July 6, 2004

ECONOMY
We're 'Stuck'
IRAQ
Rumsfeld's Record Unraveling

UNDER THE RADAR

ECONOMY
We're 'Stuck'

Despite a "disappointing" new report showing "far less than expected"
new jobs created in June, President Bush claimed the report proved the
economy was "vital and growing." As the Baltimore Sun reported,
America's "employment engine sputtered last month, producing half as
many new jobs (112,000) as expected." The unemployment rate remained
stuck at 5.6 percent - with a "high number of people hav[ing] stopped
looking for work" because the job market has become so bleak over the
last two years. The report "raised new misgivings about the strength
and endurance of the rebounding jobs market." Although the White House
boasts that 1.5 million jobs were added in the last 10 months,
columnist Paul Krugman notes, "that figure is barely enough to keep up
with a growing working-age population." The New York Times notes that
it is "surprising that President Bush would want to play the game" of
sugarcoating the economic numbers: "the economy has still lost 1.1
million more jobs than it has gained on his watch, leaving Mr. Bush at
risk of being the first president since Herbert Hoover to preside over
a net loss of jobs." As Economy.com's chief economist Mark Zandi said,
the new jobs report means "President Bush can write off hopes of
restoring the 1.8 million private-sector jobs lost during his term."
(Read a statement from American Progress on June's job numbers.)

OTHER TROUBLING NUMBERS: Along with the disappointing June numbers,
the Labor Department revised the April and May jobs figures to show
35,000 fewer jobs were created than originally reported. Additionally,
in a separate report "that implied a leveling off in the pace of the
economy," the Commerce Department said new orders at U.S. factories
slipped 0.3 percent in May on top of a 1.1 percent decline in April.
Economy.com's Zandi also pointed out that statistics prove "if you're
unemployed, you're stuck: The duration of unemployment is about as
long as it has ever been. In June [the average] was 19.9 weeks -- it
doesn't get much longer than that."

THE MYTH THAT GROWTH IS HELPING WORKERS: The president claimed the
report showed "steady, consistent growth" which means that "citizens
will be able to find a job." But as Bloomberg News reports,
record-high corporate profits are not "trickling down to U.S. workers
in the form of pay increases." The new Labor Department report showed
nominal weekly earnings actually declined by 0.5 percent. Over the
last year, wages have only risen by 2.2 percent - a rate "more than
offset" by inflation. CATO's William Niskanen, who served as chairman
of President Reagan's Council of Economic Advisers, said, "I don't see
any substantial increase in average real wages for some time." Stephen
Roach, chief economist for Morgan Stanley & Co., said stagnating wages
are "far short of the nearly 10% gains that occurred in the first 29
months of the preceding six cyclical recoveries. This translates into
a shortfall of $280 billion in 'missing' real personal income." As the
NYT notes, "take-home pay, as a share of the economy, is at its lowest
level since the government started keeping track in 1929." Read more
about the costs of the upside-down economy.

THE HEALTH CARE SQUEEZE CONTINUES: The president of Aetna, one of the
nation's biggest health insurers, recently told investors, "It's fair
to say that a lot of the jobs being created may not be the jobs that
come with benefits." In other words, workers are feeling squeezed not
only by stagnant wages, but also by skyrocketing health care costs. In
its two-part series on the health care challenges facing America, the
Toledo Blade noted for the average American family with the median
household income of $42,409, the Bush administration's refusal to deal
with health care "has meant steep increases in what [families] and
their employers have paid for health insurance. Last year, the average
premium for a family of four was $9,086, up from $6,348 in 2000." Even
when companies do offer health insurance, new studies show that many
employees can't accept it because premiums are too high. Meanwhile,
more than 43 million Americans have no health insurance at all. See
American Progress's analysis of the White House's inadequate response
to the health care crisis.

IRAQ
Rumsfeld's Record Unraveling

In early May, Secretary of Defense Donald Rumsfeld told Congress he
was "blindsided" by the abuse at Abu Ghraib. Since that time we have
learned that Rumsfeld personally authorized abusive interrogation
techniques for prisoners held in Guantanamo Bay, Cuba (including the
use of dogs for intimidation, the removal of clothing, the hooding of
prisoners, and "non-injurious physical contact") and ordered several
prisoners in Iraq to be hidden from the International Red Cross so
that the organization couldn't monitor their treatment. Now, Brig-Gen
Janis Karpinski, the former head of detention operations at Abu
Ghraib, alleges that "Rumsfeld personally approved the introduction of
harsher conditions of detention in Iraq," including "the use of
military dogs, stripping and sensory deprivation." According to
Karpinski, there are documents, not yet released by the Pentagon,
which would prove Rumsfeld's direct involvement. A Pentagon spokesman
denied that Rumsfeld approved interrogation procedures in Iraq and
insisted "the notorious abuse of prisoners at Abu Ghraib was an
aberration on the part of a handful of rogue soldiers." The spokesman
promised that "all relevant documents on interrogation techniques in
Iraq would be made public but could not say when."

RUMSFELD'S COUNTERINSURGENCY STRATEGY A FAILU On July 16, 2003, the
Pentagon acknowledged that U.S. troops "were facing a well-armed
guerrilla war in Iraq." Now Rumsfeld and his aides are being
criticized by some top Bush administration officials, military
officers and defense experts for "failing to develop a coherent,
winning strategy against the insurgency." Among the most serious
problems: "inadequate intelligence, poor assessments of enemy
strength, testy relations with U.S. civilian authorities in Baghdad
and an inconsistent application of force." Deputy Defense Secretary
Paul Wolfowitz admitted to Congress "there was probably too great a
willingness to believe that once we got the 55 people on the
blacklist, the rest of those killers would stop fighting." (See the
American Progress strategy to get things back on the right track.)

RUMSFELD'S INITIAL WAR PLAN LEFT SOLDIERS UNDERSUPPLIED: According to
an internal Army report, even the soldiers who toppled Saddam
Hussein's regime 15 months ago had to overcome poor planning by
Rumsfeld and the Pentagon. According to the Army report soldiers in
the initial phase of the war "received virtually none of the critical
spare parts they needed...[and] ran chronically short on food, water
and ammunition." Army medics "had to forage for medical supplies,
artillery gunners had to cannibalize parts from captured Iraqi guns
and intelligence units provided little useful information about the
enemy." The study "is at odds with the public perception of a
technologically superior invasion force that easily drove Hussein from
power."

PENTAGON CENSORS FOOTAGE OF HUSSEIN TRIAL: On Thursday in Baghdad,
"U.S. news networks agreed to let the American military censor out
certain images of Saddam Hussein's court hearing." U.S. officials also
"ordered CNN and Al-Jazeera, the pool camera crews, to disconnect
their audio equipment." The footage was only transmitted after "it was
viewed and okayed by two military censors." The Department of Defense
also recorded its own footage which was mixed in with network images
in such a way that "it wasn't always clear which footage was from what
source."




MEDIA – TRUMAN/DEWEY PART DEUX: The New York Post, owned by
conservative Rupert Murdoch, got it wrong again. This morning's online
edition had the breaking news: John Kerry picks a running mate…Richard
Gephardt. Amusingly, this breaking scoop ran next to the AP newswire
running the actual news that Kerry had chosen Sen. John Edwards. Looks
like the right wing could use some fact checkers.

TRADE – PROTECTING THE DRUG COMPANIES: HIV and AIDS have exploded
throughout the developing world; in these poorer countries, most
people are unable to afford expensive, brand-name drugs. Although
President Bush has paid a lot of lip service to fighting the battle
against AIDS, the Wall Street Journal reports today that U.S. trade
negotiators are opposing the proliferation of generic drugs,
supporting the powerful pharmaceutical lobby at the expense of
fighting the disease: "As public-health groups urge wider use of
generic drugs to lower the cost of treating AIDS and other diseases in
developing countries, U.S. trade negotiators -- prodded by the drug
industry -- are taking the opposite stance in new trade pacts, seeking
to strengthen protections for costlier brand-name drugs."

HALLIBURTON – THE "GRAVY TRAIN" KEEPS ROLLING: Pentagon documents
obtained by NBC News support charges the military contractor wasted
precious resources "even on routine services" in Iraq, overspending
for fancy computers, 5-star hotels, and CD players in employee-driven
SUV's. Marie deYoung, a former Army chaplain who audited accounts for
a Halliburton subsidiary and had defended the company against
"political slurs" in the past, has radically changed her opinion.
"It's just a gravy train," she said, claiming "there was no effort to
hold down costs because all costs were passed on directly to
taxpayers. She repeatedly complained to superiors of waste and fraud.
The company's response, according to deYoung, was: 'We can be as dumb
and stupid as we want in the first year of a war, nobody's going to
care.'" DeYoung cited charges including "$50,000 a month for soda, at
$45 a case; $1 million a month to clean clothes — or $100 for each
15-pound bag of laundry. 'That money could have been used to take care
of soldiers,' she said."

WAR ON TERROR – CIA AGENT SAYS NO INCREASE IN EXPERTS: More from the
hot new book by an anonymous former CIA agent: "The number of CIA
experts devoted to fighting Osama bin Laden and preventing new attacks
by his network remains about the same nearly three years after the
Sept. 11 strikes." In addition, the author claimed in an interview
with Knight Ridder that "CIA specialists who have devoted years to
studying and targeting bin Laden are worn out, and many are being
shifted to other duties, moves that will dilute the agency's pool of
knowledge about the Saudi extremist and his violent following." The
author also reiterated his book's assertion that President Bush's
invasion of Iraq was a boon to bin Laden and his followers. "There is
nothing bin Laden could have hoped for more than the American invasion
and occupation of Iraq."

CONSUMER - KAISER WORKS TO WEAKEN PROTECTIONS: The LA Times reports
Kaiser Permanente, a major beneficiary of the Bush administration's
Medicare plan and a contributor to the president and his allies, is
"joining an effort to weaken the 70-year-old consumer protection law
under which it was sued" and required to disclose how it pays doctors
to control costs. The initiative would weaken California's tough
Unfair Competition Law, and "sharply limit who can sue and under which
circumstances." Claiming the law leads to frivolous lawsuits, affected
businesses "say they are prepared to spend tens of million of dollars
if necessary" to overhaul it. The supposedly frivolous legislation has
led to the removal of tobacco billboard ads from within 1,000 feet of
schools and forced bottled-water companies to install filtration
systems to remove illegal levels of arsenic. Advocacy groups have also
"used the law to stop companies from marketing sugary children's
cereals as healthful" and they have sued insurance companies for
reducing earthquake coverage without providing adequate notice.