Rudy: An MSM Story Exposes his Lies

On Labor Day weekend when no one will read it and the rest of the press will ignore it....

Thanks for the crumbs, Time:

But being a victim of terrorism, or the steely leader of a recovery, is not necessarily the same as understanding terrorism. Nor is foreign policy experience all that matters. So how would Giuliani actually prevent, contain and respond to the next major terrorist attack in the U.S.? What is his vision for what he considers the existential challenge of our time?

This much is indisputable: Giuliani knows what it means to be a victim of terrorism, to lose old friends in an avalanche of violence and spit the dust of a skyscraper out of his mouth in a new, blackened world. He understands the urgency of speaking to the American people after an attack — and not circling above the ruins in Air Force One. He knows how to grieve and go to work at the same time.

But before 9/11, Giuliani spent eight years presiding over a city that was a known terrorist target. A TIME investigation into what he did — and didn't do — to prepare for a major catastrophe is revealing. In addition to extraordinary grace under fire, Giuliani developed an intimate knowledge of emergency management and an affinity for quantifiable results. On 9/11, he earned the trust of most Americans; one year later, 78% of those surveyed by the Marist Institute had a favorable impression of Giuliani. This magazine also named Giuliani its Person of the Year in 2001. Assuming he can keep it, trust is a priceless resource in psychological warfare.

The evidence also shows great, gaping weaknesses. Giuliani's penchant for secrecy, his tendency to value loyalty over merit and his hyperbolic rhetoric are exactly the kinds of instincts that counterterrorism experts say the U.S. can least afford right now.

Giuliani's limitations are in fact remarkably similar to those of another man who has led the nation into a war without end. Some of the Bush Administration's policies, like improved intelligence sharing between countries and our own agencies, have made the U.S. better at fighting terrorism. But others, from the war in Iraq to the treatment of detainees at Guantánamo Bay, have actually made the task much more difficult. The challenge for the next President will be focusing on and adapting the good tools and jettisoning the bad. Whether you conclude Giuliani can win this war depends ultimately on whether you think we are winning now.

A Mayor's Skill Set Giuliani and his aides have said he has been "studying Islamic terrorism" for 30 years. This is an exaggeration. As a prosecutor and Justice Department official in the 1970s and '80s, Giuliani had many successes — against white collar criminals and the Mafia. He did not direct major terrorism prosecutions that led to convictions. As Mayor, he worked relatively closely with the FBI, according to James Kallstrom, former FBI assistant director in charge of the New York office. "The four years that I was there, we had a fabulous relationship," says Kallstrom. "He was able to do many things in this city that I never expected him to be able to do."

But until 9/11, the security obsession of Giuliani and the FBI was crime, not terrorism. He came into office 11 months after the first attack by Muslim extremists on the World Trade Center. Yet an analysis of 80 of Giuliani's major speeches from 1993 to 2001 shows that he mentioned the danger of terrorism only once, in a brief reference to emergency preparedness. He talked more about the "terror" of domestic violence.

With his own preparedness staff, he did discuss terrorism, says Jerome Hauer, Giuliani's emergency-management chief from 1996 to 2000. Giuliani was certainly more aware of the subject than most mayors, which made sense, given the city's panoply of targets. But he was not a student of Islamic extremism, as he claims on the campaign trail, Hauer says. (Giuliani and Hauer had a falling-out during the election to replace Giuliani after 9/11, both sides confirm, after Hauer endorsed a Democrat, arguing in part that the city would be safer under his choice.) "We never talked about Islamic terrorism," Hauer says. "We talked about chemical terrorism, biological terrorism. We did talk about car bombs every now and then. [But] I don't think there was much interest on his part. If he's been studying it for 30 years, he certainly never verbalized it to me."

Giuliani has also claimed he knows more about foreign policy than other candidates, but that's exceedingly unlikely. John McCain spent 22 years as a Navy pilot and five as a prisoner of war and is now the ranking member of the Armed Services Committee in the Senate, where he has served for 20 years. He has been to Iraq six times; Giuliani has never been there. (Of the major candidates, only Giuliani, Fred Thompson and John Edwards have never visited Iraq.)

Giuliani had an unusual opportunity to cram foreign policy when he was invited to join the Iraq Study Group by the co-chairman, former Secretary of State James Baker III, in February 2006. Giuliani accepted, becoming one of just 10 people, including former Secretary of Defense William J. Perry and retired U.S. Supreme Court Justice Sandra Day O'Connor, in the Congressionally mandated group. He participated in a conference call to discuss logistics but then did not attend the first two major meetings. On those days, he delivered paid speeches.

The May session Giuliani missed was a master class on Iraq. He would have gotten briefings from General David Petraeus, the top U.S. commander in Iraq; former Secretary of State Colin Powell; former Army Chief of Staff Eric Shinseki; and Douglas Feith, the Pentagon's former No. 3 civilian, among others. All told, says a staffer for the Iraq Study Group, "they had 40 of the top experts on Iraq brief them for hours. They had access to anyone they wanted."

After the two no-shows, Baker contacted Giuliani and Alan Simpson, a former Senator who had also missed meetings, to gauge their commitment levels. Simpson affirmed his dedication and was able to make future meetings. But Giuliani formally withdrew, citing "previous time commitments," according to a copy of his letter to Baker provided to TIME by John B. Williams, Baker's policy assistant. Giuliani recently said he resigned because he was considering running for office and it didn't seem right to stay on such an "apolitical" panel. Staffers on the commission say they don't remember that coming up.

Room for Improvement On the campaign trail, Giuliani's foreign policy comments have sometimes come off more confident than competent. In New Hampshire this spring, according to the New York Times, Giuliani said it was unclear whether Iran or North Korea was further along on building a nuclear bomb. (North Korea tested a nuclear device in October 2006. Iran has not done so.) Then, in his speech at the Maryland synagogue in July, Giuliani mocked Democratic candidate Barack Obama for claiming that North Korea was the nation's No. 1 enemy. "North Korea is an enemy. North Korea is dangerous. I mean, I grant that. And boy, we have to be really careful about North Korea," Giuliani said, his voice iced with sarcasm. "But I don't remember North Koreans coming to America and killing us."

North Korea is known to sell advanced weaponry to other states that sponsor terrorists. The State Department has listed North Korea as a sponsor of terrorism. The reason North Korea keeps U.S. terrorism experts up at night is not that North Korean operatives will come here and attack us; it's that they might sell a nuclear bomb to people who will.

Earlier this summer, the National Intelligence Estimate stated that al-Qaeda has regenerated, directly challenging Giuliani's claims that the war in Iraq has made the U.S. safer. Yet the former Mayor continues to insist that the opposite is true: "Being on offense gives us more safety than being weak and being on defense." When I ask him how he reconciles that conclusion with reports that the terrorism threat has increased since we've been "going on offense," Giuliani dismisses those findings and points to the lack of an attack on U.S. soil since 9/11 as evidence of our safety. Sometimes," he says, "we miss the forest for the trees when we sit in places and just analyze."

In a Foreign Affairs article out this month, Giuliani blames the Clinton Administration's foreign policy for provoking terrorism. "The Terrorists' War on Us was encouraged by unrealistic and inconsistent actions taken in response to terrorist attacks in the past," he writes. He also reaches further back into history, questioning the U.S. decision to leave Vietnam. And his views on Israel sound to the right even of the Bush Administration: "It is not in the interest of the United States, at a time when it is being threatened by Islamist terrorists, to assist in the creation of another state that will support terrorism," he writes.

Democratic Senator Joe Biden is so far the only presidential candidate to directly rebut Giuliani's claim that he knows more about terrorism and foreign policy. "Give me a break," says Biden, who has served on the Senate Foreign Relations committee for 32 years and has been to Iraq seven times. "I'm more qualified than him by a mile." He calls Giuliani a "semidemagogue" on terrorism and criticizes him for mischaracterizing the threat. "I think he gets away with this because the most catastrophic event in modern American history saw him at the base of a building demonstrating some personal courage and taking command." But this is no time for sentimental whimsy, Biden says. "When power is passed from this President to the next, that person is going to be left with virtually no margin for error."

Giuliani can, of course, make up for his experience deficit with his advisers. So far, he has chosen hawkish foreign policy gurus, including Norman Podhoretz, a founding member of the neocon movement who recently called for an immediate attack on Iran, and Kim Holmes, an expert at the Heritage Foundation who advised former Defense Secretary Donald Rumsfeld. His chief foreign policy adviser is Charles Hill, a lecturer in international studies at Yale, who says Giuliani doesn't actually require much staffing. "If you run New York City, you know foreign affairs," he says. "In dealing with the U.N. and a host of foreign leaders, that's a host of experiences."

Even if Hill is correct, Giuliani — like all Presidents — would need to be surrounded with the most qualified and competent advisers, particularly when it comes to overseeing homeland security. One of the most damning criticisms of Giuliani, however, has been his record of flawed judgment on personnel. In 2004, Giuliani recommended that President George W. Bush nominate Bernard Kerik to run the Department of Homeland Security. Kerik was a police officer and Giuliani's driver before he was elevated to corrections commissioner and police chief. But the nomination collapsed when information about Kerik's past and possible ties to mob-related businesses began to filter out. Kerik pleaded guilty last summer to improperly accepting $165,000 worth of free renovations on his apartment and may still face federal charges. "I should have done a better job of investigating him, vetting him," Giuliani told reporters this spring. "It's my responsibility, and I've learned from it." (Questions were raised about Giuliani's vetting system yet again in June when his South Carolina campaign chairman, Thomas Ravenel, was indicted on federal cocaine charges.)

For his chief homeland-security adviser on the campaign, Giuliani has chosen Robert Bonner, a partner at the law firm of Gibson, Dunn and a former head of the U.S. Customs Service. But Giuliani's most surprising security adviser so far is his old friend former FBI director Louis Freeh. Freeh's stewardship of the FBI during the eight years before the bureau's most spectacular failure makes him an unusual choice. The 9/11 commission report concluded that Freeh and his FBI had failed to adapt to reality: "Freeh recognized terrorism as a major threat ... [His] efforts did not, however, translate into a significant shift of resources to counterterrorism," the report found. "Freeh did not impose his views on the field offices."

Like Giuliani, Freeh blames President Clinton and Congress for failing to dedicate the necessary resources to the FBI's counterterrorism efforts. "There was no willingness to fund any of this before 9/11," he says. New York City's communication failures on 9/11 should not give voters pause, Freeh says, because today, with new technology and increased counterterrorism funding, things would be different. And then Freeh defaults to the iconic moment, the trump card issued to all Giuliani disciples: "You don't walk through the rubble for one moment on that day and not understand that this cannot happen again and that whatever has to be done will be done."

Following the Sirens Before 9/11, Giuliani understood what needed to be done in New York City, but getting it done was another matter. In 1994, less than a year into his mayoralty, a depressed computer analyst set off a homemade bomb in a No. 4 subway train as it pulled into a busy station in lower Manhattan. The firebomb, built from a mayonnaise jar, a kitchen timer and batteries, hurt more than 40 people. Passengers spilled, screaming, out of the train, some rolling on the platform to try to put out the flames, others beating back the fire with their coats.

As soon as he learned of the attack, Giuliani did what he always does: he followed the sirens. When he got to the scene, he sought out police, fire and emergency officials. Then he went to the cameras. In an hour and a half, he held 10 interviews. Then he led a press conference in front of two dozen TV crews. "The emergency response," he said, "was close to miraculous."

It was the same public composure in crisis that Giuliani demonstrated to the world seven years later. "Everything is being done to try to make the city as secure as possible," Giuliani said late on the night of 9/11 — at his second press conference of the day. "And tomorrow New York is going to be here, and we're going to rebuild, and we're going to be stronger than we were before."

Giuliani's resolve is not just emotionally reassuring. On 9/11, he single-handedly limited the emotional and economic impact of the loss by his measured, confident response. "The fundamental prerequisite is to respond coolly and soberly and not irrationally and emotionally," says Bruce Hoffman, a Georgetown University professor and one of the country's most respected terrorism experts. "I think you could give him credit. Terrorists are trying to provoke us to respond emotionally. He kept his head about him." But that's about the extent of Hoffman's praise. "In Mayor Giuliani's case, it's a very narrow subset of skills where his credentials are unvarnished."

Giuliani dealt with major emergencies on a regular basis. He had time to prepare his city for a major calamity. But did he do all that he could? Much has been made of the fact that Giuliani's state-of-the-art emergency command center was rendered useless on the day of the attacks. The $13 million center was in the World Trade Center complex, on the 23rd floor of Building 7, which collapsed that day. When I asked Giuliani three years after 9/11 if it had been a mistake to place the command center in a known terrorist target, he said no. "You had to put it somewhere," he said. And he noted that the Secret Service and the CIA also had offices in that building. The center was above ground level, leaving it less prone to flood damage (a serious concern in lower Manhattan), and it was within walking distance of City Hall — one of Giuliani's priorities. "In hindsight, it's pretty bad," says John Farmer Jr., senior counsel to the 9/11 commission and the person in charge of reconstructing the response to the attacks for the investigation. "But that's a tough call."

Giuliani's record on managing the city's emergency responders is more telling — and shows a more complicated leadership style than Americans saw on 9/11. "When we reflected on his tenure, we saw qualities that were not helpful," says Jamie Gorelick, a member of the 9/11 commission and former Deputy Attorney General in the Clinton Administration. "[For President], I think you want someone who is not polarizing. Someone who brings people together by the power of persuasion rather than the power of dictate. Someone who is considering of other points of view and ultimately decisive. And on all three scores, I have serious doubts about the Mayor."

Remember that 1994 subway firebombing? Despite what he said in public, Giuliani had profound concerns about the emergency response, according to Hauer, who became Giuliani's emergency-management chief in 1996. When Giuliani arrived that day, he couldn't figure out who was in charge. "Rudy walked down there and got one story from the police department, one from fire, one from EMS," says Hauer. "He was very frustrated."

Getting police and fire departments to cooperate is hard anywhere. But New York City was worse than most places. "We had — and still have — a long history of competitive rivalry between the police and fire departments," says Joe Lhota, Giuliani's deputy mayor from 1998 to 2001. This kind of turf war is extremely dangerous. As we now know, the single biggest failing of intelligence agencies before 9/11 and response agencies after Hurricane Katrina was a lack of coordination and communication.

In 1996, to his credit, Giuliani tried to fix the problem. Giuliani established an Office of Emergency Management that reported directly to him. He put Hauer, an experienced emergency manager, in charge. But five years later, the problems persisted. On 9/11 the police and fire departments ran separate command centers, and communication was poor. The firefighters carried the same radios that had failed them in the 1993 bombing. At 10:04 a.m. on 9/11, after Tower Two had collapsed, a member of the New York Police Department's Aviation Unit warned that the top 15 floors of Tower One were "glowing red" and might collapse. Four minutes later, a helicopter pilot said he did not believe the tower would last much longer. Neither of these warnings made it to the fire chiefs. That tower collapsed at 10:28 a.m. "If communications were better," concluded the federal investigation into the collapse, conducted by the National Institute of Standards and Technology, "more firefighters would have been saved."

Before he left in 2000, Hauer tried to get police and fire chiefs to use radios that could communicate with one another. It never happened, partly because of the police department's refusal to cooperate, he says. The Mayor could have forced the issue, Hauer says, but he didn't: "Rudy did not back us." On 9/11 the Office of Emergency Management was run by Richard Sheirer, who now works for Giuliani Partners. Giuliani's campaign declined to make Sheirer available for an interview.

No one could have expected communications to be flawless. "That emergency would have probably overwhelmed any emergency system," notes 9/11 commission staffer Farmer, who was the attorney general for New Jersey under a Republican administration. But Giuliani owns some accountability for the failures. "To say that he had identified problems and he'd been in office for a while and they hadn't been fixed — that's fair," Farmer says. Gorelick, the 9/11 commissioner, says Giuliani's shortcomings became clear when the commission looked at the Pentagon on 9/11. "If you compare the incident command at the Pentagon to the one at the World Trade Center, you will see the difference between life and death," she says. "In New York, the hard decisions were not made. There was not a unity of command. And heroic firefighters went up into the towers when they should have been coming down."

Ministry of Fear More than anything else, counterterrorism experts interviewed by TIME cited Giuliani's campaign rhetoric as a cause for concern. He frequently conflates different threats, from Iraqi insurgents to al-Qaeda to Iran, into one monolithic dark force. He routinely compares the terrorism threat to the Holocaust and the cold war. In one 15-min. phone interview in August, Giuliani compared the terrorism threat with Nazism or communism six times. When I asked him if he risked exaggerating the threat, since most terrorist plots against the West are not the kind of attacks that will bring down a nation, he replied, "I'm not saying it would take down a country. What terrorism can do and has done is kill thousands and thousands of people. It's real, it's existential, it's independent of us."

Retired Lieut. General William Odom was director of the National Security Agency under Ronald Reagan from 1985 to 1988. He calls Giuliani's terrorism rhetoric "the most delightful thing that al-Qaeda could want." And he laments that Giuliani isn't showing the stoicism he displayed on 9/11. "We need a President who cools it," says Odom, a senior fellow with the conservative Hudson Institute. As for Giuliani's analogy to the cold war, a period Odom knows rather well, he is unimpressed. "Jihadism is a mosquito bite compared to communism," he says. "Anybody who talks about terrorism this way is like a witch doctor."

Giuliani, however, seems to think it is almost impossible to overstate the risk. "We've never had a history of overestimating threats," says the former Mayor. "We underestimated by a lot the threat of Nazism." Yet when candidates give terrorists too much credit, they can inadvertently assist them in terrifying the public, says Frank J. Cilluffo, a terrorism expert at George Washington University. "Our words matter," he says. "The last thing we want to do is empower [terrorists] and make them holy warriors, which they're not."

Giuliani used to speak more carefully about terrorism. "No mayor, no Governor, no President can offer anyone perfect security. You've got to be able to deal with a certain level of risk in anything that you do," he said in 1999. On the eve of the millennium New Year's Eve celebration in Times Square, he appeared on CNN to warn against melodrama: "When people overdo it about terrorism, terrorists actually win. You're sort of like becoming agents and instruments of the terrorists."

But now Giuliani is running for President, and he has apparently made a tactical decision to thunder loudly about terrorism, perhaps to deflect from his personal life and his liberal record on social issues — which an internal campaign memo termed potentially "insurmountable" last year. (The memo was leaked to the New York Daily News.) The more he can remind people of his performance on 9/11, the better off he is, says G.O.P. pollster Luntz. "You cannot underestimate the impact of having seen him on television hour after hour dealing with the tragedy," he says. "That gives him a level of credibility that nobody else has."

As Giuliani himself put it to the Detroit News recently, "The American people are not going to vote for a weakling. They're going to elect someone who will protect them from terrorism for the next four years." It's the same calculus Bush used in 2004. In fact, it sometimes seems as if Giuliani is in a time warp. Freeh cites this as a point of pride: "If you compare [Giuliani's] remarks to what every politician and most of our citizens were saying on Sept. 12, 2001, you would not find it noteworthy or unusual," he told the Concord, N.H., Monitor.

The question is whether voters have changed. Borrowing rhetoric from one of the least popular Presidents in history may backfire, even for America's mayor. In a recent CBS poll, 46% of respondents said the war in Iraq is actually creating more terrorists. For many, though, the same words sound different when Giuliani says them. Sherie Silverman, 62, went to hear Giuliani in Rockville and left convinced that he "gets it" on terrorism. "He said what I wanted to hear," she said. "I'm looking for a more competent version of Bush." The crowd gave Giuliani a standing ovation.

Tom Tomorrow Explains Larry Craig Far Better than I

Now we can close the books on this subject, I hope....

Link.

Wait, wait, wait, there's more: The people speak out!

Now I think I'm done with this subject.

Really.

For now....

The Golden Age is Upon Us, Thanks to Our Leaders

Golden not as in wealth and prosperity, golden as in shower :)

As I was saying in an earlier post today, prognostication is tough. My "neighbor" and one of my favorite writers, Alan Abelson, has been sounding the cry of the imminent bear market for years and, well, we may be really, really close but we're otherwise still waiting.

But as to what may be the first act, Abelson has this to say:

What better proof is there that the mounting credit crisis and its vast potential to do damage to the economy and your average Joe and Jane's well-being is a clear and present danger than that even the White House has been forced to evince alarm and pledge to provide aid and comfort to impecunious homeowners. So much for the president's stout resolve, voiced on more than one occasion over the past six years, not to change his mind because it would "mean arguing" with himself.

Flip, flop, flip, flop, flip, flop, flip, flop, flip, flop, flip, flop, flip, flop....

Making the about-face all the more abrupt is that Mr. Bush a scant few weeks earlier fingered as the culprit for the subprime disaster and the tsunami of delinquencies and foreclosures it has touched off the failure of folks to read the fine print in their mortgage agreements, leaving the distinct impression that the solution for the dispossessed is to consult the nearest ophthalmologist.

And yes, it's unfair that Our Beloved Leader thinks every imbecile is blessed with an Ivy League education like his own. And check out the photo at the bottom of this post; Our Beloved Leader certainly can't bother to read for himself. It's part of Dick's job, that and telling Our Leader what he thinks. No reading, no thinking... it's OK for the President of the United States, not for relatively unsophisticated people who want to own homes....

On Friday, however, in a change of script that was as surprising for its timing as for its substance, he allowed as how the Devil (his nickname for Uncle Sam) might be enlisted to ease the pain of the delinquent and foreclosed masses. And the crowd, at least on Wall Street, went bananas.

Which, just conceivably, may have been the real point of the exercise.

***

A hedge-fund manager quoted by Barry [Ritholtz, the canny market watcher and proprietor of the eponymous Ritholtz Capital Partners] sums it up rather persuasively: "I don't see anything in Bush's plan that will change the insolvency of the home buyer. The 'system' is illiquid (and that 'problem' was addressed by the central banks two weeks ago), but the 'borrowers' are insolvent. Nothing I've seen yet changes that fact. Nothing. Besides, has this administration, which doesn't believe in government programs, ever done anything well bureaucratically?"

Softening the tax bite on mortgage write downs and allowing homeowners who are delinquent by more than three months and who have a decent credit history to switch into a Federal Housing Administration loan carrying a lower interest rate will effect modest fixes, but are no big deal. Certainly, given the wretched condition of housing, the inexorable decline in home prices and the prospect of a huge resetting upwards of adjustable-rate mortgages over the next 12 months, with a big spike in March '08, we're talking Band-Aids rather than serious relief.

(Link for photo.)

Just in Case One Needs Yet Another Example of Big Media Mendacity....

Look here.

Another History Lesson

Unlike Our Beloved Leader, as an economist, Atrios actually, like, knows stuff.

Three and a half years ago, he posted this:

Has He Gone Insane?

Has the entire country gone insane?

Now I'm starting to get a little scared. More than a little scared, actually. First we have this little tidbit about Alan Greenspan recommending that consumers replace their fixed rate mortages with variable rate ones.

Then I look around and discover that quite a few people have been getting variable rate mortgages.

This is really scary. A lot of people have been concerned about a bursting housing bubble happening once interest rates start to rise. Even if that happens it wouldn't necessarily be such a big deal. But, if a large chunk of our population got suckered into getting variable rate mortgages so they could go from buying a house the couldn't afford to buying a house they REALLY REALLY couldn't afford, the impact of an interest rate rise could be, uh, bad.

Here's the deal. Interest rates go up. Your housing price falls. Your mortgage payment goes up substantially. You can no longer afford to make your mortgage payment. And, since the market value of your house is now less than the value of your outstanding loan, you can't just sell and trade down. Default. Foreclosure. Cardboard box.

As long as most consumers have fixed rate loans, the consequences of increased interest rates and a sudden housing price downturn wouldn't necessarily be so great. But, if people are drinking Greenspan's kool-aid...

But Big Media, water-carrying for Our Leaders, assures us the crisis' end is, like, iminent....

History Lesson for Today

Prognostration is tough, at least for me. God knows how bad my average is.

But here's Cheney; five years later, nothing has proven him right in 2002:

The case of Saddam Hussein, a sworn enemy of our country, requires a candid appraisal of the facts. After his defeat in the Gulf War in 1991, Saddam agreed under to U.N. Security Council Resolution 687 to cease all development of weapons of mass destruction. He agreed to end his nuclear weapons program. He agreed to destroy his chemical and his biological weapons. He further agreed to admit U.N. inspection teams into his country to ensure that he was in fact complying with these terms.

In the past decade, Saddam has systematically broken each of these agreements. The Iraqi regime has in fact been very busy enhancing its capabilities in the field of chemical and biological agents. And they continue to pursue the nuclear program they began so many years ago. These are not weapons for the purpose of defending Iraq; these are offensive weapons for the purpose of inflicting death on a massive scale, developed so that Saddam can hold the threat over the head of anyone he chooses, in his own region or beyond.

On the nuclear question, many of you will recall that Saddam's nuclear ambitions suffered a severe setback in 1981 when the Israelis bombed the Osirak reactor. They suffered another major blow in Desert Storm and its aftermath.

But we now know that Saddam has resumed his efforts to acquire nuclear weapons. Among other sources, we've gotten this from the firsthand testimony of defectors -- including Saddam's own son-in-law, who was subsequently murdered at Saddam's direction. Many of us are convinced that Saddam will acquire nuclear weapons fairly soon.

Just how soon, we cannot really gauge. Intelligence is an uncertain business, even in the best of circumstances. This is especially the case when you are dealing with a totalitarian regime that has made a science out of deceiving the international community. Let me give you just one example of what I mean. Prior to the Gulf War, America's top intelligence analysts would come to my office in the Defense Department and tell me that Saddam Hussein was at least five or perhaps even 10 years away from having a nuclear weapon. After the war we learned that he had been much closer than that, perhaps within a year of acquiring such a weapon.

Saddam also devised an elaborate program to conceal his active efforts to build chemical and biological weapons. And one must keep in mind the history of U.N. inspection teams in Iraq. Even as they were conducting the most intrusive system of arms control in history, the inspectors missed a great deal. Before being barred from the country, the inspectors found and destroyed thousands of chemical weapons, and hundreds of tons of mustard gas and other nerve agents.

Yet Saddam Hussein had sought to frustrate and deceive them at every turn, and was often successful in doing so. I'll cite one instance. During the spring of 1995, the inspectors were actually on the verge of declaring that Saddam's programs to develop chemical weapons and longer-range ballistic missiles had been fully accounted for and shut down. Then Saddam's son-in-law suddenly defected and began sharing information. Within days the inspectors were led to an Iraqi chicken farm. Hidden there were boxes of documents and lots of evidence regarding Iraq's most secret weapons programs. That should serve as a reminder to all that we often learned more as the result of defections than we learned from the inspection regime itself.

To the dismay of the inspectors, they in time discovered that Saddam had kept them largely in the dark about the extent of his program to mass produce VX, one of the deadliest chemicals known to man. And far from having shut down Iraq's prohibited missile programs, the inspectors found that Saddam had continued to test such missiles, almost literally under the noses of the U.N. inspectors.

Against that background, a person would be right to question any suggestion that we should just get inspectors back into Iraq, and then our worries will be over. Saddam has perfected the game of cheat and retreat, and is very skilled in the art of denial and deception. A return of inspectors would provide no assurance whatsoever of his compliance with U.N. resolutions. On the contrary, there is a great danger that it would provide false comfort that Saddam was somehow "back in his box."

Meanwhile, he would continue to plot. Nothing in the last dozen years has stopped him -- not his agreements; not the discoveries of the inspectors; not the revelations by defectors; not criticism or ostracism by the international community; and not four days of bombings by the U.S. in 1998. What he wants is time and more time to husband his resources, to invest in his ongoing chemical and biological weapons programs, and to gain possession of nuclear arms.

Should all his ambitions be realized, the implications would be enormous for the Middle East, for the United States, and for the peace of the world. The whole range of weapons of mass destruction then would rest in the hands of a dictator who has already shown his willingness to use such weapons, and has done so, both in his war with Iran and against his own people. Armed with an arsenal of these weapons of terror, and seated atop ten percent of the world's oil reserves, Saddam Hussein could then be expected to seek domination of the entire Middle East, take control of a great portion of the world's energy supplies, directly threaten America's friends throughout the region, and subject the United States or any other nation to nuclear blackmail.

Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destruction. There is no doubt he is amassing them to use against our friends, against our allies, and against us. And there is no doubt that his aggressive regional ambitions will lead him into future confrontations with his neighbors -- confrontations that will involve both the weapons he has today, and the ones he will continue to develop with his oil wealth.

Ladies and gentlemen, there is no basis in Saddam Hussein's conduct or history to discount any of the concerns that I am raising this morning. We are, after all, dealing with the same dictator who shoots at American and British pilots in the no-fly zone, on a regular basis, the same dictator who dispatched a team of assassins to murder former President Bush as he traveled abroad, the same dictator who invaded Iran and Kuwait, and has fired ballistic missiles at Iran, Saudi Arabia, and Israel, the same dictator who has been on the State Department's list of state sponsors of terrorism for the better part of two decades.

In the face of such a threat, we must proceed with care, deliberation, and consultation with our allies. I know our president very well. I've worked beside him as he directed our response to the events of 9/11. I know that he will proceed cautiously and deliberately to consider all possible options to deal with the threat that an Iraq ruled by Saddam Hussein represents. And I am confident that he will, as he has said he would, consult widely with the Congress and with our friends and allies before deciding upon a course of action. He welcomes the debate that has now been joined here at home, and he has made it clear to his national security team that he wants us to participate fully in the hearings that will be held in Congress next month on this vitally important issue.

***

As former Secretary of State Kissinger recently stated: "The imminence of proliferation of weapons of mass destruction, the huge dangers it involves, the rejection of a viable inspection system, and the demonstrated hostility of Saddam Hussein combine to produce an imperative for preemptive action." If the United States could have preempted 9/11, we would have, no question. Should we be able to prevent another, much more devastating attack, we will, no question. This nation will not live at the mercy of terrorists or terror regimes. (Applause.)

I am familiar with the arguments against taking action in the case of Saddam Hussein. Some concede that Saddam is evil, power-hungry, and a menace -- but that, until he crosses the threshold of actually possessing nuclear weapons, we should rule out any preemptive action. That logic seems to me to be deeply flawed. The argument comes down to this: yes, Saddam is as dangerous as we say he is, we just need to let him get stronger before we do anything about it.

Yet if we did wait until that moment, Saddam would simply be emboldened, and it would become even harder for us to gather friends and allies to oppose him. As one of those who worked to assemble the Gulf War coalition, I can tell you that our job then would have been infinitely more difficult in the face of a nuclear-armed Saddam Hussein. And many of those who now argue that we should act only if he gets a nuclear weapon, would then turn around and say that we cannot act because he has a nuclear weapon. At bottom, that argument counsels a course of inaction that itself could have devastating consequences for many countries, including our own.

Another argument holds that opposing Saddam Hussein would cause even greater troubles in that part of the world, and interfere with the larger war against terror. I believe the opposite is true. Regime change in Iraq would bring about a number of benefits to the region. When the gravest of threats are eliminated, the freedom-loving peoples of the region will have a chance to promote the values that can bring lasting peace. As for the reaction of the Arab "street," the Middle East expert Professor Fouad Ajami predicts that after liberation, the streets in Basra and Baghdad are "sure to erupt in joy in the same way the throngs in Kabul greeted the Americans." Extremists in the region would have to rethink their strategy of Jihad. Moderates throughout the region would take heart. And our ability to advance the Israeli-Palestinian peace process would be enhanced, just as it was following the liberation of Kuwait in 1991.

The reality is that these times bring not only dangers but also opportunities. In the Middle East, where so many have known only poverty and oppression, terror and tyranny, we look to the day when people can live in freedom and dignity and the young can grow up free of the conditions that breed despair, hatred, and violence.

How Our Leaders are Assuring Victory in Iraq

You have to read it for yourself....

Rudy Maintains his Track Record of Surrounding Himself with Scum

An organizer for a Rudy Giuliani presidential event plans to step down amid revelations of his arrests for allegedly extorting an FSU student in a sex case and his conviction for dealing in stolen state computers.

Barry S. Edwards, 45, told The Miami Herald that the charges against him were ''old news'' --- and were 'unfounded' in the student sex case -- but he nevertheless thought it would be best to withdraw from the Pinellas County Republican Party fundraiser because ``I'm not relevant and I shouldn't be the story.''

***

The two criminal incidents involving Edwards were unrelated, and occurred within months of each other in 1998.

According to a Florida State University arrest affidavit: Edwards was first charged after a 19-year-old FSU political science intern claimed Edwards, then an adjunct professor, plied him with beers, trolled briefly for prostitutes, watched ''heterosexual'' pornography and then exhorted him to masturbate in a game.

The intern said Edwards threatened him with bad grades if he didn't ''get into it.'' He declined to press charges. Edwards said the claims were ''lies'' but he didn't ''want to revisit it.'' Edwards was fired from FSU.

Shortly after his extortion arrest, state Capitol police then arrested Edwards on charges of theft, burglary and dealing with stolen property after the cops said he stole at least $10,000 worth of computer equipment from offices of the Florida Legislature.

In November 1998, the state dropped the extortion charges, saying the victim had requested that charges be dropped. In 1999, Edwards pleaded no contest to the dealing in stolen property and theft charges and was sentenced to 100 days in jail and three years probation. A judge withheld adjudication, meaning Edwards is not a convicted felon.

Link.

Would Coming Clean Have Helped Craig?

Steve Benen at Talking Points Memo wonders.

Well, here's the answer: Not significantly more than what ended up happening. It's tough to be a GOP closet case.... It's lose-lose, just a question of how....

Our Leaders Leading Iraq; SNAFU

With the "surge" policy in place, this was supposed to be a summer of political reconciliation. Instead, a variety of Iraqi politicians have spent their August recess plotting a "parliamentary coup" that would "oust Prime Minister Nouri al-Maliki, declare a state of emergency and install a new government."

At the forefront of these efforts is former Prime Minister Ayad Allawi, a secular Shiite who was Washington's first choice to lead Iraq after the U.S. occupation authority ended. He now is being presented by his followers as the best hope of saving Iraq from what they say is certain catastrophe.

But Allawi's is by no means the only name in circulation. Another former prime minister, two current vice presidents, a former planning minister, an Iraqi general from the old regime and an independent Sunni parliamentarian are among those being mentioned as potential alternatives.

"Everyone is desperate to be prime minister," said Saleh al-Mutlaq, a Sunni politician who has thrown his support behind Allawi but who has also been mentioned as a potential candidate. "Iraq is producing prime ministers."

U.S. officials are not innocent bystanders in this process.

"There's been a definite change in tone from Washington, and the momentum and drive to support Allawi will increase," said Jaafar al-Taie, a political analyst involved in the new coalition's campaign. "It's not only that Maliki must go, but that the whole system must go."

According to Allawi's published program, the parliamentarians would not only appoint a new government but also suspend the new constitution, declare a state of emergency and make the restoration of security its priority. [...]

"Even when Bush tried to modify what he said, he did not go so far," said Izzat Shabandar, a strategist with the Allawi bloc. "We know that Bush from inside would like to replace Maliki, but he did not say it clearly. He chose to say it in a diplomatic way."

As Digby put it, "It's a public coup --- Americans and Iraqis alike are all reading about it and talking about it like it's a TV show and we're all waiting to see the finale."

Link.

Rhetorical question: The Christofascist supporters of Our Leaders are cool with all the gratuitous death we brought to Iraq because it's non-Christian Muslims dying, right?

Our Beloved Leader, Lover of the People, Loved by the People

Link.

Staraight Talk, Straight Action

McCain was still married and living with his wife in 1979 while, according to The New York Times' Nicholas Kristof, "aggressively courting a 25-year-old woman who was as beautiful as she was rich." McCain divorced his wife, who had raised their three children while he was imprisoned in Vietnam, then launched his political career with his new wife's family money.

Link.

Glen Greenwald gives the religious context:

How can John McCain claim to believe that the law should recognize only "traditional marriages" while simultaneously demanding that the law recognize his own so-called "second marriage" -- also known as "an adulterous relationship" under the precepts of "traditional marriage" (Mark 10:11 -- "And he said to them, "Whoever divorces his wife and marries another, commits adultery against her").

As I noted in a recent comment, while dishonesty and a detachment from truth is a common trait of just about all politicians, the radical rightist America-haters of the GOP have taken that to a historical extreme. This just goes to show that these guys can't even be straight about, well, straight marriages. (See the first link for more about that.)

Our Beloved Leader's Imbecilic, Insulting Quote of the Day

It’s not the government’s job to bail out speculators, or those who made the decision to buy a home they knew they could never afford.

Who are these speculators? The predators that sell unsophisticated people a false of bills, as it were, failing to explaining that no matter how stable interest rates appear, their ARMs are still going to go up?

And does this piece of garbage really think the people desperate enough to borrow from sub-prime hawks really bought homes knowing they that couldn't afford them, that they were going to end up homeless?

Being the son of his... shrewish, zero-class nutjob mother and being none too bright himself can't quite be the complete explanation....

Condi's Legacy

The Times shouldn't be so concerned (unless there was a lot of space to fill in the Labor Day weekend Saturday paper).

She has two legacies:

First, being at the forefront of an admistration with approximately no foreign policy accomplishments of a, you know, positive nature, as well as maybe one of the great failures of American history; and
Second: She's done a great job staying in the closet.

But not to worry. The money men will take good care of her as they did before she went into the public sector.

A Schadenfreude Episode

As Mr. Square Peg, I must confess that I can only hope that this guy should only be made a punk while in prison -- you know, made someone's bitch -- if not flat out killed.

He's the poster boy for an under-30, child of the Reagan revolution and, maybe moreso, the Bush counter-revolution, drunk on his own testosterone and all around self-perceived wonderfulness.

Hears that his daughter was allegedly molested by the local middle aged geeky, weird failure so before he can bother to have anything confirmed, he has to show what hot stuff he is and beat the old guy to death.

So now the not-victim is going to spend her formative years without a father (and the odds of his dying in prison are not insignificant) and her suddenly single mom, with one less family income, is facing a suit by the real victim's family.

Lies the Wingnuts Run On

Them wingnuts love hyperventilating about the "death tax". Of course, anything that keeps money out of the public sector because, you know, the economy and the world is a better place if the wealthy elite can buy a Continental GT instead of paying taxes that may go into building a bridge that won't colllapse.

So, the the death tax.

A complete and absolute lie; in fact, it's eminently fair and sensible. If it was what the wingnuts claim, Paris Hilton would have a real job and maybe even be an honest woman instead of a drunken threat on the roads.

The truth:

Myth 1: Repealing the estate tax wouldn’t significantly worsen the deficit because the tax doesn’t raise much revenue.



Reality: Repealing the estate tax would add trillions of dollars to future deficits.
Permanent repeal of the estate tax would cost more than $1 trillion over the first ten years in which its cost would be fully felt, 2012-2021. This cost includes $859 billion in lost revenue and $247 billion in increased interest payments on the national debt. (The official ten-year cost estimate is much lower: $499 billion. But that estimate is misleading because it covers an earlier ten-year period, 2008-2017, that captures the full cost of only six years of extending repeal.) (http://www.cbpp.org/6-5-06tax.htm)

Given the current fiscal situation — and, more importantly, the looming budgetary challenges posed by the baby boomers’ retirement — it would be extremely unwise for the federal government to forgo such large revenues.


Myth 2: The estate tax forces estates to turn over half of their assets to the government.



Reality: The few estates that pay any estate tax at all generally pay less than 20 percent of the value of their estate in taxes.
Today, more than 99 percent of estates pay no estate tax at all. Among the few estates that do owe taxes, the "effective" tax rate — that is, the percentage of the estate that is paid in taxes — averaged about 20 percent in 2005 (the latest year for which IRS data are available), far below the top estate tax rate of 48 percent that these estates faced.

Why is the effective tax rate so much lower than the top tax rate? Estate taxes are due only on the portion of an estate’s value that exceeds the exemption level, not on the entire estate. For example, at today’s $2.0 million exemption level, a $2.5 million estate would owe estate taxes on $500,000 at most. In addition, a large portion of the estate’s remaining value can be shielded from taxation through available deductions (for charitable bequests and state estate taxes paid, for instance). (http://www.cbpp.org/6-14-06tax.htm)

It’s also worth noting that the effective estate tax rate will fall below 20 percent over the next few years, as the exemption level rises and the top estate tax rate declines.


Myth 3: Many small, family-owned farms and businesses must be liquidated to pay estate taxes.



Reality: The number of small, family-owned farms and businesses that owe any estate tax is small — and shrinking rapidly.
Despite oft-repeated claims that the estate tax has dire consequences for family farms and small businesses, there is in fact very little evidence that it has an outsize impact on these groups. Indeed, the American Farm Bureau Federation acknowledged to the New York Times that it could not cite a single example of a farm having to be sold to pay estate taxes.

Most recently, an analysis by the Congressional Budget Office confirms that exceedingly few family farms and small businesses face the estate tax (http://www.cbpp.org/7-11-05tax.htm and http://www.cbo.gov/ftpdocs/65xx/doc6512/07-06-EstateTax.pdf). The CBO report found that if the current exemption level of $2.0 million had been in place in 2000, only 123 farm estates and only 135 family-owned businesses nationwide would have owed any estate tax. The number of taxable farm estates drops to 65 nationwide at a $3.5 million exemption level, the level that takes effect in 2009. The number of taxable family-owned business estates falls to just 94 under the $3.5 million exemption.

The CBO report also found that of the few farm and family business estates that would owe any estate tax, the vast majority would have sufficient liquid assets (such as bank accounts, stocks, bonds, and insurance) in the estate to pay the tax without having to touch the farm or business. For instance, of the 65 farm estates that would have owed tax under a $3.5 million exemption, just 13 would have faced liquidity constraints.


Myth 4: The estate tax is best characterized as the "death tax."



Reality: The estate tax would more appropriately be called an "inheritance tax," as it ultimately affects only the heirs of large estates.
Today, the estates of only 1 out of every 200 people who die owe any estate tax whatsoever, because the first $2.0 million of the value of any estate ($4.0 million for a couple) is totally exempt from the tax. (http://www.cbpp.org/5-31-06tax2.htm)

Further, the exemption level is scheduled to rise to $3.5 million ($7 million for a couple) in 2009 under current law. At this level, only 3 of every 1,000 people who die will have an estate large enough to owe any tax.

That is why repealing the estate tax, which some people describe as "killing the death tax," has been described more aptly by others as the "Paris Hilton tax cut" after Paris Hilton, the heir to the Hilton hotel fortune.


Myth 5: The estate tax unfairly punishes success.



Reality: The estate tax affects only those most able to pay, and the funds it raises are used to support a range of programs that benefit the nation.
The estate tax is the most progressive component of a tax code that overall is only modestly progressive (particularly when regressive state and local taxes are taken into account). The money it raises funds essential programs, from health care to education to defending the nation. If the estate tax were repealed, then other taxpayers — presumably those that are more numerous and less well-off than those paying the estate tax — would have to foot the bill for these programs, face cuts in the benefits and services provided, or bear the burden of a higher national debt.

Like other Americans, the very wealthy benefit from public investments in areas such as defense, education, health care, scientific research, environmental protection, and infrastructure, and they rely even more than others on the government’s protection of individual property rights (since they have so much more to protect). Bill Gates, Sr., a prominent advocate of the estate tax, explains, “The reason the estate tax makes so much sense is that there is a direct relationship between the net worth people have when they pass on and where they live. The government that protects their business activities, the traditions that enable them to rely on certain things happening, that’s what creates capital and enables net worth to increase.” (http://www.cbpp.org/6-1-06tax-transcript.pdf)


Myth 6: Eliminating the estate tax would encourage people to save and thereby make more capital available for investment.



Reality: Eliminating the estate tax wouldn’t dramatically affect private saving, and it would greatly increase government dissaving (i.e., deficits).
A recent Congressional Research Service report found that the estate tax’s net impact on private saving is unclear — it causes some people to save more and others to save less — and that its overall impact on national saving is likely negative. "[I]f the only objective [of eliminating the estate tax] were increased savings," the report concluded, "it would probably be more effective to simply keep the estate and gift tax and use the proceeds to reduce the national debt."

The reason is simple: while repealing the estate tax might lead some people to save more, it also would lead the government to borrow more to offset the lost revenue. Government borrowing "soaks up" capital that would otherwise be available for investment in the economy. In the case of estate-tax repeal, the added government borrowing would more than outweigh any added private saving, leaving the economy no better off, and quite possibly worse off. (http://www.cbpp.org/6-8-06tax.htm)


Myth 7: The estate tax constitutes "double taxation" because it applies to assets that already have been taxed once as income.



Reality: Large estates are comprised mostly of "unrealized" capital gains that have never been taxed; the estate tax is the only means of taxing this income.
Income taxes on the appreciation of assets, such as real estate or artwork, are only paid when the asset is sold. Therefore, the increase in the value of an asset is never subject to income tax if the asset is held until a person dies. These "unrealized" capital gains can make up a significant share of an estate’s total value (http://www.cbpp.org/6-17-05tax.htm), especially among large estates — the ones likely to owe estate tax.

One reason the estate tax was created was to serve as a backstop to the income tax, taxing income that was never taxed under the income tax. That is, the taxation of this income is essentially deferred and ultimately taxed for the first time through the estate tax.


Myth 8: If the estate tax is reformed and retained, the logical top tax rate would be 15 percent, the same as the capital gains rate.



Reality: To match the effective tax rate on capital gains, the top estate tax rate would have to be 35-40 percent, not 15 percent.
Since the estate tax serves in part to tax capital gains that have not been taxed, some people have proposed taxing estates at the capital gains rate of 15 percent. But the capital gains rate is typically applied to all capital gains income, whereas the estate tax is applied only to part of the estate (see Myth 2 above).

As a result, a 15 percent top estate tax rate would result in an effective tax rate on taxable estates of only 5 or 6 percent — about one-third of the capital gains rate. A top estate tax rate of 35-40 percent would be needed to generate an effective rate of 15 percent.

Moreover, from the standpoint of the effect on the deficit and the national debt, cutting the top estate tax rate to 15 percent rate would differ little from repealing the tax entirely. Joint Committee on Taxation estimates indicate that with a 15 percent top rate and an exemption level of $3.5 million, the tax would lose 78 percent of the revenue that would be lost under repeal. With a 15 percent rate and a $5 million exemption, the loss would grow to 84 percent. (http://www.cbpp.org/5-31-06tax.htm)


Myth 9: The cost of complying with the estate tax is nearly equal to the total amount of revenue the tax raises.



Reality: The cost of estate tax compliance is modest, and is not much different than the cost of complying with other taxes.
Studies find that all of the various public and private costs associated with estate tax compliance (http://www.cbpp.org/6-14-05tax.htm) — including the IRS’s costs of administering the tax and the cost taxpayers bear in terms of estate planning and administering an estate when a person dies — are about 7 percent of estate tax revenues. These costs are consistent with the compliance costs for other taxes. For instance, administrative and compliance costs represent about 14.5 percent of revenue for the individual and corporate income taxes, 3-5 percent for value added taxes, and 2-5 percent for the sales tax.

Furthermore, the estate tax compliance burden will disappear for a growing number of families each year under current law, as the exemption level rises and fewer estates are subject to the estate tax.

Part of the confusion around the cost of estate tax compliance is that some estimates incorrectly include the cost of activities that would be necessary even in the absence of an estate tax — hiring estate executors and trustees, drafting provisions and documents for the disposition of property, and allocating bequests among family, for example. These activities account for about half of all costs sometimes associated with estate planning.

Link

with links..

Not News, Just Well Told: What Our Leaders are Really About

All their social talk is for the core religious voters. But look at the record: all the stuff that excites the wingnuts' electoral supporters never really seems to get done. It's not a priority. Indeed, if it any of it got accomplished, there's be far fewer promises for the wingnut "masses". (Whether there actually are masses....)

But I digress, as is my wont....

The primary goal of Our Leaders and there true, essential supporters -- those with and who control Big Money -- is simply to rip off the public transfer: the transfer of public funds -- our money -- to the nation's wealthiest 1%, more or less.

And one such project is Iraq. (And here's why Iraq differs from Vietnam. The latter was fought by our military, the former by private companies and, pardon the expression, way too many "weekend warriors" i.e. insufficiently trained. And, if Vietnam was fought like Iraq, Our Beloved Leader would have served in the combat zone.)

But again, I digress.

Point is, the king of snark, the rightously pissied Matt Taibi spells out the crap Our Leaders are pulling in Iraq on the supporter payback front:

How is it done? How do you screw the taxpayer for millions, get away with it and then ride off into the sunset with one middle finger extended, the other wrapped around a chilled martini? Ask Earnest O. Robbins -- he knows all about being a successful contractor in Iraq.

You start off as a well-connected bureaucrat: in this case, as an Air Force civil engineer, a post from which Robbins was responsible for overseeing 70,000 servicemen and contractors, with an annual budget of $8 billion. You serve with distinction for thirty-four years, becoming such a military all-star that the Air Force frequently sends you to the Hill to testify before Congress -- until one day in the summer of 2003, when you retire to take a job as an executive for Parsons, a private construction company looking to do work in Iraq.

Now you can finally move out of your dull government housing on Bolling Air Force Base and get your wife that dream home you've been promising her all these years. The place on Park Street in Dunn Loring, Virginia, looks pretty good -- four bedrooms, fireplace, garage, 2,900 square feet, a nice starter home in a high-end neighborhood full of spooks, think-tankers and ex-apparatchiks moved on to the nest-egg phase of their faceless careers. On October 20th, 2003, you close the deal for $775,000 and start living that private-sector good life.

A few months later, in March 2004, your company magically wins a contract from the Coalition Provisional Authority in Iraq to design and build the Baghdad Police College, a facility that's supposed to house and train at least 4,000 police recruits. But two years and $72 million later, you deliver not a functioning police academy but one of the great engineering clusterfucks of all time, a practically useless pile of rubble so badly constructed that its walls and ceilings are literally caked in shit and piss, a result of subpar plumbing in the upper floors.

You've done such a terrible job, in fact, that when auditors from the Special Inspector General for Iraq Reconstruction visit the college in the summer of 2006, their report sounds like something out of one of the Saw movies: "We witnessed a light fixture so full of diluted urine and feces that it would not operate," they write, adding that "the urine was so pervasive that it had permanently stained the ceiling tiles" and that "during our visit, a substance dripped from the ceiling onto an assessment team member's shirt." The final report helpfully includes a photo of a sloppy brown splotch on the outstretched arm of the unlucky auditor.

When Congress gets wind of the fias co, a few members on the House Oversight Committee demand a hearing. To placate them, your company decides to send you to the Hill -- after all, you're a former Air Force major general who used to oversee this kind of contracting operation for the government. So you take your twenty-minute ride in from the suburbs, sit down before the learned gentlemen of the committee and promptly get asked by an irritatingly eager Maryland congressman named Chris Van Hollen how you managed to spend $72 million on a pile of shit.

You blink. Fuck if you know. "I have some conjecture, but that's all it would be" is your deadpan answer.

The room twitters in amazement. It's hard not to applaud the balls of a man who walks into Congress short $72 million in taxpayer money and offers to guess where it all might have gone.

Next thing you know, the congressman is asking you about your company's compensation. Touchy subject -- you've got a "cost-plus" contract, which means you're guaranteed a base-line profit of three percent of your total costs on the deal. The more you spend, the more you make -- and you certainly spent a hell of a lot. But before this milk-faced congressman can even think about suggesting that you give these millions back, you've got to cut him off. "So you won't voluntarily look at this," Van Hollen is mumbling, "and say, given what has happened in this project . . . "

"No, sir, I will not," you snap.

". . . 'We will return the profits.' . . ."

"No, sir, I will not," you repeat.

Your testimony over, you wait out the rest of the hearing, go home, take a bath in one of your four bathrooms, jump into bed with the little woman. . . . A year later, Iraq is still in flames, and your president's administration is safely focused on reclaiming $485 million in aid money from a bunch of toothless black survivors of Hurricane Katrina. But the house you bought for $775K is now assessed at $929,974, and you're sure as hell not giving it back to anyone.

"Yeah, I don't know what I expected him to say," Van Hollen says now about the way Robbins responded to being asked to give the money back. "It just shows the contempt they have for us, for the taxpayer, for everything."

Operation Iraqi Freedom, it turns out, was never a war against Saddam Hussein's Iraq. It was an invasion of the federal budget, and no occupying force in history has ever been this efficient. George W. Bush's war in the Mesopotamian desert was an experiment of sorts, a crude first take at his vision of a fully privatized American government. In Iraq the lines between essential government services and for-profit enterprises have been blurred to the point of absurdity -- to the point where wounded soldiers have to pay retail prices for fresh underwear, where modern-day chattel are imported from the Third World at slave wages to peel the potatoes we once assigned to grunts in KP, where private companies are guaranteed huge profits no matter how badly they fuck things up.

And just maybe, reviewing this appalling history of invoicing orgies and million-dollar boondoggles, it's not so far-fetched to think that this is the way someone up there would like things run all over -- not just in Iraq but in Iowa, too, with the state police working for Corrections Corporation of America, and DHL with the contract to deliver every Christmas card. And why not? What the Bush administration has created in Iraq is a sort of paradise of perverted capitalism, where revenues are forcibly extracted from the customer by the state, and obscene profits are handed out not by the market but by an unaccountable government bureauc racy. This is the triumphant culmination of two centuries of flawed white-people thinking, a preposterous mix of authoritarian socialism and laissez-faire profit eering, with all the worst aspects of both ideologies rolled up into one pointless, supremely idiotic military adventure -- American men and women dying by the thousands, so that Karl Marx and Adam Smith can blow each other in a Middle Eastern glory hole.

It was an awful idea, perhaps the worst America has ever tried on foreign soil. But if you were in on it, it was great work while it lasted. Since time immemorial, the distribution of government largesse had followed a staid, paper-laden procedure in which the federal government would post the details of a contract in periodicals like Commerce Business Daily or, more recently, on the FedBizOpps Web site. Competitive bids were solicited and contracts were awarded in accordance with the labyrinthine print of the U.S. Code, a straightforward system that worked well enough before the Bush years that, as one lawyer puts it, you could "count the number of cases of criminal fraud on the fingers of one hand."

There were exceptions to the rule, of course -- emergencies that required immediate awards, contracts where there was only one available source of materials or labor, classified deals that involved national security. What no one knew at the beginning of the war was that the Bush administration had essentially decided to treat the entire Iraqi theater as an exception to the rules. All you had to do was get to Iraq and the game was on.

But getting there wasn't easy. To travel to Iraq, would-be contractors needed permission from the Bush administration, which was far from blind in its appraisal of applicants. In a much-ballyhooed example of favoritism, the White House originally installed a clown named Jim O'Beirne at the relevant evaluation desk in the Department of Defense. O'Beirne proved to be a classic Bush villain, a moron's moron who judged applicants not on their Arabic skills or their relevant expertise but on their Republican bona fides; he sent a twenty-four-year-old who had never worked in finance to manage the reopening of the Iraqi stock exchange, and appointed a recent graduate of an evangelical university for home-schooled kids who had no accounting experience to manage Iraq's $13 billion budget. James K. Haveman, who had served as Michigan's community-health director under a GOP governor, was put in charge of rehabilitating Iraq's health-care system and decided that what this war-ravaged, malnourished, sanitation-deficient country most urgently needed was . . . an anti-smoking campaign.

Town-selectmen types like Haveman weren't the only people who got passes to enter Iraq in the first few years. The administration also greenlighted brash, modern-day forty-niners like Scott Custer and Mike Battles, a pair of ex-Army officers and bottom-rank Republican pols (Battles had run for Congress in Rhode Island and had been a Fox News commentator) who had decided to form a security company called Custer Battles and make it big in Iraq. "Battles knew some people from his congres sional run, and that's how they got there," says Alan Grayson, an attorney who led a whistle-blower lawsuit against the pair for defrauding the government.

Before coming to Iraq, Custer Battles hadn't done even a million dollars in business. The company's own Web site brags that Battles had to borrow cab fare from Jordan to Iraq and arrived in Baghdad with less than $500 in his pocket. But he had good timing, arriving just as a security contract for Baghdad International Airport was being "put up" for bid. The company site raves that Custer spent "three sleepless nights" penning an offer that impressed the CPA enough to hand the partners $2 million in cash, which Battles promptly stuffed into a duffel bag and drove to deposit in a Lebanese bank.

Custer Battles had lucked into a sort of Willy Wonka's paradise for contractors, where a small pool of Republican-friendly businessmen would basically hang around the Green Zone waiting for a contracting agency to come up with a work order. In the early days of the war, the idea of "competition" was a farce, with deals handed out so quickly that there was no possibility of making rational or fairly priced estimates. According to those familiar with the process, contracting agencies would request phony "bids" from several contractors, even though the winner had been picked in advance. "The losers would play ball because they knew that eventually it would be their turn to be the winner," says Grayson.

To make such deals legal, someone in the military would simply sign a piece of paper invoking an exception. "I know one guy whose business was buying weapons on the black market for contractors," says Pratap Chatterjee, a writer who has spent months in the Mideast researching a forthcoming book on Iraq contracts. "It's illegal -- but he got military people to sign papers allowing him to do it."

The system not only had the advantage of eliminating red tape in a war zone, it also encouraged the "entrepreneurship" of patriots like Custer and Battles, who went from bumming cab fare to doing $100 million in government contracts practically overnight. And what business they did! The bid that Custer claimed to have spent "three sleepless nights" putting together was later described by Col. Richard Ballard, then the inspector general of the Army, as looking "like something that you and I would write over a bottle of vodka, complete with all the spelling and syntax errors and annexes to be filled in later." The two simply "presented it the next day and then got awarded about a $15 million contract."

The deal charged Custer Battles with the responsibility to perform airport security for civilian flights. But there were never any civilian flights into Baghdad's airport during the life of their contract, so the CPA gave them a job managing an airport checkpoint, which they failed miserably. They were also given scads of money to buy expensive X-ray equipment and set up an advanced canine bomb-sniffing system, but they never bought the equipment. As for the dog, Ballard reported, "I eventually saw one dog. The dog did not appear to be a certified, trained dog." When the dog was brought to the checkpoint, he added, it would lie down and "refuse to sniff the vehicles" -- as outstanding a metaphor for U.S. contractor performance in Iraq as has yet been produced.

Like most contractors, Custer Battles was on a cost-plus arrangement, which means its profits were guaranteed to rise with its spending. But according to testimony by officials and former employees, the partners also charged the government millions by making out phony invoices to shell companies they controlled. In another stroke of genius, they found a bunch of abandoned Iraqi Airways forklifts on airport property, repainted them to disguise the company markings and billed them to U.S. tax payers as new equipment. Every time they scratched their asses, they earned; there was so much money around for contractors, officials literally used $100,000 wads of cash as toys. "Yes -- $100 bills in plastic wrap," Frank Willis, a former CPA official, acknowledged in Senate testimony about Custer Battles. "We played football with the plastic-wrapped bricks for a little while."

The Custer Battles show only ended when the pair left a spreadsheet behind after a meeting with CPA officials -- a spreadsheet that scrupulously detailed the pair's phony invoicing. "It was the worst case of fraud I've ever seen, hands down," says Grayson. "But it's also got to be the first instance in history of a defendant leaving behind a spreadsheet full of evidence of the crime."

But even being the clumsiest war profit eers of all time was not enough to bring swift justice upon the heads of Mr. Custer and Mr. Battles -- and this is where the story of America's reconstruction effort gets really interesting. The Bush administration not only refused to prosecute the pair -- it actually tried to stop a lawsuit filed against the contractors by whistle-blowers hoping to recover the stolen money. The administration argued that Custer Battles could not be found guilty of defrauding the U.S. government because the CPA was not part of the U.S. government. When the lawsuit went forward despite the administration's objections, Custer and Battles mounted a defense that recalled Nuremberg and Lt. Calley, arguing that they could not be guilty of theft since it was done with the government's approval.

The jury disagreed, finding Custer Battles guilty of ripping off taxpayers. But the verdict was set aside by T.S. Ellis III, a federal judge who cited the administration's "the CPA is not us" argument. The very fact that private contractors, aided by the government itself, could evade conviction for what even Ellis, a Reagan-appointed judge, called "significant" evidence of fraud, says everything you need to know about the true nature of the war we are fighting in Iraq. Is it really possible to bilk American taxpayers for repainted forklifts stolen from Iraqi Airways and claim that you were just following orders? It is, when your commander in chief is George W. Bush. font >There isn't a brazen, two-bit, purse-snatching money caper you can think of that didn't happen at least 10,000 times with your tax dollars in Iraq. At the very outset of the occupation, when L. Paul Bremer was installed as head of the CPA, one of his first brilliant ideas for managing the country was to have $12 billion in cash flown into Baghdad on huge wooden pallets and stored in palaces and government buildings. To pay contractors, he'd have agents go to the various stashes -- a pile of $200 million in one of Saddam's former palaces was watched by a single soldier, who left the key to the vault in a backpack on his desk when he went out to lunch -- withdraw the money, then crisscross the country to pay the bills. When desperate auditors later tried to trace the paths of the money, one agent could account for only $6,306,836 of some $23 million he'd withdrawn. Bremer's office "acknowledged not having any supporting documentation" for $25 million given to a different agent. A ministry that claimed to have paid 8,206 guards was able to document payouts to only 602. An agent who was told by auditors that he still owed $1,878,870 magically produced exactly that amount, which, as the auditors dryly noted, "suggests that the agent had a reserve of cash."

In short, some $8.8 billion of the $12 billion proved impossible to find. "Who in their right mind would send 360 tons of cash into a war zone?" asked Rep. Henry Waxman, chairman of the House Oversight Committee. "But that's exactly what our government did."

Because contractors were paid on cost-plus arrangements, they had a powerful incentive to spend to the hilt. The undisputed master of milking the system is KBR, the former Halliburton subsidiary so ubiquitous in Iraq that soldiers even encounter its customer-survey sheets in outhouses. The company has been exposed by whistle-blowers in numerous Senate hearings for everything from double-charging taxpayers for $617,000 worth of sodas to overcharging the government 600 percent for fuel shipments. When things went wrong, KBR simply scrapped expensive gear: The company dumped 50,000 pounds of nails in the desert because they were too short, and left the Army no choice but to set fire to a supply truck that had a flat tire. "They did not have the proper wrench to change the tire," an Iraq vet named Richard Murphy told investigators, "so the decision was made to torch the truck."

In perhaps the ultimate example of military capitalism, KBR reportedly ran convoys of empty trucks back and forth across the insurgent-laden desert, pointlessly risking the lives of soldiers and drivers so the company could charge the taxpayer for its phantom deliveries. Truckers for KBR, knowing full well that the trips were bullshit, derisively referred to their cargo as "sailboat fuel."

In Fallujah, where the company was paid based on how many soldiers used the base rec center, KBR supervisors ordered employees to juke the head count by taking an hourly tally of every soldier in the facility. "They were counting the same soldier five, six, seven times," says Linda Warren, a former postal worker who was employed by KBR in Fallujah. "I was even directed to count every empty bottle of water left behind in the facility as though they were troops who had been there."

Yet for all the money KBR charged taxpayers for the rec center, it didn't provide much in the way of services to the soldiers engaged in the heaviest fighting of the war. When Warren ordered a karaoke machine, the company gave her a cardboard box stuffed with jumbled-up electronic components. "We had to borrow laptops from the troops to set up a music night," says Warren, who had a son serving in Fallujah at the time. "These boys needed R&R more than anything, but the company wouldn't spend a dime." (KBR refused requests for an interview, but has denied that it inflated troop counts or committed other wrongdoing in Iraq.)

One of the most dependable methods for burning taxpayer funds was simply to do nothing. After securing a contract in Iraq, companies would mobilize their teams, rush them into the war zone and then wait, citing the security situation or delayed paperwork -- all the while charging the government for housing, meals and other expenses. Last year, a government audit of twelve major contracts awarded to KBR, Parsons and other companies found that idle time often accounted for more than half of a contract's total costs. In one deal awarded to KBR, the company's "indirect" administrative costs were $52.7 million, and its direct costs -- the costs associated with the actual job -- were only $13.4 million.

Companies jacked up the costs even higher by hiring out layers of subcontractors to do their work for them. In some cases, each subcontractor had its own cost-plus arrangement. "We called those 'cascading contracts,' " says Rep. Van Hollen. "Each subcontractor piles on a lot of costs, and eventually they would snowball into a huge payout. It was a green light for waste."

In March 2004, Parsons -- the firm represented by Earnest O. Robbins -- was given nearly $1 million to build a fire station in Ainkawa, a small Christian community in one of the safest parts of Iraq. Parsons subcontracted the design to a British company called TPS Consult and the construction to a California firm called Innovative Technical Solutions Inc. ITSI, in turn, hired an Iraqi outfit called Zozik to do the actual labor.

A year and a half later, government auditors visited the site and found that the fire station was less than half finished. What little had been built was marred by serious design flaws, including concrete columns so shoddily constructed that they were riddled with holes that looked like "honeycombing." But getting the fuck-ups fixed proved problematic. The auditors "made a request that was sent to the Army Corps, which delivered it to Parsons, who then asked ITSI, which asked TPS Consult to check on the work done by Zozik," writes Chatterjee, who describes the mess in his forthcoming book, Baghdad Bonanza. The multiple layers of subcontractors made it almost impossible to resolve the issue -- and every day the delays dragged on meant more money for the companies.

Sometimes the government simply handed out money to companies it made up out of thin air. In 2006, the Army Corps of Engineers found itself unable to award contracts by the September deadline imposed by Congress, meaning it would have to "de-obligate" the money and return it to the government. Rather than suffer that awful fate, the corps obligated $362 million -- spread out over ninety-six different contracts -- to "Dummy Vendor." In their report on the mess, auditors noted that money to nobody "does not constitute proper obligations."

But even obligating money to no one was better than what sometimes happened in Iraq: handing out U.S. funds to the enemy. Since the beginning of the war, rumors have abounded about contractors paying protection money to insurgents to avoid attacks. No less an authority than Ahmed Chalabi, the head of the Iraqi National Congress, claimed that such payoffs are a "significant source" of income for Al Qaeda. Moreover, when things go missing in Iraq -- like bricks of $100 bills, or weapons, or trucks -- it is a fair assumption that some of the wayward booty ends up in the wrong hands. In July, a federal audit found that 190,000 weapons are missing in Iraq -- nearly one out of every three arms supplied by the United States. "These weapons almost certainly ended up on the black market, where they are repurchased by insurgents," says Chatterjee. font >For all the creative ways that contractors came up with to waste, mismanage and steal public money in Iraq, the standard remained good old-fashioned fucking up. Take the case of the Basra Children's Hospital, a much-ballyhooed "do-gooder" project championed by Laura Bush and Condi Rice. This was exactly the sort of grandstanding, self-serving, indulgent and ultimately useless project that tended to get the go-ahead under reconstruction. Like the expensive telephone-based disease-notification database approved for use in hospitals without telephones, or the natural-gas-powered electricity turbines green lighted for installation in a country without ready sources of natural gas, the Basra Children's Hospital was a state-of-the-art medical facility set to be built in a town without safe drinking water. "Why build a hospital for kids, when the kids have no clean water?" said Rep. Jim Kolbe, a Republican from Arizona.

Bechtel was given $50 million to build the hospital -- but a year later, with the price tag soaring to $169 million, the company was pulled off the project without a single bed being ready for use. The government was unfazed: Bechtel, explained USAID spokesman David Snider, was "under a 'term contract,' which means their job is over when their money ends."

Their job is over when their money ends. When I call Snider to clarify this amazing statement, he declines to discuss the matter further. But if you look over the history of the Iraqi reconstruction effort, you will find versions of this excuse every where. When Custer Battles was caught delivering broken trucks to the Army, a military official says the company told him, "We were only told we had to deliver the trucks. The contract doesn't say they had to work."

Such excuses speak to a monstrous vacuum of patriotism; it would be hard to imagine contractors being so blithely disinterested in results during World War II, where every wasted dollar might mean another American boy dead from gangrene in the Ardennes. But the rampant waste of money and resources also suggests a widespread contempt for the ostensible "purpose" of our presence in Iraq. Asked to cast a vote for the war effort, contractors responded by swiping everything they could get their hands on -- and the administration's acquiescence in their thievery suggests that it, too, saw making a buck as the true mission of the war. Two witnesses scheduled to testify before Congress against Custer Battles ultimately declined not only because they had received death threats but because they, too, were contractors and feared that they would be shut out of future government deals. To repeat: Witnesses were afraid to testify in an effort to recover government funds because they feared reprisal from the government.

The Bush administration's lack of interest in recovering stolen funds is one of the great scandals of the war. The White House has failed to litigate a single case against a contractor under the False Claims Act and has not sued anybody for breach of contract. It even declined to join in a lawsuit filed by whistle-blowers who are accusing KBR of improper invoicing in Fallujah. "For all the Bush administration claims to do in the war against terrorism," Grayson said in congressional testimony, "it is a no-show in the war against war profiteers." In nearly five years of some of the worst graft and looting in American history, the administration has recovered less than $6 million.

What's more, when anyone in the government tried to question what contractors were up to with taxpayer money, they were immediately blackballed and treated like an enemy. Take the case of Bunnatine "Bunny" Greenhouse, an outspoken and energetic woman of sixty-three who served as the chief procurement executive for the Army Corps of Engineers. In her position, Greenhouse was responsible for signing off on sole-source contracts -- those awarded without competitive bids and thus most prone to corruption. Long before Iraq, she had begun to notice favoritism in the awarding of contracts to KBR, which was careful to recruit executives who had served in the military. "That was why I joined the corps: to stop this kind of clubby contracting," she says.

A few weeks before the Iraq War started, Greenhouse was asked to sign off on the contract to restore Iraqi oil. The deal, she noticed, was suspicious on a number of fronts. For one thing, the company that had designed the project, KBR, was the same company that was being awarded the contract -- a highly unusual and improper situation. For another, the corps wanted to award a massive "emergency" contract to KBR with no competition for up to five years, which Greenhouse thought was crazy. Who ever heard of a five-year emergency? After auditing the deal, the Pentagon found that KBR had overcharged the government $61 million for fuel. "The abuse related to contracts awarded to KBR," Greenhouse testified before the Senate, "represents the most blatant and improper contract abuse I have witnessed during the course of my professional career."

And how did her superiors in the Pentagon respond to the wrongdoing highlighted by their own chief procurement officer? First they gave KBR a waiver for the overbilling, blaming the problem on an Iraqi subcontractor. Then they dealt with Greenhouse by demoting her and cutting her salary, citing a negative performance review. The retaliation sent a clear message to any would-be whistle-blowers. "It puts a chill on you," Greenhouse says. "People are scared stiff."

They were scared stiff in Iraq, too, and for good reason. When civilian employees complained about looting or other improprieties, contractors sometimes threatened to throw them outside the gates of their bases -- a life-threatening situation for any American. Robert Isakson, a former FBI agent who worked for Custer Battles, says that when he refused to go along with one scam involving a dummy company in Lebanon, he was detained by company security guards, who seized his ID badge and barred him from the base in Baghdad. He eventually had to make a hazardous, Papillon-esque journey across hostile Iraq to Jordan just to survive. (Custer Battles denies the charge.)

James Garrison, who worked at a KBR ice plant in Al Asad, recalls an incident when Indian employees threatened to go on strike: "They pulled a bus up, got them in there and said, 'We'll ship you outside the front gate if you want to go on strike.' " Not surprisingly, the workers changed their mind about a work stoppage.

You know the old adage: You don't pay a hooker to spend the night, you pay her to leave in the morning. That maxim also applies to civilian workers in Iraq. A soldier is a citizen with rights, a man to be treated with honor and respect as a protector of us all; if one loses a limb, you've got to take care of him, in theory for his whole life. But a mercenary is just another piece of equipment you can bill to the taxpayer: If one is hurt on the job, you can just throw it away and buy another one. Today there are more civilians working for private contractors in Iraq than there are troops on the ground. The totality of the thievery in Iraq is such that even the honor of patriotic service has been stolen -- we've replaced soldiers and heroes with disposable commodities, men we expected to give us a big bang for a buck and to never call us again.

Russell Skoug, who worked as a refrigeration technician for a contractor called Wolfpack, found that out the hard way. These days Skoug is back home in Diboll, Texas, and he doesn't move around much; he considers it a big accomplishment if he can make it to his mailbox and back once a day. "I'm doing a lot if I can do that much," he says, laughing a little.

A year ago, on September 11th, Skoug was working for Wolfpack at a base in Heet, Iraq. It was a convoy day -- trucks braved the trip in and out of the base every third day -- and Skoug had a generator he needed to fix. So he agreed to make a run to Al Asad. "If I would've realized that it was September 11th, I never would've went out," he says. It would turn out to be the last run he would ever make in Iraq.

An Air Force vet, Skoug had come to Iraq as a civilian to repair refrigeration units and air conditioners for a KBR subcontractor called LSI. But when he arrived, he discovered that LSI had hired him to fix Humvees. "I didn't know jack-squat about Humvees," he says. "I could maybe change the oil, that was it." (Asked about Skoug's additional assignment, KBR boasted: "Part of the reason for our success is our ability to employ individuals with multiple capabilities.")

Working with him on his crew were two other refrigeration technicians, neither of whom knew anything about fixing Humvees. Since Skoug and most of his co-workers had worked for KBR in Afghanistan, they were familiar with cost-plus contracting. The buzz around the base was that cost-plus was the reason LSI was hiring air-conditioning guys to work on unfamiliar military equipment at a cost to the taxpayer of $80,000 a year. "They was doing the same thing as KBR: just filling the body count," says Skoug.

Thanks to low troop levels, all the military repair guys had been pressed into service to fight the war, so Skoug was forced to sit in the military storeroom on the base and study vehicle manuals that, as a civilian, he wasn't allowed to check out of the building. That was how America fought terrorism in Iraq: It hired civilian air-conditioning techs to fix Humvees using the instruction manual while the real Humvee repairmen, earning a third of what the helpless civilians were paid, drove around in circles outside the wire waiting to get blown up by insurgents.

After much pleading and cajoling, Skoug managed to convince LSI to let him repair some refrigeration units. But it turned out that the company didn't have any tools for the job. "They gave me a screwdriver and a Leatherman, and that's it," he recalls. "We didn't even have freon gauges." When Skoug managed to scrounge and cannibalize parts to get the job done, he impressed the executives at Wolfpack enough to hire him away from LSI for $10,000 a month. The job required Skoug, who had been given no formal security training, to travel regularly on dangerous convoys between bases. Wolfpack issued him an armored vehicle, a Yugoslav-made AK-47 and a handgun, and wished him luck.

For nearly a year, Skoug did the job, trying at each stop to overcome the hostility that many troops felt for civilian contractors who surfed the Internet and played pool and watched movies all day for big dollars while soldiers carrying seventy-pound packs of gear labored in huts with broken air conditioning the civilian techs couldn't be bothered to repair. "They'd have the easiest thing to fix, and they wouldn't do it," Skoug says. "They'd write that they'd fixed it or that they just needed a part and then just leave it." At Haditha Dam, Skoug witnessed a near-brawl after some Marines, trying to get some sleep after returning from patrol, couldn't get a group of "KBR dudes" to turn down the television in a common area late at night.

Toward the end of Skoug's stay, insurgent activity in his area increased to the point where the soldiers leading his convoys would often drive only at night and without lights. Skoug and his co-workers asked Wolfpack to provide them with night-vision goggles that cost as little as $1,000 a pair, but the company refused. "Their attitude was, we don't need 'em and we're not buying 'em," says Thomas Lane, a Wolfpack employee who served as Skoug's security man on the night of September 11th.

On that evening, the soldiers leading the convoy refused to let Skoug drive his own vehicle back to Heet without night-vision goggles. So a soldier took Skoug's car, and Skoug was forced to be a passenger in a military vehicle. "We start out the front gate, and I find out that the truck that I was in was the frickin' lead truck," he recalls. "And I'm going, 'Oh, great.' "

The bomb went off about a half-hour later, ripping through the truck floor and destroying four inches of Skoug's left femur. "The windshield looked like there was a film on it," he says. "I find out later it was a film -- it was blood and meat and stuff all over the windshield on the inside." Skoug was loaded into the back of a Humvee, his legs hanging out, and evacuated to an Army hospital in Germany before being airlifted back to the States.

When Skoug arrived, it was his wife, Linda, who had to handle all his affairs. She was the one who arranged for an air ambulance to take him to Houston, where she had persuaded an orthopedic hospital to admit him as a patient. She had to do this because almost right from the start, Wolfpack washed its hands of Russell Skoug. The insurance policy he had been given turned out to be useless -- the company denied all coverage, beginning with a $72,597 bill for his stay in the German hospital. Despite assurances from Wolfpack chief Mark Atwood that he would cover all Skoug's expenses, neither he nor the insurance company would pay for the $16,000 trip in the air ambulance. Nobody paid for the operations Skoug had in Houston -- as many as three a day, every day for a month. And nobody paid for his subsequent rehab stint in another Houston hospital -- despite the fact that military law requires every company contracting with the government to fully insure all of its employees in the war zone.

Now that he's out, sitting at home on his couch with only partial use of his left hand and left leg, Skoug has a stack of unpaid medical bills almost three inches tall. As he speaks, he keeps fidgeting. He apologizes, explaining that he can't sit still for very long. Why? Because Skoug can no longer afford pain medication. "I take ibuprofen sometimes," he says, "but basically I just grin and bear it."

And here's where this story turns into something perfectly symbolic of everything that the war in Iraq stands for, a window into the soul of for-profit contractors who not only left behind a breathtaking legacy of fraud, waste and corruption but, through their calculating, greed-fueled hijacking of this generation's broadest and most far-reaching foreign-policy initiative, pushed America into previously unknown realms of moral insanity. When I contact Mark Atwood and ask him to explain how he could watch one of his best employees get blown up and crippled for life, and then cut him loose with debts totaling well over half a million dollars, Atwood, safe in his office in Kuwait City and contentedly suckling at the taxpayer teat, decides that answering this one question is just too much to ask of poor old him.

"Right now," Atwood says, "I just want some peace."

When Linda Skoug petitioned Atwood for help, he refused, pointing out that he had kept his now-useless employee on the payroll for four whole months before firing him. "After I have put forth to help you all out," he wrote in an e-mail, "you are going to get on me for your husband not having insurance." He even implied that Skoug had brought the accident upon himself by allowing the Army to place him at the head of the convoy: "He was not even suppose [sic] to be in the lead vehicle to begin with."

And that, ladies and gentlemen, is the story of the Iraq War in a nutshell. In the history of balls, the world has never seen anything like the private contractors George W. Bush summoned to serve in Operation Iraqi Freedom. Collectively, they are the final, polished result of 231 years of natural selection in the crucible of American capitalism: a bureaucrat class capable of stealing the same dollar twice -- once from the taxpayer and once from a veteran in a wheelchair.

The explanations that contractors offer for all the missing dollars, all the myriad ways they looted the treasury and screwed guys like Russell Skoug, rank among the most diabolical, shameless, tongue-twisting bullshit in history. Going back over the various congres sional hearings and trying to decipher the corporate responses to the mountains of thefts and fuck-ups is a thrilling intellectual journey, not unlike tackling the Pharaonic hieroglyphs or the mating chatter of colobus monkeys. Standing before Congress, contractors and the officials who are supposed to monitor them say things like "As long as we have the undefinitized contract issue that we have . . . we will continue to see the same kinds of sustension rates" (translation: We can't get back any of the fucking money) and "The need for to-fitnessization was viewed as voluntary, and that was inaccurate as the general counsel to the Army observed in a June opinion" (translation: The contractor wasn't aware that he was required to keep costs down) and "If we don't know where we're trying to go and don't have measures, then we won't know how much longer it's going to take us to get there" (translation: There never was a plan in place, other than to let contractors rip off every dollar they could).

According to the most reliable estimates, we have doled out more than $500 billion for the war, as well as $44 billion for the Iraqi reconstruction effort. And what did America's contractors give us for that money? They built big steaming shit piles, set brand-new trucks on fire, drove back and forth across the desert for no reason at all and dumped bags of nails in ditches. For the most part, nobody at home cared, because war on some level is always a waste. But what happened in Iraq went beyond inefficiency, beyond fraud even. This was about the business of government being corrupted by the profit motive to such an extraordinary degree that now we all have to wonder how we will ever be able to depend on the state to do its job in the future. If catastrophic failure is worth billions, where's the incentive to deliver success? There's no profit in patriotism, no cost-plus angle on common decency. Sixty years after America liberated Europe, those are just words, and words don't pay the bills.