Friday, February 27, 2009

Smoke This Recession

Smoke This Recession
It's simple: First we tax the booze. Then we legalize the pot. Done.
By Mark Morford, SF Gate Columnist
Friday, February 20, 2009

It is a time of strange bedfellows and bizarre contortions and extraordinary responses to extreme situations, all overslathered with gobs of panic and dread and oh my God, I might have to sell the Range Rover.

In other words, it is a time -- like you don't already know -- of plentiful alarmist rhetoric, resulting in weird outbursts of ingenuity and wanton ethics-loosening, all in a desperate effort to suck up some much-needed cash.

Translation: Money's tight, baby. City's in trouble. State's deep in the hole. Nation's broke.

Solution? Upend the system. Think differently. Get creative. Demolish Ye Olde Ways. And maybe get a really nice buzz on while you're at it.

Where to begin? How can the city/state refill their empty coffers and further gouge the populace to make ends meet? Increased bridge tolls? A new per-mile driving tax? Heavier parking fines? State parks abandoned and left to seed? Child's play, darling.

You want to raise funds in an instant? You want a sure-fire, double-barreled source of nearly limitless funds from a wary, burned-out citizenry? That's easy. Go after its biggest vices, its most beloved balms.

Up first: booze. Already local governments are quietly proposing jacking up the alcohol tax and loosening sales restrictions because, well, why the hell not? Aren't you, right this very moment, as you prepare your taxes and weep over your gutted portfolio and stare down one very bleak 2009, more in need of a drink or three than at any time in recent history except for the entirety of the last eight miserable, Bush-stabbed years? Well, there you go. Tax increases on cocktails, here they come.

But it's not just governments. Check out the happily shameless TV networks who, for the first time in a whocares number of years, are allowing ads for alcohol and K-Y lube during prime-time programming. Oh the outrage! Oh the debauchery! Who, pray who, will protect the children? Oh wait, the children are out buying daddy some more beer and applying for a job at Starbucks to help pay rent. Never mind.

New taxes on the other Great American vices: porn, gambling, prescription meds, pro sports, obesity, Miley Cyrus? Watch for it.

Now, let's get serious. Because there are, of course, bigger fish to fry in the sea of potentially lucrative, all-American inebriates. There is a far more potent, obvious solution to the state's budget woes, a huge, untapped revenue source, and now might be the perfect time to, you know, light it up.

Really now, could there be a better time to decriminalize/fully legalize pot? Or, more fully, to decriminalize pot, and then spread respectable pot shops and vending machines and dispensaries far and wide, instill quality control and decent oversight and then tax the living hell out of the glorious, stress-reducing goodness, as we stop wasting billions fighting its grand ubiquity and instead sink into profitable pools of warm, hazy progress? Don't you already know the answer?

It's difficult to imagine that some intrepid legislator hasn't already walked into Arnie "Pot is not a drug" Schwarzenegger's office and said, "Governator, now is the time. Light it up. Inhale the new reality. Pot is, by a huge margin, the single largest cash crop in the state unless you count porn stars and celebrity rehab. It rakes in upwards of $14 billion a year -- maybe a lot more than that -- and that's just from five clever hippies and a couple intrepid grandmas in Ukiah. Imagine what we could do if we went all-in."

Are the discussions ongoing? Are they passing the bong of possibility around the state Senate chambers? You're damn right they are. What's holding them back? Probably the usual: the negative PR, looking "soft" on crime, encouraging permissiveness, pressure from prison lobbies, and so on. Don't worry, Sacramento. Everyone's already plenty drunk/high on prescription meds trying to alleviate fears of losing their job to care about that nonsense right now. Get to it.

There won't be much pushback from D.C. President Obama's already stated that his upcoming appointee to head the DEA is going to knock it the hell off with the insidious raids of harmless medical pot shops in California, and wants to quit using federal resources to bash hippies and circumvent state laws.

Look. Is there really anyone left who doesn't already know the "War on Drugs" is a pathetic joke, an abject failure and a taxpayer nightmare, and the only reason it survives at all is to fund the CIA and fellate the prison guard unions and support a shameful prison system, and to let politicians say they're "tough on crime" so they can to deflect all those uninformed parents who relentlessly whine about pot in public schools just before dashing off a wine-tasting party to snort a nice line of Bolivian coke?

Anyone left, furthermore, who doesn't know that pot is far safer than booze, less addictive, nonviolent, more transportable, easier to light, and generally won't interfere with your ability to crawl across the carpet and lick cookie crumbs from your lover's thighs? And sure, while heavy, daily usage can make you slow and stupid and rather useless to the world, well, so can a six-pack of Diet Dr. Pepper and six hours of TV every day. Gateway drug? That's on Channel 2, right after "Oprah."

And another thing. Maybe it wouldn't be merely tax 'n' puff. Maybe California, already the pot-growing capital of the nation, could become something more. A hub. A world-class research center. Pot education, study, medicine, import/export, the works. We could ship our crop to various nations in desperate need of chilling the hell out, like Israel. Palestine. Pakistan. Russia. The N-Judah on a Friday afternoon. We could become the largest research and manufacturing center in the world. How proud we would be. You know, sort of.

Let's phrase this grand scenario in another way: Why the hell not try it? What have we got to lose? What, we could go more broke? We could get more desperate and anxious? Fact is, economic nightmares need not breed only miserable stories of lost homes and lost jobs and shuttered businesses. They can also spawn creative solutions, innovative thinking, widespread munchies. Now is the time.

Let's not get carried away. Pot's only one little inebriate, one mild and -- let's just admit it -- relatively boring feel-good plant. California is $40 billion in debt and we're running low on water and we can't give away those hideous tract developments out in Stockton. Milking the pot cow for all she's worth might net us, at best, a few billion a year. To get out of this massive hole, we'd have to legalize Ecstasy too. (Someday, honey, someday).

But it's something. It's radical new thinking that's not the slightest bit radical, or new, and in fact the notion is now even more obvious than it's been for the past 30 years. What are we waiting for? A match?

Ammiano bill would legalize marijuana in state

Ammiano bill would legalize marijuana in state
Wyatt Buchanan, Chronicle Staff Writer
Monday, February 23, 2009

SACRAMENTO -- California would become the first state in the nation to legalize marijuana for recreational use under a bill introduced today by Assemblyman Tom Ammiano, D-San Francisco.

The proposal would regulate marijuana like alcohol, with people over 21 years old allowed to grow, buy, sell and possess cannabis - all of which is barred by federal law.

Ammiano said taxes and other fees that accompany regulation could put more than a billion dollars a year into state coffers at a time when revenues continue to decline. He said he anticipates the federal government could soften its stance on marijuana under the Obama administration.

"We could in fact have the political will to do something, and certainly in the meantime this is a public policy call and I think it's worth the discussion," Ammiano said. "I think the outcome would be very healthy for California and California's economy."

A spokeswoman for the Drug Enforcement Agency in Washington, D.C., declined to comment on the proposal.

The use of marijuana for medical conditions has been legal in California since voters approved Proposition 215 in 1996.

E-mail Wyatt Buchanan at

Against the Use of New Nuclear Power Plants

February 22nd, 2009

Dear Readers,

The enclosed Resolution Against the Use of New Nuclear Power Plants to Solve America's Energy Problems passed this weekend (Feb. 20-21, 2009) at a meeting of the California-Pacific Conference of the United Methodist Church, Conference Board of Church and Society. The Resolution was presented by Peter Moore-Kochlacs. Peter then took the document to Washington, where he is right now, presented it to 25 people from various interfaith groups, and plans to present it to Congressional aides this Monday (February 23, 2009).

I am deeply honored to have had a part in the creation of the Resolution, along with many other people, and I hope it will be widely distributed and endorsed. If you, or any group you are associated with, endorses this Resolution, please contact Peter and let him know:

Peter Moore-Kochlacs


Ace Hoffman
Carlsbad, CA
Resolution against the use of new nuclear power plants to solve America's energy problems
Whereas the Bible is clear that we are not to pollute our neighborhoods, the planet, and the poor, but are to be good stewards of all (Genesis 2:15, Isaiah 24, Jeremiah 4:2&7,Micah 6:6-8 & Matthew 22:36-40), and

Whereas the building of nuclear power plants, the generation of nuclear power and the plant’s radiation byproducts have been proven to be very unhealthy to life, and

Whereas, every step in the nuclear process is fossil-fuel intensive, including mining, milling, fuel fabrication, building the power plants, and even operating them -- let alone the fossil fuel and other resources which will be needed to care for the used reactor cores after they have been irradiated inside the reactor, and

Whereas, the only safe nuclear power plant is one that does not exist, since no human structure (e.g. underground storage facilities, kick and roll burial of “low level” radioactive materials) can withstand the forces of nature, and

Whereas, every step in the nuclear process is not only fossil-fuel intensive, but terribly polluting in its own right, starting with leakages of radioactive radon gas from the mine tailings, to the radioactive "shine" which emanates from the spent fuel casks, despite several feet of concrete and several inches of steel, and

Whereas, our children are 100 to 1000 times more susceptible to radiation poison damage than adults, and

Whereas, thousands of diseases which are caused or enhanced or exacerbated by radiation are so much worse for children who have no voice or vote, and

Whereas, there is a very sound scientific reason why nearly $100 billion dollars in research funding so far has produced nothing in the way of safe containments for nuclear waste (the scientific reason being that radioactive decay is far stronger than any chemical bond in nature -- known or postulated), and

Whereas, money spent on nuclear power will buy, at most, half the number of jobs that money spent in developing and building cleaner energy sources, such as wind power, would buy, and the new energy would be delivered as much as ten years sooner, and

Whereas, the nuclear industry is incapable of purchasing insurance on the open market, because the size of a catastrophe would bankrupt any and all insurance agencies, and

Whereas, the Government does not provide adequate insurance (the Price-Anderson Act is a hollow shell which would hardly compensate any one after an accident); those few who would receive anything, would get fractions of a penny on the dollar, and

Whereas, every operating nuclear power plant produces isotopes of plutonium and hydrogen and other elements which are the raw materials of nuclear bombs, and

Whereas, every operating nuclear power plant has a list of security and safety violations, which if fully known and understood by the public, would create such an outcry that all current nuclear power plants would likely be shut down, and

Therefore, be it resolved that the California Pacific Conference Board of Church and Society of the United Methodist Church insist that the United States Federal Government provide that no government money be invested in any nuclear power technology, except as maybe necessary to pay for shutting down the current nuclear power plants as quickly as possible and caring for their waste in as safe as possible a manner, and

Therefore, be it further resolved that we oppose the building of any new nuclear power plants, their funding, or their approval and that the currently operating plants be closed as soon as feasible, and

Therefore, be it further resolved that people who have already been harmed by nuclear power be both identified and compensated as best as possible, and

Therefore, be it further resolved that cleaner energy alternatives such as solar, wind, geo-thermal (atmospheric vortex engines, ocean thermal energy conversion, low flow rate undersea turbines) and other workable and sustainable clean energy solutions be invested in by our Federal Government, instead of Nuclear Power Plants, and

Therefore, be it finally resolved that this resolution be presented to members of the US Congress, other government bodies, public policy organizations, religious bodies and congregations of faith across the United States and World for their information and hopeful affirmation of it.
Ace Hoffman
Author, The Code Killers:
An Expose About Nuclear Crimes High and Low, Large and Small, Far and Wide
Free download:
phone: (800) 551-2726; (760) 720-7261
address: PO Box 1936
Carlsbad, CA 92018
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Who Was Jesus?

Who Was Jesus?
Fingerprints of The Christ
A Review by
David Mills
Author of Atheist Universe

Anyone who knows me personally already appreciates what a huge fan I am of D.M. Murdock (aka "Acharya S"). After reading-and thoroughly enjoying-her book Who Was Jesus? Fingerprints of The Christ, my admiration of Ms. Murdock has climbed to an even loftier elevation. Murdock is one of only a tiny number of scholars with the richly diverse academic background (and the necessary courage) to adequately address the question of whether Jesus Christ truly existed as a walking-talking figure in first-century Palestine. This question, and many others related to New Testament reliability, are directly confronted and satisfyingly answered in Who Was Jesus? I loved this book. It is absolutely superb in every way, from the eloquence of the writing to the integrity of the scholarship. This book should be required reading in every American classroom.

My personal recommendation is that Who Was Jesus? should be the first book purchased and studied by anyone, atheist or true believer, who wants to debate Jesus' existence and the Bible's veracity. Why the first book? Because Who Was Jesus? presents all the background knowledge from which any informed discussion of Christianity must proceed. In doing so, Murdock quotes the very voices of Christian and New Testament scholars, evangelists and apologists themselves, hoisting them on their own petards! Just as a diplomat could not make meaningful proposals for Middle East Peace without an intimate knowledge of the region’s history, neither can any individual engage in intelligent discussion of Christianity without a working familiarity with the information in this brilliant volume. You should therefore make this book priority reading even over The God Delusion, God is Not Great and other excellent but, in my opinion, less important books than Murdock's.

Amply citing Old Testament text to document how the New Testament was adaptively contrived from the Old by using it as a blueprint, Murdock's book focuses primarily on how the New Testament was put together, or should I say "thrown together." I have read many books, both by Christian apologists and resolute atheists, in which the authors displayed very poor understanding of what's actually found in the New Testament. Most people, including some New York Times best-selling authors, seem to derive their "knowledge" of the Bible from hearing their own pastors' sermons on Sunday mornings or, if they’re atheists, from their distant childhood memories of their pastors' sermons on Sunday mornings. In either case, as Murdock points out so adroitly and entertainingly, our popular conception of what Scripture says is often completely at-odds with the text itself. Yes, most people remember that the first four New Testament Books are Matthew, Mark, Luke and John. But their knowledge of the Bible stops abruptly at that point. And even here, Murdock describes in a most fascinating way why these four Gospels were almost certainly not written in the order in which they currently appear, nor were they authored by the men whose names they bear, not even appearing in the historical record until over a century later!

Murdock provides a splendid and concise summary of the events described in each Gospel account and shows how they are inconsistent with each other in innumerable details. She also presents a spellbinding analysis of the so-called "secular historical references" to Jesus. In each case, she reveals how this extra-biblical "evidence" is completely lacking and how, incredibly, even these dubious "historical references" to Christ were authored by writers who weren't even born until years after Jesus' alleged crucifixion. Even charitably interpreted, therefore, the extra-biblical allusions to Jesus are second-hand hearsay, or twenty-fifth-hand hearsay, and are of no value whatever in determining the accuracy of the New Testament. The fact that there are no contemporary historical references to Jesus argues against his purported existence, especially in consideration of his astounding alleged acts and widespread fame as depicted in the New Testament, other facts emphasized in Who Was Jesus? As Murdock further demonstrates, the New Testament is internally inconsistent as well and showcases within its own pages the best possible evidence against its Divine origin. My very favorite chapter began on page 139: Questions About The Gospel Story. If the battle between atheism and Christianity may be described as a philosophical and theological war, then this chapter provides your invincible arsenal of weapons of mass destruction.

Ms. Murdock also describes Matthew's tale of newly resurrected corpses wandering the streets of Jerusalem following Jesus' crucifixion. Allegedly, these zombies popped back to life and walked away from their Jerusalem burial sites; yet there is not a single non-biblical historical reference to this unimaginably eye-popping event. Murdock points out that, in this instance-and in many other New Testament instances as well-the best explanation for the lack of outside references is simply that the biblical account was fabricated. Otherwise, we are left with the conclusion that no historian of the time considered such a mass resurrection of the dead to be noteworthy.

I really enjoyed reading this book. It was an easy and pleasurable read. Even though I've been interested in this subject myself for over thirty years, there was a great deal of information that I learned from Ms. Murdock's book. The book puts together the text of the New Testament with texts of extra-biblical sources and integrates them with common sense and logic. The result is that an objective reader is left with the conclusion that the Bible is simply false. Murdock has stated that she doesn’t tell her readers what to believe: She just presents the evidence. Perhaps so. But the evidence she presents is so compelling and so skillfully argued that the conclusion, it seems to me, is inescapable: Christianity is merely another ancient mythology, like Greek or Roman mythology. Murdock has devastatingly checkmated her theologically enslaved opponents in this debate.

I don't know whether the remainder of my comments (below) belong in a book review, but I'm expressing them nonetheless.

D.M. Murdock/Acharya S, like all authors on controversial subjects, has many critics. But they all share one commonality: They don't know what they're talking about. Murdock understands many languages and has a breadth of knowledge her critics cannot match. This fact irks the uninformed. Having given a fair hearing to some of her online detractors and their "rebuttal" videos, I have detected not only a lack of knowledge on the part of her critics, but also, in some cases, a thinly disguised misogyny. Objectively speaking, D.M. Murdock is an attractive and dazzlingly brilliant woman. This is more intimidation than some men can handle, even some atheist men. To those who follow the teachings of the Apostle Paul, who forbade women to even speak in church, it "logically" follows that Ms. Murdock should remain silent as well, especially since she is grieving the Holy Ghost. In plain English, Murdock is dealt criticism that would never befall an ugly old man in a monastery. I would like to think that 21st-century America is beyond such juvenile conduct, but that is sadly not the case.

If you live in America and you are considered a "mainstream intellectual," you may proffer the most absurd arguments imaginable-and they are considered all well and good. But if you're viewed as "outside the mainstream," you may proffer the most carefully prepared, incontrovertible evidence possible, and you will nevertheless be viewed cynically by those who cannot be troubled to think through the issues for themselves and who must instead rely upon "appeals to authority" (a logical fallacy). Murdock's critics invariably fall into this slipshod and errant category.

To summarize: D.M. Murdock's Who Was Jesus? Fingerprints of The Christ is unquestionably one of the finest and most enjoyable books I've ever read. It is thorough and scholarly, yet pleasurably provides invaluable knowledge on the most riveting of all subjects. I admire Ms. Murdock tremendously, as much for her personal courage and character as for her remarkable and vitally important volume.

David Mills
Author of Atheist Universe

Acharya S/D.M. Murdock
Author, "The Christ Conspiracy," "Suns of God," "Who Was Jesus?" and "Christ in Egypt"

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Damn that Lincoln: Abe's to blame for Jindal

Damn that Lincoln: Abe's to blame for Jindal
by Greg Palast
Exclusive to by Greg Palast

Damn that Abe Lincoln. When Louisiana and Mississippi seceded from the Union, a sensible president would have sent them a box of chocolates with a note, "Goodbye and good riddance."

Tonight, following Barack Obama's budget presentation to Congress, effectively the president's first State of the Union Address, the Republicans have chosen to give their party's response, the governor of the state that wanted to leave the Union, Louisiana's Bobby Jindal.

Jindal's going to tell us that Barack Obama is a terrible President because Obama wants to require states like Louisiana to extend unemployment insurance to - get this - the unemployed! (Technically, the federal government would pay 100% of the cost of reforming Louisiana's and Mississippi's Scrooge-sized benefit requirements.)

Jindal, and some other Republican governors, notably Haley Barbour of Mississippi, are actually turning down millions in federal funds for their own state's unemployed out of fear that, four years from now, they may have to maintain full unemployment insurance like the rest of America.

Barbour's excuse, parroted by Jindal, is that the Obama payments to the unemployed of their states would mean, when the economy returns to expansion, that their state would have to increase unemployment insurance taxes and payments to the US average, scaring away new employers. "I mean, we want more jobs," says Barbour. Um, this is the Governor of MISSISSIPPI talking. Exactly what new "jobs" is he talking about? Is Microsoft based in Gulfport? Is Genentech opening its new headquarters in Bogalusa?

As an economist, I can tell you that the only industry Mississippi leads in is deep-fried chicken-dog manufacturing. I will admit that Louisiana and Mississippi can boast of growing employment at several casinos and cathouses spilling across what the locals charmingly call the "Coon-ass Riviera." Jindal's Louisiana is, after all, the state that solved its unemployment problem by sending its unemployed to Texas in FEMA trailers.

And it's true that Jindal's and Barbour's states do lead the nation in a few indicators. Like poverty: Mississippi has America's highest poverty rate. Louisiana is third worst in America.

And how about their commitment to education? Louisiana ranks 5th and Mississippi 2nd worth in school kids' math scores. As Randy Newman notes about the gulf states' education policies, "good ol' boys... from LSU, went in dumb, come out dumb, too."

Jindal himself is a product of a more advanced culture: His parents are Democrats. The Jindals are Hindus who come from the Punjab in India, a state known for its welfare safety net. Jindal, turning away from the successful example of his parents' politics and culture, has gone native, becoming a born-again Christian Republican who doesn't accept Darwinian evolution nor Keynesian economics. (I hear he may complete his redneck makeover next week by marrying his cousin at a tractor pull.)

For over a century, Louisiana and Mississippi have been trying to attract employers by changing their economy from one based on involuntary servitude to one based on voluntary servitude, selling their citizens to the lowest bidder. The results are blindingly visible: Mississippi and Louisiana, under the Barbour/Jindal Republican regime, maintain the lowest per-capita incomes in the nation (50th and 46th respectively). Mississippi and Louisiana infant mortality rates (1st and 3rd in deaths in the USA) would shame Costa Rica.

Years back, when I worked as an economic consultant to New Orleans, the Louisiana State Legislature was about to require that schools teach evolution as merely a theory equal to the Bible's literal creation myth. When asked if this would harm big employers' views of the state, I said, "Not at all: most national employers think of Louisiana as a state filled with Bible-thumping, dumb-bell rednecks. You won't have to worry about changing that impression."

OK, it's easy to make jokes about America's own Third World states. And before I get a zillion complaints, I'll be the first one to note that Louisiana has birthed the extraordinary, including the greatest of America's investigative journalists, the late Ron Ridenhour, jazz, Chris Ruth's Steakhouse and gris-gris. And it was Louisiana that long ago led the nation in social reform, whose governor, in 1932, led the national fight to create a program now known as "unemployment insurance." Really.

Nevertheless, Jindal's rejection of funds for his state's own unemployed simply follows a history of local Republican plantation-mentality cruelty. After Hurricane Katrina, I met a young man, Stephen Smith, who was stranded with a family on Highway 10 for four days while George Bush photo-strafed him from overhead. An elderly man with Stephen died of dehydration after giving his grandchildren his last bottle of water. (See Stephen on Big Easy to Big Empty, click here.)

I investigated the drowning of New Orleans and the "let'm drown" rescue plans of the Bush Administration. What I found was sickening, heartless and Republican. Marie Antoinette at least offered cake.

Now, once again, the Republican party, by making Jindal the party's official spokesman, is adopting the Barbour-ous refusal to reach out a saving hand to Americans drowning in this economy.

So, let me make a suggestion for Governors Jindal and Barbour. If you cannot join America in accepting our President's call to arms against disaster, if you reject our President's State of the Union - then leave the Union.

As the prescient Phil Ochs sang:

And here's to the government of Mississippi In the swamp of their bureaucracy they're always bogging down…
…And the speeches of the governor are the ravings of a clown
Oh, here's to the land you've torn out the heart of
Mississippi find yourself another country to be part of

Greg Palast's investigative reports can be seen on BBC Television Newsnight. Palast, author of the New York Times bestsellers Armed Madhouse and The Best Democracy Money Can Buy, is a Nation Institute/Puffin Foundation Writing Fellow for investigative reporting. Pick up the DVD of Big Easy to Big Empty at

Please subscribe to our reports at

The US v. Barry Bonds

The US v. Barry Bonds
By Dave Zirin

This is a story about garbage. There's the actual garbage overzealous federal investigators examined in their efforts to prosecute a surly sports celebrity. There's the shredding of the Bill of Rights, crudely ignored by the government in the name of obsession and ambition. Finally, there's the thorough trashing of people's reputations, not to mention the game of baseball. Welcome to The US v. Barry Bonds ; please disregard the stench.

The trial to prove that slugger Barry Bonds perjured himself in the Bay Area Laboratory Co-operative (BALCO) steroid investigation begins March 2. Yet after seven years of investigation, millions of dollars in work hours and countless ruined reputations, the US Attorney's Office will arrive in court with virtually no leg to stand on. Judge Susan Illston struck down most of the prosecution's case, a move ESPN legal expert Lester Munson called a "devastating" setback for prosecutors. The ruling was an indictment of not only the government's case but its entire approach toward Bonds from day one.

John Ashcroft's Justice Department always seemed irrationally determined to prosecute Bonds. It was as obsessive as the fisherman Santiago attempting to bring home the great marlin in Hemingway's The Old Man and the Sea . The embodiment of this obsession was IRS agent Jeff Novitzky. He broke open the BALCO case after spending a great deal of time, to the adulation of the press, literally sifting through the company's garbage and sewage.

Novitzky was given the green light by President Bush and Ashcroft to go for the jugular. In 2004, accompanied by eleven agents, he marched into Comprehensive Drug Testing, the nation's largest sports-drug testing company. Armed with a warrant to see the confidential drug tests of ten baseball players, he walked out with 4,000 supposedly sealed medical files, including every baseball player in the major leagues. As Jon Pessah wrote in ESPN magazine, "Three federal judges reviewed the raid. One asked, incredulously, if the Fourth Amendment had been repealed. Another, Susan Illston, who has presided over the BALCO trials, called Novitzky's actions a 'callous disregard' for constitutional rights. All three instructed him to return the records. Instead, Novitzky kept the evidence...."

It was a frightening abuse of power, all aimed at imprisoning a prominent African-American athlete. Yet despite the landfills of trash, the government's case always rested on a flimsy premise. Bonds's contention under oath was that anything illegal he may have ingested was without prior knowledge. The only person who could contradict Bonds was his trainer and longtime friend Greg Anderson. The government pressed Anderson to give testimony. He refused, citing a promise made by the feds that he wouldn't have to testify after pleading guilty to steroid distribution and money laundering in 2005. The feds stuck him in jail for thirteen months to soften him up, but he didn't crack.

Anderson has remained firm even though in January, twenty FBI and IRS agents raided the home of his mother-in-law and threatened to punish her for tax evasion if Anderson didn't spill. Similar threats have been made against his wife. Mark Geragos, Anderson's attorney, told Yahoo Sports, "It's such a blatant and transparent attempt to intimidate Greg. They're acting like the Gestapo. Even the mafia spares the women and children." Without Anderson, the state's case was always weak. But now itis on serious life support. Illston ruled most of Novitzky and the government's case inadmissible, for good reason.

The prosecution wanted to submit a surreptitiously recorded statement from Anderson as well as notations on what it calls his "drug calendar," even though he would not testify to authenticate any of the evidence. Illston, to her credit, said no dice and declared those items inadmissible. The government has raised the specter of jailing Anderson again, but Illston remarked in a "raised voice" that jailing someone twice for refusing to testify would be beyond the pale.

The government is hinting that it will appeal Illston's ruling, but that would indefinitely delay the trial. If the US Attorney's Office does continue the case, it has made clear its next line of offense: it will have Bonds's former mistress, Kimberly Bell, testify in detail about the alleged "shriveling" of Bonds's testicles. Jeff Novitzky should be proud.

It's way past time to say enough is enough.

Whether or not you are a Barry Bonds fan, or consider him to be just a step above a seal-clubbing, pit bull-fighting bank executive, every person of good conscience should be aghast at the way the Justice Department has gone about its business. Barry Bonds, Greg Anderson and maybe thousands of others have had their rights trampled on, all for the glory of a perjury case that looks to be going absolutely nowhere. Attorney General Eric Holder and President Obama have strongly indicated that the government is getting out of the steroid monitoring business. That is welcome, but after so many years, so many tax dollars and so many reputations destroyed, it all feels positively Pyrrhic.

At the end of The Old Man and the Sea, when Santiago finally returns to shore, his 18-foot catch has been reduced to a skeleton. A crowd gathers to gawk and imagine what the magnificent marlin once was. Santiago completed his journey with nothing, but he felt purified for the battle and slept deeply and proudly. As we pick through the bones of Barry Bonds, I can't imagine Jeff Novitzky feels the same.

Dave Zirin is the author of “A People’s History of Sports in the United States” (The New Press) Receive his column every week by emailing Contact him at .

Megan Fox is back on the market? SCORE!

Photo is of Megan Fox with an ugly cancerous growth

Megan Fox is back on the market? SCORE!
February 24, 2009

File this under BEST NEWS EVER for girls and guys — and guys and girls — everywhere.

Hollywood's hottest engaged couple, Megan Fox and Brian Austin Green, are totally done.

"The relationship had run its course," one of those chatty insiders tells Us. "They both realized the time had come to go their separate ways. It's completely amicable, and they are remaining friends."

The openly bisexual Fox, 22 (Mikaela in "Transformers: Revenge of the Fallen"), and Green, 35 ("Terminator: The Sarah Connor Chronicles") are "both focusing on their careers," the source adds.

Is that Hollywood publicist code for, "Yes, yes, she is going to be the next Lara Croft, and she can certainly do better than Brian Austin Green."

Oh dear. But about those tattoos they got of each other's names — paging Dr. Tattoff!

Maybe Megan could call Angelina Jolie for the name of the doc she had laser off her ex-husband Billy Bob Thornton's name.

These two do have a lot in common: multiple tattoos, fabulous bods, long dark hair, past lesbian sexual experiences ....

But it's kinda sad, because even in November, Fox talked about wedding plans.

"It's not going to be a big wedding," she told Us at a GQ bash. "I'm not one of those girls. If it happens, it will be very low-key and quick and unplanned."

Wait a minute. "IF" it happens? Was she was trying to tell us something.

Hilton, Myers top Razzies bill for year's worst

Hilton, Myers top Razzies bill for year's worst

LOS ANGELES (AP) — Mike Myers' "The Love Guru" has found some disciples among Razzies voters who pick Hollywood's lowest achievements.

And Paris Hilton is getting her own Razzies moment with three awards all on her own at a ceremony that spoofs the Academy Awards on the eve of the Oscars.

"The Love Guru" won three Razzies on Saturday for worst picture, actor (Myers in the title role) and screenplay, which Myers co-wrote. Hilton's three prizes are worst actress for "The Hottie and the Nottie," supporting actress for "Repo! The Genetic Opera" and screen couple alongside either of her "Hottie" co-stars, Christine Lakin or Joel David Moore.

With three Razzies, Hilton tied the record set last year by Eddie Murphy, who won worst actor, supporting actor and supporting actress for his multiple roles in "Norbit."

Pierce Brosnan was chosen as worst supporting actor for "Mamma Mia!" The worst-director Razzie went to Uwe Boll for three movies: "In the Name of the King: A Dungeon Siege Tale," "1968: Tunnel Rats" and "Postal."

Razzies voters also gave a prize for worst career achievement to Boll, whose critically drubbed movies include "Bloodrayne" and its sequel.

"Indiana Jones and the Kingdom of the Crystal Skull" was named worst prequel, remake, rip-off or sequel.

John Wilson, founder of the Razzies, said Boll and Hilton's movies are so bad, he could envision a collaboration between the two.

"She is the 21st century Zsa Zsa Gabor. She is famous for who she hangs out with. She's not famous for any talent she has yet exhibited," Wilson said. "She may end up working with Uwe Boll. She could be the head vampire in `Bloodrayne 3.'"

"The Love Guru" features Myers as the world's second-best self-help guru, who must come to love himself before he can fully realize his potential. The movie topped out at $32 million at the domestic box office, chump change compared to the haul of Myers' "Austin Powers" sequels.

Wilson disagreed with other Razzies voters on "The Love Guru," saying that after watching it again to pull clips for the group's awards ceremony Saturday night, he did not think it was the year's worst movie.

"A couple of things he did got me to laugh, and these days, two laughs in a comedy is a high ratio," Wilson said.

In "The Hottie and the Nottie," Hilton plays a babe who won't date until her homely best pal lands a man. Hilton has a small role in "Repo," a horror musical about organ recipients who face a visit from the repo man if they fall behind on the payments.

"Repo" and "Hottie" combined did not even manage to take in $200,000 at the domestic box office.

Unlike many years, when one movie dominates, the Razzies were shared among a variety of flicks.

One voter joked that "we decided to spread the loathe around," Wilson said. "Everybody got kicked in the shin at least a little."

On the Net:


by Kenn Thomas

It started out as an interesting week for parapolitics: the son of Louis Jolyon West wrote an article on the assisted suicide of the famous CIA-MKULTRA scientist and Francis O’Neill, one of the FBI agents who remarked on “surgery to the head area” in a report of JFK’s wounds that led to David Lifton’s Best Evidence theory of body alteration, died. I circulated these stories on various conspiracy discussion lists and figured it would lead to some provocative feedback.

Jolyon West had been well-known for his association with mind control, dating to the time when he headed the psychiatry department at Lackland Air base and the US discovered many of its shot-down fighter pilots brainwashed by the North Koreans. (see: “Bug Bombs,” in the first volume of Cyberculture Counterconspiracy.) West also killed a bull elephant once by mis-administering LSD to it. He developed plans to for human experimentation as part of a Reagan-supported “anti-violence” center.

Oddly, even as Francis X. O’Neil’s obituary hit the web, so did a feature on retired Secret Service agent Dale Wunderlich, of the 11/22/63 secret service security detail, from Longmont Times-Call in Colorado. Wunderlich gave a Rotary Club talk trying to make a case for the lone nut theory. “The sight of Kennedy’s body, face down in the hospital, is still engraved on Wunderlich’s mind,” according to the article. Fruitless book and net searches for such an image--JFK’s body face down—added some weight to Wunderlich’s own statement that “I had such tears in my eyes that I couldn’t see anything.” Those not inclined to regard Wunderlich as carrying on a decades-long mythology that few really believe may have taken the kinder view that Wunderlich sees only what he wants to see about this momentous event in his life.`

That’s about where any thoughtful reflection on these parapolitical footnotes went. The lists instead got clogged with things like another poorly written Ann Coulter rant against the “fiat money” that Barack Obama plans to print up to fund the stimulus program. Coulter doesn’t disguise her role as a narrow minded and barely literate ideologue. Her readers and critics hear no complaints from her when the government starts over-printing fiat money for the sake of the military, which does as much to deplete currency value as anything. So her criticisms remain select and transparent even as her writing style shows her up as—challenged. (Christopher Hitchens has great fun with this.) I had a girlfriend once who labeled Coulter one of the "dumb blondes for Bush." The other was Barbara Olson, who died on one of the 9/11 planes. Olson’s tragic death didn't improve her arguments any which often fell along the lines of Coulter’s aping the hypocritical old "less government" bull. She supports only a shift in big government spending, not a reduction. It’s a fairly obvious false dialogue. I would have greatly preferred a discussion of things of more historical weight, like the stories of people like West and O’Neill.

Conspiracy critics do themselves a disservice by ever alluding to any of these mainstream pundits. If you have a point to make, make it yourself. Coulter and Glenn Beck and Rush Limbaugh and all those others making similar points—often gleaned from the very online conspiracy sources they say they eschew--are at best like a broken clock, right twice daily, if then. They serve the agenda most students of parapolitics claim they oppose. Their political heroes (Reagan, Bush) have time and again advanced the practice of issuing exorbitant “fiat money” far more than anyone. The TV pundits are about shifting the priorities to which the money is applied. They didn't say a word when Bush's Wall Street buddies, the courtesans of his monarchy, raided the treasury during his last weeks in office. It's only the threat that Obama wants to spend on social programs that's put a bee in their bonnet now. They could give a damn about fiat money, as they always support it for corporate welfare and when the military budget expands. All are welcome to take whatever side they want on the spectrum, of course, but all also, at least when it comes to the endeavor to understand conspiracy, must acknowledge the process of false dialogue and media brainwash. Talking about West, O’Neil and Wunderlich would have been a much more enlightening path to this understanding.

Videos by Geert Wilders have made the rounds of late as well and offer a similar lesson. He’s a right wing Dutch politician who fattens his own political fortunes by very publicly opposing the spread of jihadist Islamic culture in Europe. Wilders is at least as right about that as “conservative” “right” or whatever media is about “fiat money”, but does anyone have to support the right in the Netherlands to agree with him? Of course not. They can, in fact, oppose Wilders and the jihadists at the same time. One long-time list manager even circulated material that literally came from a neo-Nazi group in the UK because it has the same anti-jihad message! This is exactly where the false dialogue leads, islamo-fascists on one side; neo-nazis on the other. It’s not an issue of blaming the messenger. These "messengers" are the same people the conspiracy critical world has always opposed.

As for JFK and the Federal Reserve: he issued silver certificates in smaller denominations in order to help remove them from circulation. The value of the silver used in making coins had become greater than the value of the coins, so Kennedy facilitated the effort to stop using actual silver in minting coins, fully realized in 1965, under Johnson. This was a move clearly in the direction of fiat money, not toward it. The US has been off the gold standard since 1934, so Kennedy was acting in the grand tradition of FDR by doing the same for the silver standard. It's hard to think that Kennedy was shot for this purpose. Whether it’s gold, silver or the goodwill of a cabal of Jewish conspirators, money is what everyone agrees to call money—American GIs used cigarettes as currency in post WWII Germany. It’s supposed to be a consensus reality. The only place where mainstream pundits and the parapolitical underground agree is on the lack of that consensus.

Roy Lisker, Love and Cosmology

"One might posit the existence of a conspiracy in the collective unconscious, whereby society arrogates to itself the right not only to pass judgment on all matters of the heart, but to credentialize it as well, deeming illegitimate and even non-existent all manifestations which do not conform to a deliberately reductive framework imposed by social institutions and mediated through language."

--Roy Lisker, Love and Cosmology, April 1979

Tuesday, February 24, 2009

Beast of the Month - December 2008

Beast of the Month - December 2008
Al From
Democratic Leadership Council Kingpin

"I yam an anti-Christ..."
John Lydon (aka Johnny Rotten) of The Sex Pistols, "Anarchy in the UK"

"His choice, basically, is whether he's going to be Uncle Sam for the people of this country, or Uncle Tom for the giant corporations."
Ralph Nader on Barack Obama, on election night

Anyone who is cynical about the whole Obamamania fad (and yes, that would include The Konformist itself) might as well suck it up and accept the truth: like it or not, Barky is the face of "liberalism" and "the left" for at least the next eight years. (And perhaps up to forty, if you believe the persuasive political theories of Webster Tarpley and Samuel Huntington.) So the question needs to be asked: what is the reality behind this face?

Despite all the korporate press propagandizing already proclaiming President Obama a perfect mixture of JFK, MLK, RFK, FDR, Abraham Lincoln and Jesus Christ even before he has taken office (an embarrassing level of delusional fawning by the establishment media not seen since... well, since George W. Bush right after 9/11) he is decidedly a transparent fraud rather than a transcendental leader in The Konformist view. This became more annoyingly obvious as the image heavy, substance non-existent campaign continued to be exposed as a front for the most noxious elements of the Democratic Party. All the repeated chantings of the mantras of "hope" and "change" couldn't hide the repellant machine behind the bizarre mixture of a New Age religious kult and a multi-level marketing scam.

Certainly Obama, a crafty politician and master manipulator, deserves much of the credit and blame for the success of his campaign, starting off with his lofty oratorical style. Indeed, his personal magnetism in speeches is so spellbinding, many suspect he intentionally uses NLP phraseology and pacing in his delivery to induce mass hypnosis on his audience. (Then again, since mass manipulation is the purpose of all political propaganda, it's hard to fault Obama on this count just because he's better at it than everyone else.)

NLP hypnosis or not, Obama didn't come up with his war plan blueprint all by his lone gunman self. His two top political advisors, chief strategist David Axelrod and campaign manager David Plouffe, certainly deserve much of the cheers and heckles as well. Axelrod and Plouffe are partners in AKP&D Message and Media, and the campaign they helped craft earned the prize from Advertising Age for 2008 Marketer of the Year, beating out Apple and As the World Socialist Web Site would sarcastically observe, "Obama replaces last year's winner, the video game system Nintendo. The runner-up in 2007 was the insurance corporation GEICO, which features a talking lizard and a cave-man in its ads for discount insurance."

Still, even the twin David's are chump change in the Democratic Party machine, smooth spin doctor salesman rather than the policy genius. If Obama is the current Grand Theft Auto of politics, the Xbox 360 system running the software is clearly the Democratic Leadership Council, led by founder and CEO Al From, The Konformist Beast of the Month.

The DLC was founded in 1985, after the massacre of Walter Mondale by the Gipper in the '84 election. Its first major battle came in 1988, when it successfully fought against Jesse Jackson from winning the Democratic nomination. Ironically then, its first mission was blocking a smooth-talking Chicago black man from winning the White House.

The DLC's problem with Jesse wasn't that he was African-American, but that he was an economic populist, which the DLC terms as "out of touch" thinking. Instead, they support what they term "centrism" - i.e. right wing economic and foreign policy positions. Economic populism, as far as the DLC is concerned, is engaging in "class warfare" and a decided no-no. Talking populism may not be acceptable, but taking hefty dollars from oil companies, military contractors, korporate monoliths and right-wing foundations is okely dokely. Thanks to the DLC's refusal to battle the GOP talking points, they, as much as George W. Bush, Rush Limbaugh and FOX News, have pushed the rightward shift in American politics over the last twenty years.

In 2003, the DLC leadership strongly backed the invasion of Iraq. Indeed, Will Marshall (besides From, the only non-elected official on the DLC founding roster) co-signed a letter written by the neocon Project for the New American Century to George W. Bush in favor of the attack before it was launched. Even as the war became increasingly unpopular, Marshall and the DLC crowd continued to mock what they termed the "looney left" critics of the war. As Marshall would put it, "Democrats need to be choosier about the political company they keep, distancing themselves from the pacifist and anti-American fringe." The DLC went after prez candidate Howard Dean over his antiwar status, who replied that he came "from the Democratic wing of the Democratic Party." (It's plausible the repeated playing of the "Dean Scream" was orchestrated by DLCers who wanted to destroy his campaign.) There was one guy even more hated than Dean in 2004 among the DLC: Michael Moore, whose Fahrenheit 9/11 heated up the box-office and progressive voters with his Bush-bashing documentary. As Marshall would sneer, "You know, let's let Hollywood and the Cannes Film Festival fawn all over Michael Moore. We ought to make it pretty clear that he sure doesn't speak for us when it comes to standing up for our country." From would add: "We've got to repudiate, you know, the most strident and insulting anti-American voices out there sometimes on our party's left... We can't have our party identified by Michael Moore and Hollywood as our cultural values." Four years later, Moore has been proven to be even more vindicated over what the correct position on Iraq was than Jose Canseco has been on steroids in baseball. Despite this, Marshall continues to head the Progressive Policy Institute, the DLC's think tank (Orwellian in name due to its lack of any progressive values.)

Shilling for war in Iraq isn't the only Shrubian position taken by the DLC. When Bush's illegal warrantless surveillance program was uncovered, senior fellow Marshall Wittmann dismissed opposition to it as from the "fevered imaginations of graying baby boomers and twenty-something bloggers," and added: "The Democratic Party is increasingly under the influence of modern day McGovernites." It should be noted that Wittmann is a "former" Republican, still a social conservative and neocon, and a one-time legislative director for the Christian Coalition. This, of course, is totally acceptable to the DLC, but Michael Moore is not.

The current chairman of the DLC, Blue Dog conservative Democrat Harold Ford, shows the utter cluelessness of the organization. Like Obama, Ford is a charismatic African-American who barely conceals his right-wing agenda under vague generalities. In 2006, he lost the Tennessee Senate contest after his opponent Bob Corker unveiled race-baiting commercials, race-baiting Ford refused to denounce in his attempts to portray himself as a "post-racial" politician. So now, the irony of ironies, one of the few decided Democratic losers in the 2006 election cycle is leading an organization whose purpose is to show the Democratic Party the path to victory.

Thanks to its right-wing posturing, the DLC is viewed as a four-letter word among progressives, and Hillary Clinton's membership (along with her husband Billy's, who is also a former DLC chairman) became a rally just under her Iraq War support for Daily Kos Hill-hatred. In their distaste for Hillary, they found their supposed champion in Obama.

But The Konformist smells a ringer: though he denies any ties to the DLC (just as he's denied ties to Tony Rezko and Bill Ayers) he was featured prominently on the DLC's “100 to Watch” list for 2003. Meanwhile, early last year, From gushed about Obama as the potential Democratic choice, noting: “I mean his chief economist, Austan Goolsbee, is a fellow at the Progressive Policy Institute, which is our think tank.” (Goolsbee, for those keeping score, is from the University of Chicago and represents the "centrists" among Milton Friedman acolytes.) The timing of From's comment coincides with the sudden switching of loyalties in the Democratic Party establishment from Hillary to Obama.

Why did the DLC betray Hillary? Perhaps it was about Hillary not being particularly loved by the progressive crowd, meaning that she would be expected to deliver something to satisfy them. Meanwhile, Obama has come with little demands from his followers, as his kult of narcissism has substituted feel-good personality worship over policy and substance. Or perhaps it's about Hill and Bill, for all their "Third Way" and centrist leanings, are still Democrats who believe in the New Deal (having been behind crazy things like trying to provide Americans with universal health coverage) making them unpopular among the DLC crowd in their own right. Whatever the reason, the end result is that the Democratic Party now has as its standard bearer a guy who took less progressive stands on issues than either Hillary or John Edwards during the campaign, this at a time when another Great Depression may be starting and another New Deal the best remedy.

Of course, whatever the DLC may want may be trumped by reality. Sooner or later, if unemployment soars to the double digits and people keep losing their homes to banks, the masses may demand more from Obama than snuggly slogans, at the point of riots. When that happens, Obama can either finally deliver something to the public in a concrete plan or send in the National Guard. At the core of the best of politicians, the fundamental ideology is not wanting to lose, and if there is any true "hope" over Obama, it's that he doesn't want to be labeled a loser. But as shrewd betters in Las Vegas, The Konformist is guessing he's a compromised tool for the DLC establishment who is going to do too little too late, leaving an impotent Democratic Party discredited and holding the bag on Great Depression II. Go ahead, Obama, prove us wrong.

In any case, we salute Al From as Beast of the Month. Congratulations, and keep up the great work, Al!!!

Saab Distances Itself From G.M.

Saab Distances Itself From G.M.
February 20, 2009

Saab, the Swedish automaker owned by General Motors, filed for bankruptcy protection Friday and asked the Swedish government for help in making it an independent car company again.

But it was unclear whether the government would step in to help Saab, in which G.M. bought a half interest two decades ago and assumed full ownership in the 1990s.

Separately, G.M. said that its German subsidiary, Opel, would need more than the 1.8 billion euros or $2.3 billion in loan guarantees that it had previously discussed with the German government. A reorganization plan for Opel — G.M.’s second-largest brand after Chevrolet — is expected by the end of next week.

G.M. said earlier this week that it wanted to cut Saab loose by 2010, as it tries to restructure. G.M. said in a report to the Treasury Department that it planned to end financial support for Saab by next year.

Saab went to a Swedish court for protection from its creditors, and said the company would — with assistance from the Swedish government — reorganize to pave the way for private investors to buy all or part of the company.

“We explored and will continue to explore all available options for funding and/or selling Saab, and it was determined a formal reorganization would be the best way to create a truly independent entity that is ready for investment,” the managing director of Saab, Jan-Ake Jonsson, said in a statement.

Saab said it would need financing during its three-month restructuring “from both public and private sources” but that the company “would continue to operate as usual.”

But it was unclear exactly what Saab was requesting. Elisabeth Thand Ringqvist, a spokeswoman for the Swedish industry ministry, said Saab would be eligible to receive help through loan guarantees that all Swedish carmakers can access as part of a support package the government approved in December.

“This could be interpreted as the government supporting Saab in the reorganization phase,” said. She added that guarantees for working capital were not on the table.

That is precisely what is at issue in the case of Opel.

Marco Molinari, director for finances at Opel, said in a statement Friday that a change in market conditions meant that the company needed more than the 1.8 billion euros in loan guarantees from the Germany government it had previously requested.

“To put an absolute number out there without having first clarified the contributions of other participants, including shareholders and employees, is not serious,” Mr. Molinari said.

The bailout for Opel is politically contentious in Germany, with politicians calling for strict conditions on the package. Some have even called for Opel to be taken out of American hands, but it is tightly integrated into the G.M. supply and technology chain.

Despite praise for the performance of its cars, Saab has been dogged by losses since 2001. The company lost about 3 billion Swedish kronor, or $343 million, in 2008 and said it would lose a similar amount this year.

Swedish officials have repeatedly resisted efforts to nationalize Saab, which came to life as part of the Svenska Aeroplan, a company founded in 1937 to build military planes. The first Saab cars were built after World War II. A separate company, also called Saab, still makes aircraft.

G.M. bought Saab in the wake of Ford Motor’s purchase of the British luxury car maker Jaguar. Saab, long known for quirky-looking cars with ignition in the floor and a griffin insignia, became a more conventional brand under G.M. It borrowed the underpinnings from some of Opel’s cars for its lineup, which includes sedans, wagons and a sport utility vehicle.

Given its Swedish roots, and ability to maneuver in snow, Saabs have traditionally been popular in the northeastern United States. But Saab is G.M.’s worst-selling brand in the United States, selling 21,383 vehicles in 2008, down 34.7 percent from 2007. Its best selling vehicle is the 9-3, of which G.M. sold just over 10,000 cars last year.

Its Muscle Car Glory Faded, Pontiac Shrivels Up

Its Muscle Car Glory Faded, Pontiac Shrivels Up
February 19, 2009

DETROIT — With its history of building muscle cars like the GTO and the low-slung Firebird, Pontiac had good reason to take pride in its best-known marketing slogan from the 1980s, “We Build Excitement.”

Lately it has been using “Pontiac is CAR,” a phrase more likely to catch the attention of grammarians than car buffs.

And on Tuesday, when General Motors asked the federal government for more bailout money, it also announced a reorganization plan that included demoting Pontiac to a “focused niche brand,” signaling that its lineup of vehicles would shrink and that it would no longer be a separate division.

To industry analysts and Pontiac’s longtime fans, the downgrade provides a case study of the product missteps that helped put G.M. in its precarious state, and a reminder of the dangers in straying from a successful formula.

“When you deviate too far from it, that’s when you run into trouble as a brand and a company,” said Jack R. Nerad, executive editorial director at Kelley Blue Book, whose 1968 Firebird made him feel “as cool as I could be.”

More than any other G.M. brand, Pontiac stood for performance, speed and sex appeal. Its crosstown rivals followed with similar muscle cars, giving Detroit bragging rights over the cars that Japanese automakers were selling based on quality and reliability.

Though still G.M.’s third-best-selling division, behind Chevrolet and GMC, Pontiac’s sales peaked in 1984, when it sold almost 850,000 vehicles, roughly four times as many as it sold last year.

G.M.’s chief executive, Rick Wagoner, said the company’s decision to concentrate primarily on Cadillac, Chevrolet, Buick and GMC left the company with a “comprehensive portfolio.”

By many accounts, Pontiac started to falter when G.M. pursued a cost-saving strategy of providing the same cars to different divisions.

It gave Pontiac vehicles like the TransSport minivan, and the Sunbird, Sunfire and Phoenix cars that were barely distinguishable from models sold by Chevrolet and Oldsmobile.

Pontiac also garnered unwanted publicity in 2001 with the Aztek, whose tag line declared, “Quite possibly the most versatile vehicle on the planet.” Its bulky looks landed it on lists of the world’s ugliest cars. Indeed, Aztek won top honors in that category from The Daily Telegraph of London last year.

Pontiac’s current plight is reflected in its Vibe, a well-regarded crossover vehicle that shares underpinnings with the Toyota Matrix, as part of a joint venture between Toyota and G.M.

While the Matrix holds 67 percent of its resale value after three years, according to Kelley Blue Book, the Vibe retains just 54 percent.

The Vibe, whose future is not clear but which was redesigned for 2009, is meant to appeal to the same age group that Pontiac’s muscle cars once did.

But many younger Americans, who were not around for Pontiac’s prime period, will not miss the brand as it shrinks, said Ron Pinelli, who is president of, a company that tracks industry statistics.

To them, he said, “it doesn’t have any cachet unless they’re watching a late-night movie with Burt Reynolds,” whose film “Smokey and the Bandit” featured the Pontiac Trans Am.

But in its best years, Pontiacs were “highly styled and valued and really something,” Mr. Pinelli said.

Known before World War II primarily for its sedate sedans, Pontiac got a lift in the 1950s when G.M. used its cars on the racing circuit. Because of its “wide track” stance, Pontiacs quickly caught on with street racers, as well.

Tim Sampson, whose family owned a yellow Pontiac Grand Prix in the 1960s, remembered the Pontiacs that were used for drag races on President’s Island, in an industrial part of Memphis. “People used to get arrested,” said Mr. Sampson, a founder of the Stax Museum of American Soul.

Italian sports cars inspired another classic Pontiac in the 1960s, when the division’s new general manager, John Z. DeLorean, decided it needed a small, fast car modeled after a Ferrari. He hit on the name GTO — after a Ferrari coupe called the Gran Turismo Omologato.

The GTO returned this decade, as part of an effort to revive Pontiac. But G.M.’s Holden division in Australia built that car.

Its appearance barely echoed the original GTO, disappointing its core audience. It lasted only from 2004 to 2006, before G.M. stopped selling them.

The most recent efforts to breathe new life into Pontiac were put into motion by G.M.’s vice chairman, Robert A. Lutz, who will retire at the end of 2009. Known in the industry for his love of high-performance vehicles, Mr. Lutz had pushed the division to return to its car heritage.

On its Web site, Pontiac explains its new slogan more fully: “Pontiac is style. Pontiac is performance. Pontiac is culture. Pontiac is music. Pontiac is CAR.”

Now, G.M. will have to determine which Pontiacs will remain Pontiacs. So far, Mr. Wagoner and other executives have not given any indication of the company’s specific plans for Pontiac.

But unlike Saturn, which will be discontinued by 2012, G.M. does not have to dismantle a dealership lineup for Pontiac. Its franchises, for the most part, already have been grouped with Buick and GMC. Any future models, G.M. said this week, will be sold through this Buick-Pontiac-GMC organization.

“We’re the third generation, and we’re the last,” said Rick Zimmerman, whose family has sold Pontiacs in Pittsfield, Ill., since the brand came to life as part of its Oakland division in the 1920s. (Pontiac became a stand-alone division in 1932.)

Mr. Zimmerman, whose first car was a GTO, said hundreds of customers used to flood his showroom each fall when new Pontiacs — like the popular Bonneville, now a retired nameplate — were unveiled.

Now, despite positive reviews about the performance of some new models like the G8, he has trouble getting his customers interested in them.

“It’s been a good name, and had a lot of good cars,” Mr. Zimmerman said. “It’s tough to see it go.”

Nick Bunkley contributed reporting.

A version of this article appeared in print on February 20, 2009, on page A1 of the New York edition.

Implosion of GM's Saturn leaves fans marooned

Implosion of GM's Saturn leaves fans marooned

I'm not sure how I came to own five--that's right, five--Saturns during the General Motors' division's 19-year life, but it's true. My wife and I were early adopters back in the early '90s when those first plastic-bodied, import-fighting sedans and coupes arrived on the market. Having both grown up in GM families, we naturally gravitated toward this new darling in the GM fold, whose very existence seemed to mirror our need for a quality Honda or Toyota-like family sedan that would qualify for the GM employee discount program.

Ours was a bluish-green SL2 with a tan interior, with the strong-spinning twin-cam four-cylinder engine and a manual transmission. It was our first family car, and we truly loved it.

So did many others, because as we drove it around our nation's highways, especially in that first year or so, people often would approach us in gas stations and restaurant parking lots, all wondering what we thought of this new idea of a car from GM.

The car also was significant for the story it produced. To wit: When we were first "kicking the tires" at the Saturn dealership, I popped open the hood, not so much to check out the valve covers or the plumbing, but to get a bead on the engine's potential for cooking. I'd been doing a lot of engine cooking (following the instructions laid out in Manifold Destiny, written by a pair of One Lappers) and I wanted to see what kind of oven space the car offered.

Apparently, word of my engine study caught someone's attention at Saturn, because not long after taking delivery we got a call from Hal Riney & Associates, Saturn's off-beat advertising agency from San Francisco. The agency twice sent representatives to Michigan to meet us and our car, and to check out the concept of a Saturn owner "who needed a family car that could really cook." I think the idea eventually died when the GM lawyers got involved and advised that it wouldn't be prudent to advertise the idea of putting foreign substances--even if they were bratwurst--on a Saturn engine. Imagine the fires, the horrors, the lawsuits. In retrospect, I should have recognized that reaction as one of the first signs that GM was pulling its wayward planetary body back into the mother ship--and not for any good reasons.

So we went on our way, eventually trading in the SL2 (it drew a surprisingly strong price) on what every Saturn owner seem to need right about then: A minivan. Of course, because of GM's binge-and-starve product strategy for Saturn, the little car company that could had no minivans or SUVs or pickups or sports cars to sell when the market began to shift to those popular segments.

Being from the aforementioned GM family, with a solid GM employee discount to work with long before rebates galore and "employee pricing for all" made the discount nearly meaningless, we bought back-to-back GM minivans, each successively worse, until we couldn't take it anymore and went back to Saturn for the closest thing we could get to a family minivan while still buying a GM product: a Saturn station wagon.

Being back in the Saturn fold was nice, but it was clear that the company's product and styling were getting long in the tooth at that point. We couldn't have been happier when the Saturn lineup expanded for the first time in a decade to include the L-series sedan and wagon. We jumped on an LW wagon as soon as it appeared in the showroom.

When the crossover craze hit, Saturn once was again left bereft of a competitive product, so we ended up in some underwhelming alternatives from other GM divisions until the Saturn Aura arrived, claiming the title of North American Car of the Year. My wife is driving an Aura now, and we recently added an Astra five-door hatchback to the stable, which we plan to keep when the Aura lease expires in the not-too-distant future. We like the little Astra--with its five-speed manual and little four-cylinder engine, I think it reminds us a little of our first Saturn.

So there you have it--five Saturns in two decades, and clearly we could've owned more if GM had only listened to its customers and provided the product-starved division with a few more options in a few more segments.

Sadly, like many Saturn owners who came to love the cars and the dealerships that supported them, we've lived through 20 years of the Saturn whipsaw only to be cast adrift, I suppose to seek out another "different kind of car company."

Wonder what that will be?

Saturn seeks another carmaker

February 20, 2009
Saturn seeks another carmaker as GM casts it aside

The last hope to stop General Motors Corp.'s wounded Saturn brand from falling out of the solar system appears to rest with some unknown automaker building cars for the dealers to sell.

GM said in its restructuring plan presented to the U.S. government Tuesday that it will only keep Saturn running through 2011, but it's open to the possibility of spinning off the money-losing brand to retailers or investors. It's one of many tough steps the Detroit automaker says are necessary as it seeks a total of $30 billion to ride out the worst sales slump in 26 years.

Chinese and Indian automakers, which have made noise about entering the U.S. market, would be the most likely suppliers, but GM says it hasn't had any discussions with them, and Indian automakers either expressed no interest or wouldn't comment.

Saturn's dealers, with laid-back salesmen and no-haggle pricing, often match luxury brands' scores in independent customer satisfaction surveys. Their locations could be a ready retail network for a foreign automaker to come to the U.S.

"The goal -- from a product perspective -- would be to find future vehicles that match the Saturn Brand: fuel-efficient, safe, reliable and affordable," Saturn General Manager Jill Lajdziak wrote in a message to customers this week. "From a retailing perspective, we would build on our core strength of unmatched customer service. The same hassle-free experience that is a hallmark of the brand could be taken to even higher levels."

Carl F. Galeana, who owns two Saturn dealerships in Michigan, said he would welcome a buyer from China or India, as it would keep the company going and bring innovation to the product line.

"It's very possible," he said. "It gives a footprint for an automaker to come into this country on the cheap and have a good distribution network."

But other dealers are angry at GM for what they say is a lack of support for Saturn.

When GM executives cast doubt on the brand in December by announced publicly that it was under review, Mike Edwards, principal investor in seven Texas Saturn dealerships, said showroom traffic dropped and he decided to close three of his locations.

Edwards said GM's announcement raised doubts from lenders and customers about whether Saturn would even exist, yet the brand had nothing to do with GM getting government aid.

"It wasn't very well thought out," Edwards, who locked up Saturn dealerships in Amarillo, Midland-Odessa and Abilene. "Showroom traffic dropped considerably."

Mahindra & Mahindra Ltd. and Tata Motors have had the greatest appetite for foreign acquisitions among India's automakers and would be the most likely buyers, said Vaishali Jajoo, an auto analyst at Mumbai's Angel Broking. But Tata has cash flow problems and Mahindra might not be a good fit, she said.

Tata Motors spokesman Debasis Ray said the company wouldn't be interested in the Saturn brand or its distribution network.

"We are happy as we are," he said.

Mahindra declined to comment.

Calls were not returned by BYD, a Shenzhen, China, company that has touted goals to bring its electric and hybrid cars to the U.S.

GM started Saturn in 1990 as a small-car answer to Japanese automakers and billed it as a "different kind of car company." Its new factory in Spring Hill, Tenn., had more flexible work rules than traditional GM plants and more autonomy for those who built the cars, known for their plastic body panels.

Despite a cult-like following that drew thousands to annual reunions in Spring Hill, the brand never made money for GM.

As GM focused more on high-profit pickup trucks and sport utility vehicles, Saturn began to languish in the late 1990s. But in 2006, it started getting the best of GM's new models, and executives viewed it as a precursor for GM's restructuring effort.

After a good year in 2007, sales dropped 22 percent last year as the U.S. market withered.

Edwards blamed the sales drop on a lack of marketing support. Analysts often criticize GM for having so many brands that it can't advertise them adequately.

"There's nothing wrong with this product lineup," he said. "But it has to be supported by the manufacturer. They were pretty plain that they weren't going to support that."

GM also has said it is reviewing the fate of its Saab and Hummer brands. Swedish-based Saab went into court protection from creditors Friday so the unit can be spun off or sold by its struggling U.S. parent.
AP Auto Writer Kimberly S. Johnson in Detroit and Business Writer Erika Kinetz in Mumbai contributed to this report.

GM Plans to Eliminate Saab, Saturn, Hummer

GM Plans to Eliminate Saab, Saturn, Hummer and Shrink Pontiac
Feb. 18, 2009

Faced with an urgent need to restructure in order to survive, America's largest automaker plans to eliminate three of its brands quickly and shrink a fourth to become a niche brand that will make only a handful of low-volume models.

In a restructuring plan submitted to the federal government yesterday, the automaker announced that it "has committed to focus its resources primarily on its core brands: Chevrolet, Cadillac, Buick and GMC. Of the remaining brands, Pontiac -- which is part of the Buick-Pontiac-GMC retail channel -- will be a highly focused niche brand."

Hummer and Saab, both of which are typically sold through stand-alone dealerships, "are subject to ‘strategic reviews', including their potential sale."

The company plans to make a final decision on whether to sell or eliminate Hummer by the end of March. The Financial Times notes, "GM said that it was still talking to some potential buyers but that, if these negotiations come to naught, the brand will be phased out. Hummer's US sales have plummeted in recent years, but GM has found sizeable markets abroad, including in the Middle East and Russia."

GM is reportedly in negotiations with the Swedish government about the future of Saab. CNN Money reports that GM "said Tuesday its Saab subsidiary could be forced to file for reorganization as early as this month if the U.S. auto maker and the Swedish government can't come to terms on financial support for the unit. GM, as part of a revamped restructuring plan presented to the federal government to qualify for billions of dollars in government aid, said that it has proposed to effectively cap its financial support for Saab, with the Swedish brand becoming an independent entity by the start of 2010."

In both cases, GM hopes to find a buyer for the brands or spin them off into separate companies because closing the brands outright could be much more expensive. Franchise agreements would require GM to buy out Saab and Hummer dealers individually would could cost the company billions. The New York Times notes, "G.M. found out last decade just how expensive it could be to unwind a brand. It spent more than $1 billion to buy out dealers at Oldsmobile, which built its last cars in 2004."

The Saturn brand, meanwhile, will be gradually phased out of existence because that brand's dealerships "have different, easier to cut franchise agreements than other GM brands," according to Motor Trend. GM plans to continue selling the models currently on Saturn dealership lots, but will build no new Saturn models. =

The restructuring plan says that Saturn "will remain in operation through the end of the planned lifecycle for all Saturn products (2010-2011). In the interim, should Saturn retailers as a group or other investors present a plan that would allow a spin off or sale" of the brand, "GM would be open to any such possibility. If a spin off or sale does not occur, it is GM‘s intention to phase out the Saturn brand at the end of the current product lifecycle."

"Dealers will stay open through 2011, but product development overall will cease," according to Kicking Tires. That means 2010 and 2011 Saturn models will just be newly minted versions of what's already available, and they may or may not receive minor updates, like added safety features."

Pontiac, meanwhile, will be reduced to a small brand selling a handful of models though combined Buick/GMC/Pontiac dealerships. The plan does not address which specific Pontiac vehicles will survive, but industry analysts expect to see the brand become a source of performance-oriented cars like the rear-wheel-drive G8 sedan, which cost GM little to develop because they are based on GM models sold in other markets.

The impact of GM's plan on consumers is an evolving story. In the short term, if you're in the market for a new car and interested in something from one of the doomed brands, you should be aware that prices for the vehicles may crash now that their execution is inevitable.

Governor's rift with GOP grows wider,0,3998908.story

Governor's rift with GOP grows wider
After his turnaround on taxes in the budget battle, he won't be attending a state party convention -- and many won't miss him.
By Michael Finnegan
February 21, 2009

Reporting from Sacramento -- After five years as governor, Arnold Schwarzenegger came full circle on Friday: The film star who promised to rescue California from its fiscal wreckage without raising taxes signed into law $12.5 billion in tax hikes.

With that, the Republican governor broke one of the few bonds left between his shrunken party and California's mainstream voters, marring its hard-won image as a guardian against higher taxes.

"Their last gasp has been taken from them," said Larry N. Gerston, a political scientist at San Jose State, citing the unpopularity among most California voters of the party's conservative stands on abortion, illegal immigration and other touchstone issues. "It puts them in a very precarious position."

By repudiating the thrust of his candidacy in the 2003 recall -- "I will not raise taxes," Schwarzenegger stated flatly the day after he won -- the governor has also enraged the conservatives who dominate the party.

For Republicans convening at a state party convention this weekend in Sacramento, it is a wrenching moment. Schwarzenegger is skipping the event to attend a governors' conference in Washington. But his turnaround on taxes has darkened the mood of the hundreds of party loyalists venting their frustration in a hotel where the governor often stays in a penthouse suite.

To be sure, none of the GOP lawmakers who demanded that the state close its $42-billion shortfall without raising taxes detailed the doomsday cuts that approach would entail, nor did the activists who lobbied against the tax increases. If the state had laid off its entire workforce of 238,000 -- every prison guard, firefighter and clerk -- it still would have fallen billions shy of a balanced budget.

Still, in a nod to the GOP's internal realities, two of the party's top contenders for Schwarzenegger's job in the June 2010 primary have split with the governor over the tax hikes.

One, former EBay Chief Executive Meg Whitman, said they will "kill jobs, hurt families and make future deficits even worse." The other, state Insurance Commissioner Steve Poizner, called the budget a "fiasco." The heavier tax burden, he warned, will increase unemployment.

The party's lone gubernatorial contender defending the tax hikes is Tom Campbell. A former Silicon Valley congressman and state finance director under Schwarzenegger, he all but guaranteed himself pariah status among the party's rank and file by saying the governor and Legislature did the right thing.

"It was essential, because otherwise you would have no public works in the middle of a recession, and that's suicidal for the state," said Campbell, whose fortuitously timed move to Orange County this weekend will spare him the face-to-face hostility of convention delegates.

Like the governor, the six Republican lawmakers who joined Democrats in approving the tax increases are also facing vitriol within the party. Chief targets include Sens. Dave Cogdill of Modesto, whose support of the budget led to his overthrow as Senate Republican leader, and Abel Maldonado of Santa Maria, who cast the deciding vote.

Conservative blogger Matthew Cunningham has started a Facebook group, "Never Elect Abel Maldonado to Anything, Ever Again." More threatening, Ernie Konnyu, a former Bay Area congressman, has launched a campaign to recall Maldonado.

Efforts to recall other GOP lawmakers for their break with the party on taxes have sprouted. Conservative purists are pushing the state party to censure them Sunday.

The party's turmoil over taxes comes as Republicans nationwide are still reeling from their 2008 defeat. Their White House nominee, John McCain, lost California by more than 3 million votes in the party's worst presidential rout in the state since the 1930s.

Their ranks diminished, Republicans in Congress are trying to restore the party's reputation for fiscal restraint. They demanded less spending and more tax cuts as they fought President Obama's $787-billion plan to stimulate the economy.

With his pledge to hold the line on taxes, Schwarzenegger took a similar approach in his run for governor during the budget crisis that fostered the recall of Gov. Gray Davis.

Now, Schwarzenegger allies say he had no choice but to break his promise.

"In 2003, nobody was saying that in 2009 this country would go through the worst economic crisis since the Depression," said Adam Mendelsohn, a Schwarzenegger advisor.

"There's nothing Gov. Schwarzenegger hates more than raising taxes. If there was a way to realistically do this budget with $42 billion in cuts and not raising taxes, Gov. Schwarzenegger would be the first one to go and fight for that. But it's totally unrealistic."

Critics, however, say Schwarzenegger long ago abandoned any serious commitment to fiscal restraint. Among other things, they say, twin ballot measures that Schwarzenegger and his Democratic allies marketed to voters in 2004 as an economic recovery package worsened the state's long-term troubles.

Tucked into Proposition 57 were billions in new debt obligations. And the $5 billion in lottery borrowing that Schwarzenegger approved Friday belied his characterization of the 2004 companion measure, Proposition 58, as a move to slice up the credit cards of Sacramento politicians.

To Ted Costa, an anti-tax advocate and leader of the drive to recall Davis, the historic ouster of a California governor has proved to be a waste.

"There's a village back there in Austria right now that could sure have their idiot back any time they want," he said.

Others are less caustic but nonetheless point to the identity crisis that Schwarzenegger's advocacy of tax hikes has visited on the party. If the de facto leader of California Republicans is a socially liberal governor who raises taxes, many wonder, what exactly does the party stand for?

"He's not comfortable being a Republican, and Republicans aren't comfortable with him being a Republican or being governor," said Shawn Steel, the California committeeman for the Republican National Committee.

Some Republican leaders, like Steel, are somewhat forgiving toward Schwarzenegger but livid at the legislators who broke with their party on taxes in return for election reform measures and other pet causes.

"I'm far more disappointed with Republicans who actually voted for this monstrosity," said Steel, a former state party chairman. "Sadly, for the 30 pieces of silver, if that, we had some otherwise pretty good guys collapse. Their entire political careers are now threatened."

Ruling against age limit on game sales upheld

Ruling against age limit on game sales upheld
Bob Egelko, Chronicle Staff Writer
Saturday, February 21, 2009

SAN FRANCISCO -- California's ban on selling video games to minors is unconstitutional because even the most graphic on-screen mayhem is free speech, and there's no convincing evidence it causes psychological damage to young people, a federal appeals court ruled Friday.

"The government may not restrict speech in order to control a minor's thoughts," said the Ninth U.S. Circuit Court of Appeals in San Francisco in upholding a federal judge's ruling against the law, which has never been enforced. Similar laws in other states have also been struck down.

The head of an industry group that challenged the law praised the court's "rejection of video game censorship." State Sen. Leland Yee, D-San Francisco, sponsor of the law, urged state officials to appeal to the U.S. Supreme Court.

"We need to help empower parents with the ultimate decision over whether or not their children play in a world of violence and murder," Yee said.

Gov. Arnold Schwarzenegger signed the law in October 2005. It would bar the sale of an interactive video game to anyone under 18 if the game was so violent it was "patently offensive," according to prevailing community standards for minors, and lacked serious literary, artistic, political or scientific value.

'18' label on package

Those games would carry a large "18" label on their packages. Anyone who sold such a game to a minor could be fined as much as $1,000.

In defending the law, the state argued that violent content should be judged by the same obscenity standards as sex. Just as the government can prohibit the sale of explicit pornography to minors, state lawyers contended, it should be allowed to establish an adults-only category of ultra-violent video games.

The appeals court disagreed. A 1968 U.S. Supreme Court ruling that allowed tighter restrictions on selling explicit materials to minors than to adults applies only to sexual content and not to violence, the appellate panel said.

"The Supreme Court has carefully limited obscenity to sexual content," Judge Consuelo Callahan said in the 3-0 ruling. "We decline the state's invitation to apply the (same) rationale to materials depicting violence."

Video games, Callahan said, "are a form of expression protected by the First Amendment."

Callahan said the state could justify the law only by demonstrating that violent video games cause psychological harm to minors and that young people could be protected only by being banned from buying those games. She said the state had fallen short on both counts.

The state cited researchers' findings that youths who play violent video games are more likely to behave aggressively and get into fights. But Callahan said even some of the researchers acknowledged that their samples were too small to draw conclusions, that there was no proof video games caused violent behavior, or that the games affected minors differently from adults.

She also said the state had failed to show that there were no good alternatives to an outright ban on sales to minors. Callahan said such options include an educational campaign, technology that allows parents to control their children's access to video games, and the industry's rating system that includes an adults-only category.

The rating system, although it is voluntary, works well and is preferable to "state-sponsored nannyism," said Bo Andersen, president of the Entertainment Merchants Association, an industry group that sued the state.

Sellers said to be compliant

"Retailers are committed to assisting parents in assuring that children do not purchase games that are not appropriate for their age," Andersen said. He said independent surveys have found that sellers comply with the ratings 80 percent of the time.

But Deputy Attorney General Zackery Morazzini, the state's lawyer in the case, said a law restricting sales of violent games is far more effective than industry self-policing. He said the technological controls that the court cited as another alternative "can be easily bypassed by any kid with an Internet connection."

E-mail Bob Egelko at

This article appeared on page B - 1 of the San Francisco Chronicle

‘Dow Theory’ Says Worst Isn’t Over for U.S. Stocks

‘Dow Theory’ Says Worst Isn’t Over for U.S. Stocks as YRC Falls
By Eric Martin and Cristina Alesci

Feb. 21 (Bloomberg) -- A 125-year-old method for forecasting the market is telling investors the worst isn’t over for stocks.

Dow Theory, which holds that simultaneous moves in industrial and transportation shares foreshadow economic activity, indicates the Dow Jones Industrial Average’s drop to a six-year low yesterday may presage more losses.

The Dow industrials slumped to 7,365.67 on concern the deepening recession will force the U.S. government to bail out banks. Adherents of Dow Theory say the 30-stock gauge will fall farther because the Dow Jones Transportation Average has slipped to the worst level since September 2003.

“When you have that confirmation in both legs, that’s clearly negative,” said Ryan Detrick, senior technical analyst at Schaeffer’s Investment Research in Cincinnati. “There’s some validity to Dow Theory.”

This week’s retreat left the Standard & Poor’s 500 Index, the benchmark for U.S. stocks, within 2.3 percent of breaking through its Nov. 20 low to the worst level since 1997.

Citigroup Inc. and Bank of America Corp. declined the most in the Dow this week, losing more than 31 percent, on concern shareholders will be wiped out through nationaliGzation. General Motors Corp. had the third-biggest slump, losing 29 percent on concern about its solvency. General Electric Co. dropped 18 percent to $9.38, becoming the fifth stock in the average since last year to sink below $10.

“The direction of the market is clearly down,” said Richard Moroney, who manages $150 million at Hammond, Indiana- based Horizon Investment Services and edits the Dow Theory Forecasts newsletter. “We’re holding a lot more cash than we normally do.”

‘Clearly Down’

Dow Theory, created by Wall Street Journal co-founder Charles Dow in 1884, argues that transportation companies are harbingers of economic activity. The transportation gauge slipped below its November nadir in January and has kept retreating. YRC Worldwide Inc. and JetBlue Airways Corp. fell the most this week, losing more than 27 percent.

Dow Theory is showing that “the bear market is in force,” said Philip Roth, the New York-based chief technical analyst at Miller Tabak & Co. “It doesn’t tell you whether it’s going to last another year or another day. It isn’t a forecaster of magnitude, just direction.”

In November 2007, one month after the Dow industrials and S&P 500 surged to record highs, Dow Theory suggested the rally was over. The S&P 500 went on to tumble 38 percent in 2008, the most since 1937.

Bullish Strategists

The Dow Theory signal goes against all 10 Wall Street strategists tracked by Bloomberg, who on average project the S&P 500 will end the year at 1,059, a 38 percent gain from yesterday’s close of 770.05. Almost $800 billion in federal spending and the cheapest valuations in two decades will spur the rally, the strategists say.

The S&P 500 is a better indicator of the market’s direction because it has almost 17 times more companies than the Dow average and uses market value, not share prices, to determine company weightings, said Roger Volz, New York-based senior vice president at Hampton Securities Ltd. and a technical analyst since 1982.

The index would probably plunge to 681 should it fall below the 11-year-low of 752.44 reached in November, according to Volz. His chart-based techniques include Fibonacci analysis.

“I don’t think we get out of the woods for 14 months,” he said. “The destruction is severe.”

To contact the reporters on this story: Cristina Alesci in New York at; Eric Martin in New York at