Taking steps

To start undoing what has been done in our name:

Rep. Silvestre Reyes (D-Texas), the chairman of the House intelligence committee, introduced an amendment to the 2010 intelligence authorization bill imposing a 15-year criminal sentence on any “officer or employee of the intelligence community” who tortures a detainee. (Twenty years if the torture involves an “act of medical malfeasance”; life if the detainee dies.)

And

US Defense Secretary Robert Gates is concerned about possible misconduct in Afghanistan by the private security firm formerly known as Blackwater and has promised to review the issue, the Pentagon said.

So what does Blackwater do?

A Code Pink protester claimed a high-ranking Blackwater official threatened his life during a break of a Senate Armed Services hearing focused on the military contractor's actions in Afghanistan.

Code Pink co-founder Medea Benjamin reported that the threat was made by Johnny Walker, a program manager with one of Blackwater's subsidiaries. Walker testified at the hearing about the role his company, Paravant, played during its mercenary deployments to the Middle East.

But then this is going on:

In an interview with the Pakistani TV station Express TV, Defense Secretary Robert Gates confirmed that the private security firms Blackwater and DynCorp are operating inside Pakistan. “They’re operating as individual companies here in Pakistan,” Gates said, according to a DoD transcript of the interview. “There are rules concerning the contracting companies. If they’re contracting with us or with the State Department here in Pakistan, then there are very clear rules set forth by the State Department and by ourselves.”

And the realization that if we didn't have mercenary groups, we'd be unable to fight the wars we're in. We don't have the troops.

Yet the court sides against Rumsfeld:

CHICAGO � A federal judge refused Friday to dismiss a civil lawsuit accusing former Defense Secretary Donald Rumsfeld of responsibility for the alleged torture by U.S. forces of two Americans who worked for an Iraqi contracting firm.

U.S. District Judge Wayne R. Andersen's ruling did not say the two contractors had proven their claims, including that they were tortured after reporting alleged illegal activities by their company. But it did say they had alleged enough specific mistreatment to warrant hearing evidence of exactly what happened.

Andersen said his decision "represents a recognition that federal officials may not strip citizens of well settled constitutional protections against mistreatment simply because they are located in a tumultuous foreign setting."

Andersen did throw out two of the lawsuit's three counts but gave former contractors Donald Vance and Nathan Ertel the green light to go forward with a third count alleging they were unconstitutionally tortured under procedures personally approved by Rumsfeld.

Update 3/7:UPDATE:

A Xe spokesman has told Talking Points Memo that they are unaware of any plans for the RNC to hold a fundraiser at their Moyock, N.C. facility. The spokesman said he was unsure why there was a slide in an RNC fundraising presentation that suggested otherwise. RNC Communications Doug Heye also told Politico's Ben Smith, who broke the story, that "No such Blackwater event ever existed," despite the calendar entry.

The Republican National Committee plans to hold an April fundraiser at a Moyock, N.C. compound owned by the military contracting firm formerly known as Blackwater, Politico reports.

According to an RNC fundraising document uncovered on Wednesday, RNC "Young Eagles" -- party major donors under 40 -- will meet at the facility in the spring.

Gripping the rollercoaster handrails for all we're worth

Because this could be a hell of a drop.

Paul Krugman:

Yesterday, President Bush, showing off his M.B.A. vocabulary, similarly tried to reassure the markets. But Mr. Bush is, let’s say, a bit lacking in credibility. On the other hand, it’s not clear that anyone could do the trick: right now we’re suffering from a serious shortage of saviors. And that’s too bad, because we might need one.

What’s been happening in financial markets over the past few days is something that truly scares monetary economists: liquidity has dried up. That is, markets in stuff that is normally traded all the time — in particular, financial instruments backed by home mortgages — have shut down because there are no buyers.

This could turn out to be nothing more than a brief scare. At worst, however, it could cause a chain reaction of debt defaults.

The origins of the current crunch lie in the financial follies of the last few years, which in retrospect were as irrational as the dot-com mania. The housing bubble was only part of it; across the board, people began acting as if risk had disappeared.

Everyone knows now about the explosion in subprime loans, which allowed people without the usual financial qualifications to buy houses, and the eagerness with which investors bought securities backed by these loans. But investors also snapped up high-yield corporate debt, a k a junk bonds, driving the spread between junk bond yields and U.S. Treasuries down to record lows.

Then reality hit — not all at once, but in a series of blows. First, the housing bubble popped. Then subprime melted down. Then there was a surge in investor nervousness about junk bonds: two months ago the yield on corporate bonds rated B was only 2.45 percent higher than that on government bonds; now the spread is well over 4 percent.

Investors were rattled recently when the subprime meltdown caused the collapse of two hedge funds operated by Bear Stearns, the investment bank. Since then, markets have been manic-depressive, with triple-digit gains or losses in the Dow Jones industrial average — the rule rather than the exception for the past two weeks.

But yesterday’s announcement by BNP Paribas, a large French bank, that it was suspending the operations of three of its own funds was, if anything, the most ominous news yet. The suspension was necessary, the bank said, because of “the complete evaporation of liquidity in certain market segments” — that is, there are no buyers.

When liquidity dries up, as I said, it can produce a chain reaction of defaults. Financial institution A can’t sell its mortgage-backed securities, so it can’t raise enough cash to make the payment it owes to institution B, which then doesn’t have the cash to pay institution C — and those who do have cash sit on it, because they don’t trust anyone else to repay a loan, which makes things even worse.

And here’s the truly scary thing about liquidity crises: it’s very hard for policy makers to do anything about them.

A post I did on the housing bubble a while back, and this video illustrate the point:

Pelosi choses Reyes for chairman of the House Intelligence Committee

..."Pelosi said his experience gives him an understanding of the needs of both troops and policymakers. "His appreciation for the dangers inherent in the operation of secret activities in a democracy ensures that he will be a zealous protector of the civil liberties," she said.

In a recent interview, Reyes said Republicans have made a habit of rubber-stamping the Bush administration's programs. Democrats, he said, must act quickly to show they will dig deeply into the government's actions.

Overseeing the 16 U.S. spy agencies is among the most challenging — and thankless — tasks in Congress. Given the committee's inherently secret nature, much of the work is done behind closed doors. Few members of Congress have a significant constituency in the spy world, and one presidential commission weighing recent intelligence changes called the agencies "headstrong.""

Update: More on Reyes:

"Mr. Reyes, an affable West Texan, has a far lower profile in national security circles than does Ms. Harman, an outspoken and strong-willed centrist who has become a regular guest on Sunday talk shows since the Sept. 11 attacks.

But Mrs. Pelosi chose him over Ms. Harman in part because he has repeatedly taken a more combative stance toward Bush administration policies like the invasion of Iraq, military tribunals for terrorist suspects, and the National Security Agency’s domestic surveillance program."

Update 12/2: Josh Marshall has more:
"For my money the most troubling thing about Rep. Silvestre Reyes (D-TX), Nancy Pelosi's choice to head up the House Intelligence Committee, is his frequent travels with GOP loose cannon extraordinaire Curt Weldon. Today the Wall Street Journal offers conflicting accounts of whether Reyes was present at a now notorious Paris meeting between Weldon and Manucher Ghorbanifar, the Zelig of American foreign policy scandals."