Pentagon Furious at Fox News Analyst for Calling For Execution of Captured Soldier

Fox News analyst Ralph Peters said on July 19 that the Taliban should murder 23-year-old Private First Class Bowe Bergdahl.

According to NBC's top Pentagon correspondent, the Department of Defense is furious with Fox News analyst Ralph Peters, who said on July 19 that the Taliban should murder 23-year-old Private First Class Bowe Bergdahl, captured after he strayed from his post, to save the Army "legal hassles and legal bills."

Peters, a well-known Neoconservative and frequent Fox News guest, attempted to clarify his shocking statement on Tuesday night's O'Reilly Factor, telling right-wing host Bill O'Reilly he believes that Bergdahl had "deserted" his unit and deserved no sympathy. He did not apologize. O'Reilly added that Bergdahl must be "crazy."

However, Wednesday night MSNBC's Rachel Maddow fired back, interviewing Jim Miklaszewski, NBC's top Pentagon correspondent, who said the Department of Defense is furious with Peters and Fox News, adding there is no evidence that Bergdahl is a deserter.

Peters' and O'Reilly's insidious comments drew a sharp reaction from a bipartisan group of 22 veteran members of Congress, who all signed a letter demanding Fox News CEO Roger Ailes apologize to Bergdahl's family for allowing a guest on his network to provide "aid and comfort" to America's enemies.

"Mr. Peters' indefensible comments call into question, without any supporting evidence whatsoever, PFC Bergdahl's patriotism and commitment to his country, and suggest in a non-subtle way that he deserved to be captured," they wrote. "The truth is that Mr. Peters' words give more aid and comfort to the enemy…and put PFC Bergdahl at additional risk of harm."

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Congressman Eric Massa (D-NY), a former Navy commander who joined the 22 members of Congress in signing the letter, went a step further and called on Fox News to fire both O'Reilly and Peters.

"Their comments aid and abet our enemies during a time of war and the burden is on Fox News to prove that they reject this by taking the tangible action of issuing an apology and firing both of them," he wrote.

Jim Miklaszewski, NBC's Pentagon correspondent, told Maddow on Wednesday night that Bergdahl "came off patrol on June 30th, dropped off his weapon, his body armor, grabbed up a bottle of water, a compass and a knife and took off out on his own. It was sometime after that, apparently, that some local militants grabbed him and turned him over to the Taliban."

"Should he have left the post alone?" Miklaszewski asked. "Of course not. But that doesn't make him a deserter."

He continued: "Military officials I talked to are quite outraged at Peters' comments, not just the idea perhaps that he suggested that the Taliban should execute Bergdahl, but because it's totally irresponsible. Here you have a kid, 23-years-old, in custody. He's got to be terrified. And now, these Peters comments could actually be used by his captors to get even deeper inside Bergdahl's mind and further erode any confidence that he may have that he will ever come out alive."

"I suspect my fellow Americans might really bail out of the FOX viewership over this one," opined former war reporter and photographer Tim King, who edits Oregon-based Web site Salem-News.

"If this insolent wicked little man named Peters at FOX manages to turn people against this American who volunteered to serve in the military, fully aware that almost anyone in the Army can be deployed overseas, he should be arrested and tossed in prison," King continued. "When does FOX News cross the line? This is a new age, a new time, and there is no way in Hell that Peters or FOX can cry ‘free speech' now."

Goldman’s Outrage

How the Wall Street giant used your money to make $3.4 billion in profits.

They will never admit to this at Goldman Sachs (they don’t really fess up to much over there at the Big G) but in the fall of 2008, just after the Lehman Brothers bankruptcy gave the world a lesson in systemic risk, Goldman, the world’s greatest risk taker, was finished too.

That’s right, it was toast. Finished. Kaput. Until, that is, the firm that was built on wheeling and dealing in some of the most esoteric investments the world of high finance had ever seen, needed a government bailout to stay afloat, which included $10 billion in cash from the Treasury Department (granted by its former CEO, then-Treasury Secretary Hank Paulson) and more importantly, full access to the Federal Reserve’s discount window to be a commercial bank.

Goldman Sachs, which was bailed out by the federal government, is now using the bailout to resume some of the same risk-taking activity that got it in trouble in the first place.

Goldman, of course, is a commercial bank like no other. You won’t confuse Goldman with the ol’ Bailey Building & Loan. It has no customer deposits—which are what the access to the discount window was first set up to protect—and you won’t be getting a toaster or a debit card from Goldman Sachs anytime soon.

But being a bank has its rewards. With full access to the discount window, Goldman can now borrow cheaply and massively from the Fed in a pinch, and because of that access, it can borrow more cheaply in the credit markets. It’s a loophole that has allowed Goldman to turn back the clock and once again resume much of its risk-taking activities, only this time it’s being financed by the American taxpayer.

There are, of course, many urban legends about Goldman and how it uses its clout in Washington and in the financial business (both Paulson and another former CEO, Robert Rubin held the Treasury secretary post) to advance its allegedly nefarious corporate agenda.

Recent reports have the firm gaming the energy markets, creating the dot-com bubble, and the subprime-debt crisis that took down Wall Street, and then for a time benefitting from its implosion when it “shorted” subprime-related investments, a trade that allowed the bank to profit from the downward spiral. (Hell, I’m sure there are people who also believe Goldman was somehow behind the swine-flu epidemic to corner the market on drug stocks.)

Some of these stories have a basis in fact and some don’t—I’ll leave it up to the reader to figure this out—but what is true is equally disturbing: Goldman Sachs, which was bailed out by the federal government, is now using the bailout to resume the many of the same risk-taking activities that got it in trouble in the first place.

The question I have, of course, is why is the Obama administration, which has decried corporate greed whenever it’s politically feasible, allowed Goldman all the advantages of a bank, when it is really a big hedge fund?

The Treasury Department won’t say and it’s obvious why Goldman is doing what it is doing: Money, and lots of it. The firm announced Tuesday morning that net income for the second quarter was $3.44 billion, while its biggest rival, Morgan Stanley, is likely to announce a quarterly loss.

And it all comes down to risk, or to be more precise, how much risk Morgan is willing to take on the taxpayers’ dime compared to what Goldman Sachs is now taking. Morgan Stanley’s CEO John Mack, chastened by the firm’s own near-implosion last year when it too was forced to become a bank, has radically reduced the amount of borrowing, or “leverage,” Morgan is taking in trading. People inside the firm say it’s difficult to meet client demands without borrowing money.

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“We just can’t get anything done,” said one senior Morgan Stanley executive, speaking on the condition of anonymity. Borrowing to finance trades amplifies gains, but it also amplifies losses when trades go bad. During the first quarter of 2009, Morgan borrowed just $11 for every dollar it had in capital (by comparison during the Wall Street boom, firms borrowed as much as $35 for every dollar in capital), while Goldman borrowed a significantly higher amount—close to $15 for every dollar it has in capital. “Our leverage is the result of risk-taking on behalf of our clients,” Goldman spokesman Lucas van Praag says about the strategy.

And keep in mind this is only for the first quarter. Goldman’s second-quarter leverage is likely much higher given the fact that interest rates have remained remarkably low. Those low interest rates have had another benefit—it has allowed Goldman to make winning bets in the bond markets (bond prices rise when interest rates fall), the same place that decimated Wall Street in 2007 and 2008.

Of course, there are lots of reasons for Goldman’s success. The firm has amazing intellectual capital; some of the smartest people in the world of finance work there. It also knows how to game the system better than any firm on the face of the earth. Case in point: In mid-September 2008, when the world was crashing following Lehman’s bankruptcy, Goldman held $13 billion in highly risky mortgage bonds known as collateralized debt obligations. These bonds were insured by American International Group, which itself was about to go bankrupt.

Without that insurance, Goldman itself would have imploded because the bonds would have been marked down to just pennies on the dollar. The rescue of AIG was supposed to prevent a large-scale crash of the financial system, but it also prevented a crash of Goldman Sachs, which bought those crappy CDOs from Merrill Lynch, which was forced to find a buyer (Bank of America) because it too held the same sludge.

The Goldman purchase of the Merrill CDOs is proof positive that the geniuses at Goldman screw up like everyone else. And I don’t buy van Praag’s spin on the firm’s famous hedges that minimized its losses because the smart money in the markets didn’t at the time. Goldman’s shares were in a freefall, bottoming out at around $50 in the fall of 2008, compared to close to $235 just a year earlier.

Now with all the government help, Goldman is marching its way back up to $235 a share—trading at around $150 Monday—by embracing much of the same risk that nearly led to its demise. It would be nice, though, if the next time Goldman losses money taxpayers didn’t foot the bill.