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When Ted Rall's cartoon "Terror Widows" appeared on the New York Times website on March 6, angry letters of complaint poured into the

It's been more than three months since twelve Florida State University
students were arrested for setting up a "tent city" in front of the
school's administration building.

Belief in God is not the issue in the continuing brouhaha over the constitutionality of the Pledge of Allegiance. Rather, it's the government's endorsement of a monotheistic God.

Writing in a forthcoming issue of The Journal of Israeli History
about Israeli revisionism, Mark Lilla of the University of Chicago's
Committee on Social Thought makes the observation that while American
neoconservatives like to present themselves as people who "care deeply
about ideas," in truth "they are engaged in intellectual life...not out
of curiosity or natural inclination, but out of a purely political
passion to challenge 'the intellectuals,' conceived as a class
whose political tactics must be combated in kind." Hence, the
"quasi-militaristic rhetoric," the "cavalier use of sources and
quotations," and the frequent "insinuations of intellectual bad faith
and cowardice, even treason." This style marks them, Lilla notes, as a
new breed: the "counter-intellectual."

A former editor of the neocon policy journal The Public Interest
and author of The Reckless Mind: Intellectuals in Politics, Lilla
observes that among his older friends, some "had once been genuine
intellectuals who made important contributions to history and
criticism." Their obsessive hatred of the culture of the sixties,
however, induced them to renounce "any intellectual ambitions that did
not serve the cause of restoring the cultural status quo ante. As
for the young people they inspired and frequently sired, they became
counter-intellectuals without ever having been intellectuals--a unique
American phenomenon." Neocon history, Lilla explains, is one of
"political success and intellectual failure." He laments, "To judge by
the kinds of articles published in magazines like Commentary and
even Partisan Review in this period, it was hard to imagine that
writers like Lionel Trilling, Clement Greenberg, and Delmore Schwartz
had ever graced their pages."

The mass media never noticed this transformation. If you look, for
instance, at the reviews of David Brock's book Blinded by the
--wherein Brock laments the moral and intellectual decline from
Norman Podhoretz to homo-hating son John--even die-hard liberals take
the old guys on their own self-flattering terms, as if the neocon
parents were men and women of profound idealism while the "minicon"
children can muster only attitude. Well, as John Lennon used to say,
"The dream is over." The neocons have shown their true intellectual
colors, and they are not pretty.

As The Chronicle of Higher Education recently reported, Irving
Kristol, Gertrude Himmelfarb, Hilton Kramer and the intellectual
historian John Patrick Diggins have all withdrawn from a conference
honoring the work of Sidney Hook, to be held at the City University of
New York. Diggins, according to conference organizer Robert Talisse,
went so far as to threaten not only to convince others to stay away but
also to convince certain funding institutions to withdraw their money
(and hence, destroy the conference). The alleged crime: Somebody invited
Cornel West to replace Richard Rorty as a featured guest.

Now whatever one may think of Brother West's recent political
activities--and I think very little of them--he is a recognized scholar
of both Hook and the pragmatist tradition in which the latter labored.
Rorty, for instance, whose authority on pragmatism nobody dares to
question, praises West's The American Evasion of Philosophy as "a
novel piece of intellectual history." The book contains a long and
thoughtful discussion of Hook.

The Chronicle reports that this Gang of Four felt West to be "not
enough of a scholar" to justify their presence. This is a bit like a
little league coach claiming Barry Bonds is "not enough of a hitter" to
play a game of sandlot ball. Kristol and Kramer have made careers as
ideological entrepreneurs and polemical publicists. They cannot boast a
single work of lasting scholarly significance between them. Gertrude
Himmelfarb and John Patrick Diggins are both serious, albeit unusually
combative and ideology-minded, historians. Both have shamed themselves
with this act of combined intellectual cowardice and conservative
political correctness.

Harvard president Larry Summers, a neocon hero, lost West to Princeton
at least in part because of his willingness to confront him with
unfounded rumors that the deeply committed teacher was stiffing his
students. West saw his name dragged through the mud in conservative and
some not-so-conservative publications due to his willingness to take his
scholarship and inspirational personal presence beyond the territories
traditionally traversed by Harvard's University Professors. The great
irony of the CUNY conference on Sidney Hook is that it finds West doing
just what Summers and his critics complained he had neglected:
participating in the scholarly life of the academy.

One wonders just what is so frightening. Perhaps it is a sense of being
outgunned. I have seen West debate the elder Podhoretz at a conference
sponsored by the Whitney Humanities Center at Yale, and the two proved
so mismatched I left feeling a little sorry for Norman. Equally likely,
however, is the fear that a leftist like West will remind audiences that
their putative hero died a proud socialist. He may have been a fanatical
anti-Communist, but his passions derived from an honest engagement in
the life of the mind, something the neocons long ago forfeited in their
love affair with power.

Ironically, West told Sam Tanenhaus that he didn't know he had been
invited to the conference and was wholly unaware of having caused a
conservative boycott. He explained, however, that he had been planning
to go anyway--as a spectator. He saw a notice about it in The New
York Review of Books
and looked forward to catching up on the recent
scholarship on Hook. West recalled that back in 1985 he had flown from
California to Washington, DC, to be present for Hook's Jefferson Lecture
and had the opportunity to tell the then-83-year-old philosopher how
important his work had been to him.

Hook never succeeded in fusing Marx with Dewey, just as West, in this
view, is still quite a distance from combining Gramsci with Sly Stone.
They agreed on virtually nothing about the cold war or the culture wars.
But they did share a commitment to follow their ideas wherever they
might lead, and to take on all comers in a spirit of good faith and
honest engagement. We can all learn from that.

Amid all the recent assaults on the Bill of Rights, including the latest
trashing in the USA Patriot Act and the denial of habeas corpus to
citizens, amid all this, in the span of one week, the Supreme Court has
issued rulings almost beyond the dreams of the most ardent civil

Listen to the exultant cry of Steven Hawkins, executive director of the
National Coalition to Abolish the Death Penalty, who said this is "the
most favorable term in a quarter of a century, in terms of death penalty

For those who have gazed aghast over the past generation as jury rights
have been trampled by tough-on-crime fanatics and liberal elites, there
are paragraphs in certain opinions in the Court's rulings that are as
momentous as any in the Warren Court. From whose pen did these
sentiments issue?

"My observing over the past twelve years the accelerating propensity of
both state and federal legislatures to adopt sentencing factors
determined by judges that increase punishment beyond what is authorized
by the jury's verdict, and my witnessing the belief of a near majority
of my colleagues that this novel practice is perfectly OK, cause me to
believe that our people's traditional belief in the right of trial by
jury is in perilous decline. That decline is bound to be confirmed, and
indeed accelerated, by the repeated spectacle of a man's going to his
death because a judge found that an aggravating factor existed.
We cannot preserve our veneration for the protection of the jury in
criminal cases if we render ourselves callous to the need for that
protection by regularly imposing the death penalty without it."

John Paul Stevens, you guess? No, Antonin Scalia. His emphasis on the
fundamental role of the jury as guardian of our rights under the
Constitution runs entirely counter to the trend of the past couple of
decades, when judges have, with either the approval or indifference of
legislatures and the press, been allowed not only to deprecate the
jury's fundamental right to nullify and set the law aside but also to
set jurors' verdicts aside and impose their own, often with lower
standards of proof.

By and large, liberals have been the architects of these erosions of
fundamental popular rights, whether it was Tip O'Neill rushing through
totalitarian drug laws in the mid-1980s; or Clinton's Antiterrorism and
Effective Death Penalty Act (which, among other horrors, junked the
doctrine of habeas corpus); or the hate crimes statutes written into
many state codes at the behest of gay, feminist and liberal civil rights
groups in the wake of the James Byrd and Matthew Shepard killings.

Scalia exposes the contradictions tellingly in his concurring opinion in
Ring v. Arizona, where the Court struck down, 7 to 2, an Arizona
statute that allowed judges rather than juries to impose the death
penalty. He rightly chides Justice Stephen Breyer for inconsistency in
endorsing the right of judges to overrule the jury in tacking on
enhanced punishment under hate crimes statutes, and then, in Ring v.
, for tacking the other way. Scalia's term for this kind of
pirouette is "death-is-different jurisprudence."

Another momentous Supreme Court ruling, Atkins v. Virginia,
concerns a case in which a man with an IQ of 59 was sentenced to death
for committing a robbery and murder. The Court has ruled 6 to 3 that
times have changed and that it's not OK these days to put the retarded
to death.

Scalia, dissenting, made an argument in consonance with his view of the
jury's paramount role, as expressed in Ring. Why, he asked,
should the determining of a person's mental competence be allotted to
the social scientists, the IQ testers, the battery of so-called experts
so memorably stigmatized in the works of the late, great Stephen Jay
Gould? Liberals don't want to execute the mentally retarded; they just
want to abort or sterilize them. In the Atkins trial, Scalia noted, the
jury had been given testimony on the murderer's mental capacity but had
regarded it as insufficient in detaining the defendant from the death

Scalia asks, How can one exempt people from the capital penalty on the
grounds of mental incapacity to recognize the concepts of punishment and
retribution, and then put them away in prison for their rest of their
natural lives?

Where Scalia is caught in an obvious contradiction is in his endorsement
of the notion that only those prepared to vote for the death penalty
should be allowed on a jury, and that appeals court judges opposed to
the death penalty should recuse themselves in capital cases. "There is
something to be said," Scalia writes in his dissent in Atkins,
"for popular abolition of the death penalty; there is nothing to be said
for its incremental abolition by this Court." Again, it's a good
argument, but abolition of slavery began in part with the refusal of
juries to abide by statutes endorsing slavery. Ditto with religious
freedom, starting with William Penn, whose jury refused to convict him
for flouting the Conventicle Act.

If he were consistent, Scalia would recognize that jurors should be
rejected only if they have a material interest in the outcome of the
case. And given that some 30 percent or more in the United States are
opposed to the death penalty, such juries would more than likely have a
death penalty opponent among the twelve. On the role and rights of the
jury I strongly recommend Godfrey Lehman's Is This Any Way to Run a

Meanwhile, we should honor the tremendous efforts of the defense teams
who fought these cases to the Supreme Court and who have been rewarded
by two decisions that overturn the death sentences of hundreds. But the
fact remains that it is the death penalty itself that needs to be
abolished, and this is a peerless moment of opportunity for death
penalty activists to press forward.

The Court majority said in the Atkins decision that the Eighth
Amendment prohibition on cruel and unusual punishment reflects social
values, which change from century to century and decade to decade
(notwithstanding Scalia, who gazes back nostalgically 2,000 years to St.
Paul). What an excellent springboard for an invigorated campaign to end
the barbarism of judicial killing.

With the Bush Administration too often feeling the pain of its corporate
sponsors, and with the Enron scandal (so far) producing little political
fallout or legislative change on Capitol Hill, advocates of corporate
accountability have cause for frustration. (Martha Stewart is not much
consolation.) But in one area corporate critics can feel encouraged. For
several years, a small group of lawyers and labor advocates has been
trying to hold transnational companies responsible for their actions by
suing them in the United States for abetting and/or benefiting from
human rights abuses overseas. Finally, these corporation-chasers are
beginning to see signs of possible success.

In about a dozen cases, attorneys in the United States, on behalf of
villagers, indigenous people and labor leaders overseas, have filed
legal action against large corporations under the Alien Tort Claims Act
(ATCA), a law passed in 1789 that allowed foreigners to sue one another
in US courts. The law was not much used until 1979, when the family of a
17-year-old boy tortured and killed by a Paraguayan policeman
successfully employed it to sue the officer. Afterward, human rights
lawyers turned to the act as a way to address human rights violations
conducted or enabled by multinational firms.

In 1996, for instance, the Washington-based International Labor Rights
Fund (ILRF) filed an ATCA suit against Unocal, an oil and gas firm,
charging that it knowingly used slave labor to build a pipeline in
Burma. The plaintiffs included villagers who said they were forced at
gunpoint to work on the project. A federal judge dismissed the ATCA
lawsuit, arguing that Unocal did not have direct control over the
Burmese military regime, a partner in the pipeline project. That
decision is under appeal, but, in a legal first, in June a California
state judge ordered Unocal to stand trial. In that trial, in September,
the plaintiffs will argue under state law that partners in a joint
venture can be held responsible for each other's actions. That would be
a blow to Unocal. Evidence in the federal case showed it was well aware
that human rights abuses were committed by the military regime in
relation to the pipeline.

ATCA-wielding lawyers and activists have been going after corporate
malfeasance around the globe. Earlier this year, a case filed against
Shell by EarthRights International and the Center for Constitutional
Rights got a major boost. This lawsuit claims the oil company is liable
for human rights abuses committed by the Nigerian military against the
Ogoni people, who opposed a Shell pipeline. Shell repeatedly filed
motions to dismiss the case, but in February a federal judge denied
these motions and permitted the case to move into the discovery phase.
Now the plaintiffs can take depositions of Shell officials and review
Shell documents.

Texaco was sued in New York by indigenous people of Ecuador, who charged
it with destroying their local environment by dumping a million gallons
of toxic waste into the ecosystem for two decades. The company's
actions, they claim, devastated rainforest areas, caused an increase in
cancer and other diseases and brought several tribes to the brink of
extinction. In March the two sides argued about whether the case should
be dismissed on jurisdictional grounds. The court has not yet ruled. Two
years ago, residents of Bougainville Island in Papua New Guinea filed a
lawsuit in San Francisco against the London-based Rio Tinto mining firm.
The plaintiffs maintained that the corporation, which took over a
company that developed a mine on the island, was in cahoots with a
government that engaged in human rights abuses and destroyed entire
villages in wiping out local resistance to the project. In March a
federal judge dismissed the lawsuit after the State Department argued
that the case could interfere with an ongoing peace process in Papua New
Guinea. But the judge said the Papua New Guinea government would have to
agree to permit the plaintiffs to file a case there.

In addition to the Unocal case, the ILRF is handling ATCA lawsuits
against Coca-Cola (for allegedly using paramilitary forces to
suppress--violently--union activity in Colombia), Del Monte (for
allegedly employing thugs who tortured union leaders in Guatemala),
DynCorp (for allegedly spraying Ecuadorean farmers and villagers with
toxic chemicals that were supposed to be dumped on coca plants in
Colombia) and the Drummond Company, a mining firm (for allegedly hiring
gunmen to torture, kidnap and murder labor leaders in Colombia). In a
case against ExxonMobil, ILRF contends that Mobil, which formed a
joint-venture natural gas project with the Indonesian government, paid
the Indonesian military for security and that these troops committed
human rights atrocities--including murder and torture--against villagers
in the Aceh province.

As these ATCA lawsuits creep forward, corporations here and abroad have
to take notice. A plaintiff's win would compel transnationals to
consider bringing their activities overseas into sync with international
human rights standards. As the Wall Street Journal noted, a
ruling against Unocal--if upheld--"could subject a long list of US
companies to lawsuits in American courts as human rights groups seek to
expand the reach of American tort law to foreign soil." Already the
Street is paying attention. "I've started getting calls from mutual fund
managers," says Terry Collingsworth, ILRF's executive director. "They
tell me that they cannot base stock recommendations on moral
considerations. But if there is a chance a company could be damaged by a
big award in a trial, its business practices overseas become quite
relevant." That is, "the markets" are watching and waiting--to see if
Third World locals screwed by transnationals can find justice in courts
far from their villages.

Inside an old courthouse in the dusty tropical town of Dili, an
exhibition documents the history of East Timor's resistance to
Indonesian occupation. Next to a grainy black-and-white photo of a
youthful man in a beard, a large inscription reads, "Our victory is
merely a question of time."

They were the words of Nicolau Lobato, East Timor's leader in the first
terrible years of war against the Indonesian invasion of December 7,
1975. Ill equipped and abandoned by all, including their Portuguese
colonial masters, the Timorese nevertheless held their ground, creating
large losses on both sides. That is, until May 1978, when Jakarta made a
successful plea to the Carter Administration for a squadron of attack
bombers and more parts and ammunition for its counterinsurgency
aircraft. Britain, under a Labour government, similarly authorized a
request for sixteen Hawk ground-attack aircraft. Used to bomb and napalm
the Timorese into submission, the escalation left 200,000 dead from war
and famine, including Lobato and most of his fellow leaders.

But in the end, Lobato was right. This May, East Timor became the
world's newest nation, the first country born in the twenty-first
century. Lobato could not have foreseen the twenty-four years of
despair, massacre, torture and disappearances that would follow the
Indonesian invasion. Or the betrayal of friends, the connivance of
wealthy nations and the paralysis of well-meaning institutions like the
United Nations. His faith in a righteous outcome is common among
Timorese: They believe that in the end, justice prevails. You just have
to give it time.

And time is something the Timorese now have: time to build a society in
their image, time to argue the minutiae of democracy, something they do
with delight--sixteen parties contested elections last year, and 91
percent of eligible voters cast a ballot. It's hard to walk the streets
of Dili and not be affected by this euphoria for openness, for
democracy, for freedom. It's everywhere: in the light of a newly
graduating teacher's eyes, the laughter of an expectant mother. And
while people are clearly poor (according to the World Bank, East Timor
is Asia's poorest country and the world's twentieth poorest), the
capital of this half-island territory, on the southeastern fringe of the
Indonesian archipelago, seems today alive with possibilities.

The danger is that this enthusiasm will be dashed against the rocks of
reality once the Timorese see how slowly grind the wheels of
development. This nation of 760,000 has a mortality rate for children
under 5 of 200 per 1,000, while malaria, tuberculosis and dengue are
endemic. More than half of the 2,400 villages have no wells or piped
water, and only one in four schools can fully accommodate students or
even functions at all. "We must have patience," says Paulo da Costa
Amaral, a onetime guerrilla fighter now running a Timorese charity in
the country's impoverished highlands. "Independence is the beginning....
there are many steps for us to climb."

Amaral is doing his share. With the help of the Australian aid
organization Austcare, his Halarae Foundation is training scores of
highland Timorese as teachers, offering microcredit to village
cooperatives and helping establish community gardens where crops can be
grown for both self-sufficiency and supplementary income. On a visit to
the impoverished but immaculately kept mountain village of Belola, near
the border with Indonesia, he is received with great ceremony, and a
village meeting is called in his honor. After daintily dressed children
complete a welcome dance, and after formalities are exchanged, people in
their Sunday best wait for a turn to speak. He hears old men lamenting
the village's lack of potable water and young women requesting sewing
machines so they can set up a garment cooperative.

A grizzled old man asks for help to rebuild the school--destroyed by
Indonesian-backed militias in the mayhem following the UN-supervised
independence referendum in 1999--and receives popular acclamation. The
village's 189 children are attending school in nearby Balibo, but they
have to walk for hours in the hot sun or in the pouring rain to get
there, dodging the perilously overloaded trucks that rumble up and down
the narrow mountain roads.

Amaral nods in understanding. He speaks eloquently of the promise of the
future and the difficulty of the present. Patience, he urges; we will do
what we can. Later, as we talk on the journey back in the foundation's
only vehicle, he shakes his head. Rebuilding a school is not the only
problem; the fledgling government would also need to commit funds for
teachers, books and other materials. There are many such villages in
East Timor, not all of them within walking distance of a school.

History has not been kind to the Timorese. After a bloodless coup in
Lisbon in 1974, Portugal began to decolonize and political parties met
openly in East Timor. But soon, tensions between largely well-off
Timorese and firebrand students who had returned from exile erupted into
open conflict. Now known to have been fomented by Indonesian military
intelligence, a civil war broke out and thousands died over a three-week
period. Portugal withdrew, and the victors--the leftist Fretilin
party--governed temporarily, while calling for Lisbon to reassert
control and complete decolonization. But Portugal appeared unwilling,
and into this vacuum stepped Indonesia. Sensing an invasion, Fretilin
declared independence on November 28, 1975. Two days later, leaders of
the defeated Timorese factions requested Indonesian intervention. The
Democratic Republic of East Timor existed for all of nine days before a
large-scale Indonesian invasion began, killing thousands and driving
hundreds of thousands into the mountains.

Luckily for the Timorese, the UN had never accepted Indonesia's
annexation of their country, a fact that was to prove crucial when, in
1997, the Asian financial crisis brought Jakarta to its knees. President
Suharto--who had ordered Indonesia's invasion--was toppled, and his
successor, in desperate need of economic aid, yielded to pressure for a
UN referendum on East Timor's future. And so it was that on August 30,
1999, 78.5 percent of the Timorese voted for independence, despite a
violent campaign of intimidation. So humiliated were the Indonesian
military and its proxy militias by the result that, over three weeks,
they laid waste to most of East Timor, destroying 80 percent of
buildings and butchering thousands of unarmed civilians. In the end,
this televised bloodbath prompted the world to act: An Australian-led
multinational force landed on September 20 and put an end to the

The territory was then ruled by the United Nations Transitional
Administration in East Timor, the first time in history the
international body has actually run a country. Led by Brazilian career
diplomat Sergio Vieira de Mello, it was both welcomed and cursed by the
Timorese. Welcomed for bringing peace and stability to a people who had
known little of it; for restoring burned-out homes and buildings,
repairing badly damaged infrastructure and reopening hundreds of
schools. For creating an impartial police force (a third of whom are
women), an independent justice system, for training 11,000 civil
servants (less than half the size of the bloated local administration
under Indonesian rule) and for establishing a modest but well-trained
defense force that has--along with a token contingent of international
troops--created a sense of security among a people who still recall the
unpredictable brutality of the Indonesian military and its militias.

But it's also been cursed for its mind-numbing bureaucracy, which sees
so many initiatives repeatedly delayed or never completed. For the
incongruence of air-conditioned Range Rovers roaring past dirt-poor
households, or senior officials on fat pay-packets bickering loudly with
Timorese waitresses about their restaurant bills. Or the sight of a
young UN worker thundering down the streets on an imported
Harley-Davidson motorbike, earning in one year more than a Timorese
family might hope to see in a lifetime. "There have been many, many lost
opportunities," admitted one senior French-speaking UN official who was
heading home. "The waste has been phenomenal, the bureaucracy is at
times unbelievable. There's so much more we could have done. But I have
to keep telling myself, there's so much we've achieved, too. You've got
to understand, the UN has never done this before."

For the Timorese, it will be a challenge to run their own affairs: Many
basic skills are lacking, and their only role models are a lackadaisical
Portuguese administration, a corrupt and bloated Indonesian bureaucracy,
followed by a process-obsessed and expensive UN technocracy. "We've
certainly seen how not to do it," joked one young Timorese official in
the new government. Luckily, many of the estimated 20,000 Timorese in
the diaspora for a quarter of a century--largely in Australia and
Portugal--have returned, bringing not only Western degrees but Western
sensibilities. This not only means a taste for cafe latte and cable
television but expectations of impartial justice, an intolerance of
corruption and an understanding of individual rights and responsible

Exiles are certainly well represented in the power structure: Prime
Minister Mari Alkatiri was a high-ranking Fretilin official who escaped
to Mozambique, where Justice Minister Ana Pessoa Pinto--an exiled law
student--became a judge. Agriculture Minister Estanislau da Silva was a
research agronomist in Australia, and Foreign Minister José Ramos
Horta--a Nobel laureate and for many years East Timor's resistance
spokesman abroad--taught international relations in Sydney.

Time has also mellowed the leftist fervor of Fretilin (Revolutionary
Front of an Independent East Timor), which emerged from a UN-supervised
election last year with fifty-five of the eighty-eight seats in the new
Parliament. Despite Fretilin's dominance, Alkatiri has formed a cabinet
with members from minor parties as well as independents. And the onetime
radical is now often seen networking with potential investors or
officials of the World Bank and the Asian Development Bank.
Seventies-era talk of nationalization is gone. The US dollar is the
national currency, and revenue from the new offshore oil and gas fields
in the Timor Gap will (for the first few years) be banked rather than
spent, and the government plans to run deficit-free budgets.

But it would be a mistake to see East Timor as a client state of
neoliberal think tanks: In the first years of independence, education
and healthcare will consume 48 percent of spending. Thanks to a cleverly
negotiated aid program that is top-heavy at the start (until the big
offshore oil revenues kick in), East Timor will begin life
debt-free--something few nations can claim. It's as if the government is
determined to leverage its oil and gas windfall--estimated at $6 billion
over twenty years--to create a self-sustaining economy.

What is remarkable is how priorities were set. The government's National
Development Plan is a laudable manifesto stretching twenty years, aimed
at lifting the nation out of poverty and creating a sustainable economy
based on crops like organic coffee and services like ecotourism. It was
drafted after consultations involving 40,000 people in more than 500
towns and villages across the country. Asked to name the top priorities,
respondents listed education (70 percent), health (49 percent) and
agriculture (32 percent) as the top three, followed by the economy,
roads, poverty, water and electricity.

Launching the plan, former resistance leader Xanana
Gusmão--elected the country's first president in April--said that
no other nation "has had the wisdom or faith in its people to ask these
questions. No other nation has consulted the people so widely and so
systematically. This is something unique that we all, as Timorese,
should be proud of." Alkatiri called it "a common vision for development
and the eradication of poverty."

Not all is rosy: Political leaders worry about Fretilin's dominance in
Parliament, accusing it of bulldozing initiatives and paying lip service
to democracy. The World Bank, while supportive of the National
Development Plan, is critical of the lack of a timetable. Activists
criticize the new government's unwillingness to push for the prosecution
of Indonesian military officers guilty of atrocities in East Timor
during the mayhem of 1999. But both Gusmão and Alkatiri prefer to
focus on rebuilding bridges with Jakarta and its new president, Megawati
Sukarnoputri. They even convinced her to attend the independence
celebrations, despite the fact that wounds over the loss of East Timor
have yet to heal.

All in all, it is easy for visiting Westerners to find fault. One
foreign journalist criticized the new nation for bankrolling its $1.3
million independence celebrations with corporate donations. Others saw
it as a master stroke; instead of diverting much-needed money from
health or education, the government chose to lean on corporations and
wealthy nations keen for good relations. It seems East Timor really is a
twenty-first-century nation.

Victims of domestic violence defend their right to keep their children.

Historians have made much of the ways that the social protest movements of the 1960s unsettled the morals of the dominant culture, but it is often forgotten that activists themselves were sometimes jarred by the new sensibilities as well.

The capital unscrupulously pumped from poor neighborhoods by way of
predatory loans whizzes along a high-speed financial pipeline to Wall
Street to be used for investment. "It's about creating debt that can be
turned into bonds that can be sold to customers on Wall Street,"
explains Irv Ackelsberg, an attorney with Community Legal Services in
Philadelphia who has been defending clients against foreclosure and
working to restructure onerous loans for twenty-five years.

Household-name companies like Lehman Brothers, Prudential and First
Union are involved in managing the process of bundling loans--including
subprime and predatory--into mortgage-backed securities. They often
provide the initial cash to make the loans, find banks to act as
trustees, pull together the layers of financial and insurance
institutions, and create the "special vehicles"--shades of Enron--that
shield investors from risk.

Four securities-rating agencies--Moody's, Standard & Poor's, Duff
& Phelps and Fitch--provide bond ratings for all of Wall Street;
before assigning the acceptable rating that will draw investors, they
assess the risk firewalls constructed by the securitizing company. It
becomes a complex matrix of financial operations designed to generate
capital and minimize risk for Wall Street with the unwitting help of
borrowers. "This whole business is about providing triple-A bonds to
funds that you or I would invest in," says Ackelsberg. "The poor are
being used to produce this debt--what you have is a glorified
money-laundering scheme."

Ackelsberg and his colleagues frequently find themselves struggling
through a tangle of companies to find a party legally liable for remedy
when a client is in foreclosure due to a bad loan. Often the company
that originated the loan doesn't actually own it but, rather, is acting
as a servicing agent--assuring the cash flow to a securitization trust.
Frequently shifting ownership also complicates attempts to create
accountability: In one case, United Companies Lending, once hired as a
trust by Lehman Brothers, went bankrupt; EMC Mortgage Corporation, a
wholly owned subsidiary of Bear Stearns, placed the highest bid for the
right to service the outstanding loans and collect the servicing fees.

Sheila Canavan, a Berkeley-based attorney who recently won a settlement
that will pay out some $60 million to the plaintiffs in a fraud lawsuit
against First Alliance Mortgage, says, "The industry and lawyers make it
as complicated and arcane as they can so people don't understand." They
also, she adds, want to distance themselves from the frontline predators
who hawk the loans.

Government-sponsored mortgage lenders Fannie Mae (FNMA) and Ginnie Mae
(GNMA) have long bundled conventional loans--in the 8-percent range--to
create mortgage-backed securities. During the mergers and acquisitions
boom in the mid-1990s, when banks began absorbing subprime lenders, Wall
Street caught on to the potential of bunching subprime mortgages,
including predatory loans. "The banks realized that this was a
moneymaker," says Shirley Peoples, a social research analyst for the
Calvert Group, an investment fund specializing in socially responsible
lending. "They put a legitimacy on it, but it still is what it is."

"Wall Street, since it got into securitization, needs product, needs
mortgage loans to pull together," says Canavan. The securities are then
aggressively marketed, she says. "The Wall Streeters go around the
country, pools of loans are sold to institutional investors, pension
plans, universities."

And while it looks as if the lenders themselves set up the difficult
loan terms, Canavan says that Wall Street encourages the gouging
practices. The big financial institutions fronting cash for predatory
loans have information on the loans' interest rates and know very well
what it takes to trap borrowers into those rates. They also build in
incentives for dubious practices: "The loan originators are compensated
with late fees," Canavan says, by way of example. "They're going to make
sure payments don't get there on time, that they get lost or, as the
industry says, 'drawered.'"

It's tough for a mutual fund investor to know whether investment dollars
are going toward supporting a predatory loan scheme. The investor who
knows the names of the biggest offenders may be able to detect them in a
prospectus, but many times the information is not included or the names
of the companies change. Socially responsible funds such as Calvert and
organizations like the Interfaith Center on Corporate Responsibility
have been meeting face to face with banking interests to probe their
policies and positions on bundling the predatory loans. And many in the
industry argue that a rash of bankruptcies and financial failures has
pressured the industry to reform.

But not all consumer advocates buy that.

"These companies come and go," says Ackelsberg, "but the residue of
their abusive activity remains because the mortgage loans are still out


The new political correctness is real, even if it isn’t always wrong.

January 29, 2015

Stanley Kubrick “has taken a whole complex of America’s basic assumptions by the shoulders and given them a rough shaking,” The Nation’s Robert Hatch wrote.

January 29, 2015

What do you get when fall in love… with lucrative corporate boondoggles?

January 28, 2015

The fining of Marshawn Lynch by Roger Goodell speaks to far larger hypocrisies and prejudices that emanate from the NFL's central office. 

January 27, 2015

Federal prosecutors want to put one in prison for taking kickbacks for doing political favors. The other has been richly rewarded for defrauding investors and saving fellow bankers from criminal prosecution.

January 27, 2015

The headline of Frank Donner’s open letter to the committee is probably the best The Nation has ever run.

January 27, 2015

At the heart of a silly scandal, there is a damning truth about NFL Commissioner Roger Goodell and the billionaires he represents. 

January 26, 2015

Kaiser's workers and patients have had enough of epic waiting times and surging suicide rates.

January 26, 2015

Yes, The Almanac covered the Clinton impeachment trial back on January 7. But the rules are the rules: seventeen years ago today, Bill Clinton looked America in the eyes and lied.

January 26, 2015

A profile of Bell in The Nation that year reported that the Scot spoke with a "rattling burr that adds piquancy to whatever he says."

January 25, 2015