At Talking Points Memo, the TPMCafe is featuring a discussion of Jane Mayer’s The Dark Side. In addition to Mayer, participants include Scott Horton, Spencer Ackerman, Marty Lederman, Christopher Hitchens, ad many others. Here is Jane’s foirst contribution:
The Unmentionable Question
By Jane Mayer
Welcome to all who are part of this discussion – please let it rip.
I wanted to start by bringing up the unmentionable question in the current presidential campaign, where both candidates are avowedly against the Bush Administration’s embrace of torture and lesser cruelties in the “war-on-terror.” While both McCain and Obama have spoken out against torture, neither has spelled out what he plans to do about holding Bush Administration officials accountable who may have committed or authorized crimes. Understandably, this is a toxic subject, reeking of political payback. But I have personally interviewed CIA officers who have said they refused to partake in the “enhanced interrogation” program because they feared that eventually it would lead to criminal charges. They had seen this happen before, and wanted nothing to do with it, even if it meant in some instances, leaving the CIA. The threat of prosecution clearly acted as a deterrent. My question is what happens if there is no accountability for America’s first program of state-authorized torture? Does it send a green light to torture again when the next attack takes place? Is it an invitation to other forms of lawlessness by the U.S. Government? But, if top officials of the Bush Administration who were acting in what they believed to be the best interests of the country’s security, are now prosecuted, is that just? Will the public support it? Particularly if Obama is elected, wont this become exhibit A that the Democrats are soft on terrorism, and members of the “Blame-America-First” Club?
Stewart Taylor has urged a truth commission rather than criminal prosecutions. Is this likely? Will it do any good? Or is it more likely that President Bush will simply pardon everyone who could conceivably be criminally liable in connection with this program before he leaves office, and then sweep the whole sordid episode under the rug? Why not?
So–on a morning when accountability seems to have evaporated in the financial world – I’d like to know what we do about accountability at the top of our government for authorizing the abuse- and in some cases the killing of U.S.-held prisoners, all of which were criminal until the day before 9/11. Any thoughts?
(Those who are uncertain about the connection between U.S.-policy and the abuse, and even deaths that resulted from it, should tune in tonight to HBO, which is airing for the first time, the Oscar-winning documentary on torture, Taxi to the Dark Side.)
In Britain they have laws against cooperating with torture:
Soldiers who hand prisoners to US could face legal action, MPs warned
By Duncan Campbell
British troops who hand over prisoners in Iraq to US military personnel could find themselves facing prosecution, according to a legal opinion compiled for parliament. The finding has led to calls for the British government to rethink its current policy and investigate how the US treats its prisoners, and whether torture is employed against them.
Earlier this year the all-party parliamentary group on extraordinary rendition sought legal opinion from Michael Fordham QC on whether a human rights violation would arise under the European convention on human rights (ECHR) and the 1998 Human Rights Act (HRA) if an individual in British detention in Iraq were handed over to US military personnel, “despite substantial grounds for considering that there is a real risk of that person being subjected to torture or inhuman and degrading treatment”.
The conclusion reached by Fordham and his colleague Tom Hickman is that an offence would definitely have been committed. If acted on, the opinion could mean that UK troops would not be allowed to “render” detainees to the US military until it was clear that they would no longer face the possibility of torture or ill-treatment.
What prompted the inquiry was a statement made in February this year by Ben Griffin, a former SAS soldier who was on active service in Iraq. In his statement, Griffin said that he was “in no doubt” that individuals handed over to the US military “would be tortured”. He cited what had happened to those detained at Guantánamo Bay, Bagram airbase and Abu Ghraib prison.
The opinion adds: “UK forces operating in Iraq are potentially also subject to UK criminal law, tort law and Iraqi law. Notably, the Criminal Justice Act 1988 makes it a criminal offence for a public official, whatever his nationality and wherever located, to commit an act of torture.”
Andrew Tyrie, the Conservative MP who chairs the committee which commissioned the report, said there had been a number of allegations that UK forces had been capturing people and handing them over to US authorities, knowing that these detainees were at risk of being tortured or mistreated.
“I commissioned a legal opinion to establish whether the UK acted unlawfully when they were handed over,” said Tyrie. “I now have the answer. The UK remains legally responsible for the subsequent treatment of anybody who has been detained by the UK. It is likely that British policy on this area is not only ethically questionable but is also unlawful. The government now needs to radically rethink its policy on this issue.”
Clive Stafford Smith, director of the legal action charity Reprieve, also welcomed the findings. “We are delighted that the all-party parliamentary group has recognised the illegality of British troops handing over prisoners to US custody in Iraq, ” he said. “These prisoners promptly disappear into an unaccountable prison network in which over 20,000 prisoners are held for illegal interrogation and torture. If it is confirmed that this has been happening, the British government must immediately reveal how many people have been handed over, where they are now, and what has been done to them.”
Paul Marsh, president of the Law Society, called on the government to investigate what happens to prisoners rendered from British custody. “Extraordinary rendition has been used by some states as a means of bypassing the formal justice system,” said Marsh. “To do so is a breach of the rule of law and puts individuals at risk of ill-treatment. The Law Society calls on the UK government to look beyond assurances from other countries and positively investigate and monitor whether individuals rendered from British custody are receiving equivalent standards of due process. It is time we returned to our values in the rule of law.”
Some in Congress don’t buy the trillion dollar ripoff. Representative Marcy Kaptur (D-Ohio) explains how the Wall Street Bailout reality game is being played. Join her in creating a new game:
Nobel Prize wining economist Joseph Stiglitz discusses alternatives:
A Better Bailout
By Joseph E. Stiglitz
The champagne bottle corks were popping as Treasury Secretary Henry Paulson announced his trillion-dollar bailout for the banks, buying up their toxic mortgages. To a skeptic, Paulson’s proposal looks like another of those shell games that Wall Street has honed to a fine art. Wall Street has always made money by slicing, dicing, and recombining risk. This “cure” is another one of these rearrangements: somehow, by stripping out the bad assets from the banks and paying fair market value for them, the value of the banks will soar.
There is, however, an alternative explanation for Wall Street’s celebration: the banks realized that they were about to get a free ride at taxpayers’ expense. No private firm was willing to buy these toxic mortgages at what the seller thought was a reasonable price; they finally had found a sucker who would take them off their hands–called the American taxpayer.
The administration attempts to assure us that they will protect the American people by insisting on buying the mortgages at the lowest price at auction. Evidently, Paulson didn’t learn the lessons of information asymmetry which played such a large role in getting us into this mess. The banks will pass on their lousiest mortgages. Paulson may try to assure us that we will hire the best and brightest of Wall Street to make sure that this doesn’t happen. (Wall Street firms are already licking their lips at the prospect of a new source of revenues: fees from the US Treasury.) But even Wall Street’s best and brightest do not exactly have a credible record in asset valuation; if they had done better, we wouldn’t be where we are. And that assumes that they are really working for the American people, not their long-term employers in financial markets. Even if they do use some fancy mathematical model to value different mortgages, those in Wall Street have long made money by gaming against these models. We will then wind up not with the absolutely lousiest mortgages, but with those in which Treasury’s models most underpriced risk. Either way, we the taxpayers lose, and Wall Street gains.
And for what? In the S&L bailout, taxpayers were already on the hook, with their deposit guarantee. Part of the question then was how to minimize taxpayers’ exposure. But not so this time. The objective of the bailout should not be to protect the banks’ shareholders, or even their creditors, who facilitated this bad lending. The objective should be to maintain the flow of credit, especially to mortgages. But wasn’t that what the Fannie Mae/Freddie Mac bailout was suppose to assure us?
There are four fundamental problems with our financial system, and the Paulson proposal addresses only one. The first is that the financial institutions have all these toxic products–which they created–and since no one trusts anyone about their value, no one is willing to lend to anyone else. The Paulson approach solves this by passing the risk to us, the taxpayer–and for no return. The second problem is that there is a big and increasing hole in bank balance sheets–banks lent money to people beyond their ability to repay–and no financial alchemy will fix that. If, as Paulson claims, banks get paid fairly for their lousy mortgages and the complex products in which they are embedded, the hole in their balance sheet will remain. What is needed is a transparent equity injection, not the non-transparent ruse that the administration is proposing.
The third problem is that our economy has been supercharged by a housing bubble which has now burst. The best experts believe that prices still have a way to fall before the return to normal, and that means there will be more foreclosures. No amount of talking up the market is going to change that. The hidden agenda here may be taking large amounts of real estate off the market–and letting it deteriorate at taxpayers’ expense.
The fourth problem is a lack of trust, a credibility gap. Regrettably, the way the entire financial crisis has been handled has only made that gap larger.
Paulson and others in Wall Street are claiming that the bailout is necessary and that we are in deep trouble. Not long ago, they were telling us that we had turned a corner. The administration even turned down an effective stimulus package last February–one that would have included increased unemployment benefits and aid to states and localities–and they still say we don’t need another stimulus. To be frank, the administration has a credibility and trust gap as big as that of Wall Street. If the crisis was as severe as they claim, why didn’t they propose a more credible plan? With lack of oversight and transparency the cause of the current problem, how could they make a proposal so short in both? If a quick consensus is required, why not include provisions to stop the source of bleeding, the millions of Americans that are losing their homes? Why not spend as much on them as on Wall Street? Do they still believe in trickle down economics, when for the past eight years money has been trickling up to the wizards of Wall Street? Why not enact bankruptcy reform, to help Americans write down the value of the mortgage on their overvalued home? No one benefits from these costly foreclosures.
The administration is once again holding a gun at our head, saying, “My way or the highway.” We have been bamboozled before by this tactic. We should not let it happen to us again. There are alternatives. Warren Buffet showed the way, in providing equity to Goldman Sachs. The Scandinavian countries showed the way, almost two decades ago. By issuing preferred shares with warrants (options), one reduces the public’s downside risk and insures that they participate in some of the upside potential. This approach is not only proven, it provides both incentives and wherewithal to resume lending. It furthermore avoids the hopeless task of trying to value millions of complex mortgages and even more complex products in which they are embedded, and it deals with the “lemons” problem–the government getting stuck with the worst or most overpriced assets.
Finally, we need to impose a special financial sector tax to pay for the bailouts conducted so far. We also need to create a reserve fund so that poor taxpayers won’t have to be called upon again to finance Wall Street’s foolishness.
If we design the right bailout, it won’t lead to an increase in our long term debt–we might even make a profit. But if we implement the wrong strategy, there is a serious risk that our national debt–already overburdened from a failed war and eight years of fiscal profligacy–will soar, and future living standards will be compromised. The president seemed to think that his new shell game will arrest the decline in house prices, and we won’t be faced holding a lot of bad mortgages. I hope he’s right, but I wouldn’t count on it: it’s not what most housing experts say. The president’s economic credentials are hardly stellar. Our national debt has already climbed from $5.7 trillion to over $9 trillion in eight years, and the deficits for 2008 and 2009–not including the bailouts–are expected to reach new heights. There is no such thing as a free war–and no such thing as a free bailout. The bill will be paid, in one way or another.
Perhaps by the time this article is published, the administration and Congress will have reached an agreement. No politician wants to be accused of being responsible for the next Great Depression by blocking key legislation. By all accounts, the compromise will be far better than the bill originally proposed by Paulson but still far short of what I have outlined should be done. No one expects them to address the underlying causes of the problem: the spirit of excessive deregulation that the Bush Administration so promoted. Almost surely, there will be plenty of work to be done by the next president and the next Congress. It would be better if we got it right the first time, but that is expecting too much of this president and his administration.
Joseph E. Stiglitz is University Professor at Columbia University. He received the Nobel Prize in Economics in 2001 for research on the economics of information. Most recently, he is the co-author, with Linda Bilmes, of The Three Trillion Dollar War: The True Costs of the Iraq Conflict.