standing suspicions and open allegations that the White House, faced with challenges to the credibility of its representations regarding the Iraqi dictator, engaged in a systematic pattern of revenge upon critics who had evidence or belief that the Administration's case was, at best, overblown and, at worst, entirely fabricated. The outing of Ms. Plame sent a strong signal to the intelligence community that taking public exception to the White House would be at the high risk of professional and possibly even personal harm: an exposed undercover operative, as well as his or her contacts, faces permanent, possibly life-threatening dangers after being revealed, and few career employees, especially those working in law enforcement at the national or international level, would be willing to bear such dangers merely to express a judgment in dissent to the highest ranks of a powerful, single-minded, vengeful Executive Branch.

Mr. Libby has vowed through his attorneys to seek a retrial and, failing to obtain such, has vowed to appeal his conviction in federal court. In fact, the appeal of the conviction is automatic; but the point of Mr. Libby's stance is that he will not take the adverse judgment of the federal jury lying down. The arguments he will set forth in seeking retrial are still to be fully formed, as are the arguments that will be placed before the Court of Appeals. As a matter of statistics, the likelihood of Mr. Libby being granted a retrial are slim, and the prospect that an Appeals Court will find substantive error in the trial is even more so.

In the absence of relief in retrial or appeal, Mr. Libby faces a maximum of 25 years in prison and a fine of one million dollars. While it is unlikely that the presiding trial judge, Reggie Walton, will "throw the book" at the convict, it is equally unlikely that Mr. Libby will altogether avoid serving prison time and paying a huge amount of money in fines. As a so-called "white collar criminal," and especially one who served at the behest of a sitting President of the United States, Mr. Libby's prison term would be served in a minimum security facility (with thanks to Richard Crane for pointing out that the camp originally suggested in this article is now closed). While nothing like living as a free person, the convict serving time in such a facility certainly does not suffer many of the deprivations and physical dangers that those serving in higher-security prisons face day in and day out. Although references to 'minimum security golf resorts' abound (one prison administrator describes his minimum security facility as "Camp Cupcake"), Mr. Libby would probably prefer to choose his own golf courses and foursome partners, so he'll make every effort to avoid what would otherwise be a stint in the gilded confines of a minimum security federal prison, comfortable as it might be.

Absent the retrial or overturn of his conviction on appeal, Mr. Libby's only chance of avoiding the certain, permanent stain of being a convicted felon and the near-certain, fairly long pain of confinement is an official pardon for his criminal acts by the President of the United States. Article II, Section 2 of the U.S. Constitution reserves to the sitting President the privilege of "Power to Grant Reprieves and Pardons for Offenses against the United States except in Cases of Impeachment." The language is clear, simple, and without recourse by those who might object to any particular case in which the President has granted clemency. Presidents, including the incumbent, have used this power with greater or lesser liberality, particularly in the waning days of their Administrations, when personal political backlash would be minimal or when legacy of mercy was being burnished. The constitutional provision is given procedural specificity by Part 1 of Title 28 of the Code of Federal Regulations, which sets forth the way in which a convict may seek, through the Pardon Attorney in the Department of Justice, clemency from the President. While quite specific, the statute is entirely non-binding upon the President, who may, at his or her discretion, choose to partially or wholly circumvent the process set forth therein. Even at that, though, it is quite likely that Mr. Libby, having exhausted all personal avenues of possible exoneration, would follow the steps prescribed in Title 28, provided President Bush had not already pardoned him.

While many commentators have expressed the opinion that a Presidential pardon (the highest of possible grants of clemency) is almost certain for Mr. Libby, such mercy granted by Mr. Bush would be highly problematic for those in an Administration hoping that the conviction of Mr. Cheney's former Chief of Staff is the official end of the so-called "Valerie Plame Scandal."

Any pardon Mr. Bush would grant Mr. Libby would have to be broad in scope, expressly protecting the latter from future prosecution on charges related to, but separate from, those for which he was just convicted. Such protective wording of a pardon would be along the lines of "...any and all acts carried out in the course of duties." While not rising to the level of so-called "blanket" immunity (exempting the individual from prosecution for any prior acts), such a pardon would have the effect of being an extraordinarily broad "use" immunity to keep any future investigation from leading to charges against Mr. Libby for what he did for and at the behest of higher White House officials. In other words, in any future trials involving White House officials who were part of the smear campaign against Valerie Plame and her husband, Mr. Libby's pardon would have to ensure that he would not face "jeopardy" in both the common and legal senses of that word.

But therein lies the problem: in any future legal proceeding, be it at the level of a federal grand jury, in a District Court, or before a congressional commmittee, Mr. Libby could not decline to respond to any question by invoking the Fifth Amendment, which would otherwise protect him from being compelled to give self-incriminating statements. Mr. Libby could, in fact, not incriminate himself in any manner that would lead to jeopardy for him.

Worse, if he were to decline to speak fully and truthfully anyway, he could at a minimum be charged with contempt of court and quite probably also be charged with obstruction of justice; and no such charges against him would be covered by the Presidential pardon because they were ex post acts in transgression of law and were committed subsequent to his "official duties" since he is no longer an officer of the Executive Branch.

Even future claims by Mr. Libby of defects in his memory of certain events would surely lead to punishment because that defense had already been rejected at trial and could not be revisited by Mr. Libby in future proceedings. To do so would virtually ensure a finding of contempt of court were he to persist in representing that he could not remember when events occurred.

Granted a Presidential pardon, then, Mr. Libby would be an extraordinary legal danger to those in the White House who directed, participated in, or subsequently obstructed the investigation of the Valerie Plame Scandal. A Presidential pardon broad enough to protect Mr. Libby would turn him into a veritable treasure trove of information awaiting responsible congressional and law enforcement authorities willing and able to fully extract from him what he most certainly knows about the possible criminal acts of Administration officials who, in their wildly imaginative case for war, used the power of their offices to wreck those who knew they were lying.

Key, however, to Mr. Libby's possible future role as an informant with no meaningful right against self-incrimination is a thorough investigation, followed by a comprehensive prosecution of all involved. That federal prosecutor Patrick Fitzgerald was inadequate to that large, grave, and necessary work must not disabuse other officials of what is not merely their constitutional duty, but is more to the point their moral obligation to right this one of many wrongs committed by an Administration unfettered by any internal sense of its own responsibility to adhere to the rule of law.



The Dark Wraith encourages President George W. Bush, in the spirit of mercy and friendship, to pardon I. Lewis "Scooter" Libby.

Analysis: The Economics of Wreckage, Part One

This is the first of a three-part series on macroeconomic financial effects of the Presidency of George W. Bush. On Tuesday, February 27, 2007, stock markets around the world dropped precipitously, led into the vortex by China, where the Shanghai Stock Exchange lost almost nine percent of its value. Major stock indices in the U.S. followed suit, wiping out recent gains that had brought forth breathless praise from the mainstream media about near-record highs that were nothing more than a brief, illusory departure from the pattern of abysmal real returns that common stock portfolios have offered investors over the past six years.

This first part of the series is the latest in a continuing program of index portfolio analyses that have been an on-going project here at The Dark Wraith Forums. Readers who have followed previous installments may recall that negative or miserably weak positive returns on equity index investments have been the typical outcome of these calculations in the past. Only in the last installment, published just after the sixth anniversary of President Bush's inauguration in 2001, did even one of the major indices, the Dow Jones Industrial Average, register a barely positive annualized real rate of return over the six years, and the decline in that and the other U.S. indices served to bring all three of the averages surveyed here back into line with the overall negative performance they have displayed over the tenure of the Bush Administration.

This first part, then, is a reminder to all who would offer even a modicum of praise for the Bush Administration's record as the steward of the American economy. Financial markets do not lie. They do not fabricate numbers, nor do they manipulate quantitative outcomes to suit the public relations purposes of the neo-conservatives; instead, the inflation-adjusted returns on investment in the three major stock indices of the United States calculated and presented below deliver the stark, objective assessment generated from trillions and trillions of trades involving nearly incomprehensible amounts of money: the Bush Administration has been an engine of financial depletion of the value of claims on ownership in American companies publicly listed by the three largest, most comprehensive stock indices.

The second part of this series will provide a standard, relatively simple macroeconomic model of the distribution of spending that comprises the total national income of a country, and that model will be applied to explain the way in which the United States government has financed hundreds of billions of dollars in deficit spending through the use of its trade deficits, particularly those it has run with China, which has for years deliberately manipulated the exchange rate of its currency, the yuan, with the U.S. dollar to the end of causing American greenbacks to flow to the central bank of China, which then used those dollars to finance the staggering budget deficits the Republicans have created year after year.

The third part of the series will review the dynamics by which the U.S. trade deficits with China have fostered the conditions the Bush Administration exploited to maintain abnormally low tax rates concomitantly with profligate spending, particularly on wars of opportunity. That third installment will conclude with the explanation of why the Shanghai stock market necessarily had to crash and what will be the likely consequences of recent economic events on the long-term prospects of a United States weakened by the irresponsible incompetence of the Bush Administration and its Republican cohorts who, until just recently, served as the exclusive, if unworthy, stewards of a nation that could have been far better off than it will be as the incontrovertible result of their time in power.

Responsibility Assigned
George W. Bush became the 43rd President of the United States on January 20, 2001. Until January 4, 2007, when the Democrats took control of both the U.S. House of Representatives and the Senate, the Republicans had controlled both the Executive and Legislative branches of the federal government, save for a brief period in mid- to late-2001 when a Republican-turned-Independent caused an even split in the Senate. Over the past six years, then, the financial house of this country has been in the virtually uninterrupted hands of the GOP, during which time the federal government went from running growing budget surpluses in the last years of the Clinton Administration to bleeding hundreds of billions of dollars in red ink every year under President George W. Bush and his congressional allies.

The Republican Party, through its legislators in Congress and its President in the White House, has overseen the abysmal performance of the U.S. stock markets, which represent the overwhelming bulk of the value of all public ownership of American corporations. It is in the stocks traded on these exchanges that much of the wealth of the nation is invested by everything from huge pension and mutual funds to individual speculators.

The GOP has no one but its own elected representatives to blame, notwithstanding any possible obfuscation by its elected representatives or their apologists in the mainstream media or among the tap-dancing ranks of the Right-wing punditry brigade. Republican economics has been a failure: it is based upon budget deficit-driven fiscal stimulus financed by trade deficits that have had the effect of causing the sell-off of the American capital base, which America's trading partners have then lent back to the United States government to finance its budget shortfalls. The irresponsible policy pursued by Mr. Bush, the Republicans in Congress, and their neo-conservative pseudo-intellectual backers is a twist on Keynesian economic policy prescriptions, but true Keynesians would never have abided fiscal health-draining deficits for more than a short period of time, and they never would have even so much as suggested hocking the American economy to an enormous, mercantilist-Communist country that has cynically, systematically distorted exchange rates to draw American dollars and jobs from America's shores.

Index Portfolio Performance during the Bush Administration to Date
As of (and including) Friday, March 2, 2007, George W. Bush had been President of the United States 2,233 days. As pointed out above, responsibility for the huge federal budget deficits year after year that have hallmarked the rule of the Republicans rests squarely with their party, its legislators in Congress, and the policy-makers in the White House, including George W. Bush, himself. Similarly, the Republicans have no one but themselves to blame for what is shown below to have been an unconscionable erosion of the purchasing power of dollars invested in the three largest U.S. stock indices over the six years that George W. Bush has been President of the United States.

From the first day of trading, January 22, 2001, after President Bush became the 43rd President of the United States, until the last trading day, March 2, 2007, before the publication date of this article, the performance of the major stock markets—measured by the index portfolios of the Dow Jones Industrial Average, the Standard & Poor's 500, and the NASDAQ Composite—has been abysmal: all three indices have delivered negative real returns on investment over the term of the past six years.

January 22, 2001, was the first day of trading after Mr. Bush became President. The three major stock market indices stood at the following levels at the close of trading on that day:

January 22, 2001, Index Closing Values

Dow Jones Industrial Average	10,578.24
Standard & Poor's 500	1,342.90
NASDAQ Composite	2,757.91

At the close of trading on Friday, March 2, 2007, these same three averages stood at the following levels:

March 2, 2007, Index Closing Values

Dow Jones Industrial Average	12,114.10
Standard & Poor's 500	1,387.17
NASDAQ Composite	2,368.00

If an investor were to have formed a portfolio based upon each of these three indices and managed each portfolio in terms of composition and balance to mirror the relevant index, the investor would have earned the following total nominal returns on investment over the 2,233 days from January 22, 2001, to March 2, 2007:

Total Nominal Portfolio Returns from 1/22/2001 to 3/2/2007

Dow Jones Industrial Average	14.52%
Standard & Poor's 500	3.30%
NASDAQ Composite	-14.14%

Expressing these returns on an annualized (that is, "percentage return per year compounded") basis, the nominal results just presented are as follows:

Annualized Nominal Portfolio Returns from 1/22/2001 to 3/2/2007

Dow Jones Industrial Average	2.24%
Standard & Poor's 500	0.53%
NASDAQ Composite	-2.46%

The above are nominal (that is, "not corrected for inflation") results. Taking into account the erosion of purchasing power (that is, "the effect of inflation") on portfolio values over the holding period requires adjusting each of the current values to its equivalent purchasing power value on January 22, 2001. From the Bureau of Labor Statistics Consumer Price Index data for January 2001, the CPI stood at 175.1, and for January 2007, the CPI stood at 202.4. The February 2007 figure can be estimated by various methods, and here, a conservative projection of 202.76 is derived from the three-month moving average of the CPI, implying an annualized inflation rate for the February of 2.2 percent, based upon the average of the annualized inflation rates for the previous three months.

Expressing the closing index portfolio values as of Friday, March 2, 2007, in terms of their January 2001 purchasing power equivalents provides the following results:

March 2, 2007, Index Values in January 2001 Purchasing Power Value

Dow Jones Industrial Average	10,461.55
Standard & Poor's 500	1,197.94
NASDAQ Composite	2,044.97

The total real return on investment for each portfolio is then the quotient of the January 2001 index value when divided into the adjusted March 2, 2007, value:

Total Real Portfolio Returns from 1/22/2001 to 3/2/2007

Dow Jones Industrial Average	-1.10%
Standard & Poor's 500	-10.79%
NASDAQ Composite	-25.85%

Finally, expressing these real returns on an annualized (that is, "percentage return per year compounded") basis, the total real return results just presented are as follows:

Annualized Real Portfolio Returns from January 22, 2001, to March 2, 2007

Dow Jones Industrial Average	-0.18%
Standard & Poor's 500	-1.85%
NASDAQ Composite	-4.78%

The total and annualized real returns to the selected portfolios are presented below in graphical form:




As is plainly evident, real returns on investment in three large U.S. stock indices, representing as they do the majority of ownership value in publicly traded U.S. corporations, have been negative. Investing in even the very largest, presumably safest public corporations would have led to an actual loss of money in real terms, and that loss would have been worse by investing in smaller-cap public companies through the NASDAQ Composite.

In practical terms, the numbers above mean this: an investor putting $100 on January 20, 2001, into a portfolio of the Dow Jones 30 Industrials and maintaining the index balance until March 2, 2007, would now have the purchasing power of $98.90; an investor doing the same but investing in the Standard & Poor's 500 would now have the purchasing power of $89.21; and an investor doing the same but investing in the NASDAQ Composite index would now have the purchasing power of $74.15.

Investing in stocks, particularly in well-balanced portfolios, is supposed to create capital appreciation in real terms over a long period of holding time; instead, over the course of the Bush Administration, investments in well-balanced, standard index portfolios have resulted in real purchasing power erosion of dollars invested.

This is objective evidence, accumulating over more than six years, of fiscal mismanagement on a scale that will be felt for generations to come. This, then, is objective evidence of a degraded future for the United States, whose citizens will labor mightily under the after-effects of economic degradation caused by men and women in Washington who posed as prudent, fiscal conservatives, but instead acted in a more economically reckless manner than any American leadership in decades.

This series will continue in the next installment with a survey of the national income allocation model, which will be used to explain the way in which the Republicans propelled the economy far too long on funds borrowed from overseas investors who got their money to make the loans by bleeding the American economy of both its greenbacks and its jobs.


The Dark Wraith trusts that readers will stay tuned.