| Robs Real News |
| Send donations and comments to Robsrealnews@yahoo.com |
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| Mel Carnahan, democratic senator from Missouri who was assasinated right before the 2000 election on behalf of criminal conservatives mobsters who have taken over our government in order to pass legislation on behalf of criminals in the energy, healthcare and Tobacco industries and force their ideology on the world. Their agenda is to have an income distribution like Latin America. |
| Paul Wellstone, Democratic Senator from Minnesota who was assasinated before the 2002 election by the conservative mobsters that rules this country so they could take control of the senate and ram their agenda down the throats of the american people |
| G Bush recently confessed he is guilty of mass murder because of his incompetence in dealing with disaster relief in New Orleans. This is just a very obvious example of the lives ruined by the Bush/Cheney Whitehouse. Its almost insignificant in comparison to the lives ruines by their Iraq war and the economic policies they have forced on the world. But now the effect Bush/Cheney's incompetence has on the american people is obvious even to the uneducated. If these conservatives weren't so arrogant and corrupt they would know before running for office they don't have the education, intelligence or desire to serve in the best interest of the american people. Their ego's blinded them to the fact they could jepardize the nation with their incompetence. If they had any integrity they would never have run for office. They refuse to learn from history. They have no place in positions of power. |
| Click on the links to read a rough draft of a screen play I started to write called "The New Deal" |
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| Wanted Dead- AIPAC, The American Enterprise Institute and the above slime-ball Jew cohorts in crime, murder and genocide. AIPAC is the force behind the neocons. I hold them more responsible than anyone for pushing the US into Iraq, costing the US tax payers trillions, ruining the lives of millions in Iraq, the destruction of the Iraqi economy. They should be executed like the Nazi leaders. Jews Like Rove and the Neocons should not be above ground. |
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| Click here to watch an excerpt from the film The Trials of Henry Kissinger and understand that the US is The Evil Empire, AVI File |
| Those above and those who allowed FOX News (CIA News) to get on the air, those behind Cerberus Capital, those responsible for the oil companies price gouging, those who allowed Exelon to buy Com-ed in Chicago, those opposed to regulation or nationalization of oil, water, utilities, energy, defense contractors, transportation, steel, other natural resources, banks, healthcare, mail delivery, and many big businesses. |
| The Ignorant, the Evil and the Corrupt.They deserve to be locked up in the Gitmo prison and tortured for the rest of their lives.Scott Peck defines the conservative mind in his book, "The People of the Lie." Newt Gingrich, Karl Rove and Bill OReilly are the epitomie of this personality described by Peck. |
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| The country needs the progressive tax rates it had post WW2 when the top tax rate was over 80% and the capital gains rate should be what it was before Reagan took office which I believe was 40%. I'd eliminate all taxes for people earning less than $20,000. Corporate rates should return to the post WW2 rates. Robert Eisner would recognize all capital gains when acrued. The proceeds should be used to eliminate poverty, provide free education and healthcare and nationalize the industries mentioned below to take the profits out of them and have them serve the interests of the people. |
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| Round up and hang everyone behind mafia Jewish criminal supported Evil(Fox) News. FOX News was created with Jewish money |
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| Click here to get your copy of "The Money and the Power" the making of Las Vegas and its hold on America |
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Speeches by Michael
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Speeches by Chomsky
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| Conservative thought is not thought but propaganda on behalf of the criminals. For that reason it should be removed from public discourse. The two links above concern the mafias attempt to rid the media of any real news. FOX, DowJones (everything owned by Murdock) Headline News and CNBC are devoted to conservative propaganda. |
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| Whacked by the demented mob |
Memorable quotes-"They're
not fit to lead" Their
objective is to comfort the
comfortable and afflict the
afflicted" by Noem Chomsky
not fit to lead" Their
objective is to comfort the
comfortable and afflict the
afflicted" by Noem Chomsky
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My favorite sites
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Not Whacked
by the mob
by the mob
Don't be evil
| Democracy Now |
Staples I believe is owned by Bain capital. The private equity fund of mobster Mitt Romney. After
the mob whacked Michael Jackson they are giving him a funeral at mob owned Staples center. See
how nice they are to him after they robbed and killed him.
I saw the movie Public Enemy today. Notice at the end of the film the cop who got John Dillinger died
a few years later from an alleged suicide. Same thing happened to the cop who killed Harvey Milk.
The CIA should round up Roberto Micheletti, and the elites in Honduras and deport them all to Sicily.
They took over Honduras to have something to mess with. Look what Berlosconi had done for the mob
in italy. An ever shrinking economy even with all the money that pours in from mob criminal activities.
I've tried to educate the gangsters on economics but this take over of Honduras indicates they
havn't learned a thing. The solution to ending poverty is to redistribute wealth downward. Honduras
has 70% poverty. They know with such poverty trickle down policies would never receive democratic
support so they are required to maintain mafia control of all institutions to preserve the status quo.
Hillary Clinton, speaking on behalf of the imperial mafia, has supported the over throw of democracy
and the continued impoverishment of the people of Honduras. This coup was carried out not for the
benefit of the people. It was to prevent democracy and has been supported by the US. Mafia (FOX)
news supports mafia run tyranny in Honduras. They're control freaks. They impoverished over a
billion people in SE Asia for ideological reasons. Thats like driving three times the population of the
US into poverty because they wanted to do their own thing. Ignorant sick demented white trash
mobsters.
Michael Milkin steals billions from investors but gets a slap on the wrists because he is jewish.
Maddof also jewish, steals from the jews and gets 150 years
The gangsters need to get out of Honduras. We have enough bananas. After the gangsters
intentionally impoverished a billion people by tearing apart the planned economies in SE Asia you would
think by now they would realize they are only capable of fucking things up. But here they go again, this
time fucking up Honduras.
Now the gangsters have their boy Donald Trump saying maybe now isn't the time for national health
care. Three trillion for Iraq on behalf of the Jew sadists but not for the American people. Trump is
another corrupt ignorant mafia scum bag control freak.
Now the gangsters are going to give Michael Jacksons father money to start a record company if he
doesn't pursue an investigation of the mob murdering their son Michael. The gangsters owe me
billions. I want to produce films.
The gangsters in Hollywood want ten nominations for best picture even though they are incapable of
making one really good film. This will allow them to get off on themselves for making more shit films.
Its summer now and there isn't one great film for the whole summer. Everything the gangsters touch
turns to shit including the film business.
Obama should use the troops from Iraq to invade Honduras and restore democracy or arm Chavez
and have him invade Honduras and kick all the wops out.
The gangsters kidnapped Manuel Zelaya and shipped him off to mob controlled Costa Rica. Woody
Harrelson used to hang out in Costa Rica. I was told Harellson's father was designated mob fall guy
or something like that. The guy they replaced him with is a mobster. Micheletti, a son of immigrants
from Lombardy, Italy[1], is a member of the Liberal Party of Honduras and the owner of Spanish
social network Cielo.com. He has been named president by the National Congress of Honduras during
the 2009 Honduran political crisis and military coup d'état against president Manuel Zelaya
concerning the Honduran constitutional referendum, 2009.[4] [5] In 2008 he sought his party's
nomination to run for president in the November 2009 election, but was defeated by Vice President
Elvin Ernesto Santos. If you read Niami Kleins book, "The Shock Doctrine" you see that every time
the gangsters over throw a leftist government the people are worse of. Look at Mexico after the
gangsters installed Salinas. The standard of living of the Mexican people was cut in half. These
mobsters never learn. Were the people of Haiti better of after the CIA deposed Arastide. No. Klein
does a brilliant job illustrating the disasters the gangsters have created in Latin America and the
former Soviet Union.
I was speaking with a secretary who used to work for Allstate here in mob controlled Illinois. She
said after 20 years they have gotten the most productive years out of an employee and they are
coming into higher pay and benefits the gangsters will lay them off. I was told the same is true about
being an entertainer in Vegas. Once you gain some recognition an are able to demand a higher salary
the gangsters will lay you off. And now it appears that once you become a famous actor like heath
ledger and the gangsters are through with you they will whack you. But it appears the gangsters have
changed their ways a bit. Instead of whacking the president of Honduras they have deported him to
lovely Costa Rica. I'm not familiar with the president of Honduras but the gangsters chosen
candidates don't have a favorable track record because the mobsters are stupid insane barbarians
who only know how to fuck things up. In Honduras the Congress, courts and military are controlled by
the mob. Just like in the US. A guy who worked for the mob told me all they do is fuck people up.
There social welfare policies is a good indicator of how sick they are. This excerpt explains how the
gangsters took over Honduras. The Nicaraguan Conflict
Honduras Table of Contents
President Suazo Córdova had foreshadowed the Honduran ambivalence toward the Contras in a July
1983 letter to President Reagan, in which Suazo Córdova stated that "our people are beginning to ask
with greater vigor if it is convenient to our own interests to be so intimately linked to the interests of
the United States if we receive so little in exchange." Although 1983 and 1985 public opinion polls had
shown that a majority of Hondurans supported United States policy in Central America, there was
still a growing uneasiness over the country's role as reluctant host to Nicaraguan rebel forces. At
the height of the conflict with the Sandinista Popular Army (Ejercito Popular Sandinista--EPS), in the
mid 1980s the Contra forces reportedly totaled between 12,000 and 17,000, depending on the
source of the estimate. This force level rivaled that of the entire Honduran armed forces. This fact
and the continued close ties between Honduras and the United States made it doubtful that the
armed forces would expel the Nicaraguan rebels from Honduran territory by force. However, the
prospect of an EPS victory over the Contras, which most observers considered inevitable, raised the
disturbing prospect of a foreign armed force trapped on Honduran soil. Most Hondurans believed
that, under such circumstances, the Nicaraguans would fail to assimilate well into the Honduran
population and would resort to banditry in order to survive. Honduran politicians reflected little faith
in the willingness of the United States to assist them should events take such a negative turn. Most
believed that, following a Contra defeat, Washington would cut its losses and withdraw all support
from the group.
Continued and sharply increased United States military aid to Honduras was the counterbalance to
the prospect of United States withdrawal from the Nicaraguan conflict. For the years 1975-80, the
total aid to Honduras had been US$16.3 million. From 1981-85, the total reached US$169 million.
Meanwhile, the percentage of the military budget coming directly or indirectly from the United
States increased from 7 percent in 1980 to 76 percent in 1985.
As the Nicaraguan conflict spread, Hondurans were left to ponder the merits of the deal the armed
forces had brokered. On March 22, 1986, approximately 1,500 EPS ground troops crossed the
Honduran border and engaged Contra forces near the hamlet of Las Vegas. The EPS withdrew into
northern Nicaragua without making contact with Honduran forces. Honduran officials acknowledged
the incursion publicly, but only after United States spokespersons had trumpeted the incident as
proof of the Sandinistas' aggressive intentions toward their northern neighbor. Shortly thereafter,
the United States Congress approved US$100 million in military aid to the Contra forces. Other EPS
incursions into Honduran territory followed, notably in December 1986 and June 1987. How much
human suffering passed in the frontier region without public notice by any government remained
unknown. As in decades past, the spillover of the Nicaraguan conflict into more peaceful Honduras
demonstrated the interrelatedness of events in all of the states of Central America.
So Heath Ledger, Anna Nicole Danny Ganns and Michael Jackson all OD on the same leathal cocktail.
The mobsters don't even bother to mix it up. It would be interesting to see where the wealth of all
four will be diverted. Jackson must have made over 5 billion in his career and when he dies he owed a
half billion so I figure the ruling criminals stole most of that. His Pepsi deal was for one billion. He
probably made a few billion on records because he had the best record contract in the business and
he sold 350 million records. His teacher told me he made 1.5 million a night for a live performance.
See what you get to look forward to when you become rich and famous performance artist. In that
movie on Sinatra one of the Chicago gangsters asks the other if he thinks they should whack Sinatra.
He says no because he wants to hear him sing Chicago again.
A gangster once told me that because I have a bad back from a shit criminal jew doctor that he
could arrange for me to be put out of my misery and make it look like an accident. He wanted to help
me get rid of my back problem. The way I feel now it sounds like a good idea. The gangsters turned
Elvis into a drug addict and hasted his demise. I bet they were behind the early demise of Jackson.
They had him living out in Parump Nevada where he might have been a prisoner like Howard Hughes.
They kept Hughes locked in a Vegas Hotel. In the book "The Money and the Power" it says they
shipped him out to the Caman islands till they had his makeshift prison ready for him in Vegas and
then altered his will. They said he was on drugs. That seems to be part of the gangsters play book. I
imagine the gangsters didn't want to go through with Jackson's London tour. They had the Italian Lou
Farigno training him.
I don't think the gangsters understand entertainers. Donald trump said he firsts met Michael
Jackson before a concert and after speaking to him he didn't think Michael could ever go out and put
on a great show. He then said Michael blew him away. A few years ago Trump said if they booked
Jackson in Vegas he didn't know if he would show up. I thought that strange. Michael Jackson was
showing up for concert all his life but ego maniac mobster under estimate them because they don't
speak the gangsters language. It is required that they speak like Telly Savalis. The gangsters
whacked Danny Gans last week in the same manner. They took Michaels body off in a helicopter to
get the desired results from the autopsy. (kind of like burying John John kennedy at sea before an
autopsy)You know if you don't want to book these people you can pension them off like normal people.
When they tired of Mario Alanza because he wasn't telling them what they wanted to hear they
whacked him also. The gangsters love to exercise power and control and entertainers are good
targets because they get their money when they're dead. The gangsters have a distorted perception
of reality. It's their deluded wishful thinking. They don't want people to be free. They want to fuck
with people. They're just greedy control freaks. When Mario Alanza didn't do as he was told they
wanted him dead. The same probably was true with Danny Gans and Michael Jackson.
Sanatra sang the song "My Way". Because he was one of the boys he could get away with doing things
his way and even then he didn't always get his way. Others aren't so lucky. They are intolerant of
aberrant behavior or use it as an excuse to do whatever they want with someone. Helping people
doesn't seem to be in the gangsters play book. Whacking is. I might have said Michael was strange
but strange might be good. They tolerate Berlesconi's pacadillos. These entertainers can be given
townhouses in Malibu for retirement instead of whacking them. Julie Andrews and Glen Campbell
have retired to Malibu. Jackson could have been writing and singing for twenty more years. The
gangsters don't like old performers. Buddy Grecko, Sinatra's pianist at 80 years had to scrape
together nickles and dimes to open a hole in the wall join in cathedral city Ca. in order to have a place
to perform. The gangsters want to spend millions or nothing at all. At one time to open a club in
Malibu where retired performers who live in the area could perform a lounge act. Bugsy Siegel tried
to put a little money away for a rainy day after making millions for the mob and starting vegas. They
whacked him because he was stealing company money.
Here is how the US handles political demonstrations. They tell the would be protesters if they would
like to protest they need to take a boat to this island in the middle of the harbor called Alcatraz. On
that island they will find a barbed wire enclosure that is the designated containment area for
protesters. Then they tell them that if they chose to go there and protest they will be video taped
and there is a good chance they will get a police record that will prevent them from ever getting a
good job and their family will starve. Such is the nature of US democracy, the beacon of freedom. On
the eve of the US invasion of Iraq I drove to downtown Chicago to the Daley center and the federal
building. Not one protestor could be seen anywhere in the city. The gangsters had achieved absolute
control and intimidation.
You have Obama coming out of mob controlled U of Chicago running against a military man from mob
controlled Arizona. A military man that somehow came to own more homes than he can remember and
his running mate is from the sparsely populated, mob controlled oil producing state of Alaska. (like
cheney was from mineral rich under populated Wyoming where elections are easy to control)The oil
industry being owned and operated by gangsters for national security of course. Then the gangsters
have their Jason Bourne's across the globe assuring the correct political outcomes. The old Chicago
tribune once wrote an article that Putin was made president of Russia after he allowed the gangsters
to steal half the art in Saint Petersburg. The plot of the Bourne Supremecy is based on a true story.
Under Boris Yeltsin the mob used CIA money to buy up Russian oil leases. I do believe because of my
brilliant reporting they may have returned most of those assets to the russian people but I'm not
sure. Under Yeltsin, the Jews tried to steal much of those assets. Putin put one Jew in jail and the
other was hiding out in London.
The Jews maximize profits by moving productive enterprise off shore to low wage producers. Low
wages give them more capital to use to create asset bubbles. The profits derived from getting out
before the bubble pops maximizes their profits but leaves the real economy unable to compete in the
long run with planned economies like Germany and Japan.
Yesterday NBC, the military network, had Jew sadist, slime, Nethanyaho saying something regarding
the crackdown on riots in Iran and the apparent lack of freedom. What a joke. The jews spent three
trillion of tax payers money invading Iraq because SADDAM helped families of Palastinians who
faught for freedom. He doesn't mention how the US supported a dictator, the Shah of Iran for
decades in order to exploit its resources. The current president was one who fought for Iran
independance from US domination and exploitation. These globalization theories forced on the world
by mobsters and Jews through the IMF and world bank are designed to facilitate Jewish and
mafia control of the levers of financial power. The ideology was formented by Jews like Milton
Friedman while he was a professor at the U of Chicago and reiterated by Jew propagandists like
Thomas Friedman and jewish academics/financial leaders such as Larry Summers. But all these
people were selected for positions of prominence by the gangsters/CIA. Its in the book "Bad
Samaritans." and "The Shock Docrine".
A link to the audio version of "Bad Samaritans" is somewhere below.
The Jew media is wasting our time with stories of the Iranian election. Who cares. The Iranians
havn't learned how the mobsters practice crowd control during US sham elections. You can't get
within a mile of a convention because of barbed wire and all protesters are put in an isolated area
that is walled off with barbed wire. Such is the nature of US sham democracy orchestrated by the
imperial mafia.
American Medical Association Trying To Sink Health Care Reform Again
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First Posted: 06-11-09 01:30 AM | Updated: 06-11-09 01:51 AM
Just days before President Barack Obama is set to address the American Medical Association to
pitch its members on his vision for health care reform, the 250,000-member physician group
announced it would oppose a major component of that effort.
On Wednesday night, the New York Times reported that AMA was "letting Congress know" that it
would resist a public plan for health insurance coverage.
Politically, the revelation could be a potentially significant blow to progressive health care reform
advocates, who contend that a public option is the best way to reduce costs and increase insurance
coverage. AMA has institutional resources and the prestige to affect debates in the halls of
Congress.
Historically and philosophically, however, AMA's opposition is hardly newsworthy. Despite a lofty
reputation and the laudable commitment to universal coverage, AMA has fought almost every major
effort at health care reform of the past 70 years. The group's reputation on this matter is so
notorious that historians pinpoint it with creating the ominous sounding phrase "socialized medicine" in
the early decades of the 1900s.
"The AMA used it to mean any kind of proposal that involved an increased role for the government in
the health care system," Jonathan Oberlander, a professor of health policy at the University of
North Carolina, told NPR in a December 2007 interview. "They also used it to mean things in the
private system that they didn't like. So, at one point, HMOs were a form of socialized medicine."
Indeed, the role played by AMA throughout health care reform battles past has often been
primarily as the defender of the status quo. In 1935, fears of an AMA backlash helped persuade
Franklin Roosevelt's advisers to drop a health care article from the Social Security package -
fearful that the opposition would sink the legislation altogether.
Concerned about government restriction on and oversight over surgical activities -- not to mention
the loss of physician income -- the group deployed the "socialized medicine" argument to undermine
Harry Truman's effort at a national health care system years later.
In 1961, AMA organized a campaign to block Medicare. Titled "Operation Coffeecup," the effort
insisted that the government-sponsored system would lead to a varying form of totalitarianism. For a
spokesman, the group turned to Ronald Reagan, who lent his famous actor's voice to a 10-minute plus
recording.
Story continues below
"One of the traditional methods of imposing state-ism or socialism on a people has been by way of
medicine," said the then-future president. "It is very easy to disguise a medical program as a
humanitarian project. Most people are a little reluctant to oppose anything that suggests medical
care for people who possibly can't afford it."
During the most recent effort at reform - the Clinton administration's go at it in the early '90s -
AMA found itself, once again, the spoiler. The group, worried about cost-control measures, poured
$3 million into defeating Hillary Clinton's proposal. Perhaps as significantly, it lent its name (and the
prestige of its members) to the political opposition. In 1995, AMA endorsed then-House Speaker
Newt Gingrich's Medicare Preservation Act. It was interpreted, at the time, as a patently political
ploy - an effort to align with the party that held the keys to legislative power.
The same cannot be said of the American Medical Association's decision to oppose a public plan in the
current health care reform quarrel, in which the Obama White House holds the vast majority of
political power. Indeed, up until Wednesday, AMA, like most other private players, had kept its
powder dry.
So why speak up now? The group cited impossible-to-avoid policy disagreements.
"The A.M.A. does not believe that creating a public health insurance option for non-disabled
individuals under age 65 is the best way to expand health insurance coverage and lower costs," read
an organizational statement to the Senate Finance Committee. "The introduction of a new public plan
threatens to restrict patient choice by driving out private insurers, which currently provide coverage
for nearly 70 percent of Americans."
Without private insurers in the market, the statement added, "the corresponding surge in public plan
participation would likely lead to an explosion of costs that would need to be absorbed by taxpayers."
On this front as well, AMA's critics have room to scoff. Indeed, in mid-February, the Commonwealth
Fund put out a report on the most cost-effective ways to revamp the health care industry. The public
plan, it concluded, "plays a central role in harnessing markets for positive change" by lowering
premiums for many Americans by, potentially, $1,000 a year. In addition, the Commonwealth Fund
added, a public plan would help decrease the number of uninsured in the country from "an estimated
48 million in 2009 (16 percent of the U.S. population) to 4 million by 2012."
Another psycho jew from hell
AIG lawyer: Ex-top exec plundered retirement plan
NEW YORK – The former top executive of American International Group Inc. plundered an AIG
retirement program of billions of dollars because he was angry at being forced out of the company, a
lawyer for AIG told jurors Monday at the start of a civil trial.
Attorney Theodore Wells told the jury in Manhattan that former AIG Chief Executive Officer
Maurice "Hank" Greenberg improperly took $4.3 billion in stock from the company in 2005, after he
was ousted by the company amid investigations of accounting irregularities.
"Hank Greenberg was mad. He was angry," Wells said in U.S. District Court of the emotional state of
the man who, over a 35-year-career, built AIG from a small company into the world's largest
insurance provider. He said the saga is a story of "anger, betrayal and cover-up."
Wells said that Greenberg, within weeks of being forced out in mid-2005, gave the go-ahead for
tens of millions of shares to be sold from a trust fund. The fund was set up to provide incentive
bonuses to a select group of AIG management and highly compensated employees that they would
receive upon their retirement.
Wells showed the jury several clips of Greenberg speaking on videotape about the responsibilities of
the trust fund. He called it Greenberg's "videotaped confession."
Wells asked the jury to award AIG $4.276 billion and 185 million AIG shares.
Greenberg, 84, has contended through his lawyers that he had the right to sell the shares because
they were owned by Starr International, a privately held company he controlled.
Greenberg's lawyer, David Boies, told the jury in his opening statement that the shares sold by his
client did not belong to AIG.
"I disagree with a great many things that Mr. Wells said," Boies told the jury. He said a study of the
documents in the case would prove that the shares sold by Greenberg did not belong to AIG.
"Look in this case not to what people said after this lawsuit started," Boies said. "Look to what they
said and did and wrote before the lawsuit started."
Starr International was named after Cornelius Vander Starr, who created a worldwide network of
insurance companies in the early 1900s.
AIG maintains that Starr and Greenberg, his protege and successor, decided in the late 1960s to
organize the various companies under one holding company, AIG.
Starr International remained a private company and its shareholders decided in 1970 that the
amount that its shares of AIG were worth above book value of about $110 million should be used to
compensate AIG employees, AIG has said.
The embattled insurer is trying to reclaim the money from Starr it says was wrongly pocketed
through stock sales by Greenberg.
The trial relates to events that occurred long before AIG found itself under attack earlier this year
over its bonus program.
The company was roundly criticized after it accepted $182 billion in federal aid and then paid out
$165 million in bonuses to employees, including traders in the financial products unit that nearly
caused the company to collapse.
Before the jury was chosen Monday, U.S. District Judge Jed S. Rakoff said evidence in the trial
could not include information about the government bailout.
The trial featured two legal heavyweights.
Boies argued on behalf of Democratic presidential candidate Al Gore before the U.S. Supreme Court
during the disputed presidential vote in 2000. Wells was on the team of defense lawyers in 2007 for
former White House aide I. Lewis "Scooter" Libby, who was convicted of perjury, obstruction and
lying to the FBI about his role in leaking the name of a CIA operative to a reporter.
ECONOMICS
Wall Street’s Toxic Message
When the current crisis is over, the reputation of American-style capitalism will have taken a
beating—not least because of the gap between what Washington practices and what it preaches.
Disillusioned developing nations may well turn their backs on the free market, warns Nobel laureate
Joseph E. Stiglitz, posing new threats to global stability and U.S. security.
BY JOSEPH E. STIGLITZ July 2009
Illustration by Edward Sorel.
Every crisis comes to an end—and, bleak as things seem now, the current economic crisis too shall
pass. But no crisis, especially one of this severity, recedes without leaving a legacy. And among this
one’s legacies will be a worldwide battle over ideas—over what kind of economic system is likely to
deliver the greatest benefit to the most people. Nowhere is that battle raging more hotly than in the
Third World, among the 80 percent of the world’s population that lives in Asia, Latin America, and
Africa, 1.4 billion of whom subsist on less than $1.25 a day. In America, calling someone a socialist
may be nothing more than a cheap shot. In much of the world, however, the battle between capitalism
and socialism—or at least something that many Americans would label as socialism—still rages. While
there may be no winners in the current economic crisis, there are losers, and among the big losers is
support for American-style capitalism. This has consequences we’ll be living with for a long time to
come.
Joseph E. Stiglitz on the economic crisis.
Capitalist Fools, January 2009
Reversal of Fortune, November 2008
The $3 Trillion War, April 2008 (with Linda J. Bilmes)
The Economic Consequences of Mr. Bush, December 2007
The fall of the Berlin Wall, in 1989, marked the end of Communism as a viable idea. Yes, the problems
with Communism had been manifest for decades. But after 1989 it was hard for anyone to say a word
in its defense. For a while, it seemed that the defeat of Communism meant the sure victory of
capitalism, particularly in its American form. Francis Fukuyama went as far as to proclaim “the end of
history,” defining democratic market capitalism as the final stage of social development, and
declaring that all humanity was now heading in this direction. In truth, historians will mark the 20
years since 1989 as the short period of American triumphalism. With the collapse of great banks and
financial houses, and the ensuing economic turmoil and chaotic attempts at rescue, that period is over.
So, too, is the debate over “market fundamentalism,” the notion that unfettered markets, all by
themselves, can ensure economic prosperity and growth. Today only the deluded would argue that
markets are self-correcting or that we can rely on the self-interested behavior of market
participants to guarantee that everything works honestly and properly.
The economic debate takes on particular potency in the developing world. Although we in the West
tend to forget, 190 years ago one-third of the world’s gross domestic product was in China. But then,
rather suddenly, colonial exploitation and unfair trade agreements, combined with a technological
revolution in Europe and America, left the developing countries far behind, to the point where, by
1950, China’s economy constituted less than 5 percent of the world’s G.D.P. In the mid–19th century
the United Kingdom and France actually waged a war to open China to global trade. This was the
Second Opium War, so named because the West had little of value to sell to China other than drugs,
which it had been dumping into Chinese markets, with the collateral effect of causing widespread
addiction. It was an early attempt by the West to correct a balance-of-payments problem.
Colonialism left a mixed legacy in the developing world—but one clear result was the view among
people there that they had been cruelly exploited. Among many emerging leaders, Marxist theory
provided an interpretation of their experience; it suggested that exploitation was in fact the
underpinning of the capitalist system. The political independence that came to scores of colonies
after World War II did not put an end to economic colonialism. In some regions, such as Africa, the
exploitation—the extraction of natural resources and the rape of the environment, all in return for a
pittance—was obvious. Elsewhere it was more subtle. In many parts of the world, global institutions
such as the International Monetary Fund and the World Bank came to be seen as instruments of post-
colonial control. These institutions pushed market fundamentalism (“neoliberalism,” it was often
called), a notion idealized by Americans as “free and unfettered markets.” They pressed for
financial-sector deregulation, privatization, and trade liberalization.
The World Bank and the I.M.F. said they were doing all this for the benefit of the developing world.
They were backed up by teams of free-market economists, many from that cathedral of free-
market economics, the University of Chicago. In the end, the programs of “the Chicago boys” didn’t
bring the promised results. Incomes stagnated. Where there was growth, the wealth went to those
at the top. Economic crises in individual countries became ever more frequent—there have been more
than a hundred severe ones in the past 30 years alone.
Not surprisingly, people in developing countries became less and less convinced that Western help
was motivated by altruism. They suspected that the free-market rhetoric—“the Washington
consensus,” as it is known in shorthand—was just a cover for the old commercial interests. Suspicions
were reinforced by the West’s own hypocrisy. Europe and America didn’t open up their own markets
to the agricultural produce of the Third World, which was often all these poor countries had to offer.
They forced developing countries to eliminate subsidies aimed at creating new industries, even as
they provided massive subsidies to their own farmers.
Free-market ideology turned out to be an excuse for new forms of exploitation. “Privatization” meant
that foreigners could buy mines and oil fields in developing countries at low prices. It meant they
could reap large profits from monopolies and quasi-monopolies, such as in telecommunications.
“Liberalization” meant that they could get high returns on their loans—and when loans went bad, the I.
M.F. forced the socialization of the losses, meaning that the screws were put on entire populations to
pay the banks back. It meant, too, that foreign firms could wipe out nascent industries, suppressing
the development of entrepreneurial talent. While capital flowed freely, labor did not—except in the
case of the most talented individuals, who found good jobs in a global marketplace.
This picture is, obviously, painted with too broad a brush. There were always those in Asia who
resisted the Washington consensus. They put restrictions on capital flows. The giants of Asia—China
and India—managed their economies their own way, producing unprecedented growth. But elsewhere,
and especially in the countries where the World Bank and the I.M.F. held sway, things did not go well.
And everywhere, the debate over ideas continued. Even in countries that have done very well, there
is a conviction among the educated and influential that the rules of the game have not been fair. They
believe that they have done well despite the unfair rules, and they sympathize with their weaker
friends in the developing world who have not done well at all.
Among critics of American-style capitalism in the Third World, the way that America has responded
to the current economic crisis has been the last straw. During the East Asia crisis, just a decade ago,
America and the I.M.F. demanded that the affected countries cut their deficits by cutting back
expenditures—even if, as in Thailand, this contributed to a resurgence of the AIDS epidemic, or
even if, as in Indonesia, this meant curtailing food subsidies for the starving. America and the I.M.F.
forced countries to raise interest rates, in some cases to more than 50 percent. They lectured
Indonesia about being tough on its banks—and demanded that the government not bail them out.
What a terrible precedent this would set, they said, and what a terrible intervention in the Swiss-
clock mechanisms of the free market.
The contrast between the handling of the East Asia crisis and the American crisis is stark and has not
gone unnoticed. To pull America out of the hole, we are now witnessing massive increases in spending
and massive deficits, even as interest rates have been brought down to zero. Banks are being bailed
out right and left. Some of the same officials in Washington who dealt with the East Asia crisis are
now managing the response to the American crisis. Why, people in the Third World ask, is the United
States administering different medicine to itself?
Many in the developing world still smart from the hectoring they received for so many years: they
should adopt American institutions, follow our policies, engage in deregulation, open up their markets
to American banks so they could learn “good” banking practices, and (not coincidentally) sell their
firms and banks to Americans, especially at fire-sale prices during crises. Yes, Washington said, it
will be painful, but in the end you will be better for it. America sent its Treasury secretaries (from
both parties) around the planet to spread the word. In the eyes of many throughout the developing
world, the revolving door, which allows American financial leaders to move seamlessly from Wall
Street to Washington and back to Wall Street, gave them even more credibility; these men seemed
to combine the power of money and the power of politics. American financial leaders were correct in
believing that what was good for America or the world was good for financial markets, but they were
incorrect in thinking the converse, that what was good for Wall Street was good for America and the
world.
It is not so much Schadenfreude that motivates the intense scrutiny by developing countries of
America’s economic failure as it is a real need to discover what kind of economic system can work for
them in the future. Indeed, these countries have every interest in seeing a quick American recovery.
What they know is that they themselves cannot afford to do what America has done to attempt to
revive its economy. They know that even this amount of spending isn’t working very fast. They know
that the fallout from America’s downturn has moved 200 million additional people into poverty in the
span of just a few years. And they are increasingly convinced that any economic ideals America may
espouse are ideals to run from rather than embrace.
Why should we care that the world has become disillusioned with the American model of capitalism?
The ideology that we promoted has been tarnished, but perhaps it is a good thing that it may be
tarnished beyond repair. Can’t we survive—even do just as well—if not everyone adheres to the
American way?
To be sure, our influence will diminish, as we are less likely to be held up as a role model, but that
was happening in any case. America used to play a pivotal role in global capital, because others
believed that we had a special talent for managing risk and allocating financial resources. No one
thinks that now, and Asia—where much of the world’s saving occurs today—is already developing its
own financial centers. We are no longer the chief source of capital. The world’s top three banks are
now Chinese. America’s largest bank is down at the No. 5 spot.
The dollar has long been the reserve currency—countries held the dollar in order to back up
confidence in their own currencies and governments. But it has gradually dawned on central banks
around the world that the dollar may not be a good store of value. Its value has been volatile, and
declining. The massive increase in America’s indebtedness during the current crisis, combined with
the Federal Reserve Board’s massive lending, has heightened anxieties about the future of the
dollar. The Chinese have openly floated the idea of inventing some new reserve currency to replace it.
Meanwhile, the cost of dealing with the crisis is crowding out other needs. We have never been
generous in our assistance to poor countries. But matters are getting worse. In recent years, China’s
infrastructure investment in Africa has been greater than that of the World Bank and the African
Development Bank combined, and it dwarfs America’s. African countries are running to Beijing for
assistance in this crisis, not to Washington.
But my concern here is more with the realm of ideas. I worry that, as they see more clearly the flaws
in America’s economic and social system, many in the developing world will draw the wrong
conclusions. A few countries—and maybe America itself—will learn the right lessons. They will realize
that what is required for success is a regime where the roles of market and government are in
balance, and where a strong state administers effective regulations. They will realize that the power
of special interests must be curbed.
But, for many other countries, the consequences will be messier, and profoundly tragic. The former
Communist countries generally turned, after the dismal failure of their postwar system, to market
capitalism, replacing Karl Marx with Milton Friedman as their god. The new religion has not served
them well. Many countries may conclude not simply that unfettered capitalism, American-style, has
failed but that the very concept of a market economy has failed, and is indeed unworkable under any
circumstances. Old-style Communism won’t be back, but a variety of forms of excessive market
intervention will return. And these will fail. The poor suffered under market fundamentalism—we
had trickle-up economics, not trickle-down economics. But the poor will suffer again under these new
regimes, which will not deliver growth. Without growth there cannot be sustainable poverty
reduction. There has been no successful economy that has not relied heavily on markets. Poverty
feeds disaffection. The inevitable downturns, hard to manage in any case, but especially so by
governments brought to power on the basis of rage against American-style capitalism, will lead to
more poverty. The con?sequences for global stability and American security are obvious.
Joseph E. Stiglitz on the economic crisis.
Capitalist Fools, January 2009
Reversal of Fortune, November 2008
The $3 Trillion War, April 2008 (with Linda J. Bilmes)
The Economic Consequences of Mr. Bush, December 2007
There used to be a sense of shared values between America and the American-educated elites
around the world. The economic crisis has now undermined the credibility of those elites. We have
given critics who opposed America’s licentious form of capitalism ample ammunition to preach a
broader anti-market philosophy. And we keep giving them more and more ammunition. While we
committed ourselves at a recent G-20 meeting not to engage in protectionism, we put a “buy
American” provision into our own stimulus package. And then, to soften the opposition from our
European allies, we modified that provision, in effect discriminating against only poor countries.
Globalization has made us more interdependent; what happens in one part of the world affects those
in another—a fact made manifest by the contagion of our economic difficulties. To solve global
problems, there must be a sense of cooperation and trust, including a sense of shared values. That
trust was never strong, and it is weakening by the hour.
Faith in democracy is another victim. In the developing world, people look at Washington and see a
system of government that allowed Wall Street to write self-serving rules which put at risk the
entire global economy—and then, when the day of reckoning came, turned to Wall Street to manage
the recovery. They see continued re-distributions of wealth to the top of the pyramid, transparently
at the expense of ordinary citizens. They see, in short, a fundamental problem of political
accountability in the American system of democracy. After they have seen all this, it is but a short
step to conclude that something is fatally wrong, and inevitably so, with democracy itself.
The American economy will eventually recover, and so, too, up to a point, will our standing abroad.
America was for a long time the most admired country in the world, and we are still the richest. Like
it or not, our actions are subject to minute examination. Our successes are emulated. But our failures
are looked upon with scorn. Which brings me back to Francis Fukuyama. He was wrong to think that
the forces of liberal democracy and the market economy would inevitably triumph, and that there
could be no turning back. But he was not wrong to believe that democracy and market forces are
essential to a just and prosperous world. The economic crisis, created largely by America’s behavior,
has done more damage to these fundamental values than any totalitarian regime ever could have.
Perhaps it is true that the world is heading toward the end of history, but it is now sailing against the
wind, on a course we set ourselves.
Joseph E. Stiglitz, a Nobel Prize–winning economist, is a professor at Columbia University.
Corresponding with a Conservative
An email exchange on the Canada-Colombia Free Trade Agreement
June 15, 2009 By Frank Seier
and Joanne Robertson
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[Note: The following email exchange took place between two Canadians (Joanne Robertson and Frank
Seier) and Conservative parliamentarian Ed Fast. Most remarkable about it is the sarcasm and
contempt shown by a politician towards constituents. During the parliamentary debates,
Conservatives showed surprise when they heard that Liberal, NDP, and Bloc politicians were receiving
letters from all over the country against the Canada-Colombia Free Trade Agreement. Campaigners
generally didn't write the Conservatives. The Conservative parliamentarian's attitude towards those
who wrote him shows why...]
June 3, 2009
From Joanne Robertson
To: Conservative MPs and Prime Minister
Honourable Prime Minister Harper and Conservative MPs:
I was shocked and dismayed to read in the Hansard transcript of the recent debate on Bill C-23, an
Act to Implement the Canada-Colombia Free Trade Agreement, that Conservative MPs (MP Ed Fast,
among others) stated that they are not aware of any public opposition to the Canada-Colombia Free
Trade Agreement (CCFTA) ). I hereby go on the public record that I am opposed to the CCFTA, and
respectfully request that your government withdraw Bill C-23 until such time as there has been an
independent human rights impact assessment done of the CCFTA.
As you are aware, the current Colombian government of President Uribe is a notorious human rights
violator, and Canada's approval of Bill C-23 would condone past violations and be seen internationally
as an endorsement of the continuation of the Uribe government's practices.
When your government entered into the CCFTA negotiations in mid-2007, it claimed that the Uribe
administration's human rights record was improving. Since that time, the human rights situation in
Colombia has deteriorated in the following ways:
1. the humanitarian crisis has worsened - there are now approximately 4 million internally displaced
persons (second only to Sudan in absolute numbers) as part of a campaign to cleanse rural land of
indigenous populations in order to make it available to transnational corporations
2. the murder of trade union leaders/activists by right-wing paramilitaries has escalated - out of
every 10 trade union leaders/members killed in the world, 7 are Colombian
3. only 3% of such murders are investigated/prosecuted by the Uribe government
4. scandals linking the Uribe administration to right-wing paramilitaries have increased - including the
recent "para-politics" scandals involving the bribery and influence-peddling by paramilitaries of
Uribista Congress members - the Uribe administration has extradited paramilitary members to
deflect public attention
5. scandals linking the Colombian Military to the extra-judicial killings of innocent civilians in order to
exaggerate the progress of Uribe's "war on drugs" efforts have increased - including the "false
positives" scandal where innocent civilians were lured into conflict areas, murdered and dressed in
guerrilla uniforms, and alleged to have been shot in an armed conflict with the Military
Prime Minister Harper, you have argued that it is ridiculous to require Colombia to "fix all its human
rights problems before Canada will engage in trade relations with it." With all due respect,
Honorable Prime Minister, as a signatory to the International Covenant on Civil and Political Rights,
international law requires Colombia to respect and protect human rights immediately, not when it is
more economically convenient for it to do so, as your government proposes with its "trickle-down
theory of economic engagement. Moreover, by rewarding a human rights violator like Colombia with a
free trade agreement, Canada throws away one of the strongest tools the international community
has to ensure compliance by recalcitrant states with international law.
This government's position on proceeding with a free-trade agreement with Colombia is inconsistent
and at odds with its past position on econimic relations with notorious human rights violators.
Colombia's record puts it in the company of countries such as Myanmar, Zimbabwe, Sudan, etc. with
whom Canada refuses to have trade relations based on their dismal human rights record. And
Canada's inability to substantively influence China's human rights behaviour, notwithstanding a
significant history of economic relations, seriously undermines the theory that it is easier to influence
human rights behaviour through economic engagement.
By approving the CCFTA and Bill C-23, Canada's internationally recognized reputation as one of the
world's staunchest supporters of human rights will be seriously tarnished. Canadian exports to
Colombia are relatively insignificant, and an free-trade agreement will not sufficiently increase trade
to justify Canada destroying its international human rights reputation. This is a bargain in which
Canada has everything to lose and nothing to gain.
Colombia will point to the CCFTA as Canada's seal of approval of the Uribe administration's policies
and practices, in order to embellish its human rights record internationally. It will use the CCFTA
approval to pressure the United States' Congress to approve a US/Colombia free-trade agreement,
which is currently stalled due to human rights concerns.
Canada's Parliamentary Standing Committee on International Trade has recommended that a human
rights impact assessment be carried out and the recommendations of that assessment be addressed
before Canada considers signing, ratifying and implementing the Canada-Colombia Free Trade
Agreement.
Honorable Prime Minister, I call on you and Conservative MPs to support the recommendations of
Parliament's Standing Committee on International Trade to conduct an independent human rights
impact assessment, and withdraw Bill C-23 until such time.
Yours truly,
Joanne Robertson
Sault Ste. Marie, ON
[Ed Fast's Reply]
From: FastE1A@parl.gc.ca
Subject: Re: Canada-Colombia Free Trade Agreement
Date: June 3, 2009
Published on Friday, June 26, 2009 by Agence France Presse
Author Naomi Klein Calls for Boycott of Israel
BILIN , West Bank - Bestselling author Naomi Klein on Friday took her call for a boycott of Israel to
the occupied West Bank village of Bilin, where she witnessed Israeli forces clashing with protesters.
Bestselling Canadian author Naomi Klein on Friday took her call for a boycott of Israel to the
occupied West Bank village of Bilin, where she witnessed Israeli forces clashing with protesters.
'Boycott is a tactic . . . we're trying to create a dynamic which was the dynamic that ultimately ended
apartheid in South Africa,' she said. (Photograph by: John Kenney, National Post)
"It's a boycott of Israeli institutions, it's a boycott of the Israeli economy," the Canadian writer told
journalists as she joined a weekly demonstration against Israel's controversial separation wall.
"Boycott is a tactic . . . we're trying to create a dynamic which was the dynamic that ultimately ended
apartheid in South Africa," said Klein, the author of "The Shock Doctrine: The Rise of Disaster
Capitalism."
"It's an extraordinarily important part of Israel's identity to be able to have the illusion of Western
normalcy," the Canadian writer and activist said.
"When that is threatened, when the rock concerts don't come, when the symphonies don't come,
when a film you really want to see doesn't play at the Jerusalem film festival . . . then it starts to
threaten the very idea of what the Israeli state is."
She briefly joined about 200 villagers and foreign activists protesting the barrier which Israel says
it needs to prevent attacks, but which Palestinians say aims at grabbing their land and undermining
the viability of their promised state.
She then watched from a safe distance as the protesters reached the fence, where Israeli forces
fired teargas and some youths responded by throwing stones at the army.
"This apartheid, this is absolutely a system of segregation," Klein said adding that Israeli troops
would never crack down as violently against Jewish protesters.
She pointed out that her visit coincided with court hearings in Quebec in a case where the villagers of
Bilin are suing two Canadian companies, accusing them of illegally building and selling homes to Israelis
on land that belongs to the village.
The plaintiffs claim that by building in the Jewish settlement of Modiin Illit, near Bilin, Green Park
International and Green Mount International are in violation of international laws that prohibit an
occupying power from transferring some of its population to the lands it occupies.
"I'm hoping and praying that Canadian courts will bring some justice to the people of Bilin," Klein said.
Her visit was also part of a promotional tour in Israel and the West Bank for "The Shock Doctrine"
which has recently been translated into Hebrew and Arabic. Klein said she would get no royalties
from sales of the Hebrew version and that the proceeds would go instead to an activist group.
The gangsters don’t want regulation that would hinder their ability to steal everything
The Root of Madoff’s Evil
EMAIL PRINT SHARE
Posted on Jul 1, 2009
AP Photo / Louis Lanzano
Bernard Madoff arrives at Manhattan federal court.
By Robert Scheer
How convenient for the judge and the media to paint Bernard Madoff as Mr. Evil, a uniquely venal
blight on an otherwise responsible financial industry in which money is handled honestly and with
transparency.
Madoff, sentenced Monday to 150 years in prison for bilking investors of billions, should be exhibit A
in why the dark world of totally unregulated private money managers and hedge funds should be
opened to the light of systematic government supervision. Instead, he is being treated as an
aberrant menace, with the danger removed once the devil incarnate, as his victims describe him, is
locked up and the key thrown away.
For goodness’ sake this was not some sort of weird outsider who flipped out, but rather a key
developer of the modern system of electronic trading and a founder and chairman of Nasdaq.
Madoff often was called upon to help write the rules on financial regulation and therefore became
quite expert at subverting them.
As Securities and Exchange Commission Inspector General H. David Kotz testified before Congress,
the inspector general’s office is looking into “[t]he extent to which the reputation and status of
Bernard Madoff, and the fact that he served on SEC Advisory Committees, participated on
securities industry boards and panels, and had social and professional relationships with SEC
officials, may have affected commission decisions regarding investigations, examinations and
inspections of his firm.”
Those relationships were close (the personal ties included the marriage of one of Madoff’s nieces to
an SEC official) and stretched out over the decades during which Madoff was a major player on Wall
Street. At the very time back in 1999 when the SEC was being formally warned that a Madoff scam
was under way, Madoff was consulting with then-SEC Chairman Arthur Levitt Jr. on regulatory
matters. When Levitt retired a year later, Madoff was quoted in the trades as paying tribute to him:
“He brought all of us to the negotiating table time and time again, on a whole host of issues, and to a
greater extent than any other SEC chairman.”
Levitt wrote in a January 2009 opinion article in The Wall Street Journal, “I knew Bernie Madoff and
had no reason to believe he was not a legitimate market maker, nor did anyone at that time know he
was acting as an adviser to outside investors.”
Nor was he required to tell anyone. And even if he had been, it’s unlikely that part of Madoff’s
business would have been looked into. In the deregulatory mania of the preceding two decades, it had
been assumed that such managers did not need regulating, and funding for the SEC kept getting cut.
As Levitt noted in the article, it would only get worse:
“Since 2002, the number of investment advisers—such as Madoff Securities—has increased by 50%.
Yet enforcement resources have been flat or even reduced. … As a result, only about 10% of
investment advisers can expect to be examined every three years, and the goal of inspecting every
adviser once every five years—laughably light oversight in its own right—has been abandoned.”
Money for proper oversight was not allocated because the prevailing ideology regarding private
investment firms—embraced by President Bill Clinton ever as fervently as President George W. Bush
would later—was the gospel of radical financial deregulation, a practice that has landed us in the
larger banking mess. As with the trading in unregulated derivatives, all of the operations of private
investor groups, such as hedge funds, were thought not to require government supervision because
these were conducted by professional financiers dealing with sophisticated investors who knew what
they were doing. If the investment went south, it was on their dime and there would be no innocent
victims.
As we saw with the collapse of AIG and now Madoff, that notion is false because private investment
contracts can involve the resources of charitable organizations and pension funds and can end up
costing the homes, savings and jobs of ordinary citizens who have no idea of which end of this arcane
stuff is up.
When Levitt worked for Clinton as head of the SEC, he teamed up with Alan Greenspan, Robert Rubin
and Lawrence Summers to destroy what remained of financial service industry regulation imposed by
President Franklin Roosevelt in response to the Great Depression. In recent years Levitt, alone
among that gang of four, has criticized that action and accepted some personal responsibility for the
subsequent financial meltdown.
He was right again when he stated in his January article: “The Madoff scandal should be a wake-up
call for more consistent, uniform, and rigorous regulation of investment advising … the final prod for
a fundamental reform of the financial regulatory structure. … ”
He gets it. Let’s hope that Congress does too and is not fooled by the argument of Wall Street
lobbyists that Madoff was a lone rotten apple now safely discarded.
The US should help over throw this mafia imposter that has taken over Honduras.
Obama's Real Message to Latin America?
The Coup in Honduras
By NIKOLAS KOZLOFF
Could the diplomatic thaw between Venezuela and the United States be coming to an abrupt end? At
the recent Summit of the Americas held in Port of Spain, Barack Obama shook Venezuelan President
Hugo Chávez’s hand and declared that he would pursue a less arrogant foreign policy towards Latin
America. Building on that good will, Venezuela and the United States agreed to restore their
ambassadors late last week. Such diplomatic overtures provided a stark contrast to the miserable
state of relations during the Bush years: just nine months ago Venezuela expelled the U.S. envoy in a
diplomatic tussle. At the time, Chávez said he kicked the U.S. ambassador out to demonstrate
solidarity with left ally Bolivia, which had also expelled a top American diplomat after accusing him of
blatant political interference in the Andean nation’s internal affairs.
Whatever goodwill existed last week however could now be undone by turbulent political events in
Honduras. Following the military coup d’etat there on Sunday, Chávez accused the U.S. of helping to
orchestrate the overthrow of Honduran President Manuel Zelaya. “Behind these soldiers are the
Honduran bourgeois, the rich who converted Honduras into a Banana Republic, into a political and
military base for North American imperialism,” Chávez thundered. The Venezuelan leader urged the
Honduran military to return Zelaya to power and even threatened military action against the coup
regime if Venezuela’s ambassador was killed or local troops entered the Venezuelan Embassy.
Reportedly, Honduran soldiers beat the ambassador and left him on the side of a road in the course
of the military coup. Tensions have ratcheted up to such an extent that Chávez has now placed his
armed forces on alert.
On the surface at least it seems unlikely that Obama would endorse an interventionist U.S. foreign
policy in Central America. Over the past few months he has gone to great lengths to “re-brand”
America in the eyes of the world as a reasonable power engaged in respectful diplomacy as opposed
to reckless unilateralism. If it were ever proven that Obama sanctioned the overthrow of a
democratically elected government this could completely undermine the U.S. President’s carefully
crafted image.
Officially, the military removed Zelaya from power on the grounds that the Honduran President had
abused his authority. On Sunday Zelaya hoped to hold a constitutional referendum which could have
allowed him to run for reelection for another four year term, a move which Honduras’ Supreme Court
and Congress declared illegal. But while the controversy over Zelaya’s constitutional referendum
certainly provided the excuse for military intervention, it’s no secret that the President was at odds
politically with the Honduran elite for the past few years and had become one of Washington’s
fiercest critics in the region.
The Rise of Zelaya
Zelaya, who sports a thick black mustache, cowboy boots and large white Stetson hat, was elected in
late 2005. At first blush he hardly seemed the type of politician to rock the boat. A landowner from
a wealthy landowning family engaged in the lumber industry, Zelaya headed the Liberal Party, one of
the two dominant political parties in Honduras. The President supported the Central American Free
Trade Agreement which eliminated trade barriers with the United States.
Despite these initial conservative leanings, Zelaya began to criticize powerful, vested interests in the
country such as the media and owners of maquiladora sweatshops which produced goods for export in
industrial free zones. Gradually he started to adopt some socially progressive policies. For example,
Zelaya instituted a 60 per cent minimum wage increase which angered the wealthy business
community. The hike in the minimum wage, Zelaya declared, would “force the business oligarchy to
start paying what is fair.” “This is a government of great social transformations, committed to the
poor,” he added. Trade unions celebrated the decision, not surprising given that Honduras is the
third poorest country in the hemisphere and 70 per cent of its people live in poverty. When private
business associations announced that they would challenge the government’s wage decree in
Honduras’ Supreme Court, Zelaya’s Labor Minister called the critics “greedy exploiters.”
In another move that must have raised eyebrows in Washington, Zelaya declared during a meeting of
Latin American and Caribbean anti-drug officials that drug consumption should be legalized to halt
violence related to smuggling. In recent years Honduras has been plagued by drug trafficking and
so-called maras or street gangs which carry out gruesome beheadings, rapes and eye gouging.
“Instead of pursuing drug traffickers, societies should invest resources in educating drug addicts
and curbing their demand,” Zelaya said. Rodolfo Zelaya, the head of a Honduran congressional
commission on drug trafficking, rejected Zelaya’s comments. He told participants at the meeting that
he was “confused and stunned by what the Honduran leader said.”
Zelaya and ALBA
Not content to stop there, Zelaya started to conduct an increasingly more independent foreign
policy. In late 2007 he traveled to Cuba, the first official trip by a Honduran president to the
Communist island in 46 years. There, Zelaya met with Raul Castro to discuss bilateral relations and
other topics of mutual interest.
But what really led Zelaya towards a political collision course with the Honduran elite was his decision
to join the Bolivarian Alternative for the Americas (known by its Spanish acronym ALBA), an alliance
of leftist Latin American and Caribbean nations headed by Chávez. The regional trade group
including Venezuela, Cuba, Nicaragua, Bolivia and Dominica seeks to counteract corporate-friendly U.
S-backed free trade schemes. Since its founding in 2004, ALBA countries have promoted joint
factories and banks, an emergency food fund, and exchanges of cheap Venezuelan oil for food,
housing, and educational investment.
In an emphatic departure from previous Honduran leaders who had been compliant vassals of the U.
S., Zelaya stated “Honduras and the Honduran people do not have to ask permission of any
imperialism to join the ALBA.” Speaking in the Honduran capital of Tegucigalpa before a crowd of
50,000 unionists, women’s groups, farmers and indigenous peoples, Chávez remarked that Venezuela
would guarantee cheap oil to Honduras for “at least 100 years.” By signing onto ALBA, Zelaya was
able to secure access to credit lines, energy and food benefits. As an act of good faith, Chávez
agreed to forgive Honduran debt to Venezuela amounting to $30 million.
Infuriating the local elite, Chávez declared that Hondurans who opposed ALBA were “sellouts.” “I
did not come here to meddle in internal affairs,” he continued, “but…I cannot explain how a Honduran
could be against Honduras joining the ALBA, the path of development, the path of integration.”
Chávez lambasted the Honduran press which he labeled pitiyanquis (little Yanqui imitators) and
“abject hand-lickers of the Yanquis.” For his part, Zelaya said “we need no one’s permission to sign
this commitment. Today we are taking a step towards becoming a government of the center-left, and
if anyone dislikes this, well just remove the word ‘center’ and keep the second one.”
It wasn’t long before private business started to attack Zelaya bitterly for moving Honduras into
Chávez’s orbit. By joining ALBA, business representatives argued, the President was endangering
free enterprise and the Central American Free Trade Agreement with the United States. Former
President Ricardo Maduro even claimed that the United States might retaliate against Honduras by
deporting Honduran migrants from the United States. “Don't bite the hand that feeds you,” Maduro
warned, alluding to Washington. Zelaya was piqued by the criticisms. “When I met with (U.S.
President) George W. Bush,” he said, “no one called me an anti-imperialist and the business community
applauded me. Now that I am meeting with the impoverished peoples of the world, they criticize me.”
Zelaya’s Letter to Obama
In September, 2008 Zelaya further strained U.S. relations by delaying accreditation of the new U.S.
ambassador out of solidarity with Bolivia and Venezuela which had just gone through diplomatic dust
ups with Washington. “We are not breaking relations with the United States,” Zelaya said. “We only
are (doing this) in solidarity with [Bolivian President] Morales, who has denounced the meddling of the
United States in Bolivia's internal affairs.” Defending his decision, Zelaya said small nations needed
to stick together. “The world powers must treat us fairly and with respect,” he stated.
In November, Zelaya hailed Obama’s election in the U.S. as “a hope for the world,” but just two
months later tensions began to emerge. In an audacious letter sent personally to Obama, Zelaya
accused the U.S. of “interventionism” and called on the new administration in Washington to respect
the principle of non-interference in the political affairs of other nations. According to Spanish news
agency EFE which saw a copy of the note, Zelaya told Obama that it wasn’t his intention to tell the U.
S. President what he should or should not do.
He then however went on to do precisely that. First of all, Zelaya brought up the issue of U.S. visas
and urged Obama to “revise the procedure by which visas are cancelled or denied to citizens of
different parts of the world as a means of pressure against those people who hold different beliefs
or ideologies which pose no threat to the U.S.”
As if that was not impudent enough, Zelaya then moved on to drug trafficking: “The legitimate
struggle against drug trafficking…should not be used as an excuse to carry out interventionist
policies in other countries.” The struggle against drug smuggling, Zelaya wrote, “should not be
divorced from a vigorous policy of controlling distribution and consumer demand in all countries, as
well as money laundering which operates through financial circuits and which involve networks within
developed countries.”
Zelaya also argued “for the urgent necessity” of revising and transforming the structure of the
United Nations and “to solve the Venezuela and Bolivia problems” through dialogue which “yields
better fruit than confrontation.” The Cuban embargo, meanwhile, “was a useless instrument” and “a
means of unjust pressure and violation of human rights.”
Run Up to June Coup
It’s unclear what Obama might have made of the audacious letter sent from the leader of a small
Central American nation. It does seem however that Zelaya became somewhat disenchanted with the
new administration in Washington. Just three months ago, the Honduran leader declined to attend a
meeting of the System for Central American Integration (known by its Spanish acronym SICA) which
would bring Central American Presidents together with U.S. Vice President Joe Biden in San José,
Costa Rica.
Both Zelaya and President Daniel Ortega of Nicaragua boycotted the meeting, viewing it as a
diplomatic affront. Nicaragua currently holds the presidency of SICA, and so the proper course of
action should have been for Biden to have Ortega hold the meeting. Sandinista economist and former
Nicaraguan Minister of Foreign Trade Alejandro Martínez Cuenca declared that the United States
had missed a vital opportunity to encourage a new era of relations with Central America by
“prioritizing personal relations with [Costa Rican President] Arias over respect for Central America's
institutional order.”
Could all of the contentious diplomatic back and forth between Tegucigalpa and Washington have
turned the Obama administration against Zelaya? In the days ahead there will surely be a lot of
attention and scrutiny paid to the role of Romeo Vasquez, a General who led the military coup against
Zelaya. Vasquez is a graduate of the notorious U.S. School of the Americas, an institution which
trained the Latin American military in torture.
Are we to believe that the United States had no role in coordinating with Vasquez and the coup
plotters? The U.S. has had longstanding military ties to the Honduran armed forces, particularly
during the Contra War in Nicaragua during the 1980s. The White House, needless to say, has
rejected claims that the U.S. played a role. The New York Times has reported claims that the
Obama administration knew that a coup was imminent and tried to persuade the military to back
down. The paper writes that it was the Honduran military which broke off discussions with American
officials. Obama himself has taken the high road, remarking “I call on all political and social actors in
Honduras to respect democratic norms [and] the rule of law…Any existing tensions and disputes
must be resolved peacefully through dialogue free from any outside interference.”
Even if the Obama administration did not play an underhanded role in this affair, the Honduran coup
highlights growing geo-political tensions in the region. In recent years, Chávez has sought to extend
his influence to smaller Central American and Caribbean nations. The Venezuelan leader shows no
intention of backing down over the Honduran coup, remarking that ALBA nations “will not recognize
any [Honduran] government that isn't Zelaya’s.”
Chávez then derided Honduras’ interim president, Roberto Micheletti. “Mr. Roberto Micheletti will
either wind up in prison or he'll need to go into exile… If they swear him in we'll overthrow him, mark
my words. Thugetti--as I'm going to refer to him from now on--you better pack your bags, because
you're either going to jail or you're going into exile. We're not going to forgive your error, you're
going to get swept out of there. We're not going to let it happen, we're going to make life impossible
for you. President Manuel Zelaya needs to retake his position as president.”
With tensions running high, heads of ALBA nations have vowed to meet in Managua to discuss the coup
in Honduras. Zelaya, who was exiled to Costa Rica from Honduras, plans to fly to Nicaragua to speak
with his colleagues. With such political unity amongst ALBA nations, Obama will have to decide what
the public U.S. posture ought to be.
Nikolas Kozloff is the author of Revolution! South America and the Rise of the New Left (Palgrave-
Macmillan, 2008) Follow his blog at senorchichero.blogspot.com
Undo the Coup
EMAIL PRINT SHARE
Posted on Jun 30, 2009
By Amy Goodman
The first coup d’etat in Central America in more than a quarter-century occurred last Sunday in
Honduras. Honduran soldiers roused democratically elected President Manuel Zelaya from his bed
and flew him into exile in Costa Rica. The coup, led by the Honduran Gen. Romeo Vasquez, has been
condemned by the United States, the European Union, the United Nations, the Organization of
American States and all of Honduras’ immediate national neighbors. Mass protests have erupted on
the streets of Honduras, with reports that elements in the military loyal to Zelaya are rebelling
against the coup.
The United States has a long history of domination in the hemisphere. President Barack Obama and
Secretary of State Hillary Clinton can chart a new course, away from the dark days of military
dictatorship, repression and murder. Obama indicated such a direction when he spoke in April at the
Summit of the Americas: “[A]t times we sought to dictate our terms. But I pledge to you that we
seek an equal partnership. There is no senior partner and junior partner in our relations.”
Two who know well the history of dictated U.S. terms are Dr. Juan Almendares, a medical doctor and
award-winning human rights activist in Honduras, and the American clergyman Father Roy Bourgeois,
a priest who for years has fought to close the U.S. Army’s School of the Americas (SOA) at Fort
Benning, Ga. Both men link the coup in Honduras to the SOA.
The SOA, renamed in 2000 the Western Hemisphere Institute for Security Cooperation
(WHINSEC), is the U.S. military facility that trains Latin American soldiers. The SOA has trained
more than 60,000 soldiers, many of whom have returned home and committed human rights abuses,
torture, extrajudicial execution and massacres.
Almendares, targeted by Honduran death squads and the military, has been the victim of that
training. He talked to me from Tegucigalpa, the Honduran capital: “Most of this military have been
trained by the School of America. ... They have been guardians of the multinational business from the
United States or from other countries. ... The army in Honduras has links with very powerful people,
very rich, wealthy people who keep the poverty in the country. We are occupied by your country.”
Born in Louisiana, Bourgeois became a Catholic priest in 1972. He worked in Bolivia and was forced out
by the (SOA-trained) dictator Gen. Hugo Banzer. The assassination of Archbishop Oscar Romero and
the murders of four Catholic churchwomen in El Salvador in 1980 led him to protest where some of
the killers were trained: Fort Benning’s SOA. After six Jesuit priests, their housekeeper and her
daughter were murdered in El Salvador in 1989, Bourgeois founded SOA Watch and has built an
international movement to close the SOA.
Honduran coup leader Vasquez attended the SOA in 1976 and 1984. Air Force Gen. Luis Javier Prince
Suazo, who also participated in the coup, was trained at the SOA in 1996.
Bourgeois’ SOA Watch office is just yards from the Fort Benning gates. He has been frustrated in
recent years by increased secrecy at SOA/WHINSEC. He told me: “They are trying to present the
school as one of democracy and transparency, but we are not able to get the names of those trained
here—for over five years. However, there was a little sign of hope when the U.S. House approved an
amendment to the defense authorization bill last week that would force the school to release names
and ranks of people who train here.” The amendment still has to make it through the House-Senate
conference committee.
Bourgeois speaks with the same urgency that he has for decades. His voice is well known at Fort
Benning, where he was first arrested more than 25 years ago when he climbed a tree at night near
the barracks of Salvadoran soldiers who were training there at the time.
Bourgeois blasted a recording of the voice of Romero in his last address before he was assassinated.
The archbishop was speaking directly to Salvadoran soldiers in his country: “In the name of God, in
the name of this suffering people whose cry rises to heaven more loudly each day, I implore you, I
beg you, I order you: Stop the repression.”
Almost 30 years later, in a country bordering Romero’s El Salvador, the U.S. has a chance to change
course and support the democratic institutions of Honduras. Undo the coup.
Denis Moynihan contributed research to this column.
Amy Goodman is the host of “Democracy Now!,” a daily international TV/radio news hour airing on
more than 750 stations in North America. She is the co-author of “Standing Up to the Madness:
Ordinary Heroes in Extraordinary Times,” recently released in paperback.
© 2009 Amy Goodman
Distributed by King Features Syndicate
The gangsters are out of control
US had role in coup in Honduras?
Top News
Written by Estrella Torres / Reporter
TUESDAY, 30 JUNE 2009 00:38
TWO revolutionary leaders of Latin America, Cuba's Fidel Castro and Venezuelan president Hugo
Chavez, have accused the US government of involvement in the worsening political crisis in the
Honduras with the ouster of President Manuel Zelaya.
The United Nations Organization of American States (OAS) and the Bolivarian Alliance for the
Peoples of Our America (Alba) have also expressed their support for Zelaya and aired calls for the
restoration of the democratic government there.
“The Yankee empire has a lot to do with this. I call upon the US President to pronounce, just as we do,
that we spoke from the depths of our souls against the coup,” said Chavez in a statement issued by
the Cuban Embassy in Manila.
In his reflections, Castro said Zelaya has not infringed the law in any way, neither did he resort to
the use of force. “He [Zelaya] is the president and the general commander of the Armed Forces of
Honduras. The situation that might result from whatever occurs in that country will be a test for the
OAS and the current US administration.”
United Nations Secretary-General Ban Ki-Moon, meanwhile, called for the reinstatement of
democratically elected leaders in Honduras, led by Zelaya. He called on Hondurans “to engage
peacefully and in the spirit of reconciliation to resolve their differences.”
Ban added, “The United Nations stands ready to provide assistance in overcoming this crisis.”
The ambassadors of Venezuela and Cuba in the Philippines said the situation in Honduras remains
delicate not only for Hondurans but for foreign nationals, as well.
The Department of Foreign Affairs (DFA) said there are 220 Filipinos in Honduras, mostly working
for garment factories there.
“The situation in Honduras remains delicate as the military, known for its fascist behavior, remains in
power over the entire country,” said Cuban Ambassador to the Philippines Jorge Rey Jimenez in a
press briefing on Monday in Manila.
The two envoys also expressed concern over the kidnapping of Honduras Foreign Minister Patricia
Rodas and Cuban Ambassador to Honduras Juan Carlos Hernandez. They said the international
community does not see the real picture in Honduras as the media outlets there have been
manipulated.
Former University of the Philippines president Dr. Francisco Nemenzo said Honduras President
Manuel Zelaya had only wanted to involve the people in a move to amend the Constitution. Zelaya had
called for a referendum to ask the Hondurans if they want to change the Constitution.
Dr. Nemenzo, now president of the Philippines-Cuba Cultural and Friendship Association, said the
situation in Honduras, “only shows how precarious democracy is if it is well entrenched by the military
while its Congress and Supreme Court are dominated by oligarchies.”
He noted that in the Philippines, members of Congress, who are known supporters of President
Arroyo, want to call a constituent assembly to amend the Charter without involving the Filipino people.
“There is a big difference (with the situation in Honduras) because its Congress is not bribed by the
President to amend the Charter but instead, it is backed by oligarchs who are out of the formal social
structure,” said Nemenzo who joined the Venezuelan and Cuban envoys in expressing support for
Zelaya.
Is CIA involved in Iran's election unrest?
Observers: Bush-era CIA campaign of propaganda, disinformation on Iran could still be still active.
TEHRAN - There is a valid possibility that CIA is playing a sinister role behind the scenes to exploit
the current Iranian election protests to destabilise the country, observers said.
The CIA secret programme involves playing the media (especially websites) as well as having secret
agents on the ground in Iran, they add.
In May 2007, ABC News reported that the CIA has received secret presidential (Bush) approval to
mount a covert "black" operation to destabilize the Iranian government, citing officials in the
intelligence community.
The sources, who spoke on the condition of anonymity, said Bush has signed a "nonlethal presidential
finding" that puts into motion a CIA plan that reportedly includes a coordinated campaign of
propaganda, disinformation and manipulation of Iran's currency and international financial
transactions.
The CIA was allowed to supply communications equipment which would enable opposition groups in
Iran to work together and bypass internet censorship by the government.
The White House does not usually comment on intelligence matters.
Under the law, the CIA needs an official presidential finding to carry out such covert actions. But the
CIA is permitted to mount covert "collection" operations without a presidential finding.
Terror against Tehran
The "nonlethal" aspect of the presidential finding means CIA officers may not use deadly force in
carrying out the secret operations against Iran.
Still, some fear that even a nonlethal covert CIA program carries great risks.
As earlier reported on the Blotter on ABCNews.com, the United States has supported and
encouraged an Iranian militant group, Jundullah, that has conducted deadly raids inside Iran from
bases on the rugged Iran-Pakistan-Afghanistan "tri-border region."
US officials deny any "direct funding" of Jundullah groups but say the leader of Jundullah was in
regular contact with US officials.
Spying and funding
Reports also suggest that the so called US "National Endowment for Democracy" has been involved in
funding candidates favourable to the US in many countries.
Observers say their interference could very well include Iran in 2009.
Roxana Saberi, a US-Iranian journalist who was recently released after being charged for spying for
the US in Iran, is said to have been convicted of spying in part because she had a copy of a
confidential Iranian report on the war in Iraq.
Her lawyer, Saleh Nikbakht, said that she had copied the report "out of curiosity."
Saberi had admitted that she had copied the document two years ago but said she had not passed it
on to the Americans as the Iranian prosecutors had claimed. She had apologised, saying it had been a
mistake to take the report.
Observers say there is no reason to believe that there has been a change of CIA policy towards Iran.
Iran strikes back
Iran Wednesday said it had identified websites run by companies it said were backed by the US and
British secret services.
"We warn those who propagate riots and spread rumours that our legal action against them will cost
them dearly, especially since some of the youth of this land were killed by the thugs' action, so we
urge them to delete such material from their sites," a statement said.
"It shows the animosity of the Western media towards the Iranian people," it added.
Iran said the sites had been "identified" and were "financially and technically sponsored by Canadian
and American firms which are backed by the US and British intelligence services."
Iran on Wednesday accused some foreign media outlets of becoming the "mouthpiece of rioters."
"The presence of hundreds of foreign media (personnel) during the last election and their
observation of the existing realities alongside the successful experience in the past 30 years in
organising elections is a symbol of utter transparency in the election process," the foreign ministry
said.
"But some countries, in an uncalculated, hasty and rude reaction towards the illegal gatherings, have
supported them contrary to democratic principles and regulations and have become the mouthpiece
of the rioters' movement."
The ministry also warned the foreign media to change its "approach towards Iranian events."
"...The chess players will monitor their behaviour and at the appropriate time, without any doubt,
checkmate the enemies of Iran's national unity."
The statement carried by the ISNA news agency was directed to "interfering comments by some
Western countries, officials and media."
Twitter takes part
The US government took the unusual step of asking Twitter to delay a planned maintenance outage
because of its use as a communications tool by Iranians following their disputed election, a US senior
official said Tuesday.
The request highlighted the Obama administration's Web-savvy and the power of social networks
such as Twitter and Facebook in organizing protests over the election results in the face of a ban by
Iranian authorities on other media.
But it also seemed to run counter to Obama's public efforts not to appear to be meddling in Iran's
internal affairs.
A State Department official in Washington said Twitter had been asked to delay Monday's shutdown
because it was being used as "an important means of communications" in Iran.
The official told reporters on condition of anonymity that Twitter was all the more important because
the Iranian government had shut down other websites, cell phones, and newspapers.
Twitter co-founder Biz Stone, in a blog post, noted the State Department request but said the
decision to delay the outage was made with Twitter's network provider, NTT America.
State Department spokesman Ian Kelly said meanwhile that the United States does not intend to
meddle in Iranian politics. "We don't want to be seen as interfering," he said.
"We're of course monitoring the situation through a number of different media, including social media
networks like Facebook and Twitter," he said.
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Judges Not For Sale
In a 5-4 decision yesterday, the Supreme Court ruled "that elected judges must step aside from
cases when large campaign contributions from interested parties create the appearance of bias."
The decision, "the first to say the Constitution's due process clause has a role to play in policing the
role of money in judicial elections," found that excessive campaign contributions can pose "an
unconstitutional threat to a fair trial." In his opinion for the majority, Justice Anthony Kennedy wrote,
"Not every campaign contribution by a litigant or attorney creates a probability of bias that requires
a judge's recusal, but this is an exceptional case." The case in question, which was the basis for a
John Grisham legal thriller, involves America's fourth largest coal company, Massey Energy, and its
CEO, Don Blankenship. After Massey lost a $50 million verdict in a fraud lawsuit brought by Hugh
Caperton and his small, independent Harman Mining Co., Massey appealed the decision. "As the case
moved toward appeals, Blankenship contributed $3 million to help unseat incumbent Democratic state
supreme court Judge Warren McGraw in his race against a Republican, Charleston lawyer Brent
Benjamin -- 60 percent of the total spent in favor of Benjamin and against McGraw." Benjamin won
the election and three years later, when Massey's appeal reached the West Virginia Supreme Court,
he cast a crucial vote overturning the $50 million verdict. "I remember looking up at a judge who had
just gotten $3 million...to be elected and thinking, 'How in the world is this fair?'" said Caperton.
Noting Benjamin's refusal to recuse himself, despite repeated requests, Caperton took his case to
the Supreme Court. Now, for the first time, the court has "set down a rule for disqualifications
arising from money judges receive as they campaign for election to the bench."
'A SERIOUS RISK OF ACTUAL BIAS': "Just as no man is allowed to be a judge in his own cause,
similar fears of bias can arise when -- without the consent of the other parties -- a man chooses the
judge in his own cause," wrote Kennedy in the majority's opinion, who was joined by Justices Stephen
Breyer, Ruth Bader Ginsburg, David Souter, and John Paul Stevens. "There is a serious risk of actual
bias -- based on objective and reasonable perceptions -- when a person with a personal stake in a
particular case had a significant and disproportionate influence in placing the judge on the case." But
all four of the Court's most conservative members voted that there is no problem with a wealthy
businessman buying a judge. In a dissent joined by conservative justices Antonin Scalia, Clarence
Thomas, and Samuel Alito, Chief Justice John Roberts argued that this decision would encourage
"groundless" charges that other "judges are biased." "The end result will do far more to erode
public confidence in judicial impartiality than an isolated failure to recuse in a particular case,"
Roberts argued . The Center for American Progress Action Fund's Ian Millhiser pointed out that,
while "the result in this narrowly-decided case hinges on the vote of retiring Justice David Souter, it
appears that Supreme Court nominee Judge Sonia Sotomayor agrees with Souter that judges cannot
be for sale." In a 1996 speech, Sotomayor argued that "[w]e would never condone private gifts to
judges about to decide a case implicating the gift-givers' interests," yet "our system of election
financing permits extensive private, including corporate, financing of candidates' campaigns, raising
again and again the question what the difference is between contributions and bribes."
MONEY IN JUDICIAL ELECTIONS: The risk of the wealthy influencing justice through campaign
contributions has become graver in recent years. Currently, 39 states "elect at least some of their
judges, and election campaigns, particularly for state supreme courts, have in recent years grown
increasingly expensive and nasty." The Conference of Chief Justices, a national group of top state
judges, has found that 60 percent of all state appellate judges and 80 percent of trial judges face
election, which the organization called "high-dollar free-for-alls" in a neutral brief submitted in
Caperton v. Massey. "From 2000 to 2007, $168 million was spent on contested elections for states'
highest courts, up from $87 million from 1990 to 1999," according to the Brennan Center for Justice.
The New York Times reports that "elected judges routinely accept contributions from lawyers and
litigants who appear before them, and they seldom disqualify themselves for cases involving donors."
Perhaps the most prominent critic of money in the judicial selection process is former Supreme Court
Justice Sandra Day O'Connor, who sat in the courtroom during oral arguments in the Caperton case.
"The money and vitriol being put into judicial campaigns has reached new and dangerous levels," said
O'Connor in April. In terms of vitriol, it's hard to find a more stunning example than Blankenship's $3
million attack on Judge Warren McGraw.
BLANKENSHIP'S DIRTY POLITICS: As the CEO of one of the top coal companies in the country,
Blankenship, who sits on the boards of the US Chamber of Commerce and the National Mining
Association, is no stranger to getting his hands dirty in politics. Though Blankenship donated only
$1,000 to Brent Benjamin's campaign in 2004, the $3 million he spent to influence the election was
mostly dedicated to "television advertisements aimed at defeating the incumbent justice, Warren R.
McGraw." Under the auspices of his "And For The Sake of the Kids" PAC, Blankenship accused
McGraw of voting to "free an incarcerated child rapist, and of allowing that rapist to work in a public
school." McGraw lost the race and afterwards described the damage that Blankenship had done to
his reputation. "They say our court set a child molester loose in our schools. It's absolutely untrue.
I'm embarrassed to go out in public. They've absolutely destroyed me," McGraw told the New York
Times. Blankenship has no qualms about demonizing his political opponents. Last year, he compared his
critics to "enemies" like Osama Bin Laden, adding that "it is a great pleasure for me to be criticized
by the communists and the atheists of the Charleston Gazette." Previously, he was caught on tape
threatening to shoot an ABC reporter and then assaulting him.
CIVIL RIGHTS -- SUPREME COURT DENIES CHALLENGE TO 'DON'T ASK, DON'T TELL': The
Supreme Court yesterday refused to hear a challenge to an 1st Circuit appellate court decision on
the military's "Don't Ask, Don't Tell" (DADT) policy, which had found that courts must defer to
Congress on federal statutes regarding military affairs. The case was filed by "James E. Pietrangelo
II, a former Army captain who was discharged from the military for being gay." But now, the
Supreme Court's move "effectively leave[s] it to" Congress and the Obama administration "to
resolve the long-standing controversial issue." Indeed, Rep. Rush Holt (D-NJ), co-sponsor of
legislation to overturn DADT, said on MSNBC last night that "one way or another [a change] is going
to come." The president and Congress have been slow to act on the repeal, even as pressure to
reverse the ban is gaining momentum. A new poll shows that nearly 70 percent of Americans support
openly gay men and women being allowed to serve in the U.S. military. But the poll also shows a 12-
point increase in the percentage of conservatives who said they oppose the policy, from 46 percent in
November 2004 to 58 percent now. Obama's new nominee for Secretary of the Army, James
McHugh, has also hinted that he supports a repeal of the ban.
June 15, 2009
Appointment in Yekaterinburg
The Ending of America's Financial-Military Empire
By MICHAEL HUDSON
The city of Yekaterinburg, Russia’s largest east of the Urals, may become known not only as the end
of the road for the tsars but of American hegemony too; as the place not only where US U-2 pilot
Gary Powers was shot down in 1960, but where the US-centered international financial order was
brought to ground.
Challenging America is the prime focus of extended meetings in Yekaterinburg, Russia (formerly
Sverdlovsk) today and tomorrow (June 15-16) for Chinese President Hu Jintao, Russian President
Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO).
The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with
observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for
trade discussions among the so-called BRIC nations --Brazil, Russia, India and China.
The attendees have assured American diplomats that it is not their aim to dismantle the financial and
military empire of the United States. They simply want to discuss mutual aid – but in a way that has no
role for the United States, for NATO or for the US dollar as a vehicle for trade. US diplomats may
well ask what this really means, if not a move to make US hegemony obsolete. After all, that is what a
multipolar world means. For starters, in 2005 the SCO asked Washington to set a timeline to
withdraw from its military bases in Central Asia. Two years later the SCO countries formally aligned
themselves with the former CIS republics belonging to the Collective Security Treaty Organization
(CSTO), established in 2002 as a counterweight to NATO.
Yet the Yekaterinburg meeting has elicited only a collective yawn from the US and even European
press despite its agenda -- nothing less than the replacement of the global dollar standard with a
new financial and military defense system. A Council on Foreign Relations spokesman has said he
hardly can imagine that Russia and China can overcome their geopolitical rivalry, suggesting that
America can use the divide-and-conquer that Britain used so deftly for many centuries in
fragmenting foreign opposition to its own empire. But George W. Bush (“I’m a uniter, not a divider”)
built on the Clinton administration’s legacy in driving Russia, China and their neighbors to find a
common ground when it comes to finding an alternative to the dollar and hence to the US ability to run
balance-of-payments deficits ad infinitum.
What may prove to be the last rites of American hegemony began already in April at the G-20
conference, and became even more explicit at the St. Petersburg International Economic Forum on
June 5, when Mr. Medvedev called for China, Russia and India to “build an increasingly multipolar
world order.” What this means in plain English is: We have reached our limit in subsidizing the United
States’ military encirclement of Eurasia while also allowing the US to appropriate our exports,
companies, stocks and real estate in exchange for paper money of questionable worth.
The artificially maintained unipolar system,” Mr. Medvedev spelled out, is based on “one big center of
consumption, financed by a growing deficit, and thus growing debts, one formerly strong reserve
currency, and one dominant system of assessing assets and risks.” At the root of the global financial
crisis, he concluded, is the fact that the United States makes too little and spends too much,
particularly its vast military outlays, such as the stepped-up US military aid to Georgia announced
just last week, the NATO missile shield in Eastern Europe and the US buildup in the oil-rich Middle
East and Central Asia.
The sticking point for all these countries is the ability of the United States to print unlimited
amounts of dollars. Overspending by U.S. consumers on imports in excess of exports, U.S. buy-outs
of foreign companies and real estate, and the dollars that the Pentagon spends abroad all end up in
foreign central banks. These banks then face a hard choice: either to recycle these dollars back to
the United States by purchasing US Treasury bills, or to let the “free market” force up their
currency relative to the dollar – thereby pricing their exports out of world markets and hence
creating domestic unemployment and business insolvency.
When China and other countries recycle their dollar inflows by buying US Treasury bills to “invest” in
the United States, this buildup is not really voluntary. It does not reflect faith in the ability of the U.
S. economy to enrich foreign central banks for their savings. Nor does it represent any calculated
investment preference. It is simply a matter of a lack of alternatives. U.S.-style “free markets”
hook countries into a system that forces them to accept dollars without limit. Now they want out.
This means creating a new alternative. Rather than making merely “cosmetic changes as some
countries and perhaps the international financial organisations themselves might want,” said Mr.
Medvedev at the end of his St. Petersburg speech, “what we need are financial institutions of a
completely new type, where particular political issues and motives, and particular countries will not
dominate.”
When foreign military spending forced the US balance of payments into deficit and drove the United
States off gold in 1971, central banks were left without the traditional asset used to settle
payments imbalances. The alternative was to invest their subsequent inflows of US dollars in US
Treasury bonds, as if these still were “as good as gold.” Central banks now hold $4 trillion of these
bonds in their international reserves. These loans have financed most of the US Government’s
domestic budget deficits for over three decades now! Given the fact that about half of US
Government discretionary spending is for military operations – including more than 750 foreign
military bases and increasingly expensive operations in the oil-producing and transporting countries –
the international financial system is organized in a way that finances the Pentagonand also US buyouts
of foreign assets expected to yield much more than the Treasury bonds that foreign central banks
hold.
The main political issue confronting the world’s central banks is therefore how to avoid adding yet
more dollars to their reserves and thereby financing yet further US deficit spending – including
military spending on their borders.
For starters, the six SCO countries and BRIC countries intend to trade in their own currencies so as
to get the benefit of mutual credit that the United States until now has monopolized for itself.
Toward this end, China has struck bilateral deals with Argentina and Brazil to denominate their trade
in renminbi rather than the dollar, sterling or euros, and two weeks ago China reached an agreement
with Malaysia to denominate trade between the two countries in renminbi. Former Prime Minister Tun
Dr. Mahathir Mohamad explained to me in January that as a Muslim country, Malaysia wants to avoid
doing anything that would facilitate US military action against Islamic countries, including Palestine.
The nation has too many dollar assets as it is, his colleagues explained. Central bank governor Zhou
Xiaochuan of the People's Bank of China put an official statement on the bank’s website, explaining
that the goal is now to create a reserve currency “that is disconnected from individual nations.” This
is the aim of the discussions in Yekaterinburg.
Aside from no longer financing the U.S. buyout of their own industries and the U.S. military
encirclement of the globe, China, Russia and other countries would no doubt like to enjoy the same
kind of free ride that America has been getting. As matters stand now, they see the United States
as a lawless nation, financially as well as militarily. How else to characterize a nation that proclaims a
set of laws for others – on war, debt repayment and treatment of prisoners – but flouts them itself?
The United States is now the world’s largest debtor yet has avoided the pain of “structural
adjustments” imposed on other debtor economies. U.S. interest-rate and tax reductions in the face
of exploding trade and budget deficits are seen as the height of hypocrisy in view of the austerity
programs that Washington forces on other countries via the IMF and other Washington vehicles.
The United States tells debtor economies to sell off their public utilities and natural resources, raise
their interest rates and increase taxes while gutting their social safety nets to squeeze out money to
pay creditors. And at home, Congress blocked, on grounds of national security, China’s CNOOK from
buying Unocal, much as it blocked Dubai from buying US ports and blocked other sovereign wealth
funds from buying into key infrastructure. Foreigners are invited to emulate the Japanese purchase
of white elephant trophies such as Rockefeller Center, on which investors quickly lost a billion dollars
and ended up walking away.
In this respect the US has given China and other payments-surplus nations no alternative but to find
a way to avoid further dollar buildups. To date, China’s attempts to diversify its dollar holdings
beyond Treasury bonds have not proved very successful. For starters, Hank Paulson of Goldman
Sachs steered its central bank into higher-yielding Fannie Mae and Freddie Mac securities, explaining
that these were de facto public obligations. They collapsed in 2008, but at least the U.S. Government
took over these two mortgage-lending agencies, formally adding their $5.2 trillion in obligations to
the national debt. In fact, it was largely foreign official investment that prompted the bailout.
Imposing a loss for foreign official agencies would have broken the Treasury-bill standard then and
there, not only by utterly destroying US credibility but because there simply are too few
Government bonds to absorb the dollars being flooded into the world economy by the soaring US
balance-of-payments deficits.
in late 2007, seeking more of an equity position to protect the value of their dollar holdings as the
Federal Reserve’s credit bubble drove interest rates down, China’s sovereign wealth funds sought to
diversify. China bought stakes in the well-connected Blackstone equity fund and Morgan Stanley on
Wall Street, Barclays in Britain, South Africa’s Standard Bank (once affiliated with Chase Manhattan
back in the apartheid 1960s) and in the soon-to-collapse Belgian financial conglomerate Fortis. But
the US financial sector was collapsing under the weight of its debt pyramiding, and prices for shares
plunged for banks and investment firms across the globe.
Foreigners see the IMF, World Bank and World Trade Organization as Washington surrogates in a
financial system backed by American military bases and aircraft carriers encircling the globe. But
this military domination is a vestige of an American empire no longer able to rule by economic
strength. US military power is muscle-bound, based more on atomic weaponry and long-distance air
strikes than on ground operations, which have become too politically unpopular to mount on any large
scale.
On the economic front there is no foreseeable way in which the United States can work off the $4
trillion it owes foreign governments, their central banks and the sovereign wealth funds set up to
dispose of the global dollar glut. America has become a deadbeat –a militarily aggressive one -- as it
sruggles to hold onto the immense power it once earned by economic means. The problem for the
rest of the world is how to constrain its behavior. Yu Yongding, a former Chinese central bank
advisor now with China’s Academy of Sciences, suggested that US Treasury Secretary Tim Geithner
be advised that the United States should “save” first and foremost by cutting back its military
budget. “U.S. tax revenue,” he said, “is not likely to increase in the short term because of low
economic growth, inflexible expenditures and the cost of ‘fighting two wars.’”
At present foreign savings are what finance the US budget deficit by buying most Treasury bonds.
The consequence is taxation without representation for foreign voters as to how the US Government
uses their forced savings. It therefore is necessary for the financial diplomats to broaden the scope
of their policy-making beyond the private-sector marketplace. Exchange rates are determined by
many factors besides “consumers wielding credit cards,” the usual euphemism that the US media cite
for America’s balance-of-payments deficit. Since the 13th century, war has been a dominating factor
in the balance of payments of leading nations – and of their national debts. Government bond financing
consists mainly of war debts, as normal peacetime budgets tend to be balanced. This links the war
budget directly to the balance of payments and exchange rates.
Foreign nations see themselves stuck with unpayable IOUs under conditions where, if they move to
stop the US free lunch, the dollar will plunge and their dollar holdings will fall in value relative to
their own domestic currencies and other currencies. If China’s currency rises by 10 per cent against
the dollar, its central bank will show the equivalent of a $200 million loss on its $2 trillion of dollar
holdings as denominated in yuan. This explains why, when bond ratings agencies talk of the US
Treasury securities losing their AAA rating, they don’t mean that the government cannot simply print
the paper dollars to “make good” on these bonds. They mean that dollars will depreciate in
international value. And that is just what is now occurring. When U.S. Treasury Secretary Geithner
assumed an earnest mien and told an audience at Peking University in early June that he believed in a
“strong dollar” and China’s US investments therefore were safe and sound, he was greeted with
derisive laughter.
Anticipation of a rise in China’s exchange rate provides an incentive for speculators to seek to borrow
in dollars to buy renminbi and benefit from the appreciation. For China, the problem is that this
speculative inflow would become a self-fulfilling prophecy by forcing up its currency. So the problem
of international reserves is inherently linked to that of capital controls. Why should China see its
profitable companies sold for yet more freely-created US dollars, which the central bank must use
to buy low-yielding US Treasury bills or lose yet further money on Wall Street?
To steer round this quandary it is necessary to reverse the philosophy of open capital markets that
the world has held ever since Bretton Woods in 1944. On the occasion of Mr. Geithner’s visit to China,
Zhou Xiaochuan, minister of the Peoples Bank of China, the country’s central bank, said pointedly that
this was the first time since the semiannual talks began in 2006 that “China needed to learn from
American mistakes as well as its successes” when it came to deregulating capital markets and
dismantling controls.
So an era is winding to its end. In the face of continued US overspending, de-dollarization threatens
to force countries to return to the kind of dual exchange rates common between World Wars I and
II: one exchange rate for commodity trade, another for capital movements and investments, at least
from dollar-area economies.
Even without capital controls, the nations meeting at Yekaterinburg are taking steps to avoid being
the unwilling recipients of yet more dollars. Seeing that U.S. global hegemony cannot continue without
the spending power that they themselves supply, governments are attempting to hasten what
Chalmers Johnson has called “the sorrows of empire” in his book by that name – the bankruptcy of
the US financial-military world order. If China, Russia and their non-aligned allies have their way, the
United States will no longer live off the savings of others in the form of its own recycled dollars, nor
have the money for unlimited military expenditures and adventures.
US officials wanted to attend the Yekaterinburg meeting as observers. They were told No. It is a
word that Americans will hear much more in the future.
Michael Hudson is a former Wall Street economist. A Distinguished Research Professor at University
of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The
Economic Strategy of American Empire (new ed., Pluto Press, 2002) He can be reached via his
website, mh@michael-hudson.com
Obama Pot Calls Iranian Kettle Black
Criminalizing Dissent
By DAVE LINDORFF
President Barack Obama, referring to the violent attacks on protesters against the controversial
election results in Iran’s just-completed presidential election, this week lectured Iran’s government,
saying, “Peaceful dissent should never be subject to violence.”
Referring to the tens and hundreds of thousands of frustrated and angry Iranians who have taken to
the streets accusing Iranian authorities of rigging the election in favor of incumbent President
Mahmoud Ahmadinejad, Obama said that “the Iranian people and their voices should be heard and
respected."
But there is a certain hypocrisy going on here.
Just days ago, the ACLU of Northern California issued a <a href=”http://www.ibabuzz.
com/politics/2009/06/10/defense-department-sees-protests-as-terrorism/”>press release</a>
announcing that it had filed a complaint over a Pentagon anti-terrorism training manual. That training
manual, aimed at Pentagon personnel, describes domestic protests as “low-level terrorist activity.”
As Staff Attorney Ann Brick and ACLU Washington National Security Policy Council member Michael
German write in their complaint letter to the Department of Defense, “For the DoD to instruct its
employees that lawful protest activities should be treated as ‘low-level terrorism’ is deeply
disturbing in and of itself. It is an even more egregious insult to constitutional values, however, when
viewed in the context of a long-term pattern of domestic security initiatives that have attempted to
equate lawful dissent with terrorism.”
The ACLU has documented that the government has been and continues a policy of spying on
legitimate peaceful protest organizations—particularly those that have been opposing America’s wars
and its military policies, and the new president has said nothing and done nothing about terminating
this egregious assault on First Amendment freedom of speech and assembly. Given that President
Obama has also done nothing since taking office to undo the USA PATRIOT Act, which codifies much
activity that traditionally would have been called dissent as a crime, or to publicly reverse the policy
of the last eight years during which non-violent protest organizations have been spied on and
infiltrated by agents of the military and by the FBI, and during which actual protesters have been
harassed, penned into fenced-off “free speech zones,” assaulted by armed police and arrested, his
pontificating to Iran about the sanctity of dissent rings particularly hollow.
Imagine, if you will, what this government’s response would be to having hundreds of thousands of
American protesters gather in the center of Washington, DC without a permit, to protest the policies
of the national government. There would be riot police in the thousands, some mounted on horseback.
There would be federal troops. There would be police charges against demonstrators. There would
be tear gas and arrests.
How do we know this? It happens every time there are major protests in Washington—even when
protests are granted permits.
This writer spent three days in the Federal Detention Center at Occoquan, VA, back in 1967 for
participating in a peaceful anti-war protest at the Pentagon that year. I was one of hundreds at that
event who found himself, as a peaceful demonstrator, confronting armed federal troops with fixed
bayonets at that event. Not much has changed since ‘67, as others have met the same fate over the
years in Washington and around the country. Certainly there is every reason to assume that, if the
public finally loses patience over the current administration’s continuation of the wars in Iraq and
Afghanistan, its failure to really tackle the health care crisis, and its limp response to the economic
crisis, and if people descend on Washington or perhaps New York City en masse to protest, those
people will be met with the same kind of draconian, police-state style response that protesters have
met in the past--or that protesters are being met with in Iran today.
If the Pentagon is teaching its people to equate protest with “low-level terrorism,” how different,
really, is Washington from Tehran?
Dave Lindorff is a Philadelphia-based journalist and columnist. His latest book is “The Case for
Impeachment” (St. Martin’s Press, 2006 and now available in paperback). He can be reached at
dlindorff@mindspring.com
Profit Over Common Sense
Congress and the Health Business Lobby
By KEVIN ZEESE
Yesterday, as Senator Tom Harkin (D-IO) left the health care hearing room he leaned over to me
and said:
“I used to sell insurance. The basic rule is the larger the pool the less expensive the health care.
Today we have 1,300 separate pools – separate health care plans – and that is why health care is so
expensive; 700 pools would be more efficient and less expensive and one pool would be the least
expensive. That’s why single payer is the answer.”
Nothing like common sense.
But, common sense was not on display in the Senate yesterday. Instead, the senate is seeking a path
to the goal of universal coverage by protecting the least efficient model – the for-profit insurance
industry that through waste, fraud, abuse and bureaucracy eats up 31% the cost of health care.
Chris Dodd (D-CT) who chaired the hearing, standing in for the ailing Ted Kennedy, has received $2.1
million from insurance industry throughout his career, another $547,000 from the pharmaceutical
industry, and $467,000 from health care professionals. Dodd opened the hearing stating the stark
facts:
We spend more than $2 trillion on health care every year- more than 18 percent of our GDP. By
2040, 34 cents of every dollar we spend could be on healthcare. That is not simply unacceptable – it’s
unsustainable. Premiums and out-of-pocket costs for individuals and families alike continue to
skyrocket.
It was evident, throughout the day that money was on the mind of the senators. But, they could not
look into the face of the obviously most efficient path, single payer, instead they were going through
contortions to protect their benefactors from the insurance industry.
The senators and witnesses showed there is a lot of division over financing health care and no easy
solution – so long as the first goal is to protect the insurance industry. Business groups wanted to tax
employee benefits not take away the business tax credit for companies that provide health care.
These are the only two big pots of money the senate sees. There was also talk about making
Americans healthier to save money, certainly a good goal. But, Sen. McCain (R-AZ), probably
correctly if rudely, mocked witnesses who said health care could be paid for by doing away with
inefficiencies and wellness programs. McCain favors taxing health care benefits.
Of course, both the business tax credit and not taxing health benefits are two reasons the health
insurance industry is able to acquire massive wealth. These are annual, indirect taxpayer giveaways to
the insurance industry that demonstrate how government is already paying for health care.
Taxpayers are just doing so in the most inefficient way. Rather than actually using tax dollars to pay
for health care, they are used to pay for insurance and all the profits and waste that goes with it.
Senator Bernie Sanders (I-VT), the sponsor of S.703, the single payer bill in the Senate, finally got
his chance to speak and railed against the waste of the health insurance model, criticized their
massive profits and emphasized that health care was a human right. He pointed his question to the
lone witness advocating for single payer of the dozen testifying, Dr. Margaret Flowers of Physicians
for National Health Plan.
Flowers, who had been arrested just six weeks ago for protesting the exclusion of single payer from
discussions in the Senate Finance Committee, went into a long list of reasons why the multi-payer
system is so expensive – inefficiencies built into the system, insurance companies making massive
profits while people died from lack of health care access, hospitals needing massive billing
departments creating bigger administrative staff than nursing staff, doctors spending 20% of their
overhead on dealing with the insurance industry, fee for service payments that lead to unecessary
treatments and expensive, often unneeded tests, malpractice litigation because patients do not have
access to health care to bad health care outcomes. . .
Flowers was still going strong, the list was incomplete, when Sanders cut her off, saying I only have a
few minutes for questioning.
Sitting next to Flowers was the CEO of Aetna Insurance, Ronald Williams. The senators fawned over
him, except for Sanders who pointed out Medicare was more popular that Aetna. Williams makes
anywhere from $13 million annually in salary and stock according to Insurance Industry News to
$30.86 million annually according to Forbes. Insurance Industry News reports that if Aetna grows
by 15% by 2010 Williams gets an addition $4.3 million. Is he not the perfect example of what is
wrong with health care in America? Profits are the top priority of corporate interests, and usually
short term profits. Should the insurance industry be striving to grow so rapidly when they already
gobble up too many health care dollars?
The senate also struggled with how to make sure everyone is covered with health insurance. Again the
divisions were obvious. Business groups said there should not be an employer mandate, but rather an
individual mandate. Unions said there should be an employer mandate not an individual mandate. Big
businesses said there should be no subsidy for small businesses that would be unfair to big
businesses. Republicans scoffed at the idea of expanding Medicaid to more of the working poor – too
expensive, unaffordable, they pointed out. The public insurance option was described as unfair to the
insurance industry and too expensive to implement. The Democrats squirmed uncomfortably at
choices that they know will upset some powerful interest group.
What a mess! The effort to protect the insurance industry at all costs is making real health care
reform impossible. Maybe, because the Democrats want to do something, anything, so badly they will
find a way to pass something, but if they do it will not work, it will be very costly and the group that
will benefit most clearly will be the health insurance industry which will reap hundreds of billions in
corporate welfare every year from the deform of health care in America. Of course, incumbents who
support it will benefit with campaign donations from the industry. Pay to play politics on display in
America.
Margaret Flowers, MD was the first witness to testify at the senate hearing on June 12. Her
comments focused on health care as a human right. She pointed out how FDR was the first to try and
put in place a social security system that included a single payer health care system. And, how years
of trying the “uniquely American approach” of the market solution – for-profit health care – had
failed the country and put health care on a path to government deficit with health care costs already
a cause in two-thirds of bankruptcies. She urged the senate to not tinker with a broken system but
instead to take a new path and adopt a national health plan with single payer as the financing system.
Sadly, there were four doctors on the panel and only one, Flowers, who spoke of health care as a
human right. Perhaps the AMA was the most despicable. Not only did they oppose single payer –
something supported by 60% of doctors according to a survey of the AMA data base – but they even
opposed the weak public insurance option. The AMA spokesperson said they would only support
market approaches. No wonder the AMA is shrinking rapidly. While not long ago it represented 70%
of American doctors, they are now down to only 30%. At this hearing, their callous disregard of the
needs of patients and their disregard of the opinions of doctors showed why they are a shell of an
organization.
Sen. Sanders pointed out the historic breakthrough of having the first witness for single payer being
allowed to testify as part of the health care reform discussion. The audience began to applaud,
Sanders warned “be careful, you might get arrested.”
The day before this hearing a House subcommittee held a session on single payer health care. One
witness Dr. Walter Tsou, a University of Pennsylvania professor, former health commissioner and an
adviser to Physicians for a National Health Program responded to the claim that single payer was too
radical saying "Our most famous radical document begins with the words, 'We the People.' Not 'We
the Insurers,'" he said. "It is time for our own generation's revolution."
And, it will take the people speaking out and getting active to make real health care reform possible.
If you don’t want to see another massive transfer of wealth to the insurance industry while
Americans continue to lack health care, you need to take action. Tell your representatives that you
want a national health plan funded by a single payer system. The insurers are working hard, the
American people have to work harder. The time is now.
You can take action by clicking here.
Kevin Zeese is the executive director of ProsperityAgenda.US which is working for an economy for
all and not just the elites.
Published on Wednesday, June 10, 2009 by CommonDreams.org
The IMF Accountability Moment
The Obama administration's budgetary Machiavellianism has backfired.
by Robert Weissman
Seeking to avoid a direct up-or-down vote on a proposal to send $108 billion to the International
Monetary Fund, the administration, at the last moment, had the money stuck into a supplemental
appropriations bill to fund the wars in Iraq and Afghanistan.
That maneuver turned out to be too clever by a turn.
Republicans in the House of Representatives -- opposed to the process by which the IMF money was
added, frustrated with the IMF unaccountability and critical of international institutions in general --
have announced they will oppose the appropriations bill.
Meanwhile, 51 antiwar Democrats in the House voted against the appropriations bill when it was first
under consideration, and 41 Democrats (overlapping substantially but not entirely with the 51 antiwar
Democrats) have raised concerns about funding the IMF without attaching meaningful conditions.
This unlikely coalition is poised to defeat the supplemental, unless the administration can peel off 18
of the antiwar Democrats to support the bill. The administration may need more than 18 if other
Democrats vote against the bill because of the IMF money (this might include Blue Dog Democrats
who object to the budgetary impact of the IMF funding and the ways in which the IMF money will aid
European banks, as well as progressives).
Defeating the bill will be a meaningful statement against the wars, and against unconditional money
for the IMF.
The White House and Congressional leadership are pressuring Progressive Dems to support the
supplemental, warning of the cost of dealing a legislative defeat to President Obama. Whether they
can stand up to the pressure -- and thus the outcome of the supplemental -- will depend in significant
part on how much the public mobilizes to urge a vote against the wars and the IMF. You can take
action through this "Citizen Whip" site maintained by firedoglake.com.
Emanuel of course wields enormous power, but his arguments are misplaced. A defeat on the
supplemental will be self-inflicted, not the work of progressives unsympathetic to the president.
If the administration and House leadership are unable to garner sufficient votes to pass the
supplemental, they can pull the IMF funding. Republicans will support a war-only bill. But antiwar
forces will have shown their seriousness and power.
And, the administration can seek funding for the IMF later this year, hopefully moving through
normal legislative procedures. That would enable a legitimate debate over the merits of IMF
funding. Critics would raise concerns that the money will be used to bail out European banks that lent
recklessly in Eastern Europe. Appropriations Committee Chair David Obey has highlighted this issue,
and noted the incongruity of aiding the European banks while Europe refuses to employ the
stimulative measures adopted by the United States and China, among others.
Critics would also focus on the contractionary policies -- primarily reduced government spending and
higher interest rates -- that the IMF is imposing on borrowing countries hit by a global financial crisis
not of their making. These policies are the opposite of the stimulative policies that the IMF
recommends for rich countries, and directly contrary to the global stimulus that was the rationale
for the decision of the G-20 (the world's most economically powerful countries) to increase IMF
resources by $750 billion.
On the ground in borrowing countries, these policies deepen the harmful impact of the economic
crisis, and translate into serious human depredations. Less money is available for health, education
and other key government programs; unemployment skyrockets; and families struggle to subsist.
The IMF's favored contractionary policies also conflict with the economic logic of providing loans in
the context of an economic crisis. "The main purpose of providing balance of payments support to a
developing country in a time of recession or approaching recession is to enable the government to
pursue the expansionary fiscal and monetary policies necessary to stabilize the economy," explains
the Center for Economic and Policy Research in a recent paper.
To be clear, the IMF has a response to these arguments: It says it has changed, and is much more
reticent about demanding borrowing countries adopt contractionary policies than it once was. And, it
says it aims to protect social spending in crisis-affected countries.
Putting it mildly, the evidence does not exactly comport with this story. But in any case, it is a claim
that should be examined through a proper legislative process.
And, if the IMF takes the position that it only imposes contractionary policies when absolutely
necessary, then it should be receptive to the top-line requests from IMF campaigners. These include
demands that no contractionary conditions be included in IMF programs absent a quantitative showing
that such conditions are necessary and cannot be delayed, and that health and education spending be
exempted from IMF-mandated budget restraints.
Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, and director of
Essential Action.
Published on Wednesday, June 10, 2009 by The Chicago Tribune
US Needs New Industrial Policy
by Jesse Jackson
'The fight for American manufacturing is the fight for America's future," President Barack Obama
declared as he pledged billions to help save and reorganize Chrysler and General Motors. Yet, he
also says he doesn't want to manage the car companies.
"The sooner we can get out of that business, the better off we're going to be." But that sentiment --
widely praised by editorials across the country -- contradicts the commitment needed to revive
American manufacturing.
Clearly, the future of an America that makes things will center on what happens to America's
automotive industry. The auto industry still accounts for one-fourth of U.S. manufacturing output and
provides jobs for about one of every 10 manufacturing workers. It is, in the words of AFL-CIO
economist Ron Blackwell, "the spine of the country's manufacturing capacity."
The auto companies are battered by massive overcapacity in the industry across the globe and
burdened with pensions and health care promised to retirees while competitors are free of such
costs. Auto companies in Korea, Japan, France and Germany get significant government protection
and subsidies. The U.S. companies have suffered without that help.
Obama has boldly pointed to a new American economy, one where finance is the servant of the real
economy, not the master. In this economy, America builds the future -- making fuel-efficient cars,
windmills and batteries and solar panels vital to the next economy. The skilled workers and high
technology of the Midwest will produce the products that will dominate the global green markets of
the future.
That transition will require planning, an industrial policy and government commitment. If Obama
simply lends money to Chrysler and GM, forces their bankruptcy and downsizing and then walks away,
the result is likely to be failure. We've seen plans by Chrysler and GM to expand production abroad
while eliminating U.S. plants at home.
We did not provide taxpayer money to save the brand General Motors. We provided it to save highly
skilled U.S. jobs and U.S. manufacturing capacity.
Last week, I attended a Senate hearing on Chrysler and GM's bankruptcies. Not once did I hear
anybody speak about health insurance, credit, trade policy or the price of oil and gas or about the
need to link the bank bailout to stemming the tide of home foreclosures and stimulating jobs and
business.
We need an industrial plan that helps forge new industry and new markets. Public investment in mass
transit -- buses, subways, fast rail -- and subsidies for fuel-efficient cars help generate the market.
Significant investment in research and development for the next generation of products helps
capture the future. Resources to retool factories and retrain workers are needed to build the new
generation of fuel-efficient cars or renewable energy sources.
We need an industrial policy that bridges the gap between the old manufacturing sector and the
emerging "green economy." Republicans don't get this. They would let GM and Chrysler go belly up
rather than try to restructure them.
Obama has stepped up to help the companies restructure, but has yet to detail an industrial policy
that will ensure that U.S. workers benefit. The restructuring has been done almost in a vacuum, as if
it were a commercial deal, with most of the discussion focused on how to slash work forces, close
dealers, shut down plants and cut obligations to current and retired workers.
No doubt GM and Chrysler have been mismanaged. Reductions in the work force and dealerships are
inevitable. But to revive U.S. manufacturing, the re- organization must focus on what will be built, on
new markets and new technologies -- not only on what gets cut. And that requires the commitment
and engagement of the federal government.
Crisis creates opportunity. In this crisis, it is time for America to put aside the failed ideas of the
past and step up boldly to ensure that America once more builds the future.
© 2009 The Chicago Tribune
Jesse Jackson writes a regular column for The Chicago Tribune.
________________________________________
Article printed from www.CommonDreams.org
URL to article: http://www.commondreams.org/view/2009/06/10-9
The gangsters made Arnold a big star because they were impressed with his big muscles and like
Reagan, took directions well. After making 800 million for the mob they made him governor. I few
months ago I saw him sitting outside of a Brentwood restaurant with his workout buddies. He flies in
to Sacramento when the gangsters tell him to. I hear they plan on bringing him back to Hollywood to
make movies when his term is over. I was told Julia Roberts is done but they plan on bringing Arnold
back. Whatever.
Tax breaks to corporations undermine California budget
Redwood Times
Posted: 06/18/2009 03:12:21 PM PDT
To the Editor:
We Californians are reeling at the prospect of state parks closing and nearly 1 million children losing
health care because of the budget crisis.
Yet I learned today a new analysis by the California Budget Project (www.cbp.org) details the
corporate tax breaks tucked into budget deals by Gov. Arnold Schwarzenegger and the Legislature.
Those tax breaks will cost the state $640 million for the fiscal year that ends this month - and $2.5
billion a year when they take full effect.
Ross, executive director for the California Budget Project, found these tax breaks at full
implementation would be enough to pay for the entire cost of three programs Gov. Arnold
Schwarzenegger is proposing to eliminate: CalWORKS, the welfare-to-work program; Healthy
Families, the health insurance program for poor children; and cash assistance payments to low-income
elderly and those with severe disabilities.
Yet the dirty trick for you and me and our representatives: repealing the loopholes requires a two-
thirds vote because it would be considered a tax increase. Write them now.
Please read more: http://www.mercurynews.com/breakingnews/ci_12511192?nclick_check=1.
Dr. Lauren J Oliver
Redway
The three steps to financial reform
By George Soros
Published: June 16 2009 19:47 | Last updated: June 16 2009 19:47
The Obama administration is expected on Wednesday to propose a reorganisation of the way we
regulate financial markets. I am not an advocate of too much regulation. Having gone too far in
deregulating – which contributed to the current crisis – we must resist the temptation to go too far in
the opposite direction. While markets are imperfect, regulators are even more so. Not only are they
human, they are also bureaucratic and subject to political influences, therefore regulations should be
kept to a minimum.
Three principles should guide reform. First, since markets are bubble-prone, regulators must accept
responsibility for preventing bubbles from growing too big. Alan Greenspan, the former chairman of
the Federal Reserve, and others have expressly refused that responsibility. If markets cannot
recognise bubbles, they argued, neither can regulators. They were right and yet the authorities must
accept the assignment, even knowing that they are bound to be wrong. They will, however, have the
benefit of feedback from the markets so they can and must continually recalibrate to correct their
mistakes.
Second, to control asset bubbles it is not enough to control the money supply; we must also control
the availability of credit. This cannot be done with monetary tools alone – we must also use credit
controls such as margin requirements and minimum capital requirements. Currently these tend to be
fixed irrespective of the market’s mood. Part of the authorities’ job is to counteract these moods.
Margin and minimum capital requirements should be adjusted to suit market conditions. Regulators
should vary the loan-to-value ratio on commercial and residential mortgages for risk-weighting
purposes to forestall real estate bubbles.
Third, we must reconceptualise the meaning of market risk. The efficient market hypothesis
postulates that markets tend towards equilibrium and deviations occur in a random fashion;
moreover, markets are supposed to function without any discontinuity in the sequence of prices.
Under these conditions market risks can be equated with the risks affecting individual market
participants. As long as they manage their risks properly, regulators ought to be happy.
But the efficient market hypothesis is unrealistic. Markets are subject to imbalances that individual
participants may ignore if they think they can liquidate their positions. Regulators cannot ignore these
imbalances. If too many participants are on the same side, positions cannot be liquidated without
causing a discontinuity or, worse, a collapse. In that case the authorities may have to come to the
rescue. That means that there is systemic risk in the market in addition to the risks most market
participants perceived prior to the crisis.
The securitisation of mortgages added a new dimension of systemic risk. Financial engineers claimed
they were reducing risks through geographic diversification: in fact they were increasing them by
creating an agency problem. The agents were more interested in maximising fee income than in
protecting the interests of bondholders. That is the verity that was ignored by regulators and
market participants alike.
To avert a repetition, the agents must have “skin in the game” but the 5 per cent proposed by the
administration is more symbolic than substantive. I would consider 10 per cent as the minimum
requirement. To allow for possible discontinuities in markets securities held by banks should carry a
higher risk rating than they do under the Basel Accords. Banks should pay for the implicit guarantee
they enjoy by using less leverage and accepting restrictions on how they invest depositors’ money;
they should not be allowed to speculate for their own account with other people’s money.
It is probably impractical to separate investment banking from commercial banking as the US did
with the Glass-Steagall Act of 1933. But there has to be an internal firewall that separates
proprietary trading from commercial banking. Proprietary trading ought to be financed out of a bank’
s own capital. If a bank is too big to fail, regulators must go even further to protect its capital from
undue risk. They must regulate the compensation packages of proprietary traders so that risks and
rewards are properly aligned. This may push proprietary trading out of banks into hedge funds. That
is where it properly belongs. Hedge funds and other large investors must also be closely monitored
to ensure that they do not build up dangerous imbalances.
Finally, I have strong views on the regulation of derivatives. The prevailing opinion is that they ought
to be traded on regulated exchanges. That is not enough. The issuance and trading of derivatives
ought to be as strictly regulated as stocks. Regulators ought to insist that derivatives be
homogenous, standardised and transparent.
Custom-made derivatives only serve to improve the profit margin of the financial engineers designing
them. In fact, some derivatives ought not to be traded at all. I have in mind credit default swaps.
Consider the recent bankruptcy of AbitibiBowater and that of General Motors. In both cases, some
bondholders owned CDS and stood to gain more by bankruptcy than by reorganisation. It is like
buying life insurance on someone else’s life and owning a licence to kill him. CDS are instruments of
destruction that ought to be outlawed.
The writer is chairman of Soros Fund Management and author of ‘The Crash of 2008’ (PublicAffairs
2009)
Copyright The Financial Times Limited 2009
Why are Powerful People Afraid to Give Us the Right to Choose a Public Plan?
We Need a Holistic, Cradle-to-the-Grave National Health Care System
By CAROL MILLER
In the 15 years since Congress gave up on universal health care, about 300,000 Americans have died
from the lack of health coverage alone, using the government’s own data.
Added to the tragic death toll is the economic toll. More than a half-million individuals and families
declare medical bankruptcy every year; most of them have health insurance. Actually, they thought
they had health insurance because they pay for insurance. People learn the hard way that when help is
really needed for a catastrophic health crisis, private insurance does not protect them from financial
ruin.
We stand again as a nation at the same fork in the road on the path to improve access to health care
for all of our neighbors and family members.
One choice is the fork that brings us together to weave a safety net. This fork is the Medicare-for-
all approach; everybody in, nobody out. Imagine a cradle-to-grave, holistic system based on public
health, prevention, wellness, a medical home for everyone and — according to the Congressional
Budget Office — doing all of this while saving money. This is the single-payer choice.
Then there is the other fork: forcing everyone to have insurance by building on the current broken
system. This is the déjà vu path. Choosing this path continues corporate rationing, procedure-based
sickness care, out-of-control costs and obscene CEO and executive compensation. During the last
debate on universal health care, Congress fell for industry promises of savings through an expansion
of managed care. After a year or so, all voluntary “savings” were gone and the bad old days of
skyrocketing costs were back.
Secret Bailout
It’s bailout fever now; every corporation and industry wants theirs. Some are out in the open like
Wall Street, American International Group and the automakers. One big corporate bailout is secret,
disguised as a uniquely American way of doing business.
I’m talking about the for-profit corporate sickness insurance industry. An industry that takes in
money, lots of money, much of it from us, the taxpayers, and in return pays for as little health care
as possible to maximize profits for their investors.
It is strange to listen to the Members of Congress criticize the Big Three automakers, when at the
same time they not only continue to support, but even propose expanding the for-profit, corporate
health insurance industry. At least automakers make something. They have the capability to retool
and build better and more efficient cars, light rail, solar panels or even better mousetraps.
Strategy for Passage
There are two issues on the table. First is the fate of the various “reform” bills as they continue to
be introduced and move through Congress, and second is the strategy for actually passing reform
this year. Watching the same mistakes that killed the Clinton-era reforms being made again — by
Democrats and Republicans — is painful.
There are three health reform choices being proposed this year. One choice is the completely public
option, universal, single-payer social insurance, which the president and Congress are trying very
hard to keep “off the table.” The middle ground has an insurance mandate with an individual choice of
either private, likely for-profit, insurance or a public insurance plan, for example, buying in to
Medicare. The third option provides the least choice, a mandate to buy private insurance.
This is where strategy matters. By leaving the universal, social insurance option out of the debate, it
is easier for the industry, media and some Members of Congress to paint the mixed public-private
plan as an extreme rather than what it is — the middle ground. And while not ideal, the mixed plan is
a place for Congressional compromise.
Why are powerful people afraid to give us the right to choose a public plan? Are they afraid we will
learn that more than $1 billion every day is wasted on insurance overhead? Or that more than a
trillion dollars bleeds from the health care system every two and a half years — money not spent on
health care but on insurance administration, advertising, marketing and corporate profits?
In surveys of the American people, Medicare is always ranked as the best and most popular
government program. If Congress fails to enact a universal social insurance plan, enrolling in
Medicare or a new public program must be a choice for the uninsured and underinsured.
If we are lucky, we will see real courage from Congress this year. Every Member knows that sooner
or later, because of the economics, the United States will join the rest of the developed world and
create a national health plan. This is privately conceded even by the biggest insurance industry
boosters on Capitol Hill. Without real reform, there will be more tinkering at the edges until the
tsunami of medical costs finally forces the government to do the right thing.
During these challenging economic times, we have the chance to complete the promise of full social
insurance. Universal access to health care has been deferred for 74 years since it was stripped
from the Social Security Act of 1935 — and that is long enough.
Carol Miller is a rural and public health activist who lives in a small village in Ojo Sarco, N.M. Miller
has public service in Washington, D.C., in both Republican and Democratic administrations, including
the Clinton Health Care Task Force. In 1994 she was the health reform policy adviser for the
National Rural Health Association and the New Mexico secretary of health.
This article originally appeared in Roll Call.
I have a new idea for a Palestinian state. I would deport all the Jews in the US and Europe to Israel
then if they don’t get a real Palestinian state I would bomb Israel.
June 18, 2009
What Does He Mean When He Says "Yes"?
The Case of Netanyahu and the Curious Incident
By URI AVNERY
"You must be celebrating,” the interviewer from a popular radio station told me after Netanyahu’s
speech. “After all, he is accepting the plan which you proposed 42 years ago!” (Actually it was 60
years ago, but who is counting?)
The front page of Haaretz carried an article by Gideon Levy, in which he wrote that “the courageous
call of Uri Avnery and his friends four decades ago is now being echoed, though feebly, from end to
end (of the Israeli political spectrum).”
I would be lying if I denied feeling a brief glow of satisfaction, but it faded quickly. This was no
“historic” speech, not even a “great” speech. It was a clever speech.
It contained some sanctimonious verbiage to appease Barack Obama, followed right away by the
opposite, to pacify the Israeli extreme right. Not much more.
NETANYAHU DECLARED that “our hand is extended for peace.”
In my ears, that rang a bell: in the 1956 Sinai war, a member of my editorial staff was attached to
the brigade that conquered Sharm-al-Sheikh. Since he had grown up in Egypt, he interviewed the
senior captured Egyptian officer, a colonel. “Every time David Ben-Gurion announced that his hand
was stretched out for peace,” the Egyptian told him, “we were put on high alert.”
And indeed, that was Ben-Gurion’s method. Before every provocation he would declare that “our
hands are extended for peace”, adding conditions that he knew were totally unacceptable to the
other side. Thus an ideal situation (for him) was created: The world saw Israel as a peace-loving
country, while the Arabs looked like serial peace-killers. Our secret weapon is the Arab refusal, it
used to be joked in Jerusalem at the time.
This week, Netanyahu wheeled out the same old trick.
* * *
I DO NOT underrate, of course, the significance of the chief of the Likud uttering the two words:
“Palestinian state”.
Words carry political weight. Once released into the world, they have a life of their own. Unlike
dogs, they cannot be called back.
In a popular Israeli love song, the boy asks the girl: “When you say no, what do you mean?” One could
well ask: When Netanyahu says yes, what does he mean?
But even if the words “Palestinian state” passed his lips only under duress, and when Netanyahu has
no intention at all of turning them into reality, it is still important that the head of the government and
the chief of the Likud was compelled to utter them. The idea of the Palestinian state has now become
a part of the national consensus, and only a handful of ultra-rightists reject it directly. But this is only
the beginning. The main struggle will be about turning the idea into reality.
* * *
THE ENTIRE speech was addressed to one single person: Barack Obama. It was not designed to
appeal to the Palestinians. It was quite clear that the Palestinians are only the passive object of a
discussion between the President of the USA and the Prime Minister of Israel. Except in some tired
old clichés, Netanyahu spoke about them, not to them.
He is ready, so he says, to conduct negotiations with the “Palestinian community”, and that, of course,
“without preconditions”. Meaning: without Palestinian preconditions. On Netanyahu’s part, there are
plenty of preconditions, every one of which is designed to make certain that no Palestinian, no Arab
and indeed no Muslim will agree to enter negotiations.
Condition 1: The Arabs have to recognize Israel as “the nation-state of the Jewish people” (and not
just “a Jewish state”, as many in the media erroneously reported.) As Hosny Mubarak has already
answered: No Arab will accept this, because it would mean that 1.5 million Arab citizens of Israel are
cut off from the state, and because it would deny in advance the Right of Return of the Palestinian
refugees - the main bargaining chip of the Arab side.
It should be remembered that when the United Nations resolved in 1947 to partition Palestine
between a “Jewish state” and an “Arab state”, they did not mean to define the character of the
states. They were just stating facts: there are two mutually hostile populations in the country, and
therefore the country has to be divided between them. (Anyhow, 40% of the population of the
“Jewish” state was to consist of Arabs.)
Condition 2: The Palestinian Authority must first of all establish its rule over the Gaza Strip. How?
After all, the Israeli government prevents travel between the West Bank and the Gaza Strip, and no
Palestinian force can pass from one to the other. And the solution of the problem by establishing a
Palestinian unity government is also ruled out: Netanyahu flatly declared that there would be no
negotiations with a Palestinian leadership that includes “terrorists who want to annihilate us” – his way
of referring to Hamas.
Condition 3: The Palestinian state will be demilitarized. This is not a new idea. All peace plans that
have been put forward up to now speak about security arrangements that would protect Israel from
Palestinian attacks and Palestine from Israeli attacks. But that is not what Netanyahu has in mind: he
did not speak about mutuality, but about domination. Israel would control the air space and the
border crossings of the Palestinian state, turning it into a kind of giant Gaza Strip. Also, Netanyahu’s
style was deliberately overbearing and humiliating: he obviously hopes that the word ‘demilitarized”
would be enough to get the Palestinians to say “no”.
Condition 4: Undivided Jerusalem will remain under Israeli rule. This was not proposed as an opening
gambit for negotiations but presented as a final decision. That by itself ensures that no Palestinian,
nor any Arab or even any Muslim, could accept the proposal.
In the Oslo Agreement, Israel undertook to negotiate about the future of Jerusalem. It is an
accepted legal rule that if one undertakes to negotiate, one accepts to do so bona fide, on the basis
of give and take. Therefore, all peace plans provide that East Jerusalem - wholly or partly – will be
returned to Arab rule.
Condition 5: Between Israel and the Palestinian state there will be “defensible borders”. These are
code-words for extensive annexations by Israel. Their meaning: no return to the 1967 borders, not
even with a swap of territory that would allow for some of the large settlements to be joined to
Israel. In order to create “defensible borders”, a major part of the occupied Palestinian territories
(which altogether make up just 22% of pre-1948 Palestine) will be absorbed into Israel.
Condition 6: The refugee problem will be solved “outside the territory of Israel”. Meaning: not a
single refugee will be allowed to return. True, all realistic people agree that there can be no return
of millions of refugees. According to the Arab peace initiative, the solution must be “mutually agreed”
– which means that Israel has to agree to any solution. The assumption is that the two parties will
agree on the return of a symbolic number. This is a highly charged and sensitive matter, which must
be treated with prudence and the utmost sensitivity. Netanyahu does the opposite: his provocative
statement, devoid of all empathy, is clearly designed to bring about an automatic refusal.
Condition 7: No settlement freeze. The “normal life” of the settlers will continue. Meaning: the
building activity for the “natural increase” will go on. This illustrates the saying of Michael Tarazy, a
legal advisor to the PLO: “We are negotiating about sharing a pizza, and in the meantime Israel is
eating it.”
All this was in the speech. No less interesting is what was not in it. For example, the words: Road
Map. Annapolis. Palestine. The Arab peace plan. Occupation. Palestinian Sovereignty. Opening of the
Gaza Strip border crossings. Golan Heights. And, even more important: there was not a hint of
respect for the enemy who must be turned into a friend, in the words of the ancient Jewish saying.
* * *
SO WHAT is more important? The verbal recognition of “a Palestinian state” or the conditions which
empty these words of all content?
The public response is interesting. In an opinion poll taken immediately after the speech, 71%
supported it, but 55% believed that Netanyahu just “gave in to American pressure”, and 70% did not
believe that a Palestinian state would really come about during the next few years.
What exactly do the 71% support? The “Palestinian state” solution or the conditions which obstruct
its implementation – or both?
There is, of course, an extreme right-wing minority which prefers a head-on collision with the United
States to giving up any territory between the Mediterranean Sea and the Jordan River. Along the
road to Jerusalem one can see large posters showing a manipulated photo of Obama wearing an Arab
headdress. (It sends a shiver down the spine, because it reminds us of seeing exactly the same
poster with Yitzhak Rabin under the keffiyeh.) But the great majority of the people understand that
a break with the US must be avoided at all costs.
Netanyahu and the right-wing hoped that the Palestinians would reject his words outright, thus
painting themselves as serial peace refusers, while the Israeli government would be seen as taking
the first small but significant step towards peace. They are sure that this could be achieved for
nothing: the Palestinian state will not be set up, the Israeli government will not give up anything, the
occupation will remain, settlement activity will go on and Obama will accept all this.
* * *
SO THE main question is: how will Obama react?
The first reaction was minor. A politely positive response.
Obama is not seeking a frontal collision with the Israeli government. It seems that he wants to exert
“soft” pressure, vigorously but quietly. To my mind, that is a wise approach.
A few hours before the speech, I met with ex-President Jimmy Carter. The meeting took place at
the American Colony hotel in East Jerusalem. It was organized by Gush Shalom, with several other
Israeli peace organizations taking part. In my opening remarks, I pointed out that we were in exactly
the same room where 16 years ago, while the Oslo agreement was being signed in Washington, Israeli
peace activists and the leaders of the Palestinian population in Jerusalem met and opened bottles of
champagne. The euphoria of those moments has disappeared without leaving a trace.
Israelis and Palestinians have lost hope. On both sides, the overwhelming majority wants an end to the
conflict but do not believe that peace is possible – and each side blames the other. Our task is to
rekindle the belief that it is indeed possible.
For this there is a need for a dramatic event, a kind of invigorating electric shock – like the historic
visit of Anwar Sadat to Jerusalem in 1977. I suggested that Obama should come to Jerusalem and
speak directly to the Israeli public, perhaps even from the Knesset rostrum, like Sadat.
After listening intently to the participants, the former President encouraged us in our activities and
put forward some proposals of his own.
* * *
THE DECISIVE point at this moment is, of course, the matter of the settlements. Will Obama insist
on a total freeze of all building activity or not?
Netanyahu hopes to wriggle out of it. He has now found a new gimmick: projects that have already
started must be allowed to be finished. One cannot stop them in the middle. The plans have already
been approved. The tenants are waiting for their apartments, and they must not be made to suffer.
The Supreme Court will not allow a freeze. (A particularly ridiculous argument, like the court allowing
a thief to spend some more of the money he has stolen before passing sentence.)
If Obama falls for this, he should not be surprised to find out belatedly that these projects include
100,000 new housing units.
This brings us to the most important fact of this week: the settlers did not raise hell after
Netanyahu’s speech. On the contrary. Here and there some feeble criticism could be heard, but the
large and armed settler population kept remarkably quiet.
Which brings us back to the unforgettable Sherlock Holmes, who explained how he solved one of his
mysteries by drawing attention to “the curious incident of the dog in the night-time.”
“But the dog did nothing in the night-time!” someone objected.
“That was the curious incident,” remarked Holmes.
Uri Avnery is an Israeli writer and peace activist with Gush Shalom. He is a contributor to
CounterPunch's book The Politics of Anti-Semitism.
I was the first to expose this news story. It was the least I could do for the gangsters who owe me
billions.
Fed faces cover-up claim on BofA merger
By Krishna Guha and Tom Braithwaite in Washington
Published: June 24 2009 23:57 | Last updated: June 24 2009 23:57
A Republican congressman on Wednesday accused the Federal Reserve of a “cover-up” over the
Bank of America-Merrill Lynch takeover, raising the stakes ahead of Fed chairman Ben Bernanke’s
appearance on Thursday before a House subcommittee investigating the deal.
Darrell Issa, the senior Republican on the subcommittee, said the Fed “engaged in a cover-up and
deliberately hid concerns and pertinent details regarding the merger from other federal regulatory
agencies”.
Dennis Kucinich, the Democratic chairman of the subcommittee, dismissed Mr Issa’s concerns, but
signalled he would attack the Fed’s handling of the BofA-Merrill deal on different lines.
A Republican memorandum cites excerpts from e-mails written by Fed officials in which they appear
to suggest they did not share complete information about ongoing discussions with BofA with the
Securities and Exchange Commission and the OCC, BofA’s regulator.
Mr Issa also repeated the claim that Mr Bernanke and the Fed “made inappropriate threats to fire
Bank of America management unless they went ahead with the shotgun wedding that was the Merrill
Lynch acquisition”.
The Fed declined to comment ahead of the hearing. However, a person familiar with Fed thinking said
the central bank and other regulators had good working relationships and that the Fed had made no
effort ever to withhold information from any other regulator.
In an April 30 letter to Mr Kucinich, Mr Bernanke stated that he did not press BofA management to
hide mounting losses at Merrill from its shareholders, and did not threaten to fire the board if it
tried to pull out of the deal.
Mr Kucinich raised different concerns about the Fed’s role. “In spite of the doubts felt about Ken
Lewis’s management of Bank of America, the Fed’s leadership orchestrated an aid package that
attached no meaningful conditions to the money,” he said.
Copyright The Financial Times Limited 2009
North Korea: "Sanity" at the Brink
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Nations that chart a self-defining course, seeking to use their land, labor, natural resources, and
markets as they see fit, free from the smothering embrace of the US corporate global order,
frequently become a target of defamation. Their leaders often have their moral sanity called into
question by US officials and US media, as has been the case at one time or another with Castro,
Noriega, Ortega, Qaddafi, Aristide, Milosevic, Saddam Hussein, Hugo Chavez, and others.
So it comes as no surprise that the rulers of the Democratic People's Republic of Korea (DPRK or
North Korea) have been routinely described as mentally unbalanced by our policymakers and pundits.
Senior Defense Department officials refer to the DPRK as a country "not of this planet," led by
"dysfunctional" autocrats. One government official, quoted in the New York Times, wondered aloud
"if they are really totally crazy." The New Yorker magazine called them "balmy," and late-night TV
host David Letterman got into the act by labeling Kim Jong-il a "madman maniac."
To be sure, there are things about the DPRK that one might wonder about, including its dynastic
leadership system, its highly dictatorial one-party rule, and the chaos that seems implanted in the
heart of its "planned" economy.
But in its much advertised effort to become a nuclear power, North Korea is actually displaying more
sanity than first meets the eye. The Pyongyang leadership seems to know something about US global
policy that our own policymakers and pundits have overlooked. In a word, the United States has never
attacked or invaded any nation that has a nuclear arsenal.
The countries directly battered by US military actions in recent decades (Grenada, Panama, Iraq,
Libya, Somalia, Yugoslavia, Afghanistan, then again Iraq), along with numerous other states that have
been threatened at one time or another for being "anti-American" or "anti-West" (Iran, Cuba, South
Yemen, Venezuela, Syria, North Korea, and others) have one thing in common: not one of them has
wielded a nuclear deterrence-until now.
Let us provide a little background. Put aside the entire Korean War (1950-53) in which US aerial
power destroyed most of the DPRK's infrastructure and tens of thousands of its civilians. Consider
more recent events. In the jingoist tide that followed the September 11, 2001 attacks on the World
Trade Center and the Pentagon, President George W. Bush claimed the right to initiate any military
action against any "terrorist" nation, organization, or individual of his choosing. Such a claim to
arbitrary power-in violation of international law, the UN charter, and the US Constitution-
transformed the president into something of an absolute monarch who could exercise life and death
power over any quarter of the Earth. Needless to say, numerous nations--the DPRK among them-
were considerably discomforted by the US president's elevation to King of the Planet.
It was only in 2008 that President Bush finally removed North Korea from a list of states that
allegedly sponsor terrorism. But there remains another more devilishly disquieting hit list that
Pyongyang recalls. In December 2001, two months after 9/11, Vice President Dick Cheney referred
chillingly to "forty or fifty countries" that might need military disciplining. A month later in his 2002
State of the Union message, President Bush pruned the list down to three especially dangerous
culprits: Iraq, Iran, and North Korea, who, he said, composed an "axis of evil."
It was a curious lumping together of three nations that had little in common. In Iraq the leadership
was secular, in Iran it was a near Islamic theocracy. And far from being allies, the two countries
were serious enemies. Meanwhile the DPRK, had no historical, cultural, or geographical links to either
Iraq or Iran. But it could witness what was happening.
The first to get hit was Iraq, nation #1 on the short list of accused evil doers. Before the Gulf War
of 1990-91 and the subsequent decade of sanctions, Iraq had the highest standard of living in the
Middle East. But years of war, sanctions, and occupation reduced the country to shambles, its
infrastructure shattered and much of its population drenched in blood and misery.
Were it not that Iraq has proven to be such a costly venture, the United States long ago would have
been moving against Iran, #2 on the axis-of-evil hit list. As we might expect, Iranian president
Mahmoud Amadinijad has been diagnosed in the US media as "dangerously unstable." The Pentagon
has announced that thousands of key sites in Iran have been mapped and targeted for aerial attack.
All sorts of threats have been directed against Tehran for having pursued an enriched uranium
program-which every nation in the world has a right to do. And on a recent Sunday TV program,
Secretary of State Hillary Clinton warned that the United States might undertake a "first strike"
against Iran to prevent its nuclear weapons development.
Rather than passively await its fate sitting in Washington's crosshairs, nation #3 on the US hit list is
trying to pack a deterrence. The DPRK's attempt at self-defense is characterized in US official
circles and US media as wild aggression. Secretary Clinton warned that the United States would not
be "blackmailed by North Korea." Defense Secretary Robert Gates fulminated, "We will not stand
idly by as North Korea builds the capability to wreak destruction on any target in Asia-or on us." The
DPRK's nuclear program, Gates warns, is a "harbinger of a dark future."
President Obama condemned North Korea's "belligerent provocative behavior" as posing a "grave
threat." In June 2009, the UN Security Council unanimously passed a US-sponsored resolution
ratcheting up the financial, trade, and military sanctions against the DPRK, a nation already hard hit
by sanctions. In response to the Security Council's action, Kim Jong il's government announced it
would no longer "even think about giving up its nuclear weapons" and would enlarge its efforts to
produce more of them.
In his earlier Cairo speech Obama stated, "No single nation should pick and choose which nation holds
nuclear weapons." But that is exactly what the United States is trying to do in regard to a benighted
North Korea--and Iran. Physicist and political writer Manuel Garcia, Jr., observes that Washington's
policy "is to encourage other nations to abide by the terms of the Nuclear Non-Proliferation Treaty--
and renounce nuclear weapons--while exempting itself." Others must disarm so that Washington may
more easily rule over them, Garcia concludes.
US leaders still refuse to give any guarantee that they will not try to topple Pyongyang's communist
government. There is talk of putting the DPRK back on the list of state sponsors of terrorism, though
Secretary Clinton admits that evidence is wanting to support such a designation.
From its lonely and precarious perch the North cannot help feeling vulnerable. Consider the
intimidating military threat it faces. The DPRK's outdated and ill-equipped army is no match for the
conventional forces of the United States, South Korea, and Japan. The United States maintains a
large attack base in South Korea. As Paul Sack reminds us in a recent correspondence to the New
York Times, at least once a year the US military conducts joint exercises with South Korean forces,
practicing a land invasion of the DPRK. The US Air Force maintains a "nuclear umbrella" over South
Korea with nuclear arsenals in Okinawa, Guam, and Hawaii. Japan not only says it can produce nuclear
bombs within a year, it seems increasingly willing to do so. And the newly installed leadership in South
Korea is showing itself to be anything but friendly toward Pyongyang.
The DPRK's nuclear arsenal is a two-edged sword. It can deter attack or invite attack. It may cause
US officials to think twice before cinching a tighter knot around the North, or it may cause them to
move aggressively toward a confrontation that no one really wants.
After years of encirclement and repeated rebuffs from Washington, years of threat, isolation, and
demonization, the Pyongyang leaders are convinced that the best way to resist superpower attack
and domination is by developing a nuclear arsenal. It does not really sound so crazy. As already
mentioned, the United States does not invade countries that are armed with long-range nuclear
missiles (at least not thus far).
Having been pushed to the brink for so long, the North Koreans are now taking a gamble, upping the
ante, pursuing an arguably "sane" deterrence policy in the otherwise insane world configured by an
overweening and voracious empire.
-----------------
Michael Parenti's recent books include: Contrary Notions: The Michael Parenti Reader (City Lights);
Democracy for the Few, 8th ed. (Wadsworth); and God and His Demons (Prometheus Books,
forthcoming). For further information, visit his website: www.michaelparenti.org.
Published on Monday, June 22, 2009 by TruthDig.com
Iran Had a Democracy Before We Took It Away
by Chris Hedges
Iranians do not need or want us to teach them about liberty and representative government. They
have long embodied this struggle. It is we who need to be taught. It was Washington that
orchestrated the 1953 coup to topple Iran’s democratically elected government, the first in the
Middle East, and install the compliant shah in power. It was Washington that forced Prime Minister
Mohammed Mossadegh, a man who cared as much for his country as he did for the rule of law and
democracy, to spend the rest of his life under house arrest. We gave to the Iranian people the
corrupt regime of the shah and his savage secret police and the primitive clerics that rose out of the
swamp of the dictator’s Iran. Iranians know they once had a democracy until we took it away.
The fundamental problem in the Middle East is not a degenerate and corrupt Islam. The fundamental
problem is a degenerate and corrupt Christendom. We have not brought freedom and democracy and
enlightenment to the Muslim world. We have brought the opposite. We have used the iron fist of the
American military to implant our oil companies in Iraq, occupy Afghanistan and ensure that the region
is submissive and cowed. We have supported a government in Israel that has carried out egregious
war crimes in Lebanon and Gaza and is daily stealing ever greater portions of Palestinian land. We
have established a network of military bases, some the size of small cities, in Iraq, Afghanistan,
Saudi Arabia, Turkey and Kuwait, and we have secured basing rights in the Gulf states of Bahrain,
Qatar, Oman and the United Arab Emirates. We have expanded our military operations to
Uzbekistan, Pakistan, Kyrgyzstan, Tajikistan, Egypt, Algeria and Yemen. And no one naively believes,
except perhaps us, that we have any intention of leaving.
We are the biggest problem in the Middle East. We have through our cruelty and violence created
and legitimized the Mahmoud Ahmadinejads and the Osama bin Ladens. The longer we lurch around
the region dropping iron fragmentation bombs and seizing Muslim land the more these monsters,
reflections of our own distorted image, will proliferate. The theologian Reinhold Niebuhr wrote that
“the most significant moral characteristic of a nation is its hypocrisy.” But our hypocrisy no longer
fools anyone but ourselves. It will ensure our imperial and economic collapse.
The history of modern Iran is the history of a people battling tyranny. These tyrants were almost
always propped up and funded by foreign powers. This suppression and distortion of legitimate
democratic movements over the decades resulted in the 1979 revolution that brought the Iranian
clerics to power, unleashing another tragic cycle of Iranian resistance.
“The central story of Iran over the last 200 years has been national humiliation at the hands of
foreign powers who have subjugated and looted the country,” Stephen Kinzer, the author of “All the
Shah’s Men: An American Coup and the Roots of Middle East Terror,” told me. “For a long time the
perpetrators were the British and Russians. Beginning in 1953, the United States began taking over
that role. In that year, the American and British secret services overthrew an elected government,
wiped away Iranian democracy, and set the country on the path to dictatorship.”
“Then, in the 1980s, the U.S. sided with Saddam Hussein in the Iran-Iraq war, providing him with
military equipment and intelligence that helped make it possible for his army to kill hundreds of
thousands of Iranians,” Kinzer said. “Given this history, the moral credibility of the U.S. to pose as a
promoter of democracy in Iran is close to nil.
Especially ludicrous is the sight of people in Washington calling for intervention on behalf of
democracy in Iran when just last year they were calling for the bombing of Iran. If they had had
their way then, many of the brave protesters on the streets of Tehran today—the ones they hold up
as heroes of democracy—would be dead now.”
Washington has never recovered from the loss of Iran—something our intelligence services never
saw coming. The overthrow of the shah, the humiliation of the embassy hostages, the laborious piecing
together of tiny shreds of paper from classified embassy documents to expose America’s venal role
in thwarting democratic movements in Iran and the region, allowed the outside world to see the dark
heart of the American empire. Washington has demonized Iran ever since, painting it as an irrational
and barbaric country filled with primitive, religious zealots. But Iranians, as these street protests
illustrate, have proved in recent years far more courageous in the defense of democracy than most
Americans.
Where were we when our election was stolen from us in 2000 by Republican operatives and a
Supreme Court that overturned all legal precedent to anoint George W. Bush president? Did tens of
thousands of us fill the squares of our major cities and denounce the fraud? Did we mobilize day
after day to restore transparency and accountability to our election process? Did we fight back with
the same courage and tenacity as the citizens of Iran? Did Al Gore defy the power elite and, as
opposition candidate Mir Hossein Mousavi has done, demand a recount at the risk of being killed?
President Obama retreated in his Cairo speech into our spectacular moral nihilism, suggesting that
our crimes matched the crimes of Iran, that there is, in his words, "a tumultuous history between us."
He went on: "In the middle of the Cold War, the United States played a role in the overthrow of a
democratically elected Iranian government. Since the Islamic Revolution, Iran has played a role in
acts of hostage-taking and violence against U.S. troops and civilians." It all, he seemed to say,
balances out.
I am no friend of the Iranian regime, which helped create and arm Hezbollah, is certainly meddling in
Iraq, has persecuted human rights activists, gays, women and religious and ethnic minorities,
embraces racism and intolerance and uses its power to deny popular will. But I do not remember
Iran orchestrating a coup in the United States to replace an elected government with a brutal
dictator who for decades persecuted, assassinated and imprisoned democracy activists. I do not
remember Iran arming and funding a neighboring state to wage war against our country. Iran never
shot down one of our passenger jets as did the USS Vincennes-caustically nicknamed Robocruiser by
the crews of other American vessels-when in June 1988 it fired missiles at an Airbus filled with
Iranian civilians, killing everyone on board. Iran is not sponsoring terrorism within the United States,
as our intelligence services currently do in Iran. The attacks on Iranian soil include suicide bombings,
kidnappings, beheadings, sabotage and "targeted assassinations" of government officials, scientists
and other Iranian leaders. What would we do if the situation was reversed? How would we react if
Iran carried out these policies against us?
We are, and have long been, the primary engine for radicalism in the Middle East. The greatest favor
we can do for democracy activists in Iran, as well as in Iraq, Afghanistan, the Gulf and the
dictatorships that dot North Africa, is withdraw our troops from the region and begin to speak to
Iranians and the rest of the Muslim world in the civilized language of diplomacy, respect and mutual
interests. The longer we cling to the doomed doctrine of permanent war the more we give credibility
to the extremists who need, indeed yearn for, an enemy that speaks in their crude slogans of
nationalist cant and violence. The louder the Israelis and their idiot allies in Washington call for the
bombing of Iran to thwart its nuclear ambitions, the happier are the bankrupt clerics who are
ordering the beating and murder of demonstrators. We may laugh when crowds supporting
Ahmadinejad call us "the Great Satan," but there is a very palpable reality that has informed the
terrible algebra of their hatred.
Our intoxication with our military prowess blinds us to all possibilities of hope and mutual cooperation.
It was Mohammed Khatami, the president of Iran from 1997 to 2005-perhaps the only honorable
Middle East leader of our time-whose refusal to countenance violence by his own supporters led to
the demise of his lofty "civil society" at the hands of more ruthless, less scrupulous opponents. It
was Khatami who proclaimed that "the death of even one Jew is a crime." And we sputtered back to
this great and civilized man the primitive slogans of all deformed militarists. We were captive, as all
bigots are, to our demons, and could not hear any sound but our own shouting. It is time to banish
these demons. It is time to stand not with the helmeted goons who beat protesters, not with those in
the Pentagon who make endless wars, but with the unarmed demonstrators in Iran who daily show us
what we must become.
The fight of the Iranian people is our fight. And, perhaps for the first time, we can match our actions
to our ideals. We have no right under post-Nuremberg laws to occupy Iraq or Afghanistan. These
occupations are defined by these statutes as criminal "wars of aggression." They are war crimes. We
have no right to use force, including the state-sponsored terrorism we unleash on Iran, to turn the
Middle East into a private gas station for our large oil companies. We have no right to empower
Israel's continuing occupation of Palestine, a flagrant violation of international law. The resistance you
see in Iran will not end until Iranians, and all those burdened with repression in the Middle East, free
themselves from the tyranny that comes from within and without. Let us, for once, be on the side of
those who share our democratic ideals.
© 2009 TruthDig.com
Chris Hedges writes a regular column for Truthdig.com. Hedges graduated from Harvard Divinity
School and was for nearly two decades a foreign correspondent for The New York Times. He is the
author of many books, including: War Is A Force That Gives Us Meaning, What Every Person Should
Know About War, and American Fascists: The Christian Right and the War on America. His most
recent book, Empire of Illusion: The End of Literacy and the Triumph of Spectacle, will be out in July,
but is available for pre-order.
Published on Tuesday, June 23, 2009 by Consortium News
Serving the Medical-Industrial Complex
by Robert Parry
The usual knock on government programs is that they're not as efficient as the private sector, which
we're told can provide the same product for less money and with higher quality. Thus, it should be no
big deal when the public and private collide because the private sector should prevail.
However, in providing health insurance, those rules clearly don't apply, which is why congressional
Republicans and so-called "centrist" Democrats are going to such lengths to deny the American
people access to a public option on health insurance.
Indeed, if a public option were to be piggybacked onto the existing Medicare bureaucracy, the
chances for savings could be impressive for average Americans and the overall American economy.
Insurance middlemen could be eliminated; investigators who ferret out "preexisting conditions"
wouldn't be needed; doctors could save on administrative costs; the burden on U.S. industry
providing health benefits could be reduced; and more money could be freed to cover the nearly 50
million uninsured or for actual doctoring.
For a nation facing multiple fiscal crises - all complicated by the costs of health care - one might think
that the most sure thing in the health care debate would be to allow a cost-saving public option, which
as President Barack Obama says would help keep private health insurers "honest" regarding their
promises to trim waste and control premiums.
According to a New York Times/CBS poll, that point is obvious to 72 percent of the American people
who favor "offering everyone a government administered health insurance plan like Medicare that
would compete with private health insurance plans."
It's also reflected in a study cited by Sen. Chuck Grassley, R-Iowa, and other insurance industry
defenders saying that 119 million Americans would bolt from their private insurers to the public
option if they were given the chance.
To put that figure in perspective, it is about two-thirds of Americans who have private insurance
through their employers or as individuals. In other words, the industry's defenders say two of every
three customers want out.
Though some analysts doubt the defection rate would reach 119 million, Grassley's argument is that
Americans would so prefer a government-run plan that it would destroy the private insurance
industry - and that therefore the public option simply can't be permitted.
Grassley's fear of 119 million Americans voting with their pocketbooks against private health
insurance represents a remarkable admission of failure by the industry and its backers. It says, in
effect, that the industry's treatment of its customers has been so highhanded over the decades that
the industry can only survive if Americans are left with the unappetizing choice of private coverage
or no coverage.
Representing Whom?
So, not only are the Republicans - and some Democrats - standing against the desires for 72 percent
of the population but, in effect, they also are trying to lock in 119 million unhappy customers for a
profit-making industry. To add another windfall for the insurance industry, Congress may compel the
near 50 million uninsured to buy insurance under penalty of fines.
Even in the sorry history of special-interest-dominated Washington, it is rare for politicians to so
blatantly adopt defense of a private industry over the will of the people.
One might think that Democrats would take this club and beat the Republicans over the head with it.
The Democrats could argue that the public option is not only popular but could save money for
struggling U.S. businesses by bringing down their health insurance costs and freeing up more money
for investment and for the hiring of new workers.
One of the key factors that drove General Motors into bankruptcy was how its health insurance
benefits for employees inflated the company's costs-per-worker total and thus hurt its
competitiveness against rivals who operate in countries where the government pays for health care.
The public option issue also would seem ready-made for Democrats given that the New York
Times/CBS poll found that a solid majority of Americans (57 percent) were willing to pay higher
taxes so that all Americans could have "health insurance that they can't lose no matter what." [NYT,
June 21, 2009]
Nevertheless, key "centrist" Democrats, such as Sens. Max Baucus of Montana and Kent Conrad of
North Dakota, are ready to scuttle the public option to secure a few GOP votes so they can claim
their plan is "bipartisan." Conrad has called for substituting a privately run, non-profit "cooperative"
for the public option.
While Conrad's "cooperative," which would be ostensibly owned by its members, has some superficial
appeal, it would require the creation of an entirely new bureaucracy - rather than relying on the
government's existing infrastructure for Medicare - and would likely be run by high-paid executives
recruited from the existing private insurance industry.
Critics of Conrad's plan also note that the cooperative would have far less leverage in negotiating
lower prices from pharmaceutical companies and other parts of the medical industry, so the savings
would be marginal - which is exactly why the idea appeals to industry groups.
Patrons and the People
It goes without saying that the medical-industry complex has made generous contributions to all the
key lawmakers, especially those like Grassley and Baucus who are at the top of the influential Senate
Banking Committee.
But the obsession of some Senate Democrats, like Conrad, to find "common ground" with Republicans
seems to go beyond simply rewarding benefactors. Though it's clear that many, if not most,
Republicans have a single-minded goal - to sabotage the Obama administration - Democrats
nevertheless continue in their quest for the elusive "bipartisanship."
This quest goes on despite the fact that Republicans were trounced in the last two elections, are
down to 40 senators, and are facing historically low approval ratings. Still, "centrist" Democrats
insist on bending over backwards to accommodate the GOP desires, even when those desires fly in
the face of popular opinion and do not represent the most sensible policies.
These Democrats - sometimes including President Obama - appear deeply influenced by Inside-the-
Beltway chatter coming from pundits who still reflect the Ronald-Reagan-to-George-W.-Bush
conventional wisdom that "government is the problem," that tax cuts are the answer to every
question, and that "self-regulating markets" have made bureaucrats largely irrelevant.
Despite the nation's cascading crises - which can be traced to too little government, excessive tax
cuts and a lack of sound regulation - the chattering class has not been shaken from its biases. So, the
minority Republicans are given far more time and space than they reasonably deserve (and much
more than minority Democrats got during George W. Bush's presidency).
Amid Republican charges of "socialism," the reaction of Democrats, like Baucus and Conrad, is to
position themselves in what they must consider the safe center, earning praise from the pundits for
their courageous willingness to stand up to the Democratic "base" - and to the overwhelming majority
of Americans - in order to stop the public option.
But Baucus and Conrad will likely find that the safe center isn't so safe. When half-measures and
half-baked compromises leave the American people disappointed or angry, the fault will be laid on
the government's failure to do the job right.
And that failure will be cited by Republicans and the pundits as further proof of the superiority of
the private sector.
© 2009 Consortium News
Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and
Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written
with two of his sons, Sam and Nat. His two previous books are Secrecy & Privilege: The Rise of the
Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & 'Project
Truth'.
Published on Tuesday, June 23, 2009 by CommonDreams.org
Israeli Leader Reveals Why Israeli Shuns Negotiation
by Ira Chernus
Israeli government officials are experts at finding excuses to avoid negotiating with Palestinians.
Israel’s Minister of Strategic Affairs, Moshe Ya'alon, pulled out an old one the other day: "There is
no partner on the Palestinian side, we just give, and we get nothing."
Others have now come up with a new one: Israeli Prime Minister Benjamin Netanyahu said in his
recent speech, “Let us begin peace negotiations immediately without prior conditions”; but the
Palestinians, backed by the Obama administration, are demanding a halt to settlement expansion as a
precondition to talks.
Either way, it seems, the Palestinians (as usual) must take all the blame.
But now, in a rare moment of unguarded honesty, Israel’s second ranking leader, Ehud Barak --
Defense Minister, former Prime Minister, former head of the military -- has let the truth slip out.
According to Israel’s premier newspaper, Ha’aretz, Barak told reporters: “In negotiations with the
Palestinians, Israel is the ‘only one that can give, the Palestinians are the underdog and the talks are
asymmetrical.’ But in regional talks, Barak said, it becomes clear that Israel is the isolated party.”
Israel has to look like the isolated underdog to keep up the myth that it is the innocent, virtuous,
aggrieved party. That has always been a fundamental principle of Israeli strategy: Someone else
must take all the blame for the conflict that keeps Israelis as well as their neighbors insecure. The
only difference now is that a top Israeli leader has admitted it in public.
Barak knows perfectly well that the other excuses for avoiding direct negotiations with the
Palestinians are bogus.
Take the “no partner” ploy. For many years the Israelis had a universally-accepted Palestinian
partner, Yasser Arafat. Arafat could not embrace Barak’s so-called “generous offer” at Camp David
in 2000 because it was actually an offer to create a state of Palestine that was bound to fail. The
New York Times recently called it, quite rightly, an “archipelago” of small clumps of land separated
by Israeli settlements, security roads, and check points. The Israelis continue to offer only variants
on the same impossible plan.
When Arafat turned down the offer, knowing that his people would never tolerate it, the Israelis
launched a calculated plan to make him “irrelevant” and then proclaim that they had “no partner for
peace.” Unfortunately, the plan worked all too well.
After Arafat’s death and the electoral victory of Hamas, the Israelis’ great fear was that the two
major Palestinian parties, Hamas and Fatah, would create a unified government, whose head would
obviously be a partner for peace. So they torpedoed every effort in that direction, exacerbating
(with U.S. help) the conflict between the two parties that continues to the present day.
Palestinian unity efforts continue, too. Fatah leader Mahmoud Abbas has just ordered the release of
all Hamas prisoners held by his security forces, in a goodwill gesture aimed at speeding the
formation of a single Palestinian government. We can expect some kind of high-profile Israeli
violence to break up that effort any day now, to make sure there is “no partner for peace.”
The other Israeli argument against negotiations -- the claim of Palestinian preconditions -- is equally
bogus. It was Netanyahu who recited, in his major address, a litany of conditions the Palestinians
would have to accept in any settlement, many of them so painful that he can be quite sure they’re
impossible for his foe to swallow: no capital in Jerusalem, no right of return (not even a symbolic
one), no withdrawal from or even freeze on settlements, and a state at some vague future date with
no army, no control of their air space, no right to sign treaties unless Israel approves them.
As Barak rightly pointed out, Israel is in a position to demand such preconditions because it has all
the power. It is “the only one that can give,” and that leaves it in a position to dictate the outcome of
negotiations from the beginning. Against all that, the Palestinian negotiators have to come up with
some way to shift the power balance a tiny bit in their direction. Otherwise, they will sit down at the
negotiating table powerless. And then, why should they bother to talk at all?
So against all of Israel’s preconditions they’ve come up with this one, relatively minor precondition of
their own: freezing expansion of the settlements immediately, which means only that Israel should
begin complying with international law. Full compliance with Article 47 of the Fourth Geneva
Convention would mean removing all the quarter-million or so Jewish settlers from the occupied
territories, as Tony Judt recently pointed out. However, as Judt noted, Netanyahu has made it
painfully clear that the settlements will stay: “His government has no intention of recognizing
international law or opinion with respect to Israel’s land-grab in “Judea and Samaria.”
That makes it all the more important for the Israelis to find some way to avoid direct talks with the
Palestinians while keeping up their image as the innocent underdogs. Hence, as Barak said quite
plainly, they will resist two-way talks with the Palestinians and demand a regional peace conference --
which can be dragged on for years, with the settlement issue lost amid the vast complexities of
regional matters, while the settlements themselves continue to grow quite unnaturally. Thank you, Mr.
Defense Minister, for that rare moment of honesty.
Ira Chernus, a Professor of Religious Studies at the University of Colorado at Boulder, is the author
of American Nonviolence: The History of an Idea and Monsters To Destroy: The Neoconservative
War on Terror and Sin. He can be contacted at chernus@colorado.edu.
Published on Wednesday, June 24, 2009 by The Baltimore Sun
What Happened to the Crackdown on Executive Pay?
by Chuck Collins & Sam Pizzigati
Last February, amid public anger over millions in bonuses at bailed-out insurance giant AIG, our top
national political leaders rushed to express their outrage - and even took some steps to place a lid on
over-the-top executive pay.
That lid has now come off.
Treasury Secretary Timothy Geithner, with his just-released rules and proposals on executive pay,
has essentially turned the specific executive pay limits that President Barack Obama announced and
Congress legislated this past winter into mushy prescriptions that pose no real threat to the
windfalls to which CEOs have so thoroughly become accustomed.
Remember that $500,000 "cap" on executive compensation that the White House announced back in
February? That maximum has now become a minimum. Under the new Treasury rules, a new federal
pay czar will "automatically approve" any paycheck from a troubled enterprise like AIG that doesn't
top half a million - and even allow with that paycheck "additional compensation paid in the form of long-
term restricted stock."
None of this backpedaling on executive pay reform should surprise us. Ever since the early 1980s,
the years when pay for power suits first started pirouetting up, up and away, the pattern has
become depressingly familiar. A CEO walks off with a windfall. A Wall Street highflyer hits an
unimaginably massive jackpot. Editorial writers tut-tut. News magazines run cover stories about
corporate greed. Lawmakers hold hearings and earnestly insist on "pay for performance."
And nothing changes. The outrages just keep getting more outrageous.
Two decades ago, a commentator labeled Warner Communications CEO Steve Ross the "prince of
pay." Mr. Ross was averaging, in the 1980s, all of $16 million a year.
In 1993, Walt Disney CEO Michael Eisner took home $203 million. An outraged Business Week called
that sum the most any CEO "has made in a single year - or probably in an entire career in the history
of American business."
Four years later, Mr. Eisner took home even more. He cashed out a stash of stock options and
cleared $565 million, the "biggest payday for an executive in history," The Washington Post
exclaimed.
These days, that $565 million payday almost seems ordinary. In 2007, the financial world's top 50
hedge fund managers averaged $581 million each.
We need to end, and soon, this endless escalation of what our power suits get to stuff in their
pockets. We simply can't afford to continue down the economic road we've been traveling.
Outrageously huge rewards, the economic meltdown of the past year has made perfectly plain, have
no redeeming social value. They serve only to create incentives for outrageous behavior. We need to
start discouraging that behavior - and we can. The best place to start: the federal tax code.
Right now, our tax code actually encourages excessive executive pay. The more companies shell out in
executive bonuses and stock awards, for instance, the more they can deduct off their taxes.
Consider, for instance, Lockheed Martin, a company that feeds almost exclusively off government
contracts. Lockheed recently announced that its CEO took home $26.5 million in 2008. Under current
law, almost all of that $26.5 million qualifies as a tax deduction for the company.
One member of Congress, Rep. Barbara Lee from California, is moving to end taxpayer subsidies for
excessive executive pay. Ms. Lee has introduced legislation, the Income Equity Act, which denies
corporations tax deductions on any executive compensation that runs over $500,000 or 25 times the
pay of a company's lowest-wage worker.
Enacting this legislation, says Ms. Lee, "would discourage skyrocketing pay at the top and encourage
companies to raise the pay of workers at the bottom."
That pay at the bottom desperately needs raising. Average Americans today, after adjusting for
inflation, are making less in weekly wages than they made back in the 1970s.
And that's no accident. For three decades now, America's corporate aristocrats have "performed" -
and pocketed personal fortunes - by attacking the well-being of average Americans. Over those
years, they've downsized workers and outsourced jobs. They've gutted pensions and benefits.
They've hollowed out our middle class.
We need to start heading in a different direction. And quick.
© 2009 The Baltimore Sun
Chuck Collins is a senior scholar at the Institute for Policy Studies in its Boston office, where he
directs the Program on Inequality and the Common Good. Sam Pizzigati, an Institute associate fellow
who lives in Kensington, edits "Too Much," an online weekly on excess and inequality. They are co-
authors of "Executive Excess," a yearly report on CEO pay.
Published on Wednesday, June 24, 2009 by Creators Syndicate
Today's Perpetrators of Gas Pump Thievery
by Jim Hightower
Like a Fourth of July crescendo of fireworks, our gasoline prices are rising higher and higher. While
this is tough on consumers, we're assured by a covey of tongue-clucking industry analysts that
nothing can be done about it, for it's simply the law of supply and demand in action - so suck it up, and
pay up.
But hold your BPExxonMobilShellChevron horses right there. Supply and demand? The supply of
crude oil has risen this year to its highest level in nearly two decades, even while the demand for
gasoline has dropped dramatically, having fallen this month to a 10-year low. Let's see - supply up,
demand down. That's a classic market formula for cheaper prices at the pump. Yet our prices have
steadily moved up, rising by two-thirds since the beginning of the year (and by 60 cents a gallon in
the past two months alone).
What's going on here is not the "magic of the marketplace," but some hocus-pocus by brand-name
dealers. What might surprise you, though, is that the wheeler-dealers now jacking up our pump prices
don't operate under the BPExxonMobilShellChevron brands - but the logos of Goldman Sachs,
Morgan Stanley and other Wall Street traders that have been placing vast, unregulated, secretive
bets on the future price of oil. They're playing an electronic casino game in a global "dark market" of
exotic derivatives and credit swaps.
If this sounds vaguely familiar to you, it's because this is the same game that Wall Street played
with subprime mortgages, leading to the present crash of our economy. And, yes, these are the exact
same banksters that you and I are presently bailing out with our trillions of tax dollars.
Yet, there they go again. By pooling money from sheltered hedge funds, sovereign state funds,
offshore accounts and other super-wealthy investors, speculators like Goldman and Morgan have
quietly been buying trillions of dollars worth of oil derivatives - which essentially are bets that oil
prices will rise to a certain level by a certain date.
Unlike those investors who actually purchase contracts for future delivery of oil, there is no limit on
how much money these gamblers can put into the oil market. Nor do they have to report to anyone
how much they have bet, even though their massive infusion of money is totally and artificially
distorting the real value of petroleum.
As CNBC television's top energy correspondent, Sharon Epperson, reported last month, "It's this
money flow - rather than the fundamental supply-demand data - that's driving oil prices higher."
Why is this allowed? Because the Commodity Futures' Modernization Act of 2000 included a
provision that was quietly tucked into the law by then-Sen. Phil Gramm, R-Texas, specifically
prohibiting any regulation of such commodity-based derivatives. Among the enthusiastic backers of
this legalized thievery were Robert Rubin, the Wall Streeter who was Bill Clinton's treasury
secretary, and his protege, Larry Summers, who is now Barack Obama's chief economic advisor.
This bipartisan cabal created a speculative mechanism that's presently sucking money out of your
pocket with every gallon of gas you pump. Meanwhile, every dollar that Goldman, Morgan and the rest
use to inflate oil prices is a dollar they are not investing in real economic activity that could create
middle-class jobs.
Of course, Wall Street culprits are trying to keep their involvement hush-hush. When a McClatchy
newspaper reporter approached Goldman Sachs about it, the response was terse: "Goldman Sachs
declines to comment for your story."
As Woody Guthrie wrote in a song about outlaws: "Some'll rob you with a six-gun/Some with a
fountain pen." It's time to regulate Wall Street's gas-pump thievery - and to put a few of the
perpetrators in jail.
© 2009 Creators Syndicate
National radio commentator, writer, public speaker, and author of the book, Swim Against The
Current: Even A Dead Fish Can Go With The Flow , Jim Hightower has spent three decades battling
the Powers That Be on behalf of the Powers That Ought To Be - consumers, working families,
environmentalists, small businesses, and just-plain-folks.
________________________________________
Article printed from www.CommonDreams.org
URL to article: http://www.commondreams.org/view/2009/06/24-7
Published on Wednesday, June 24, 2009 by TruthDig.com
Foreclosure Fiasco
by Robert Scheer
It's not working. The Bush-Obama strategy of throwing trillions at the banks to solve the mortgage
crisis is a huge bust. The financial moguls, while tickled pink to have $1.25 trillion in toxic assets
covered by the feds, along with hundreds of billions in direct handouts, are not using that money to
turn around the free fall in housing foreclosures.
As The Wall Street Journal reported Tuesday, "The Mortgage Bankers Association cut its forecast
of home-mortgage lending this year by 27% amid deflating hopes for a boom in refinancing." The
same association said that the total refinancing under the administration's much ballyhooed Home
Affordable Refinance Program is "very low."
Aside from a tight mortgage market, the problem in preventing foreclosures has to do with
homeowners losing their jobs. Here again the administration, continuing the Bush strategy, is working
the wrong end of the problem. Although President Obama was wise enough to at least launch a job
stimulus program, a far greater amount of federal funding benefits Wall Street as opposed to Main
Street.
State and local governments have been forced into draconian budget cuts, firing workers who are
among the most reliable in making their mortgage payments-when they have jobs. Yet the Obama
administration won't spend even a small fraction of what it has wasted on the banks to cover state
shortfalls.
California couldn't get the White House to guarantee $5.5 billion in short-term notes to avert severe
cuts in state and local payrolls, from prison guards to schoolteachers. Compare that with the $50
billion already given to Citigroup, plus an astounding $300 billion to guarantee that institution's toxic
assets. Citigroup benefits from being a bank "too big to fail," although through its irresponsible
actions to get that large it did as much as any company to cause this mess.
How big a mess? According to the Federal Reserve's most recent report, seven straight quarters of
declining household wealth have left Americans $14 trillion poorer. Many who thought they were
middle class have now joined the ranks of the poor. Food banks are strapped and welfare rolls are
dramatically on the rise, as the WSJ reports, with a 27 percent year-to-year increase in Oregon, 23
percent in South Carolina and 10 percent in California. And you have to be very poor to get on
welfare, thanks to President Clinton's so-called welfare reform, which he signed into law before he
ramped up the radical deregulation of the financial services industry, enabling our economic downturn.
Citigroup, the prime mover for ending the sensible restraints of the Glass-Steagall Act of 1933, is
now a pathetic ward of the state. But back in the day President Clinton would tour the country with
Citigroup founder Sandy Weill touting the wonderful work that Weill and other moguls were doing to
invest in economically depressed communities. It wasn't really happening then, and now millions of
folks in those communities have seen their houses snatched from them as if they were just pieces in a
game of Monopoly that Clinton and his fat-cat buddy were playing.
Once Weill got the radical deregulation law he wanted, he issued a statement giving credit: "In
particular, we congratulate President Clinton, Treasury Secretary Larry Summers, NEC [National
Economic Council] Chairman Gene Sperling, Under Secretary of the Treasury Gary Gensler, Assistant
Treasury Secretaries Linda Robertson and Greg Baer."
Summers is now Obama's top economic adviser, Sperling has been appointed legal counselor at
Treasury, and Gensler, a former partner in Goldman Sachs, is head of the Commodity Futures
Trading Commission, which he once attempted to prevent from regulating derivatives when it was run
by Brooksley Born. Robertson worked for Summers in pushing through the Commodity Futures
Modernization Act, which freed the derivatives market from adult supervision and contained the
"Enron Loophole," permitting that company to go wild. Robertson then became the top Washington
lobbyist for Enron and was recently appointed senior adviser to Fed Chair Ben S. Bernanke. Baer
went to work as a corporate counsel for Bank of America, which announced his appointment with a
press release crediting him with having "coordinated Treasury policy" during the Clinton years in
getting Glass-Steagall repealed. As a result of deregulation, B of A too spiraled out of control and
ended up as a beneficiary of the Treasury's welfare program.
Why was I so naive as to have expected this Democratic president to not do the bidding of the banks
when the last president from that party joined the Republicans in giving the moguls everything they
wanted? Please, Obama, prove me wrong.
© 2009 TruthDig.com
Robert Scheer is editor of Truthdig.com and a regular columnist for The San Francisco Chronicle.
Spreading the Wealth Around to the Insurance Industry & Friends
June 24, 2009 By Dean Baker
Source: Truthout
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This is the time when the excrement starts hitting the fan. The lobbyists are in overdrive, rounding
up members of Congress just like the cowboys of the Old West would bring in the herd.
The industry groups will also have their friends in the news media working overtime hyping any
possible obstacle to health care reform. And they are filling the airwaves with scary ads, warning
that people will never be able to see a doctor again if meaningful health care reform passes.
Since there are trillions of dollars at stake, the effort is understandable. The basic story is simple.
The insurance, pharmaceutical, and medical supply industries, along with the hospitals and the
American Medical Association have rigged the deck so that they get rich at the public's expense.
They have structured our health care system so that we pay more than twice as much per person as
people in other wealthy countries, even though we get worse care by many measures.
The bloat in the health care sector is projected to grow rapidly over the next decade as health care
consumes an ever larger share of the economy. The Centers for Medicare and Medicaid Services
(CMS) estimates that just the increase in health care spending over the next decade will cost us
$4.3 trillion. That is equal to a health care tax of $57,000 for an average family of four.
Who benefits from the taxpayers' generosity? CMS projects that $1.4 trillion, or $18,500 per
family will go to the hospitals. Doctors and the pharmaceutical companies are each expected to score
about $550 billion, costing families $7,300. And the insurance industry's share of GDP is projected
to rise by $360 billion, or $4,800 for an average family.
These massive transfers are not the result of the wonders of the free market. These folks are
getting money out of our pockets because their friends in Congress have rigged the deck so the
money flows from us to them. For example, the government grants the pharmaceutical industry
patent monopolies that prevent normal competition in the prescription drug market.
Unlike every other country in the world, the United States lets the drug companies use their
government-granted monopolies to charge whatever they want. As a result, we pay nearly twice as
much for our prescription drugs as people in countries like Canada and Germany.
Similarly, doctors are able to tightly control the supply of both U.S. trained physicians and the
number of doctors that can enter the country from abroad. If custodians had the same control over
the labor market for janitors, they would all be making $80,000 a year. We pay close to twice as
much for our doctors as people in other wealthy countries. The gap is especially wide for highly paid
specialists like neurosurgeons and cardiologists.
Of course the insurance industry is a total mess. They pocket more than 15 cents for every dollar
they pay out to providers. By comparison, the administrative costs of Medicare are less than 2
percent of its revenue. If the insurers ever had to compete with a publicly run insurance plan on a
level playing field, they would be blown out of the water.
We know that private insurers can't compete because we already had this experiment with the
Medicare program. When private insurers had to compete on a level playing field with the traditional
government-run plan they were almost driven from the market. That is why they got their friends in
Congress to pass Medicare Advantage. This program spreads the wealth around by giving the private
insurers a subsidy of more than 11 percent per patient.
As Congress debates health care reform we should be very clear what is going on. It is easy to
devise reforms that will reduce costs without jeopardizing the quality of care.
That is not the fight. The fight is over whether Congress will leave in place structures that will siphon
an ever larger amount of money out of taxpayers' pockets and put this money in the hands of the
insurance industry, the hospitals, the drug companies and the doctors.
Getting a robust public plan, that both individuals and employers can buy into, will be the key indicator
of whether Congress is still determined to redistribute income into the hands of the insurers, the
drug companies and the rest. A robust Medicare-type plan will not only reduce the insurance
industry's tax on our health care, it will also be able to bargain for lower prices from the drug
companies, the medical supply companies and other health care providers.
For this reason, most of the industry is united against any sort of serious public plan. Their latest
compromise is a system of small cooperative insurers that will have no bargaining power. That's a
cute joke, but it has nothing to do with health care reform.
So keep hold of your scorecard. Unless Congress creates a serious public plan, you can expect to be
hit with the largest tax increase in the history of the world - all of it going into the pockets of the
health care industry.
-- This article was published on June 22, 2009 by Truthout.
The Financial Crisis Slams Into Europe
Do Americans Realize How The Crisis Breeds Global Chaos?
March 14, 2009 By Danny Schechter
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KREMS, AUSTRIA: Obsessed as we are about our own crumbling economy, it's hard for most
Americans to see and appreciate the global nature of the crisis and how it is impacting and will impact
others throughout the world. We don't recognize how many in other countries blame the fall of their
own economies on a kind of "financial aids" born in the USA."
And even as protests spread with Britain just putting its own army on alert for fear of disruptions
this summer by anarchists with bent on class war with slogans like "burn a banker," mass
demonstrations show no sign of abating in France, Iceland, Ireland Greece and other EU countries.
People here have politicized economic issues perhaps because of a more thorough and diverse media
environment as well as an expectation that their governments have a duty to protect their people.
When I arrived in Vienna for a film forum and festival at the Danube University, I was surprised to
see merchandise and remainders marked down to flea market prices at stalls in the usual pricey
booths at an airport usually only known for pedaling luxury brands.
Some think the European Union and the Euro zone may not survive the tremors. European Commission
President Jose Manuel Barroso said on Friday. "The European Union is facing an unprecedented
situation due to the economic crisis and needs to work at different levels to restore credit flows."
He said the bloc's economy is expected to contract by 2 percent this year.
General Motors wants a bailout from European governments too with 32,000 jobs at risk.
Eastern Europe is feeling the crunch worst with its currencies reeling. Western Europe has so far
declined to come to their requests for more bailouts from Hungary, for example, once a model for
how the free market can replace Soviet bloc economics.
There are waves of protests underway in the East. Left publications report "thousands of
demonstrators in Lithuania, Latvia and Bulgaria have attacked government buildings and called on
their governments to resign as unemployment soars in Eastern Europe.
Experts predict a regional increase of 15 million to 18 million unemployed in the coming months, with
no relief as jobs for immigrants disappear in Western Europe and the United States."
Writes Mike Whitney: "The global economy is decelerating at the fastest pace on record. 40 percent
of global wealth has been wiped out. The banking system is insolvent, unemployment is soaring, tax
revenues are falling, the markets are in shock, housing is crashing, deficits are soaring, and consumer
confidence is at its lowest point in history."
When you look at some of the numbers, you can see the time bombs that are ticking away, According
to Ed Bonawitz, many countries are in deep hock, "Ireland's external debt, at US$1.8 trillion, equals
900% of the country's US$200 billion GDP. The United Kingdom's external debt of US$10.5 trillion
equals 456% of its US$2.3 trillion GDP. Switzerland's external debt of US$1.3 trillion equals 433%
of its US$300 billion GDP." Now that the credit markets are locked tight, renegotiating the terms of
these loans is virtually impossible.' U.S. Banks are said to have a loan ratio of around 26-to-1. And
European Banks have one that is around 60-to-1.
F. Wiliam Engdahl writes: "The problems in Eastern Europe which are just now emerging with full
force are, if you will, an indirect consequence of the libertine monetary policies of the Greenspan Fed
from 2002 until 2006, the period where Wall Street's asset backed securitization Ponzi Scheme
took off.
The riskiness of these eastern European loans is now coming to light as the global economic recession
in both east and west Europe is forcing western banks to pull back, refusing to renew loans or
'rollover' the credits, leaving thousands of borrowers with unpayable loan debts. The dimension of
the eastern European emerging loan crisis pales anything yet realized...
According to my well-informed City of London sources, the new concerns over bank exposures to
eastern Europe will define the next wave of the global financial crisis, one they believe could be even
more devastating than the US sub-prime securitization collapse which triggered the entire crisis of
confidence. "
Because of globalization and the interwoven nature of the world economy, what is happening there will
make things worse for us here,
Reuters reports: "A new report suggesting Eastern Europe's economic slump will drag Western
banks further into the red fanned fears that emerging economies will deepen the recession in the
West. No wonder international agencies are up in arms."
One issue that is just getting attention Europe is unregulated activity by Hedge Funds and controlling
enormous amounts of money stashed in untaxed off shore accounts. European leaders have now
agreed a tough stance on hedge funds, the highly speculative products that many blame for fuelling
instability in financial markets. Another major issue involves Swiss Banks. US tax authorities
demanded the names of 52,000 Americans banking in secret accounts to evade taxes.
Bloomberg reports: "In the past two weeks, Finance Minister Hans-Rudolf Merz said he's willing to
collect taxes on offshore accounts for the U.S., and Justice Minister Eveline Widmer-Schlumpf
offered cooperation on some cases of tax evasion.
"That's de facto abolishing banking secrecy," said Regula Staempfli, a Swiss political scientist in
Brussels."
There is also a darker dimension with reports that legitimate businesses are turning to the mafia and
organized crime gangs for the billions they need
to stay in business. Douglas Farah writes in the Counterrorism blog:
"There is strong anecdotal evidence that cartels from South America to Southeast Asia and Europe ...
are stepping in to credit breach, building relations with businessmen desperate to stay in business,
who would not normally look to the "informal" economy for a loan.
This will serve to extend the tentacles of these groups even further into the legal society and
financial structure. As (one) article notes, "Stronger organized crime means a weaker state."
A story in the Washington Post "says a new report estimated that organized crime syndicates in Italy
- including Naples's Camorra, Sicily's Cosa Nostra, Calabria's 'Ndrangheta - collect about 250 million
euros, or $315 million, from retailers every day. That is about a billion dollars every three days, or
about $122 billion a year siphoned out of a single economy. Is it any wonder Italy is a constant
economic wreck?"
If trends continue, there is apt to be more opportunities for the criminal class and more of a fusion
between so the supposedly legitimate business world and the supposedly illegitimate one.
Tony Soprano, are you paying attention?
Regulators are also monitoring missing money. Here's a headline from the Financial Times: "Lehman
Brothers' US liquidators have asked Barclays to explain what happened to an estimated $3.3bn
earmarked for bonuses and other liabilities that the UK bank received when it acquired part of the
bankrupt Wall Street company last year?
Funny business like this seems to be part of the way this business is run.
Increasingly, banking bosses are sounding like mob underbosses. Here's a quote attributed to Jimmy
Cayne, former chief of Bear Stearns about Tim Geithner who engineered the sale of his bank to JP
Morgan at a sizable loss:
"The audacity of that p- in front of the American people announcing he was deciding whether or not a
firm of this stature and this whatever was good enough to get a loan ... This guy thinks he's got a big
d-. He's got nothing, except maybe a boyfriend ... Who the f- asked you? You're not an elected
officer. You're a clerk. Believe me, you're a clerk. I want to open up on this f--r, that's all I can tell
you."
This is getting nasty. It may be time to go to the mattresses. As economies crumble and the center
doesn't hold, as poet W.H, Auden wrote, things fall apart.
News Dissector Danny Schechter is making a film based on his book PLUNDER; Investigating Our
Economic Calamity (Cosimo Books at Amazon.com) He apologizes for inaccurately quoting Karl Marx
last week because of a web hoax. Comments to Dissector@mediachannel.org
These are Obama's Wars Now
June 22, 2009 By Joshua Frank
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It's time to toss those Obama t-shirts in the trash.
Last Monday the Democrat controlled House voted 226-202 to approve a rushed $106 billion dollar
war spending bill, guaranteeing more carnage in Iraq and Afghanistan (and lately Pakistan) until
September 30, 2009, which marks the end of the budget year. The Senate voted overwhelmingly in
favor of the bill's first draft last month, with the final vote on a compromised version to occur in the
Senate sometime in the next couple of weeks.
The majority of opposition in the House came from Republicans who opposed an add-on to the bill that
would open up a $5 billion International Monetary Fund line of credit for developing countries. This
opposition in the House led Senate Majority Leader Harry Reid on Tuesday to quip, "It'll be
interesting to see what happens here. Are my Republican colleagues [in the Senate] going to join with
us to fund the troops? I hope so."
No longer can the blame for the turmoil in Iraq and Afghanistan rest at the feet of George W. Bush
alone. This is now Obama's War on Terror, fully funded and operated by the Democratic Party.
The bill that passed the House on Monday, once approved by the Senate, will not be part of the
regular defense budget as it's off the books entirely. Following the attacks on September 11, 2001,
Congress has passed similar emergency spending bills to finance US military ventures in the Middle
East. The combined "supplementals" are fast approaching $1 trillion, with 30% going to fund the war
in Afghanistan.
In addition to the latest increase in war funds, Obama is also asking for an additional $130 billion to
be added on to the defense budget for the new fiscal year starting on October 1. The president is
upholding his campaign promise to escalate the war in Afghanistan, which also means increasing the
use of remote controlled drone planes in neighboring Pakistan that are to blame for hundreds of
civilian deaths since Obama took office last January.
Despite Obama's historic (albeit rhetoric filled) speech in Cairo, the new Commander in Chief is still
not about to radically change, let alone reform, the US's long-standing role in the Middle East. A
master of his craft, Obama is simply candy coating the delivery of US imperialism in the region. Given
the lack of opposition to Obama's policies back home, it is becoming clear that he may well be more
dangerous than his predecessor when it comes to the US's motivations internationally.
Had Bush pushed for more military funds at this stage, the antiwar movement (if you can call it that)
would have been organizing opposition weeks in advance, calling out the neocons for wasting our
scarce tax dollars during a recession on a never-ending, directionless war. But since Obama's a
Democrat, a beloved one at that, mums the word.
Certainly a few progressive Democrats are dismayed by what the Obama administration is up to, but
how many of these Democrats that are upset now will be willing to break rank and oppose their party
when it matters most, like during the midterm elections coming up next year? Obama had the
majority of antiwar support shored up while he ran for the presidency, with absolutely no demands
put on his candidacy. And not surprisingly, antiwar progressives have little to show for their fawning
support.
All this begs a few questions: If not now, when exactly will Obama's policies be scrutinized with the
same veracity that Bush's were? When will the media end its love affair with Obama and hold his feet
to the fire like they did Bush once the wheels fell off the war in Iraq? When will progressives see
their issues as paramount and oppose Obama and the Democratic Party until they embrace their
concerns?
If these questions are not answered soon, we are in many more years of war and bloodshed, funded
by US taxpayers and approved by a Democrat controlled White House and Congress.
Joshua Frank is the author of Left Out! How Liberals Helped Reelect George W. Bush (Common
Courage Press, 2005), and along with Jeffrey St. Clair, the editor of Red State Rebels: Tales of
Grassroots Resistance in the Heartland, published by AK Press in July 2008.
Who Can We Bank On, Who Can We Trust, As Crisis Sharpens?
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June, 22 2009By Schechter, Danny
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Washington Seems Tethered At The Hip To Wall Street and Does It's Bidding
Can it possibly be true that the Congress can't walk and chew gum at the same time? This question is
prompted by the announcement that financial reform is being pushed back as health care becomes
the priority.
This makes me nervous for two reasons. First, it portends a long drawn out legislative battle on
health care reform with more time for industry lobbyists and the Congresspersons and Senate
persons on their payrolls to compromise away or wreck the change we so deeply need.
Second, it confirms that the lobbyists for financial institutions-the people responsible for the
collapse of our economy---have been scheming and wrangling to gut the reforms that could stop
anther economic breakdown. Reviving this industry without restructuring and re-regulating it just
guarantees another disaster down the line.
Bear in mind that that disaster is already underway despite what you may be reading about "green
shoots" and signs that a turnaround is coming because unemployment didn't go down as much as
expected-only 500,000 plus a month.
In fact, many observers see a deeper crash still coming with a depression quietly deepening, even if
most us cling to our perennial optimism and trust in the changemaker we can believe in. The
Telegraph's Ambrose Evan-Pritchard, who unfortunately has been more prescient than wrong, whines:
"Those of us who still question whether the world has purged its toxins are reduced to the same tiny
band of moaning Druids from early 2007, when we shook our heads in disbelief as the carry trade
swept Iceland to fresh madness and bankers laughed off sub-prime rot at Bear Stearns. We
learned then to thicken our skins with walnut juice, lie down in dark rooms, and dissent from Goldman
Sachs."
You may recall Dennis Kucinich asking his colleagues aloud if he was in the Congress of the United
States or the "board room of Goldman Sachs" as if the former is a wholly owned subsisidiary of the
latter. Or perhaps, there was a merger between the two in the sense that Wall Street may be down
but by more means out. It is "clawing back" its influence with a new lobbying surge which is allowing
Goldman and the big banks to pay back their TARP Money and get out from under the spectre of new
regulations, compensation limits and the like.
The Empire inside the Empire is striking back.
Meanwhile we still live with a fog of misinformation, disinformation and no information. Basic
information about monies from the Federal Reserve to Banks and financial institution has not been
disclosed. Bear in mind the Banks control the Fed-and free marketers ran the economy, not the
government.
Writes Bob Chapman of International Forecaster:
"Not one banking or Wall Street executive owned up to what really happened to cause the crisis.
They are totally lacking in honesty, integrity and decency. As it now stands we'll never know the true
inside story of what really went on. We have seen no civil or criminal charges against any of these
crooks. Not even investigations. Whatever happened to RICO.Over the past 25 years our financial
industry has descended into darkness and corruption and the people who caused it are getting away
scott free"
Wow, what an indictment! Example: do we really know the purpose or the TARP program that gave
money to banks that apparently didn't need it, but didn't say no. (The other side of giving loans to
borrowers who couldn't afford them?)
The Ritholtz blog suggests:
"It was $700 billion dollar pile of money in search of a justification for its existence.
Most people still look at TARP the wrong way. When trying to discern what the true basis of it was,
we eliminated what made no sense whatsoever, and what was left were a few strange ideas. When
you eliminate the impossible, what's left, no matter how improbable, becomes the best explanation.
What was that explanation? In Bailout Nation, we discuss the possibility that The TARP was all a giant
ruse, a Hank Paulson engineered scam to cover up the simple fact that CitiGroup (C) was teetering on
the brink of implosion. A loan just to Citi alone would have been problematic, went this line of brilliant
reasoning, so instead, we gave money to all the big banks""
Oh, that explains it.
Shamus Cooke writes on Global Research: "History will likely show that these bailouts involved the
largest transfer of wealth ever - from the working class to that small group of billionaires who own
the corporations. This fact is recognized by most people now and is such common knowledge that even
the mainstream media feels comfortable discussing it. . . matter-of-factly.
These corporations have also exerted tremendous influence in other realms of politics, working
towards destroying Obama's campaign promises of health care, job creation, civil liberties, the
Employee Free Choice Act, peace, etc.
In each case, the promised reform was gutted of its essence, and "compromise" versions of the bills
are now being discussed: instead of universal health care, we will likely be universally mandated to
purchase health insurance; instead of "job creation" we are told that the stimulus has "saved jobs"
(contrary to the evidence); while troops are "drawing down" from Iraq, the war in
Afghanistan/Pakistan is being escalated; instead of allowing workers to organize unions easier, a
compromise version â€" Employee Free Choice Act, minus card check - seems more politically
"pragmatic," etc."
At the heart of the crisis is the plight of homeowners who we know were defrauded in large
numbers, victims like the Madoff investors Yet the former are getting reimbursed to some degree,
the latter are not. Bills to help them have been killed with Matt Renner on Truthout reporting:
"A new analysis from a government watchdog group shows senators who killed off a consumer-
friendly change in law aimed at addressing the foreclosure crisis received more money in campaign
contributions from the industries their vote aided. Senators who voted against the consumer-friendly
amendment received $3.98 million from the financial industry during the 2008 election cycle, while
proponents of the bill received $2.65 million."
Could this be more corruption? Of course , but they call it politics as usual. And, that's not the
worst of it, is that foreclosures are still rising and now affecting non-subprime lenders with little
relief in sight.
Back to the banks: I have been reading complex web posts showing how the stress tests of banks
were rigged and more may be needed. I have been reading about how the unemployment figures
undercount folks out of work with the real numbers probably doubled, with minorities possibly
tripled. I have been reading essays arguing that the notion that the government is "saving jobs" is not
quantifiable with no statistical back uo.
I have been followeing the campaign to get the Federal Rserve Bank to disclose its showering of
money on financial institutions-something it refuses to do,
Who can we trust and bank on? The President wants to give us confidence but seems to be playing a
confidence game. The Banks are dissembling when they are not lying. The most trenchant critics-may
they be wrong-believe a total collapse is in the offing,
And the rest of us, mostly puzzled and paralyzed, unable to comprehend the severity of the
situation, the billions, no make that trillions, gone. How do we make sense of the game playing in State
Governments like those in California and New York a caricature of responsibility. The jobs are going
and the Banksters are still going for it, sucking up what they can in a race to the bottom.
Who can we trust? Who Can We Bank on? You tell me.
Mediachannel's News Dissector Danny Schechter is making a film based on his book PLUNDER:
Investigating Our Economic Calamity (newsdissector.com/plunder) Comments to
Dissector@mediachannel.org
How the Financial Reform Plan Protects the Status Quo
Obama's (Latest) Surrender to Wall Street
By MICHAEL HUDSON
In reaching across the aisle for Republican support – and no doubt future campaign contributions
from the financial sector Pres. Obama is morphing into Joe Lieberman. There also is a touch of Boris
Yeltsin in his sponsorship of a financial “reform” ominously similar to what advisor Larry Summers
backed in Russia – relinquishing government power to a banking elite. The Financial Regulatory Reform
proposal promotes Wall Street’s “product,” debt creation, at the expense of the economy at large,
and lets financial chieftains continue to self-regulate the debt industry – and to keep scot-free all
their gains from the past decade’s worth of fraudulent lending.
Confronting the wreckage of a debt crisis worse than any since the Great Depression, Mr. Obama has
achieved what no Republican could have: rescuing the Bush Administration’s pro-creditor policies that
fostered the Bubble Economy in the first place. “Most of the financial sector lobby community is
happy with what has emerged,” the Financial Times summarized. A spokesman for the Financial
Services Forum, a major Wall Street lobbying organization, called the proposals “careful and
balanced.”1/ With such endorsements, victims of predatory lending have good reason to worry. The
Obama plan is just the opposite from reforming the financial system along lines that progressive
Democrats and other critics have urged.
The plan’s six most fatal flaws are apparent in its preamble, which lays out a false diagnosis of the
financial problem in a way that whitewashes Wall Street (in contrast to Mr. Obama’s nice televised
populist speech giving verbal criticism to “culture of irresponsibility”). A false diagnosis must lead to
wrong-headed cures – rarely by accident. There invariably is a financial beneficiary who gains from
blind spots in a legal “reform” package.
1. Regulatory capture. Preparing the ground for future Alan Greenspan “free market” ideologues
The most serious problem is “regulatory capture”: control of the public regulatory process by the
special interests being regulated. Mr. Obama’s speech introducing his reform was forthright in
acknowledging that “some companies shop for the regulator of their choice … That is why, as part of
these reforms, we will dismantle the Office of Thrift Supervision [OTS] and close loopholes that
have allowed important institutions to cherry-pick among banking rules. We will offer only one
federal banking charter, regulated by a strengthened federal supervisor.” It was the OTS, after
all, that AIG and Washington Mutual chose as their regulator, as did GE Capital. The most
incompetent, most ideologically opposed to serious regulation, its idea of a “free market” in practice
was one free for fraud-ridden subprime lenders to do whatever they wanted.
One could go down the list of non-enforcement agencies – the Securities and Exchange Commission
(SEC) not responding to warnings about Bernie Madoff, and the most deregulatory agency of them
all: the Federal Reserve under Bubblemeister Alan Greenspan. Traditionally, the Fed has acted as
lobby for the commercial banking system and indeed for Wall Street as a whole. (Its shares are
owned by the commercial bank members of its system.) The Fed’s refusal to intervene to stop the
subprime mortgage bubble, fraudulent lending and other elements of the Greenspan Chairmanship
does not give much faith that it will take actions that will interfere with Wall Street’s money-making
at the expense of the rest of the economy. Even today, the Fed is stonewalling Congress by refusing
to release details on its $2 trillion “cash for trash” giveaway to favored Wall Street institutions.
It is supposed to be the Treasury’s role to represent the public interest. Unfortunately, appointing
Treasury Secretaries from the ranks of Wall Street management – or giving Wall Street veto power
over the nominee – undermines this mission. Elsewhere in what is supposed to be the regulatory
system of public-private checks and balances, the simple tactic of underfunding the criminal justice
system, the FBI, state and local prosecutors – or actively blocking them, as George Bush did – leaves
the economy without adequate protection against financial fraud and predatory credit. Putting the
Congressional financial committee heads up for sale to the highest campaign contributors caps the
process of transforming economic democracy into oligarchy.
Meaningful regulation should start with the premise that the right of banks to create credit out of
thin air (actually, out of strokes on a computer keyboard, as long as bankers can find borrowers to
sign IOUs) is a public utility. Mr. Obama and his Treasury do not agree. They treat credit creation as
a private Wall Street monopoly, to be regulated more in name than in practice. The result is a
Thatcherite giveaway to the banking sector – and as Tim Geithner noted, Wall Street institutions of
all stripes, from brokerage houses to automobile lenders and retail stores are now declaring
themselves “banks” in order to get government handouts to anyone who is a creditor (but nothing for
their debtors). This is part of the New Class War that the Bush-Obama administration has sponsored
to polarize the economy between creditors and debtors.
The politically astute way to deregulate a public utility – especially in the wake of a financial crisis
that has much of the population up in arms – is to shed crocodile tears over Wall Street’s “culture of
irresponsibility,” as Mr. Obama did on Wednesday, and then claim that you are “centralizing”
regulation to make it stronger rather than weaker. If you are going to block future bank regulation,
of course you promise that your act will provide greater public oversight. Mr. Obama has tapped the
Federal Reserve for this role. But this is precisely what exacerbated the Greenspan Bubble.
The deregulation-by-centralization ploy peaked when Pres. George W. Bush used it to nullify
attempts by state attorney generals to prosecute Countrywide Financial, Washington Mutual,
Citibank and other financial crooks as criminal enterprises for making fraudulent subprime mortgage
loans. The ruse Mr. Bush used to block their lawsuits was an obscure small-print rule from the 1864
National Bank Act giving Washington the power to overrule local states in bringing criminal charges.
The motivation for this Civil War law was clear enough: Local governments and their courts tended to
be venal and corrupt. Washington asserted its oversight so as to prosecute “wildcat banking” in an
era when bankers issued their own bank notes, many of which were worth much less than their face
value when their holders tried to spend them.
Pres. Bush turned this law on its head, blocking eleven state AGs from prosecuting financial fraud.
Taking matters out of their hands, he assigned the complaints to the Washington national bank
regulator – who refused to prosecute, claiming that fraud was all part of America’s wonderful free
market. This has cost the U.S. economy over a trillion dollars so far. Washington has preferred to let
the banks make their fraudulent loans, and then pay them in full (along with the financial companies
they’ve victimized, but not the personal debtors of course) for their bad loans that defaulted, so as
to “save the system.”
Mr. Obama’s reform does not propose repealing or qualifying this clause of the National Bank Act so
as to permit any prosecutor to prosecute (but not to allow prosecutions of financial fraud to be
blocked). Placing regulatory power in the Fed has the potential to annull any serious fraud
prosecution. This is the Robert Rubin and Larry Summers-style free market – free for criminalized
finance to proceed unchecked. And if Mr. Summers is to become the next Fed Chairman … well, you
can guess where this will lead on the regulation/deregulatory spectrum between creditors and
debtors!
2. Failure to give meaningful teeth to fraud reduction
Sound regulations against fraud are on the books, many of them from the New Deal. But as the
Bubble Economy saw levels of financial fraud unprecedented since the 1920s, officials who wanted to
prevent abuses found their departments un-funded. Mr. Obama’s proposal fails to address this
problem. “There are … millions of Americans who signed contracts they did not always understand
offered by lenders who did not always tell the truth,” he acknowledged in introducing his plan on
June 17. Mr. Obama promised “enforcement will be the rule, not the exception.” But where is the
funding for the FBI’s criminal fraud division? Where is effective consumer protection from insurance
companies that don’t pay, from crooked contractors and mortgage companies using property
appraisers, lawyers and collection agencies, or from stockbrokers packaging junk mortgages into
junk securities? They’ve been given a fortune in recent years – and can keep it to set themselves up
to make yet a new killing. It looks as if as little will be done to financial fraud as will be done to the
Guantanamo torturers and the high-ups who condoned their actions.
Much attention has been given to the Consumer Financial Products Agency, whose role has been
defined largely by Elizabeth Warren of the Harvard Law School. Its main aim is to enforce truth-in-
lending laws on credit-card companies and mortgage lenders. (Weren’t these laws already on the
books?) This is progress, but surely much more is needed. One way to make credit-card rates more
economic would be for the government to provide its own rival service. After all, credit cards have
become a major form of payment today. Isn’t electronic payment really a public utility? The
difference is that unlike electric and gas utilities or railroads, there is no regulation to keep fees in
line with economically necessary basic costs to the card issuer. It is fine to hear that one finally will
be able to read clearly how much one is being exploited. But why not stop the exploitation in the first
place?
Republicans may simply try to make the Consumer Financial Products Agency only “advisory,” without
real regulatory power. So even if Congress doesn’t kill the proposal, Mr. Obama doesn’t have to
worry too much about offending his number-one donor constituency. Serious regulation over Wall
Street will have about as much effect as the corporate “social responsibility” desk to which
companies assign employees on their way out. At the Senate hearings on June 18, Sen. Robert
Menendez of New Jersey asked Mr. Geithner “whether the council that would watch over the
financial regulators has any power to do anything other than make recommendations. Mr. Geithner
[said] they may not have gotten the balance exactly right, but he didn’t want the council to have the
authority to unilaterally force changes on the regulators it oversees.”
To really protect consumers, why not counter extortionate credit-card practices by re-introducing
anti-usury laws? They were evaded initially by companies incorporating themselves in states with
“race to the bottom” laws. If Washington can override state prosecutors to prevent punishment of
financial fraud, why can’t it override such ploys by the usury industry? Here’s where centralized
federal law really should count for something.
3. Failure to reverse the shift to pro-creditor bankruptcy laws
The Obama plan allows Wall Street to keep on selling its product – debt, growing at exponential
rates – as if finance were an “industry” like manufacturing. (In this spirit the Dow Jones Industrial
Average now contains the leading financial-sector firms, although it dropped Citicorp when its shares
dropped below the $1 cutoff point.) The reality is that tax favoritism for finance and debt leveraging
is largely responsible for de-industrializing the economy. More and more income is being diverted
away from buying goods and services in order to pay lenders on debts run up in the past. What is
needed to free economies from such debt is repeal of the pro-creditor reversal that Congress
passed in 2005 in response to lobbying by the credit card and banking industry. Making it harder for
personal debtors to go bankrupt, this law blocked courts from rolling back debt to the population’s
ability to pay.
Obama’s plan fails to rectify matters. It treats the financial “services” issue in isolation from the
economy’s debt problem and general economic welfare. FDIC head Sheila Bair has proposed limiting
mortgage interest to 32 per cent of the debtor’s family income. The alternative is for home
foreclosures to continue, expropriating many recent buyers and also owners who have borrowed
against their homes to pay off their higher-interest credit-card debt or simply to maintainliving
standards that their paychecks no longer cover.
Ever since colonial times, New York State has had the Fraudulent Conveyance Law on its books. This
wise legislation states that if a bank makes a loan to a borrower without knowing how the debtor can
reasonably meet the terms of the loans out of normal income, the loan is deemed fraudulent and
therefore null and void.
4. Failure to re-introduce Glass Steagall or otherwise limit lenders “too big to fail”
In presenting his program, Mr. Obama misrepresented a major cause of the Bubble Economy. It all
seemed to be caused by the impersonal force of technology “A regulatory regime,” he claimed,
“basically crafted in the wake of a 20th century economic crisis – the Great Depression – was
overwhelmed by the speed, scope, and sophistication of a 21st century global economy.” Not exactly.
The capstone of FDR’s New Deal was the Glass-Steagall Act separating commercial banking from
investment banking. This blocked the financial conflict of interest between serving retail bank
customers and investment-bank profiteering.
One consequence of Glass-Steagall was to make the merger between Citibank and Travelers
Insurance illegal. To save Citibank officials from suffering the consequences of breaking the law –
and in the process, to open the doors to the conglomerate movement that brought down the economy
– President Clinton took the advice of Messrs. Summers and Greenspan and signed into law the repeal
of Glass-Steagall in 1999. Banks were permitted to buy insurance companies’ real estate and stock
brokers and law firms to package junk mortgages into junked collateralized debt obligations (CDOs),
cover them with junk-insurance policies written by A.I.G. and other companies taking fees for
promising to pay money they did not have, and get bailed out with trillions of dollars of “taxpayer”
money in the form of the Federal Reserve and Treasury’s “cash for trash” swaps.
5. Failure to deter credit default swaps and other “casino capitalist” gambles
On Mr. Summers’ watch under the Clintons, the word “reform” came to mean what it meant in Russia,
where he had a free hand in the 1990s: a giveaway of public assets to financial insiders. In the United
States this involved stripping away the true reforms put in place from the Progressive Era to the
New Deal. Among the excuses being cited is the need to free “innovation.” But financial innovation is
not like that of manufacturing. Instead of raising productivity to produce more with less labor (and
hence at falling prices), financial innovation aims at extracting more from debtors and from money-
management clients and funds. Under free competition, for example, modern electronic technology
enables banks to clear checks in a single day. But “financial engineering” has gone hand in hand with
political engineering, permitting the banking monopoly to adhere to old pony express schedules – and
keeping depositors’ money as “float,” that is, as an interest-free loan.
The main achievement of financial engineering has been to create mathematically opaque derivatives.
As no less a speculator than George Soros has noted: “Financial engineers claimed they were reducing
risks through geographic diversification: in fact they were increasing them by creating an agency
problem. The agents were more interested in maximizing fee income than in protecting the interests
of bondholders. … Custom-made derivatives only serve to improve the profit margin of the financial
engineers designing them.” The only cure is to ban credit default swaps outright. But they have
become Wall Street’s leading profit center. Mr. Obama’s reform does not interfere with that cash
cow.
As for the “technology” of credit evaluation, modern web searching should enable any creditor or
hapless buyer of packaged bank mortgages to check the estimated price of any home or building on-
line – or any credit reporting score on individuals, for that matter. Banks have no interest in doing this
when it interferes with their rip-offs. “We’ve seen a system that allowed lenders to profit by
providing loans to borrowers who would never repay,” Mr. Obama explained, “because the lender
offloaded the loan, and the consequences, to someone else.” Much of today’s institutionalized financial
irresponsibility indeed stems from the fact that banks today no longer hold the mortgages they
originated. Instead, they “offloadi” their loans and give bonuses to officers based on their loan
volume without any consideration for loan quality or reality. It used to be
the mob whacked Michael Jackson they are giving him a funeral at mob owned Staples center. See
how nice they are to him after they robbed and killed him.
I saw the movie Public Enemy today. Notice at the end of the film the cop who got John Dillinger died
a few years later from an alleged suicide. Same thing happened to the cop who killed Harvey Milk.
The CIA should round up Roberto Micheletti, and the elites in Honduras and deport them all to Sicily.
They took over Honduras to have something to mess with. Look what Berlosconi had done for the mob
in italy. An ever shrinking economy even with all the money that pours in from mob criminal activities.
I've tried to educate the gangsters on economics but this take over of Honduras indicates they
havn't learned a thing. The solution to ending poverty is to redistribute wealth downward. Honduras
has 70% poverty. They know with such poverty trickle down policies would never receive democratic
support so they are required to maintain mafia control of all institutions to preserve the status quo.
Hillary Clinton, speaking on behalf of the imperial mafia, has supported the over throw of democracy
and the continued impoverishment of the people of Honduras. This coup was carried out not for the
benefit of the people. It was to prevent democracy and has been supported by the US. Mafia (FOX)
news supports mafia run tyranny in Honduras. They're control freaks. They impoverished over a
billion people in SE Asia for ideological reasons. Thats like driving three times the population of the
US into poverty because they wanted to do their own thing. Ignorant sick demented white trash
mobsters.
Michael Milkin steals billions from investors but gets a slap on the wrists because he is jewish.
Maddof also jewish, steals from the jews and gets 150 years
The gangsters need to get out of Honduras. We have enough bananas. After the gangsters
intentionally impoverished a billion people by tearing apart the planned economies in SE Asia you would
think by now they would realize they are only capable of fucking things up. But here they go again, this
time fucking up Honduras.
Now the gangsters have their boy Donald Trump saying maybe now isn't the time for national health
care. Three trillion for Iraq on behalf of the Jew sadists but not for the American people. Trump is
another corrupt ignorant mafia scum bag control freak.
Now the gangsters are going to give Michael Jacksons father money to start a record company if he
doesn't pursue an investigation of the mob murdering their son Michael. The gangsters owe me
billions. I want to produce films.
The gangsters in Hollywood want ten nominations for best picture even though they are incapable of
making one really good film. This will allow them to get off on themselves for making more shit films.
Its summer now and there isn't one great film for the whole summer. Everything the gangsters touch
turns to shit including the film business.
Obama should use the troops from Iraq to invade Honduras and restore democracy or arm Chavez
and have him invade Honduras and kick all the wops out.
The gangsters kidnapped Manuel Zelaya and shipped him off to mob controlled Costa Rica. Woody
Harrelson used to hang out in Costa Rica. I was told Harellson's father was designated mob fall guy
or something like that. The guy they replaced him with is a mobster. Micheletti, a son of immigrants
from Lombardy, Italy[1], is a member of the Liberal Party of Honduras and the owner of Spanish
social network Cielo.com. He has been named president by the National Congress of Honduras during
the 2009 Honduran political crisis and military coup d'état against president Manuel Zelaya
concerning the Honduran constitutional referendum, 2009.[4] [5] In 2008 he sought his party's
nomination to run for president in the November 2009 election, but was defeated by Vice President
Elvin Ernesto Santos. If you read Niami Kleins book, "The Shock Doctrine" you see that every time
the gangsters over throw a leftist government the people are worse of. Look at Mexico after the
gangsters installed Salinas. The standard of living of the Mexican people was cut in half. These
mobsters never learn. Were the people of Haiti better of after the CIA deposed Arastide. No. Klein
does a brilliant job illustrating the disasters the gangsters have created in Latin America and the
former Soviet Union.
I was speaking with a secretary who used to work for Allstate here in mob controlled Illinois. She
said after 20 years they have gotten the most productive years out of an employee and they are
coming into higher pay and benefits the gangsters will lay them off. I was told the same is true about
being an entertainer in Vegas. Once you gain some recognition an are able to demand a higher salary
the gangsters will lay you off. And now it appears that once you become a famous actor like heath
ledger and the gangsters are through with you they will whack you. But it appears the gangsters have
changed their ways a bit. Instead of whacking the president of Honduras they have deported him to
lovely Costa Rica. I'm not familiar with the president of Honduras but the gangsters chosen
candidates don't have a favorable track record because the mobsters are stupid insane barbarians
who only know how to fuck things up. In Honduras the Congress, courts and military are controlled by
the mob. Just like in the US. A guy who worked for the mob told me all they do is fuck people up.
There social welfare policies is a good indicator of how sick they are. This excerpt explains how the
gangsters took over Honduras. The Nicaraguan Conflict
Honduras Table of Contents
President Suazo Córdova had foreshadowed the Honduran ambivalence toward the Contras in a July
1983 letter to President Reagan, in which Suazo Córdova stated that "our people are beginning to ask
with greater vigor if it is convenient to our own interests to be so intimately linked to the interests of
the United States if we receive so little in exchange." Although 1983 and 1985 public opinion polls had
shown that a majority of Hondurans supported United States policy in Central America, there was
still a growing uneasiness over the country's role as reluctant host to Nicaraguan rebel forces. At
the height of the conflict with the Sandinista Popular Army (Ejercito Popular Sandinista--EPS), in the
mid 1980s the Contra forces reportedly totaled between 12,000 and 17,000, depending on the
source of the estimate. This force level rivaled that of the entire Honduran armed forces. This fact
and the continued close ties between Honduras and the United States made it doubtful that the
armed forces would expel the Nicaraguan rebels from Honduran territory by force. However, the
prospect of an EPS victory over the Contras, which most observers considered inevitable, raised the
disturbing prospect of a foreign armed force trapped on Honduran soil. Most Hondurans believed
that, under such circumstances, the Nicaraguans would fail to assimilate well into the Honduran
population and would resort to banditry in order to survive. Honduran politicians reflected little faith
in the willingness of the United States to assist them should events take such a negative turn. Most
believed that, following a Contra defeat, Washington would cut its losses and withdraw all support
from the group.
Continued and sharply increased United States military aid to Honduras was the counterbalance to
the prospect of United States withdrawal from the Nicaraguan conflict. For the years 1975-80, the
total aid to Honduras had been US$16.3 million. From 1981-85, the total reached US$169 million.
Meanwhile, the percentage of the military budget coming directly or indirectly from the United
States increased from 7 percent in 1980 to 76 percent in 1985.
As the Nicaraguan conflict spread, Hondurans were left to ponder the merits of the deal the armed
forces had brokered. On March 22, 1986, approximately 1,500 EPS ground troops crossed the
Honduran border and engaged Contra forces near the hamlet of Las Vegas. The EPS withdrew into
northern Nicaragua without making contact with Honduran forces. Honduran officials acknowledged
the incursion publicly, but only after United States spokespersons had trumpeted the incident as
proof of the Sandinistas' aggressive intentions toward their northern neighbor. Shortly thereafter,
the United States Congress approved US$100 million in military aid to the Contra forces. Other EPS
incursions into Honduran territory followed, notably in December 1986 and June 1987. How much
human suffering passed in the frontier region without public notice by any government remained
unknown. As in decades past, the spillover of the Nicaraguan conflict into more peaceful Honduras
demonstrated the interrelatedness of events in all of the states of Central America.
So Heath Ledger, Anna Nicole Danny Ganns and Michael Jackson all OD on the same leathal cocktail.
The mobsters don't even bother to mix it up. It would be interesting to see where the wealth of all
four will be diverted. Jackson must have made over 5 billion in his career and when he dies he owed a
half billion so I figure the ruling criminals stole most of that. His Pepsi deal was for one billion. He
probably made a few billion on records because he had the best record contract in the business and
he sold 350 million records. His teacher told me he made 1.5 million a night for a live performance.
See what you get to look forward to when you become rich and famous performance artist. In that
movie on Sinatra one of the Chicago gangsters asks the other if he thinks they should whack Sinatra.
He says no because he wants to hear him sing Chicago again.
A gangster once told me that because I have a bad back from a shit criminal jew doctor that he
could arrange for me to be put out of my misery and make it look like an accident. He wanted to help
me get rid of my back problem. The way I feel now it sounds like a good idea. The gangsters turned
Elvis into a drug addict and hasted his demise. I bet they were behind the early demise of Jackson.
They had him living out in Parump Nevada where he might have been a prisoner like Howard Hughes.
They kept Hughes locked in a Vegas Hotel. In the book "The Money and the Power" it says they
shipped him out to the Caman islands till they had his makeshift prison ready for him in Vegas and
then altered his will. They said he was on drugs. That seems to be part of the gangsters play book. I
imagine the gangsters didn't want to go through with Jackson's London tour. They had the Italian Lou
Farigno training him.
I don't think the gangsters understand entertainers. Donald trump said he firsts met Michael
Jackson before a concert and after speaking to him he didn't think Michael could ever go out and put
on a great show. He then said Michael blew him away. A few years ago Trump said if they booked
Jackson in Vegas he didn't know if he would show up. I thought that strange. Michael Jackson was
showing up for concert all his life but ego maniac mobster under estimate them because they don't
speak the gangsters language. It is required that they speak like Telly Savalis. The gangsters
whacked Danny Gans last week in the same manner. They took Michaels body off in a helicopter to
get the desired results from the autopsy. (kind of like burying John John kennedy at sea before an
autopsy)You know if you don't want to book these people you can pension them off like normal people.
When they tired of Mario Alanza because he wasn't telling them what they wanted to hear they
whacked him also. The gangsters love to exercise power and control and entertainers are good
targets because they get their money when they're dead. The gangsters have a distorted perception
of reality. It's their deluded wishful thinking. They don't want people to be free. They want to fuck
with people. They're just greedy control freaks. When Mario Alanza didn't do as he was told they
wanted him dead. The same probably was true with Danny Gans and Michael Jackson.
Sanatra sang the song "My Way". Because he was one of the boys he could get away with doing things
his way and even then he didn't always get his way. Others aren't so lucky. They are intolerant of
aberrant behavior or use it as an excuse to do whatever they want with someone. Helping people
doesn't seem to be in the gangsters play book. Whacking is. I might have said Michael was strange
but strange might be good. They tolerate Berlesconi's pacadillos. These entertainers can be given
townhouses in Malibu for retirement instead of whacking them. Julie Andrews and Glen Campbell
have retired to Malibu. Jackson could have been writing and singing for twenty more years. The
gangsters don't like old performers. Buddy Grecko, Sinatra's pianist at 80 years had to scrape
together nickles and dimes to open a hole in the wall join in cathedral city Ca. in order to have a place
to perform. The gangsters want to spend millions or nothing at all. At one time to open a club in
Malibu where retired performers who live in the area could perform a lounge act. Bugsy Siegel tried
to put a little money away for a rainy day after making millions for the mob and starting vegas. They
whacked him because he was stealing company money.
Here is how the US handles political demonstrations. They tell the would be protesters if they would
like to protest they need to take a boat to this island in the middle of the harbor called Alcatraz. On
that island they will find a barbed wire enclosure that is the designated containment area for
protesters. Then they tell them that if they chose to go there and protest they will be video taped
and there is a good chance they will get a police record that will prevent them from ever getting a
good job and their family will starve. Such is the nature of US democracy, the beacon of freedom. On
the eve of the US invasion of Iraq I drove to downtown Chicago to the Daley center and the federal
building. Not one protestor could be seen anywhere in the city. The gangsters had achieved absolute
control and intimidation.
You have Obama coming out of mob controlled U of Chicago running against a military man from mob
controlled Arizona. A military man that somehow came to own more homes than he can remember and
his running mate is from the sparsely populated, mob controlled oil producing state of Alaska. (like
cheney was from mineral rich under populated Wyoming where elections are easy to control)The oil
industry being owned and operated by gangsters for national security of course. Then the gangsters
have their Jason Bourne's across the globe assuring the correct political outcomes. The old Chicago
tribune once wrote an article that Putin was made president of Russia after he allowed the gangsters
to steal half the art in Saint Petersburg. The plot of the Bourne Supremecy is based on a true story.
Under Boris Yeltsin the mob used CIA money to buy up Russian oil leases. I do believe because of my
brilliant reporting they may have returned most of those assets to the russian people but I'm not
sure. Under Yeltsin, the Jews tried to steal much of those assets. Putin put one Jew in jail and the
other was hiding out in London.
The Jews maximize profits by moving productive enterprise off shore to low wage producers. Low
wages give them more capital to use to create asset bubbles. The profits derived from getting out
before the bubble pops maximizes their profits but leaves the real economy unable to compete in the
long run with planned economies like Germany and Japan.
Yesterday NBC, the military network, had Jew sadist, slime, Nethanyaho saying something regarding
the crackdown on riots in Iran and the apparent lack of freedom. What a joke. The jews spent three
trillion of tax payers money invading Iraq because SADDAM helped families of Palastinians who
faught for freedom. He doesn't mention how the US supported a dictator, the Shah of Iran for
decades in order to exploit its resources. The current president was one who fought for Iran
independance from US domination and exploitation. These globalization theories forced on the world
by mobsters and Jews through the IMF and world bank are designed to facilitate Jewish and
mafia control of the levers of financial power. The ideology was formented by Jews like Milton
Friedman while he was a professor at the U of Chicago and reiterated by Jew propagandists like
Thomas Friedman and jewish academics/financial leaders such as Larry Summers. But all these
people were selected for positions of prominence by the gangsters/CIA. Its in the book "Bad
Samaritans." and "The Shock Docrine".
A link to the audio version of "Bad Samaritans" is somewhere below.
The Jew media is wasting our time with stories of the Iranian election. Who cares. The Iranians
havn't learned how the mobsters practice crowd control during US sham elections. You can't get
within a mile of a convention because of barbed wire and all protesters are put in an isolated area
that is walled off with barbed wire. Such is the nature of US sham democracy orchestrated by the
imperial mafia.
American Medical Association Trying To Sink Health Care Reform Again
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First Posted: 06-11-09 01:30 AM | Updated: 06-11-09 01:51 AM
Just days before President Barack Obama is set to address the American Medical Association to
pitch its members on his vision for health care reform, the 250,000-member physician group
announced it would oppose a major component of that effort.
On Wednesday night, the New York Times reported that AMA was "letting Congress know" that it
would resist a public plan for health insurance coverage.
Politically, the revelation could be a potentially significant blow to progressive health care reform
advocates, who contend that a public option is the best way to reduce costs and increase insurance
coverage. AMA has institutional resources and the prestige to affect debates in the halls of
Congress.
Historically and philosophically, however, AMA's opposition is hardly newsworthy. Despite a lofty
reputation and the laudable commitment to universal coverage, AMA has fought almost every major
effort at health care reform of the past 70 years. The group's reputation on this matter is so
notorious that historians pinpoint it with creating the ominous sounding phrase "socialized medicine" in
the early decades of the 1900s.
"The AMA used it to mean any kind of proposal that involved an increased role for the government in
the health care system," Jonathan Oberlander, a professor of health policy at the University of
North Carolina, told NPR in a December 2007 interview. "They also used it to mean things in the
private system that they didn't like. So, at one point, HMOs were a form of socialized medicine."
Indeed, the role played by AMA throughout health care reform battles past has often been
primarily as the defender of the status quo. In 1935, fears of an AMA backlash helped persuade
Franklin Roosevelt's advisers to drop a health care article from the Social Security package -
fearful that the opposition would sink the legislation altogether.
Concerned about government restriction on and oversight over surgical activities -- not to mention
the loss of physician income -- the group deployed the "socialized medicine" argument to undermine
Harry Truman's effort at a national health care system years later.
In 1961, AMA organized a campaign to block Medicare. Titled "Operation Coffeecup," the effort
insisted that the government-sponsored system would lead to a varying form of totalitarianism. For a
spokesman, the group turned to Ronald Reagan, who lent his famous actor's voice to a 10-minute plus
recording.
Story continues below
"One of the traditional methods of imposing state-ism or socialism on a people has been by way of
medicine," said the then-future president. "It is very easy to disguise a medical program as a
humanitarian project. Most people are a little reluctant to oppose anything that suggests medical
care for people who possibly can't afford it."
During the most recent effort at reform - the Clinton administration's go at it in the early '90s -
AMA found itself, once again, the spoiler. The group, worried about cost-control measures, poured
$3 million into defeating Hillary Clinton's proposal. Perhaps as significantly, it lent its name (and the
prestige of its members) to the political opposition. In 1995, AMA endorsed then-House Speaker
Newt Gingrich's Medicare Preservation Act. It was interpreted, at the time, as a patently political
ploy - an effort to align with the party that held the keys to legislative power.
The same cannot be said of the American Medical Association's decision to oppose a public plan in the
current health care reform quarrel, in which the Obama White House holds the vast majority of
political power. Indeed, up until Wednesday, AMA, like most other private players, had kept its
powder dry.
So why speak up now? The group cited impossible-to-avoid policy disagreements.
"The A.M.A. does not believe that creating a public health insurance option for non-disabled
individuals under age 65 is the best way to expand health insurance coverage and lower costs," read
an organizational statement to the Senate Finance Committee. "The introduction of a new public plan
threatens to restrict patient choice by driving out private insurers, which currently provide coverage
for nearly 70 percent of Americans."
Without private insurers in the market, the statement added, "the corresponding surge in public plan
participation would likely lead to an explosion of costs that would need to be absorbed by taxpayers."
On this front as well, AMA's critics have room to scoff. Indeed, in mid-February, the Commonwealth
Fund put out a report on the most cost-effective ways to revamp the health care industry. The public
plan, it concluded, "plays a central role in harnessing markets for positive change" by lowering
premiums for many Americans by, potentially, $1,000 a year. In addition, the Commonwealth Fund
added, a public plan would help decrease the number of uninsured in the country from "an estimated
48 million in 2009 (16 percent of the U.S. population) to 4 million by 2012."
Another psycho jew from hell
AIG lawyer: Ex-top exec plundered retirement plan
NEW YORK – The former top executive of American International Group Inc. plundered an AIG
retirement program of billions of dollars because he was angry at being forced out of the company, a
lawyer for AIG told jurors Monday at the start of a civil trial.
Attorney Theodore Wells told the jury in Manhattan that former AIG Chief Executive Officer
Maurice "Hank" Greenberg improperly took $4.3 billion in stock from the company in 2005, after he
was ousted by the company amid investigations of accounting irregularities.
"Hank Greenberg was mad. He was angry," Wells said in U.S. District Court of the emotional state of
the man who, over a 35-year-career, built AIG from a small company into the world's largest
insurance provider. He said the saga is a story of "anger, betrayal and cover-up."
Wells said that Greenberg, within weeks of being forced out in mid-2005, gave the go-ahead for
tens of millions of shares to be sold from a trust fund. The fund was set up to provide incentive
bonuses to a select group of AIG management and highly compensated employees that they would
receive upon their retirement.
Wells showed the jury several clips of Greenberg speaking on videotape about the responsibilities of
the trust fund. He called it Greenberg's "videotaped confession."
Wells asked the jury to award AIG $4.276 billion and 185 million AIG shares.
Greenberg, 84, has contended through his lawyers that he had the right to sell the shares because
they were owned by Starr International, a privately held company he controlled.
Greenberg's lawyer, David Boies, told the jury in his opening statement that the shares sold by his
client did not belong to AIG.
"I disagree with a great many things that Mr. Wells said," Boies told the jury. He said a study of the
documents in the case would prove that the shares sold by Greenberg did not belong to AIG.
"Look in this case not to what people said after this lawsuit started," Boies said. "Look to what they
said and did and wrote before the lawsuit started."
Starr International was named after Cornelius Vander Starr, who created a worldwide network of
insurance companies in the early 1900s.
AIG maintains that Starr and Greenberg, his protege and successor, decided in the late 1960s to
organize the various companies under one holding company, AIG.
Starr International remained a private company and its shareholders decided in 1970 that the
amount that its shares of AIG were worth above book value of about $110 million should be used to
compensate AIG employees, AIG has said.
The embattled insurer is trying to reclaim the money from Starr it says was wrongly pocketed
through stock sales by Greenberg.
The trial relates to events that occurred long before AIG found itself under attack earlier this year
over its bonus program.
The company was roundly criticized after it accepted $182 billion in federal aid and then paid out
$165 million in bonuses to employees, including traders in the financial products unit that nearly
caused the company to collapse.
Before the jury was chosen Monday, U.S. District Judge Jed S. Rakoff said evidence in the trial
could not include information about the government bailout.
The trial featured two legal heavyweights.
Boies argued on behalf of Democratic presidential candidate Al Gore before the U.S. Supreme Court
during the disputed presidential vote in 2000. Wells was on the team of defense lawyers in 2007 for
former White House aide I. Lewis "Scooter" Libby, who was convicted of perjury, obstruction and
lying to the FBI about his role in leaking the name of a CIA operative to a reporter.
ECONOMICS
Wall Street’s Toxic Message
When the current crisis is over, the reputation of American-style capitalism will have taken a
beating—not least because of the gap between what Washington practices and what it preaches.
Disillusioned developing nations may well turn their backs on the free market, warns Nobel laureate
Joseph E. Stiglitz, posing new threats to global stability and U.S. security.
BY JOSEPH E. STIGLITZ July 2009
Illustration by Edward Sorel.
Every crisis comes to an end—and, bleak as things seem now, the current economic crisis too shall
pass. But no crisis, especially one of this severity, recedes without leaving a legacy. And among this
one’s legacies will be a worldwide battle over ideas—over what kind of economic system is likely to
deliver the greatest benefit to the most people. Nowhere is that battle raging more hotly than in the
Third World, among the 80 percent of the world’s population that lives in Asia, Latin America, and
Africa, 1.4 billion of whom subsist on less than $1.25 a day. In America, calling someone a socialist
may be nothing more than a cheap shot. In much of the world, however, the battle between capitalism
and socialism—or at least something that many Americans would label as socialism—still rages. While
there may be no winners in the current economic crisis, there are losers, and among the big losers is
support for American-style capitalism. This has consequences we’ll be living with for a long time to
come.
Joseph E. Stiglitz on the economic crisis.
Capitalist Fools, January 2009
Reversal of Fortune, November 2008
The $3 Trillion War, April 2008 (with Linda J. Bilmes)
The Economic Consequences of Mr. Bush, December 2007
The fall of the Berlin Wall, in 1989, marked the end of Communism as a viable idea. Yes, the problems
with Communism had been manifest for decades. But after 1989 it was hard for anyone to say a word
in its defense. For a while, it seemed that the defeat of Communism meant the sure victory of
capitalism, particularly in its American form. Francis Fukuyama went as far as to proclaim “the end of
history,” defining democratic market capitalism as the final stage of social development, and
declaring that all humanity was now heading in this direction. In truth, historians will mark the 20
years since 1989 as the short period of American triumphalism. With the collapse of great banks and
financial houses, and the ensuing economic turmoil and chaotic attempts at rescue, that period is over.
So, too, is the debate over “market fundamentalism,” the notion that unfettered markets, all by
themselves, can ensure economic prosperity and growth. Today only the deluded would argue that
markets are self-correcting or that we can rely on the self-interested behavior of market
participants to guarantee that everything works honestly and properly.
The economic debate takes on particular potency in the developing world. Although we in the West
tend to forget, 190 years ago one-third of the world’s gross domestic product was in China. But then,
rather suddenly, colonial exploitation and unfair trade agreements, combined with a technological
revolution in Europe and America, left the developing countries far behind, to the point where, by
1950, China’s economy constituted less than 5 percent of the world’s G.D.P. In the mid–19th century
the United Kingdom and France actually waged a war to open China to global trade. This was the
Second Opium War, so named because the West had little of value to sell to China other than drugs,
which it had been dumping into Chinese markets, with the collateral effect of causing widespread
addiction. It was an early attempt by the West to correct a balance-of-payments problem.
Colonialism left a mixed legacy in the developing world—but one clear result was the view among
people there that they had been cruelly exploited. Among many emerging leaders, Marxist theory
provided an interpretation of their experience; it suggested that exploitation was in fact the
underpinning of the capitalist system. The political independence that came to scores of colonies
after World War II did not put an end to economic colonialism. In some regions, such as Africa, the
exploitation—the extraction of natural resources and the rape of the environment, all in return for a
pittance—was obvious. Elsewhere it was more subtle. In many parts of the world, global institutions
such as the International Monetary Fund and the World Bank came to be seen as instruments of post-
colonial control. These institutions pushed market fundamentalism (“neoliberalism,” it was often
called), a notion idealized by Americans as “free and unfettered markets.” They pressed for
financial-sector deregulation, privatization, and trade liberalization.
The World Bank and the I.M.F. said they were doing all this for the benefit of the developing world.
They were backed up by teams of free-market economists, many from that cathedral of free-
market economics, the University of Chicago. In the end, the programs of “the Chicago boys” didn’t
bring the promised results. Incomes stagnated. Where there was growth, the wealth went to those
at the top. Economic crises in individual countries became ever more frequent—there have been more
than a hundred severe ones in the past 30 years alone.
Not surprisingly, people in developing countries became less and less convinced that Western help
was motivated by altruism. They suspected that the free-market rhetoric—“the Washington
consensus,” as it is known in shorthand—was just a cover for the old commercial interests. Suspicions
were reinforced by the West’s own hypocrisy. Europe and America didn’t open up their own markets
to the agricultural produce of the Third World, which was often all these poor countries had to offer.
They forced developing countries to eliminate subsidies aimed at creating new industries, even as
they provided massive subsidies to their own farmers.
Free-market ideology turned out to be an excuse for new forms of exploitation. “Privatization” meant
that foreigners could buy mines and oil fields in developing countries at low prices. It meant they
could reap large profits from monopolies and quasi-monopolies, such as in telecommunications.
“Liberalization” meant that they could get high returns on their loans—and when loans went bad, the I.
M.F. forced the socialization of the losses, meaning that the screws were put on entire populations to
pay the banks back. It meant, too, that foreign firms could wipe out nascent industries, suppressing
the development of entrepreneurial talent. While capital flowed freely, labor did not—except in the
case of the most talented individuals, who found good jobs in a global marketplace.
This picture is, obviously, painted with too broad a brush. There were always those in Asia who
resisted the Washington consensus. They put restrictions on capital flows. The giants of Asia—China
and India—managed their economies their own way, producing unprecedented growth. But elsewhere,
and especially in the countries where the World Bank and the I.M.F. held sway, things did not go well.
And everywhere, the debate over ideas continued. Even in countries that have done very well, there
is a conviction among the educated and influential that the rules of the game have not been fair. They
believe that they have done well despite the unfair rules, and they sympathize with their weaker
friends in the developing world who have not done well at all.
Among critics of American-style capitalism in the Third World, the way that America has responded
to the current economic crisis has been the last straw. During the East Asia crisis, just a decade ago,
America and the I.M.F. demanded that the affected countries cut their deficits by cutting back
expenditures—even if, as in Thailand, this contributed to a resurgence of the AIDS epidemic, or
even if, as in Indonesia, this meant curtailing food subsidies for the starving. America and the I.M.F.
forced countries to raise interest rates, in some cases to more than 50 percent. They lectured
Indonesia about being tough on its banks—and demanded that the government not bail them out.
What a terrible precedent this would set, they said, and what a terrible intervention in the Swiss-
clock mechanisms of the free market.
The contrast between the handling of the East Asia crisis and the American crisis is stark and has not
gone unnoticed. To pull America out of the hole, we are now witnessing massive increases in spending
and massive deficits, even as interest rates have been brought down to zero. Banks are being bailed
out right and left. Some of the same officials in Washington who dealt with the East Asia crisis are
now managing the response to the American crisis. Why, people in the Third World ask, is the United
States administering different medicine to itself?
Many in the developing world still smart from the hectoring they received for so many years: they
should adopt American institutions, follow our policies, engage in deregulation, open up their markets
to American banks so they could learn “good” banking practices, and (not coincidentally) sell their
firms and banks to Americans, especially at fire-sale prices during crises. Yes, Washington said, it
will be painful, but in the end you will be better for it. America sent its Treasury secretaries (from
both parties) around the planet to spread the word. In the eyes of many throughout the developing
world, the revolving door, which allows American financial leaders to move seamlessly from Wall
Street to Washington and back to Wall Street, gave them even more credibility; these men seemed
to combine the power of money and the power of politics. American financial leaders were correct in
believing that what was good for America or the world was good for financial markets, but they were
incorrect in thinking the converse, that what was good for Wall Street was good for America and the
world.
It is not so much Schadenfreude that motivates the intense scrutiny by developing countries of
America’s economic failure as it is a real need to discover what kind of economic system can work for
them in the future. Indeed, these countries have every interest in seeing a quick American recovery.
What they know is that they themselves cannot afford to do what America has done to attempt to
revive its economy. They know that even this amount of spending isn’t working very fast. They know
that the fallout from America’s downturn has moved 200 million additional people into poverty in the
span of just a few years. And they are increasingly convinced that any economic ideals America may
espouse are ideals to run from rather than embrace.
Why should we care that the world has become disillusioned with the American model of capitalism?
The ideology that we promoted has been tarnished, but perhaps it is a good thing that it may be
tarnished beyond repair. Can’t we survive—even do just as well—if not everyone adheres to the
American way?
To be sure, our influence will diminish, as we are less likely to be held up as a role model, but that
was happening in any case. America used to play a pivotal role in global capital, because others
believed that we had a special talent for managing risk and allocating financial resources. No one
thinks that now, and Asia—where much of the world’s saving occurs today—is already developing its
own financial centers. We are no longer the chief source of capital. The world’s top three banks are
now Chinese. America’s largest bank is down at the No. 5 spot.
The dollar has long been the reserve currency—countries held the dollar in order to back up
confidence in their own currencies and governments. But it has gradually dawned on central banks
around the world that the dollar may not be a good store of value. Its value has been volatile, and
declining. The massive increase in America’s indebtedness during the current crisis, combined with
the Federal Reserve Board’s massive lending, has heightened anxieties about the future of the
dollar. The Chinese have openly floated the idea of inventing some new reserve currency to replace it.
Meanwhile, the cost of dealing with the crisis is crowding out other needs. We have never been
generous in our assistance to poor countries. But matters are getting worse. In recent years, China’s
infrastructure investment in Africa has been greater than that of the World Bank and the African
Development Bank combined, and it dwarfs America’s. African countries are running to Beijing for
assistance in this crisis, not to Washington.
But my concern here is more with the realm of ideas. I worry that, as they see more clearly the flaws
in America’s economic and social system, many in the developing world will draw the wrong
conclusions. A few countries—and maybe America itself—will learn the right lessons. They will realize
that what is required for success is a regime where the roles of market and government are in
balance, and where a strong state administers effective regulations. They will realize that the power
of special interests must be curbed.
But, for many other countries, the consequences will be messier, and profoundly tragic. The former
Communist countries generally turned, after the dismal failure of their postwar system, to market
capitalism, replacing Karl Marx with Milton Friedman as their god. The new religion has not served
them well. Many countries may conclude not simply that unfettered capitalism, American-style, has
failed but that the very concept of a market economy has failed, and is indeed unworkable under any
circumstances. Old-style Communism won’t be back, but a variety of forms of excessive market
intervention will return. And these will fail. The poor suffered under market fundamentalism—we
had trickle-up economics, not trickle-down economics. But the poor will suffer again under these new
regimes, which will not deliver growth. Without growth there cannot be sustainable poverty
reduction. There has been no successful economy that has not relied heavily on markets. Poverty
feeds disaffection. The inevitable downturns, hard to manage in any case, but especially so by
governments brought to power on the basis of rage against American-style capitalism, will lead to
more poverty. The con?sequences for global stability and American security are obvious.
Joseph E. Stiglitz on the economic crisis.
Capitalist Fools, January 2009
Reversal of Fortune, November 2008
The $3 Trillion War, April 2008 (with Linda J. Bilmes)
The Economic Consequences of Mr. Bush, December 2007
There used to be a sense of shared values between America and the American-educated elites
around the world. The economic crisis has now undermined the credibility of those elites. We have
given critics who opposed America’s licentious form of capitalism ample ammunition to preach a
broader anti-market philosophy. And we keep giving them more and more ammunition. While we
committed ourselves at a recent G-20 meeting not to engage in protectionism, we put a “buy
American” provision into our own stimulus package. And then, to soften the opposition from our
European allies, we modified that provision, in effect discriminating against only poor countries.
Globalization has made us more interdependent; what happens in one part of the world affects those
in another—a fact made manifest by the contagion of our economic difficulties. To solve global
problems, there must be a sense of cooperation and trust, including a sense of shared values. That
trust was never strong, and it is weakening by the hour.
Faith in democracy is another victim. In the developing world, people look at Washington and see a
system of government that allowed Wall Street to write self-serving rules which put at risk the
entire global economy—and then, when the day of reckoning came, turned to Wall Street to manage
the recovery. They see continued re-distributions of wealth to the top of the pyramid, transparently
at the expense of ordinary citizens. They see, in short, a fundamental problem of political
accountability in the American system of democracy. After they have seen all this, it is but a short
step to conclude that something is fatally wrong, and inevitably so, with democracy itself.
The American economy will eventually recover, and so, too, up to a point, will our standing abroad.
America was for a long time the most admired country in the world, and we are still the richest. Like
it or not, our actions are subject to minute examination. Our successes are emulated. But our failures
are looked upon with scorn. Which brings me back to Francis Fukuyama. He was wrong to think that
the forces of liberal democracy and the market economy would inevitably triumph, and that there
could be no turning back. But he was not wrong to believe that democracy and market forces are
essential to a just and prosperous world. The economic crisis, created largely by America’s behavior,
has done more damage to these fundamental values than any totalitarian regime ever could have.
Perhaps it is true that the world is heading toward the end of history, but it is now sailing against the
wind, on a course we set ourselves.
Joseph E. Stiglitz, a Nobel Prize–winning economist, is a professor at Columbia University.
Corresponding with a Conservative
An email exchange on the Canada-Colombia Free Trade Agreement
June 15, 2009 By Frank Seier
and Joanne Robertson
Frank Seier's ZSpace Page
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[Note: The following email exchange took place between two Canadians (Joanne Robertson and Frank
Seier) and Conservative parliamentarian Ed Fast. Most remarkable about it is the sarcasm and
contempt shown by a politician towards constituents. During the parliamentary debates,
Conservatives showed surprise when they heard that Liberal, NDP, and Bloc politicians were receiving
letters from all over the country against the Canada-Colombia Free Trade Agreement. Campaigners
generally didn't write the Conservatives. The Conservative parliamentarian's attitude towards those
who wrote him shows why...]
June 3, 2009
From Joanne Robertson
To: Conservative MPs and Prime Minister
Honourable Prime Minister Harper and Conservative MPs:
I was shocked and dismayed to read in the Hansard transcript of the recent debate on Bill C-23, an
Act to Implement the Canada-Colombia Free Trade Agreement, that Conservative MPs (MP Ed Fast,
among others) stated that they are not aware of any public opposition to the Canada-Colombia Free
Trade Agreement (CCFTA) ). I hereby go on the public record that I am opposed to the CCFTA, and
respectfully request that your government withdraw Bill C-23 until such time as there has been an
independent human rights impact assessment done of the CCFTA.
As you are aware, the current Colombian government of President Uribe is a notorious human rights
violator, and Canada's approval of Bill C-23 would condone past violations and be seen internationally
as an endorsement of the continuation of the Uribe government's practices.
When your government entered into the CCFTA negotiations in mid-2007, it claimed that the Uribe
administration's human rights record was improving. Since that time, the human rights situation in
Colombia has deteriorated in the following ways:
1. the humanitarian crisis has worsened - there are now approximately 4 million internally displaced
persons (second only to Sudan in absolute numbers) as part of a campaign to cleanse rural land of
indigenous populations in order to make it available to transnational corporations
2. the murder of trade union leaders/activists by right-wing paramilitaries has escalated - out of
every 10 trade union leaders/members killed in the world, 7 are Colombian
3. only 3% of such murders are investigated/prosecuted by the Uribe government
4. scandals linking the Uribe administration to right-wing paramilitaries have increased - including the
recent "para-politics" scandals involving the bribery and influence-peddling by paramilitaries of
Uribista Congress members - the Uribe administration has extradited paramilitary members to
deflect public attention
5. scandals linking the Colombian Military to the extra-judicial killings of innocent civilians in order to
exaggerate the progress of Uribe's "war on drugs" efforts have increased - including the "false
positives" scandal where innocent civilians were lured into conflict areas, murdered and dressed in
guerrilla uniforms, and alleged to have been shot in an armed conflict with the Military
Prime Minister Harper, you have argued that it is ridiculous to require Colombia to "fix all its human
rights problems before Canada will engage in trade relations with it." With all due respect,
Honorable Prime Minister, as a signatory to the International Covenant on Civil and Political Rights,
international law requires Colombia to respect and protect human rights immediately, not when it is
more economically convenient for it to do so, as your government proposes with its "trickle-down
theory of economic engagement. Moreover, by rewarding a human rights violator like Colombia with a
free trade agreement, Canada throws away one of the strongest tools the international community
has to ensure compliance by recalcitrant states with international law.
This government's position on proceeding with a free-trade agreement with Colombia is inconsistent
and at odds with its past position on econimic relations with notorious human rights violators.
Colombia's record puts it in the company of countries such as Myanmar, Zimbabwe, Sudan, etc. with
whom Canada refuses to have trade relations based on their dismal human rights record. And
Canada's inability to substantively influence China's human rights behaviour, notwithstanding a
significant history of economic relations, seriously undermines the theory that it is easier to influence
human rights behaviour through economic engagement.
By approving the CCFTA and Bill C-23, Canada's internationally recognized reputation as one of the
world's staunchest supporters of human rights will be seriously tarnished. Canadian exports to
Colombia are relatively insignificant, and an free-trade agreement will not sufficiently increase trade
to justify Canada destroying its international human rights reputation. This is a bargain in which
Canada has everything to lose and nothing to gain.
Colombia will point to the CCFTA as Canada's seal of approval of the Uribe administration's policies
and practices, in order to embellish its human rights record internationally. It will use the CCFTA
approval to pressure the United States' Congress to approve a US/Colombia free-trade agreement,
which is currently stalled due to human rights concerns.
Canada's Parliamentary Standing Committee on International Trade has recommended that a human
rights impact assessment be carried out and the recommendations of that assessment be addressed
before Canada considers signing, ratifying and implementing the Canada-Colombia Free Trade
Agreement.
Honorable Prime Minister, I call on you and Conservative MPs to support the recommendations of
Parliament's Standing Committee on International Trade to conduct an independent human rights
impact assessment, and withdraw Bill C-23 until such time.
Yours truly,
Joanne Robertson
Sault Ste. Marie, ON
[Ed Fast's Reply]
From: FastE1A@parl.gc.ca
Subject: Re: Canada-Colombia Free Trade Agreement
Date: June 3, 2009
Published on Friday, June 26, 2009 by Agence France Presse
Author Naomi Klein Calls for Boycott of Israel
BILIN , West Bank - Bestselling author Naomi Klein on Friday took her call for a boycott of Israel to
the occupied West Bank village of Bilin, where she witnessed Israeli forces clashing with protesters.
Bestselling Canadian author Naomi Klein on Friday took her call for a boycott of Israel to the
occupied West Bank village of Bilin, where she witnessed Israeli forces clashing with protesters.
'Boycott is a tactic . . . we're trying to create a dynamic which was the dynamic that ultimately ended
apartheid in South Africa,' she said. (Photograph by: John Kenney, National Post)
"It's a boycott of Israeli institutions, it's a boycott of the Israeli economy," the Canadian writer told
journalists as she joined a weekly demonstration against Israel's controversial separation wall.
"Boycott is a tactic . . . we're trying to create a dynamic which was the dynamic that ultimately ended
apartheid in South Africa," said Klein, the author of "The Shock Doctrine: The Rise of Disaster
Capitalism."
"It's an extraordinarily important part of Israel's identity to be able to have the illusion of Western
normalcy," the Canadian writer and activist said.
"When that is threatened, when the rock concerts don't come, when the symphonies don't come,
when a film you really want to see doesn't play at the Jerusalem film festival . . . then it starts to
threaten the very idea of what the Israeli state is."
She briefly joined about 200 villagers and foreign activists protesting the barrier which Israel says
it needs to prevent attacks, but which Palestinians say aims at grabbing their land and undermining
the viability of their promised state.
She then watched from a safe distance as the protesters reached the fence, where Israeli forces
fired teargas and some youths responded by throwing stones at the army.
"This apartheid, this is absolutely a system of segregation," Klein said adding that Israeli troops
would never crack down as violently against Jewish protesters.
She pointed out that her visit coincided with court hearings in Quebec in a case where the villagers of
Bilin are suing two Canadian companies, accusing them of illegally building and selling homes to Israelis
on land that belongs to the village.
The plaintiffs claim that by building in the Jewish settlement of Modiin Illit, near Bilin, Green Park
International and Green Mount International are in violation of international laws that prohibit an
occupying power from transferring some of its population to the lands it occupies.
"I'm hoping and praying that Canadian courts will bring some justice to the people of Bilin," Klein said.
Her visit was also part of a promotional tour in Israel and the West Bank for "The Shock Doctrine"
which has recently been translated into Hebrew and Arabic. Klein said she would get no royalties
from sales of the Hebrew version and that the proceeds would go instead to an activist group.
The gangsters don’t want regulation that would hinder their ability to steal everything
The Root of Madoff’s Evil
EMAIL PRINT SHARE
Posted on Jul 1, 2009
AP Photo / Louis Lanzano
Bernard Madoff arrives at Manhattan federal court.
By Robert Scheer
How convenient for the judge and the media to paint Bernard Madoff as Mr. Evil, a uniquely venal
blight on an otherwise responsible financial industry in which money is handled honestly and with
transparency.
Madoff, sentenced Monday to 150 years in prison for bilking investors of billions, should be exhibit A
in why the dark world of totally unregulated private money managers and hedge funds should be
opened to the light of systematic government supervision. Instead, he is being treated as an
aberrant menace, with the danger removed once the devil incarnate, as his victims describe him, is
locked up and the key thrown away.
For goodness’ sake this was not some sort of weird outsider who flipped out, but rather a key
developer of the modern system of electronic trading and a founder and chairman of Nasdaq.
Madoff often was called upon to help write the rules on financial regulation and therefore became
quite expert at subverting them.
As Securities and Exchange Commission Inspector General H. David Kotz testified before Congress,
the inspector general’s office is looking into “[t]he extent to which the reputation and status of
Bernard Madoff, and the fact that he served on SEC Advisory Committees, participated on
securities industry boards and panels, and had social and professional relationships with SEC
officials, may have affected commission decisions regarding investigations, examinations and
inspections of his firm.”
Those relationships were close (the personal ties included the marriage of one of Madoff’s nieces to
an SEC official) and stretched out over the decades during which Madoff was a major player on Wall
Street. At the very time back in 1999 when the SEC was being formally warned that a Madoff scam
was under way, Madoff was consulting with then-SEC Chairman Arthur Levitt Jr. on regulatory
matters. When Levitt retired a year later, Madoff was quoted in the trades as paying tribute to him:
“He brought all of us to the negotiating table time and time again, on a whole host of issues, and to a
greater extent than any other SEC chairman.”
Levitt wrote in a January 2009 opinion article in The Wall Street Journal, “I knew Bernie Madoff and
had no reason to believe he was not a legitimate market maker, nor did anyone at that time know he
was acting as an adviser to outside investors.”
Nor was he required to tell anyone. And even if he had been, it’s unlikely that part of Madoff’s
business would have been looked into. In the deregulatory mania of the preceding two decades, it had
been assumed that such managers did not need regulating, and funding for the SEC kept getting cut.
As Levitt noted in the article, it would only get worse:
“Since 2002, the number of investment advisers—such as Madoff Securities—has increased by 50%.
Yet enforcement resources have been flat or even reduced. … As a result, only about 10% of
investment advisers can expect to be examined every three years, and the goal of inspecting every
adviser once every five years—laughably light oversight in its own right—has been abandoned.”
Money for proper oversight was not allocated because the prevailing ideology regarding private
investment firms—embraced by President Bill Clinton ever as fervently as President George W. Bush
would later—was the gospel of radical financial deregulation, a practice that has landed us in the
larger banking mess. As with the trading in unregulated derivatives, all of the operations of private
investor groups, such as hedge funds, were thought not to require government supervision because
these were conducted by professional financiers dealing with sophisticated investors who knew what
they were doing. If the investment went south, it was on their dime and there would be no innocent
victims.
As we saw with the collapse of AIG and now Madoff, that notion is false because private investment
contracts can involve the resources of charitable organizations and pension funds and can end up
costing the homes, savings and jobs of ordinary citizens who have no idea of which end of this arcane
stuff is up.
When Levitt worked for Clinton as head of the SEC, he teamed up with Alan Greenspan, Robert Rubin
and Lawrence Summers to destroy what remained of financial service industry regulation imposed by
President Franklin Roosevelt in response to the Great Depression. In recent years Levitt, alone
among that gang of four, has criticized that action and accepted some personal responsibility for the
subsequent financial meltdown.
He was right again when he stated in his January article: “The Madoff scandal should be a wake-up
call for more consistent, uniform, and rigorous regulation of investment advising … the final prod for
a fundamental reform of the financial regulatory structure. … ”
He gets it. Let’s hope that Congress does too and is not fooled by the argument of Wall Street
lobbyists that Madoff was a lone rotten apple now safely discarded.
The US should help over throw this mafia imposter that has taken over Honduras.
Obama's Real Message to Latin America?
The Coup in Honduras
By NIKOLAS KOZLOFF
Could the diplomatic thaw between Venezuela and the United States be coming to an abrupt end? At
the recent Summit of the Americas held in Port of Spain, Barack Obama shook Venezuelan President
Hugo Chávez’s hand and declared that he would pursue a less arrogant foreign policy towards Latin
America. Building on that good will, Venezuela and the United States agreed to restore their
ambassadors late last week. Such diplomatic overtures provided a stark contrast to the miserable
state of relations during the Bush years: just nine months ago Venezuela expelled the U.S. envoy in a
diplomatic tussle. At the time, Chávez said he kicked the U.S. ambassador out to demonstrate
solidarity with left ally Bolivia, which had also expelled a top American diplomat after accusing him of
blatant political interference in the Andean nation’s internal affairs.
Whatever goodwill existed last week however could now be undone by turbulent political events in
Honduras. Following the military coup d’etat there on Sunday, Chávez accused the U.S. of helping to
orchestrate the overthrow of Honduran President Manuel Zelaya. “Behind these soldiers are the
Honduran bourgeois, the rich who converted Honduras into a Banana Republic, into a political and
military base for North American imperialism,” Chávez thundered. The Venezuelan leader urged the
Honduran military to return Zelaya to power and even threatened military action against the coup
regime if Venezuela’s ambassador was killed or local troops entered the Venezuelan Embassy.
Reportedly, Honduran soldiers beat the ambassador and left him on the side of a road in the course
of the military coup. Tensions have ratcheted up to such an extent that Chávez has now placed his
armed forces on alert.
On the surface at least it seems unlikely that Obama would endorse an interventionist U.S. foreign
policy in Central America. Over the past few months he has gone to great lengths to “re-brand”
America in the eyes of the world as a reasonable power engaged in respectful diplomacy as opposed
to reckless unilateralism. If it were ever proven that Obama sanctioned the overthrow of a
democratically elected government this could completely undermine the U.S. President’s carefully
crafted image.
Officially, the military removed Zelaya from power on the grounds that the Honduran President had
abused his authority. On Sunday Zelaya hoped to hold a constitutional referendum which could have
allowed him to run for reelection for another four year term, a move which Honduras’ Supreme Court
and Congress declared illegal. But while the controversy over Zelaya’s constitutional referendum
certainly provided the excuse for military intervention, it’s no secret that the President was at odds
politically with the Honduran elite for the past few years and had become one of Washington’s
fiercest critics in the region.
The Rise of Zelaya
Zelaya, who sports a thick black mustache, cowboy boots and large white Stetson hat, was elected in
late 2005. At first blush he hardly seemed the type of politician to rock the boat. A landowner from
a wealthy landowning family engaged in the lumber industry, Zelaya headed the Liberal Party, one of
the two dominant political parties in Honduras. The President supported the Central American Free
Trade Agreement which eliminated trade barriers with the United States.
Despite these initial conservative leanings, Zelaya began to criticize powerful, vested interests in the
country such as the media and owners of maquiladora sweatshops which produced goods for export in
industrial free zones. Gradually he started to adopt some socially progressive policies. For example,
Zelaya instituted a 60 per cent minimum wage increase which angered the wealthy business
community. The hike in the minimum wage, Zelaya declared, would “force the business oligarchy to
start paying what is fair.” “This is a government of great social transformations, committed to the
poor,” he added. Trade unions celebrated the decision, not surprising given that Honduras is the
third poorest country in the hemisphere and 70 per cent of its people live in poverty. When private
business associations announced that they would challenge the government’s wage decree in
Honduras’ Supreme Court, Zelaya’s Labor Minister called the critics “greedy exploiters.”
In another move that must have raised eyebrows in Washington, Zelaya declared during a meeting of
Latin American and Caribbean anti-drug officials that drug consumption should be legalized to halt
violence related to smuggling. In recent years Honduras has been plagued by drug trafficking and
so-called maras or street gangs which carry out gruesome beheadings, rapes and eye gouging.
“Instead of pursuing drug traffickers, societies should invest resources in educating drug addicts
and curbing their demand,” Zelaya said. Rodolfo Zelaya, the head of a Honduran congressional
commission on drug trafficking, rejected Zelaya’s comments. He told participants at the meeting that
he was “confused and stunned by what the Honduran leader said.”
Zelaya and ALBA
Not content to stop there, Zelaya started to conduct an increasingly more independent foreign
policy. In late 2007 he traveled to Cuba, the first official trip by a Honduran president to the
Communist island in 46 years. There, Zelaya met with Raul Castro to discuss bilateral relations and
other topics of mutual interest.
But what really led Zelaya towards a political collision course with the Honduran elite was his decision
to join the Bolivarian Alternative for the Americas (known by its Spanish acronym ALBA), an alliance
of leftist Latin American and Caribbean nations headed by Chávez. The regional trade group
including Venezuela, Cuba, Nicaragua, Bolivia and Dominica seeks to counteract corporate-friendly U.
S-backed free trade schemes. Since its founding in 2004, ALBA countries have promoted joint
factories and banks, an emergency food fund, and exchanges of cheap Venezuelan oil for food,
housing, and educational investment.
In an emphatic departure from previous Honduran leaders who had been compliant vassals of the U.
S., Zelaya stated “Honduras and the Honduran people do not have to ask permission of any
imperialism to join the ALBA.” Speaking in the Honduran capital of Tegucigalpa before a crowd of
50,000 unionists, women’s groups, farmers and indigenous peoples, Chávez remarked that Venezuela
would guarantee cheap oil to Honduras for “at least 100 years.” By signing onto ALBA, Zelaya was
able to secure access to credit lines, energy and food benefits. As an act of good faith, Chávez
agreed to forgive Honduran debt to Venezuela amounting to $30 million.
Infuriating the local elite, Chávez declared that Hondurans who opposed ALBA were “sellouts.” “I
did not come here to meddle in internal affairs,” he continued, “but…I cannot explain how a Honduran
could be against Honduras joining the ALBA, the path of development, the path of integration.”
Chávez lambasted the Honduran press which he labeled pitiyanquis (little Yanqui imitators) and
“abject hand-lickers of the Yanquis.” For his part, Zelaya said “we need no one’s permission to sign
this commitment. Today we are taking a step towards becoming a government of the center-left, and
if anyone dislikes this, well just remove the word ‘center’ and keep the second one.”
It wasn’t long before private business started to attack Zelaya bitterly for moving Honduras into
Chávez’s orbit. By joining ALBA, business representatives argued, the President was endangering
free enterprise and the Central American Free Trade Agreement with the United States. Former
President Ricardo Maduro even claimed that the United States might retaliate against Honduras by
deporting Honduran migrants from the United States. “Don't bite the hand that feeds you,” Maduro
warned, alluding to Washington. Zelaya was piqued by the criticisms. “When I met with (U.S.
President) George W. Bush,” he said, “no one called me an anti-imperialist and the business community
applauded me. Now that I am meeting with the impoverished peoples of the world, they criticize me.”
Zelaya’s Letter to Obama
In September, 2008 Zelaya further strained U.S. relations by delaying accreditation of the new U.S.
ambassador out of solidarity with Bolivia and Venezuela which had just gone through diplomatic dust
ups with Washington. “We are not breaking relations with the United States,” Zelaya said. “We only
are (doing this) in solidarity with [Bolivian President] Morales, who has denounced the meddling of the
United States in Bolivia's internal affairs.” Defending his decision, Zelaya said small nations needed
to stick together. “The world powers must treat us fairly and with respect,” he stated.
In November, Zelaya hailed Obama’s election in the U.S. as “a hope for the world,” but just two
months later tensions began to emerge. In an audacious letter sent personally to Obama, Zelaya
accused the U.S. of “interventionism” and called on the new administration in Washington to respect
the principle of non-interference in the political affairs of other nations. According to Spanish news
agency EFE which saw a copy of the note, Zelaya told Obama that it wasn’t his intention to tell the U.
S. President what he should or should not do.
He then however went on to do precisely that. First of all, Zelaya brought up the issue of U.S. visas
and urged Obama to “revise the procedure by which visas are cancelled or denied to citizens of
different parts of the world as a means of pressure against those people who hold different beliefs
or ideologies which pose no threat to the U.S.”
As if that was not impudent enough, Zelaya then moved on to drug trafficking: “The legitimate
struggle against drug trafficking…should not be used as an excuse to carry out interventionist
policies in other countries.” The struggle against drug smuggling, Zelaya wrote, “should not be
divorced from a vigorous policy of controlling distribution and consumer demand in all countries, as
well as money laundering which operates through financial circuits and which involve networks within
developed countries.”
Zelaya also argued “for the urgent necessity” of revising and transforming the structure of the
United Nations and “to solve the Venezuela and Bolivia problems” through dialogue which “yields
better fruit than confrontation.” The Cuban embargo, meanwhile, “was a useless instrument” and “a
means of unjust pressure and violation of human rights.”
Run Up to June Coup
It’s unclear what Obama might have made of the audacious letter sent from the leader of a small
Central American nation. It does seem however that Zelaya became somewhat disenchanted with the
new administration in Washington. Just three months ago, the Honduran leader declined to attend a
meeting of the System for Central American Integration (known by its Spanish acronym SICA) which
would bring Central American Presidents together with U.S. Vice President Joe Biden in San José,
Costa Rica.
Both Zelaya and President Daniel Ortega of Nicaragua boycotted the meeting, viewing it as a
diplomatic affront. Nicaragua currently holds the presidency of SICA, and so the proper course of
action should have been for Biden to have Ortega hold the meeting. Sandinista economist and former
Nicaraguan Minister of Foreign Trade Alejandro Martínez Cuenca declared that the United States
had missed a vital opportunity to encourage a new era of relations with Central America by
“prioritizing personal relations with [Costa Rican President] Arias over respect for Central America's
institutional order.”
Could all of the contentious diplomatic back and forth between Tegucigalpa and Washington have
turned the Obama administration against Zelaya? In the days ahead there will surely be a lot of
attention and scrutiny paid to the role of Romeo Vasquez, a General who led the military coup against
Zelaya. Vasquez is a graduate of the notorious U.S. School of the Americas, an institution which
trained the Latin American military in torture.
Are we to believe that the United States had no role in coordinating with Vasquez and the coup
plotters? The U.S. has had longstanding military ties to the Honduran armed forces, particularly
during the Contra War in Nicaragua during the 1980s. The White House, needless to say, has
rejected claims that the U.S. played a role. The New York Times has reported claims that the
Obama administration knew that a coup was imminent and tried to persuade the military to back
down. The paper writes that it was the Honduran military which broke off discussions with American
officials. Obama himself has taken the high road, remarking “I call on all political and social actors in
Honduras to respect democratic norms [and] the rule of law…Any existing tensions and disputes
must be resolved peacefully through dialogue free from any outside interference.”
Even if the Obama administration did not play an underhanded role in this affair, the Honduran coup
highlights growing geo-political tensions in the region. In recent years, Chávez has sought to extend
his influence to smaller Central American and Caribbean nations. The Venezuelan leader shows no
intention of backing down over the Honduran coup, remarking that ALBA nations “will not recognize
any [Honduran] government that isn't Zelaya’s.”
Chávez then derided Honduras’ interim president, Roberto Micheletti. “Mr. Roberto Micheletti will
either wind up in prison or he'll need to go into exile… If they swear him in we'll overthrow him, mark
my words. Thugetti--as I'm going to refer to him from now on--you better pack your bags, because
you're either going to jail or you're going into exile. We're not going to forgive your error, you're
going to get swept out of there. We're not going to let it happen, we're going to make life impossible
for you. President Manuel Zelaya needs to retake his position as president.”
With tensions running high, heads of ALBA nations have vowed to meet in Managua to discuss the coup
in Honduras. Zelaya, who was exiled to Costa Rica from Honduras, plans to fly to Nicaragua to speak
with his colleagues. With such political unity amongst ALBA nations, Obama will have to decide what
the public U.S. posture ought to be.
Nikolas Kozloff is the author of Revolution! South America and the Rise of the New Left (Palgrave-
Macmillan, 2008) Follow his blog at senorchichero.blogspot.com
Undo the Coup
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Posted on Jun 30, 2009
By Amy Goodman
The first coup d’etat in Central America in more than a quarter-century occurred last Sunday in
Honduras. Honduran soldiers roused democratically elected President Manuel Zelaya from his bed
and flew him into exile in Costa Rica. The coup, led by the Honduran Gen. Romeo Vasquez, has been
condemned by the United States, the European Union, the United Nations, the Organization of
American States and all of Honduras’ immediate national neighbors. Mass protests have erupted on
the streets of Honduras, with reports that elements in the military loyal to Zelaya are rebelling
against the coup.
The United States has a long history of domination in the hemisphere. President Barack Obama and
Secretary of State Hillary Clinton can chart a new course, away from the dark days of military
dictatorship, repression and murder. Obama indicated such a direction when he spoke in April at the
Summit of the Americas: “[A]t times we sought to dictate our terms. But I pledge to you that we
seek an equal partnership. There is no senior partner and junior partner in our relations.”
Two who know well the history of dictated U.S. terms are Dr. Juan Almendares, a medical doctor and
award-winning human rights activist in Honduras, and the American clergyman Father Roy Bourgeois,
a priest who for years has fought to close the U.S. Army’s School of the Americas (SOA) at Fort
Benning, Ga. Both men link the coup in Honduras to the SOA.
The SOA, renamed in 2000 the Western Hemisphere Institute for Security Cooperation
(WHINSEC), is the U.S. military facility that trains Latin American soldiers. The SOA has trained
more than 60,000 soldiers, many of whom have returned home and committed human rights abuses,
torture, extrajudicial execution and massacres.
Almendares, targeted by Honduran death squads and the military, has been the victim of that
training. He talked to me from Tegucigalpa, the Honduran capital: “Most of this military have been
trained by the School of America. ... They have been guardians of the multinational business from the
United States or from other countries. ... The army in Honduras has links with very powerful people,
very rich, wealthy people who keep the poverty in the country. We are occupied by your country.”
Born in Louisiana, Bourgeois became a Catholic priest in 1972. He worked in Bolivia and was forced out
by the (SOA-trained) dictator Gen. Hugo Banzer. The assassination of Archbishop Oscar Romero and
the murders of four Catholic churchwomen in El Salvador in 1980 led him to protest where some of
the killers were trained: Fort Benning’s SOA. After six Jesuit priests, their housekeeper and her
daughter were murdered in El Salvador in 1989, Bourgeois founded SOA Watch and has built an
international movement to close the SOA.
Honduran coup leader Vasquez attended the SOA in 1976 and 1984. Air Force Gen. Luis Javier Prince
Suazo, who also participated in the coup, was trained at the SOA in 1996.
Bourgeois’ SOA Watch office is just yards from the Fort Benning gates. He has been frustrated in
recent years by increased secrecy at SOA/WHINSEC. He told me: “They are trying to present the
school as one of democracy and transparency, but we are not able to get the names of those trained
here—for over five years. However, there was a little sign of hope when the U.S. House approved an
amendment to the defense authorization bill last week that would force the school to release names
and ranks of people who train here.” The amendment still has to make it through the House-Senate
conference committee.
Bourgeois speaks with the same urgency that he has for decades. His voice is well known at Fort
Benning, where he was first arrested more than 25 years ago when he climbed a tree at night near
the barracks of Salvadoran soldiers who were training there at the time.
Bourgeois blasted a recording of the voice of Romero in his last address before he was assassinated.
The archbishop was speaking directly to Salvadoran soldiers in his country: “In the name of God, in
the name of this suffering people whose cry rises to heaven more loudly each day, I implore you, I
beg you, I order you: Stop the repression.”
Almost 30 years later, in a country bordering Romero’s El Salvador, the U.S. has a chance to change
course and support the democratic institutions of Honduras. Undo the coup.
Denis Moynihan contributed research to this column.
Amy Goodman is the host of “Democracy Now!,” a daily international TV/radio news hour airing on
more than 750 stations in North America. She is the co-author of “Standing Up to the Madness:
Ordinary Heroes in Extraordinary Times,” recently released in paperback.
© 2009 Amy Goodman
Distributed by King Features Syndicate
The gangsters are out of control
US had role in coup in Honduras?
Top News
Written by Estrella Torres / Reporter
TUESDAY, 30 JUNE 2009 00:38
TWO revolutionary leaders of Latin America, Cuba's Fidel Castro and Venezuelan president Hugo
Chavez, have accused the US government of involvement in the worsening political crisis in the
Honduras with the ouster of President Manuel Zelaya.
The United Nations Organization of American States (OAS) and the Bolivarian Alliance for the
Peoples of Our America (Alba) have also expressed their support for Zelaya and aired calls for the
restoration of the democratic government there.
“The Yankee empire has a lot to do with this. I call upon the US President to pronounce, just as we do,
that we spoke from the depths of our souls against the coup,” said Chavez in a statement issued by
the Cuban Embassy in Manila.
In his reflections, Castro said Zelaya has not infringed the law in any way, neither did he resort to
the use of force. “He [Zelaya] is the president and the general commander of the Armed Forces of
Honduras. The situation that might result from whatever occurs in that country will be a test for the
OAS and the current US administration.”
United Nations Secretary-General Ban Ki-Moon, meanwhile, called for the reinstatement of
democratically elected leaders in Honduras, led by Zelaya. He called on Hondurans “to engage
peacefully and in the spirit of reconciliation to resolve their differences.”
Ban added, “The United Nations stands ready to provide assistance in overcoming this crisis.”
The ambassadors of Venezuela and Cuba in the Philippines said the situation in Honduras remains
delicate not only for Hondurans but for foreign nationals, as well.
The Department of Foreign Affairs (DFA) said there are 220 Filipinos in Honduras, mostly working
for garment factories there.
“The situation in Honduras remains delicate as the military, known for its fascist behavior, remains in
power over the entire country,” said Cuban Ambassador to the Philippines Jorge Rey Jimenez in a
press briefing on Monday in Manila.
The two envoys also expressed concern over the kidnapping of Honduras Foreign Minister Patricia
Rodas and Cuban Ambassador to Honduras Juan Carlos Hernandez. They said the international
community does not see the real picture in Honduras as the media outlets there have been
manipulated.
Former University of the Philippines president Dr. Francisco Nemenzo said Honduras President
Manuel Zelaya had only wanted to involve the people in a move to amend the Constitution. Zelaya had
called for a referendum to ask the Hondurans if they want to change the Constitution.
Dr. Nemenzo, now president of the Philippines-Cuba Cultural and Friendship Association, said the
situation in Honduras, “only shows how precarious democracy is if it is well entrenched by the military
while its Congress and Supreme Court are dominated by oligarchies.”
He noted that in the Philippines, members of Congress, who are known supporters of President
Arroyo, want to call a constituent assembly to amend the Charter without involving the Filipino people.
“There is a big difference (with the situation in Honduras) because its Congress is not bribed by the
President to amend the Charter but instead, it is backed by oligarchs who are out of the formal social
structure,” said Nemenzo who joined the Venezuelan and Cuban envoys in expressing support for
Zelaya.
Is CIA involved in Iran's election unrest?
Observers: Bush-era CIA campaign of propaganda, disinformation on Iran could still be still active.
TEHRAN - There is a valid possibility that CIA is playing a sinister role behind the scenes to exploit
the current Iranian election protests to destabilise the country, observers said.
The CIA secret programme involves playing the media (especially websites) as well as having secret
agents on the ground in Iran, they add.
In May 2007, ABC News reported that the CIA has received secret presidential (Bush) approval to
mount a covert "black" operation to destabilize the Iranian government, citing officials in the
intelligence community.
The sources, who spoke on the condition of anonymity, said Bush has signed a "nonlethal presidential
finding" that puts into motion a CIA plan that reportedly includes a coordinated campaign of
propaganda, disinformation and manipulation of Iran's currency and international financial
transactions.
The CIA was allowed to supply communications equipment which would enable opposition groups in
Iran to work together and bypass internet censorship by the government.
The White House does not usually comment on intelligence matters.
Under the law, the CIA needs an official presidential finding to carry out such covert actions. But the
CIA is permitted to mount covert "collection" operations without a presidential finding.
Terror against Tehran
The "nonlethal" aspect of the presidential finding means CIA officers may not use deadly force in
carrying out the secret operations against Iran.
Still, some fear that even a nonlethal covert CIA program carries great risks.
As earlier reported on the Blotter on ABCNews.com, the United States has supported and
encouraged an Iranian militant group, Jundullah, that has conducted deadly raids inside Iran from
bases on the rugged Iran-Pakistan-Afghanistan "tri-border region."
US officials deny any "direct funding" of Jundullah groups but say the leader of Jundullah was in
regular contact with US officials.
Spying and funding
Reports also suggest that the so called US "National Endowment for Democracy" has been involved in
funding candidates favourable to the US in many countries.
Observers say their interference could very well include Iran in 2009.
Roxana Saberi, a US-Iranian journalist who was recently released after being charged for spying for
the US in Iran, is said to have been convicted of spying in part because she had a copy of a
confidential Iranian report on the war in Iraq.
Her lawyer, Saleh Nikbakht, said that she had copied the report "out of curiosity."
Saberi had admitted that she had copied the document two years ago but said she had not passed it
on to the Americans as the Iranian prosecutors had claimed. She had apologised, saying it had been a
mistake to take the report.
Observers say there is no reason to believe that there has been a change of CIA policy towards Iran.
Iran strikes back
Iran Wednesday said it had identified websites run by companies it said were backed by the US and
British secret services.
"We warn those who propagate riots and spread rumours that our legal action against them will cost
them dearly, especially since some of the youth of this land were killed by the thugs' action, so we
urge them to delete such material from their sites," a statement said.
"It shows the animosity of the Western media towards the Iranian people," it added.
Iran said the sites had been "identified" and were "financially and technically sponsored by Canadian
and American firms which are backed by the US and British intelligence services."
Iran on Wednesday accused some foreign media outlets of becoming the "mouthpiece of rioters."
"The presence of hundreds of foreign media (personnel) during the last election and their
observation of the existing realities alongside the successful experience in the past 30 years in
organising elections is a symbol of utter transparency in the election process," the foreign ministry
said.
"But some countries, in an uncalculated, hasty and rude reaction towards the illegal gatherings, have
supported them contrary to democratic principles and regulations and have become the mouthpiece
of the rioters' movement."
The ministry also warned the foreign media to change its "approach towards Iranian events."
"...The chess players will monitor their behaviour and at the appropriate time, without any doubt,
checkmate the enemies of Iran's national unity."
The statement carried by the ISNA news agency was directed to "interfering comments by some
Western countries, officials and media."
Twitter takes part
The US government took the unusual step of asking Twitter to delay a planned maintenance outage
because of its use as a communications tool by Iranians following their disputed election, a US senior
official said Tuesday.
The request highlighted the Obama administration's Web-savvy and the power of social networks
such as Twitter and Facebook in organizing protests over the election results in the face of a ban by
Iranian authorities on other media.
But it also seemed to run counter to Obama's public efforts not to appear to be meddling in Iran's
internal affairs.
A State Department official in Washington said Twitter had been asked to delay Monday's shutdown
because it was being used as "an important means of communications" in Iran.
The official told reporters on condition of anonymity that Twitter was all the more important because
the Iranian government had shut down other websites, cell phones, and newspapers.
Twitter co-founder Biz Stone, in a blog post, noted the State Department request but said the
decision to delay the outage was made with Twitter's network provider, NTT America.
State Department spokesman Ian Kelly said meanwhile that the United States does not intend to
meddle in Iranian politics. "We don't want to be seen as interfering," he said.
"We're of course monitoring the situation through a number of different media, including social media
networks like Facebook and Twitter," he said.
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Judges Not For Sale
In a 5-4 decision yesterday, the Supreme Court ruled "that elected judges must step aside from
cases when large campaign contributions from interested parties create the appearance of bias."
The decision, "the first to say the Constitution's due process clause has a role to play in policing the
role of money in judicial elections," found that excessive campaign contributions can pose "an
unconstitutional threat to a fair trial." In his opinion for the majority, Justice Anthony Kennedy wrote,
"Not every campaign contribution by a litigant or attorney creates a probability of bias that requires
a judge's recusal, but this is an exceptional case." The case in question, which was the basis for a
John Grisham legal thriller, involves America's fourth largest coal company, Massey Energy, and its
CEO, Don Blankenship. After Massey lost a $50 million verdict in a fraud lawsuit brought by Hugh
Caperton and his small, independent Harman Mining Co., Massey appealed the decision. "As the case
moved toward appeals, Blankenship contributed $3 million to help unseat incumbent Democratic state
supreme court Judge Warren McGraw in his race against a Republican, Charleston lawyer Brent
Benjamin -- 60 percent of the total spent in favor of Benjamin and against McGraw." Benjamin won
the election and three years later, when Massey's appeal reached the West Virginia Supreme Court,
he cast a crucial vote overturning the $50 million verdict. "I remember looking up at a judge who had
just gotten $3 million...to be elected and thinking, 'How in the world is this fair?'" said Caperton.
Noting Benjamin's refusal to recuse himself, despite repeated requests, Caperton took his case to
the Supreme Court. Now, for the first time, the court has "set down a rule for disqualifications
arising from money judges receive as they campaign for election to the bench."
'A SERIOUS RISK OF ACTUAL BIAS': "Just as no man is allowed to be a judge in his own cause,
similar fears of bias can arise when -- without the consent of the other parties -- a man chooses the
judge in his own cause," wrote Kennedy in the majority's opinion, who was joined by Justices Stephen
Breyer, Ruth Bader Ginsburg, David Souter, and John Paul Stevens. "There is a serious risk of actual
bias -- based on objective and reasonable perceptions -- when a person with a personal stake in a
particular case had a significant and disproportionate influence in placing the judge on the case." But
all four of the Court's most conservative members voted that there is no problem with a wealthy
businessman buying a judge. In a dissent joined by conservative justices Antonin Scalia, Clarence
Thomas, and Samuel Alito, Chief Justice John Roberts argued that this decision would encourage
"groundless" charges that other "judges are biased." "The end result will do far more to erode
public confidence in judicial impartiality than an isolated failure to recuse in a particular case,"
Roberts argued . The Center for American Progress Action Fund's Ian Millhiser pointed out that,
while "the result in this narrowly-decided case hinges on the vote of retiring Justice David Souter, it
appears that Supreme Court nominee Judge Sonia Sotomayor agrees with Souter that judges cannot
be for sale." In a 1996 speech, Sotomayor argued that "[w]e would never condone private gifts to
judges about to decide a case implicating the gift-givers' interests," yet "our system of election
financing permits extensive private, including corporate, financing of candidates' campaigns, raising
again and again the question what the difference is between contributions and bribes."
MONEY IN JUDICIAL ELECTIONS: The risk of the wealthy influencing justice through campaign
contributions has become graver in recent years. Currently, 39 states "elect at least some of their
judges, and election campaigns, particularly for state supreme courts, have in recent years grown
increasingly expensive and nasty." The Conference of Chief Justices, a national group of top state
judges, has found that 60 percent of all state appellate judges and 80 percent of trial judges face
election, which the organization called "high-dollar free-for-alls" in a neutral brief submitted in
Caperton v. Massey. "From 2000 to 2007, $168 million was spent on contested elections for states'
highest courts, up from $87 million from 1990 to 1999," according to the Brennan Center for Justice.
The New York Times reports that "elected judges routinely accept contributions from lawyers and
litigants who appear before them, and they seldom disqualify themselves for cases involving donors."
Perhaps the most prominent critic of money in the judicial selection process is former Supreme Court
Justice Sandra Day O'Connor, who sat in the courtroom during oral arguments in the Caperton case.
"The money and vitriol being put into judicial campaigns has reached new and dangerous levels," said
O'Connor in April. In terms of vitriol, it's hard to find a more stunning example than Blankenship's $3
million attack on Judge Warren McGraw.
BLANKENSHIP'S DIRTY POLITICS: As the CEO of one of the top coal companies in the country,
Blankenship, who sits on the boards of the US Chamber of Commerce and the National Mining
Association, is no stranger to getting his hands dirty in politics. Though Blankenship donated only
$1,000 to Brent Benjamin's campaign in 2004, the $3 million he spent to influence the election was
mostly dedicated to "television advertisements aimed at defeating the incumbent justice, Warren R.
McGraw." Under the auspices of his "And For The Sake of the Kids" PAC, Blankenship accused
McGraw of voting to "free an incarcerated child rapist, and of allowing that rapist to work in a public
school." McGraw lost the race and afterwards described the damage that Blankenship had done to
his reputation. "They say our court set a child molester loose in our schools. It's absolutely untrue.
I'm embarrassed to go out in public. They've absolutely destroyed me," McGraw told the New York
Times. Blankenship has no qualms about demonizing his political opponents. Last year, he compared his
critics to "enemies" like Osama Bin Laden, adding that "it is a great pleasure for me to be criticized
by the communists and the atheists of the Charleston Gazette." Previously, he was caught on tape
threatening to shoot an ABC reporter and then assaulting him.
CIVIL RIGHTS -- SUPREME COURT DENIES CHALLENGE TO 'DON'T ASK, DON'T TELL': The
Supreme Court yesterday refused to hear a challenge to an 1st Circuit appellate court decision on
the military's "Don't Ask, Don't Tell" (DADT) policy, which had found that courts must defer to
Congress on federal statutes regarding military affairs. The case was filed by "James E. Pietrangelo
II, a former Army captain who was discharged from the military for being gay." But now, the
Supreme Court's move "effectively leave[s] it to" Congress and the Obama administration "to
resolve the long-standing controversial issue." Indeed, Rep. Rush Holt (D-NJ), co-sponsor of
legislation to overturn DADT, said on MSNBC last night that "one way or another [a change] is going
to come." The president and Congress have been slow to act on the repeal, even as pressure to
reverse the ban is gaining momentum. A new poll shows that nearly 70 percent of Americans support
openly gay men and women being allowed to serve in the U.S. military. But the poll also shows a 12-
point increase in the percentage of conservatives who said they oppose the policy, from 46 percent in
November 2004 to 58 percent now. Obama's new nominee for Secretary of the Army, James
McHugh, has also hinted that he supports a repeal of the ban.
June 15, 2009
Appointment in Yekaterinburg
The Ending of America's Financial-Military Empire
By MICHAEL HUDSON
The city of Yekaterinburg, Russia’s largest east of the Urals, may become known not only as the end
of the road for the tsars but of American hegemony too; as the place not only where US U-2 pilot
Gary Powers was shot down in 1960, but where the US-centered international financial order was
brought to ground.
Challenging America is the prime focus of extended meetings in Yekaterinburg, Russia (formerly
Sverdlovsk) today and tomorrow (June 15-16) for Chinese President Hu Jintao, Russian President
Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO).
The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with
observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for
trade discussions among the so-called BRIC nations --Brazil, Russia, India and China.
The attendees have assured American diplomats that it is not their aim to dismantle the financial and
military empire of the United States. They simply want to discuss mutual aid – but in a way that has no
role for the United States, for NATO or for the US dollar as a vehicle for trade. US diplomats may
well ask what this really means, if not a move to make US hegemony obsolete. After all, that is what a
multipolar world means. For starters, in 2005 the SCO asked Washington to set a timeline to
withdraw from its military bases in Central Asia. Two years later the SCO countries formally aligned
themselves with the former CIS republics belonging to the Collective Security Treaty Organization
(CSTO), established in 2002 as a counterweight to NATO.
Yet the Yekaterinburg meeting has elicited only a collective yawn from the US and even European
press despite its agenda -- nothing less than the replacement of the global dollar standard with a
new financial and military defense system. A Council on Foreign Relations spokesman has said he
hardly can imagine that Russia and China can overcome their geopolitical rivalry, suggesting that
America can use the divide-and-conquer that Britain used so deftly for many centuries in
fragmenting foreign opposition to its own empire. But George W. Bush (“I’m a uniter, not a divider”)
built on the Clinton administration’s legacy in driving Russia, China and their neighbors to find a
common ground when it comes to finding an alternative to the dollar and hence to the US ability to run
balance-of-payments deficits ad infinitum.
What may prove to be the last rites of American hegemony began already in April at the G-20
conference, and became even more explicit at the St. Petersburg International Economic Forum on
June 5, when Mr. Medvedev called for China, Russia and India to “build an increasingly multipolar
world order.” What this means in plain English is: We have reached our limit in subsidizing the United
States’ military encirclement of Eurasia while also allowing the US to appropriate our exports,
companies, stocks and real estate in exchange for paper money of questionable worth.
The artificially maintained unipolar system,” Mr. Medvedev spelled out, is based on “one big center of
consumption, financed by a growing deficit, and thus growing debts, one formerly strong reserve
currency, and one dominant system of assessing assets and risks.” At the root of the global financial
crisis, he concluded, is the fact that the United States makes too little and spends too much,
particularly its vast military outlays, such as the stepped-up US military aid to Georgia announced
just last week, the NATO missile shield in Eastern Europe and the US buildup in the oil-rich Middle
East and Central Asia.
The sticking point for all these countries is the ability of the United States to print unlimited
amounts of dollars. Overspending by U.S. consumers on imports in excess of exports, U.S. buy-outs
of foreign companies and real estate, and the dollars that the Pentagon spends abroad all end up in
foreign central banks. These banks then face a hard choice: either to recycle these dollars back to
the United States by purchasing US Treasury bills, or to let the “free market” force up their
currency relative to the dollar – thereby pricing their exports out of world markets and hence
creating domestic unemployment and business insolvency.
When China and other countries recycle their dollar inflows by buying US Treasury bills to “invest” in
the United States, this buildup is not really voluntary. It does not reflect faith in the ability of the U.
S. economy to enrich foreign central banks for their savings. Nor does it represent any calculated
investment preference. It is simply a matter of a lack of alternatives. U.S.-style “free markets”
hook countries into a system that forces them to accept dollars without limit. Now they want out.
This means creating a new alternative. Rather than making merely “cosmetic changes as some
countries and perhaps the international financial organisations themselves might want,” said Mr.
Medvedev at the end of his St. Petersburg speech, “what we need are financial institutions of a
completely new type, where particular political issues and motives, and particular countries will not
dominate.”
When foreign military spending forced the US balance of payments into deficit and drove the United
States off gold in 1971, central banks were left without the traditional asset used to settle
payments imbalances. The alternative was to invest their subsequent inflows of US dollars in US
Treasury bonds, as if these still were “as good as gold.” Central banks now hold $4 trillion of these
bonds in their international reserves. These loans have financed most of the US Government’s
domestic budget deficits for over three decades now! Given the fact that about half of US
Government discretionary spending is for military operations – including more than 750 foreign
military bases and increasingly expensive operations in the oil-producing and transporting countries –
the international financial system is organized in a way that finances the Pentagonand also US buyouts
of foreign assets expected to yield much more than the Treasury bonds that foreign central banks
hold.
The main political issue confronting the world’s central banks is therefore how to avoid adding yet
more dollars to their reserves and thereby financing yet further US deficit spending – including
military spending on their borders.
For starters, the six SCO countries and BRIC countries intend to trade in their own currencies so as
to get the benefit of mutual credit that the United States until now has monopolized for itself.
Toward this end, China has struck bilateral deals with Argentina and Brazil to denominate their trade
in renminbi rather than the dollar, sterling or euros, and two weeks ago China reached an agreement
with Malaysia to denominate trade between the two countries in renminbi. Former Prime Minister Tun
Dr. Mahathir Mohamad explained to me in January that as a Muslim country, Malaysia wants to avoid
doing anything that would facilitate US military action against Islamic countries, including Palestine.
The nation has too many dollar assets as it is, his colleagues explained. Central bank governor Zhou
Xiaochuan of the People's Bank of China put an official statement on the bank’s website, explaining
that the goal is now to create a reserve currency “that is disconnected from individual nations.” This
is the aim of the discussions in Yekaterinburg.
Aside from no longer financing the U.S. buyout of their own industries and the U.S. military
encirclement of the globe, China, Russia and other countries would no doubt like to enjoy the same
kind of free ride that America has been getting. As matters stand now, they see the United States
as a lawless nation, financially as well as militarily. How else to characterize a nation that proclaims a
set of laws for others – on war, debt repayment and treatment of prisoners – but flouts them itself?
The United States is now the world’s largest debtor yet has avoided the pain of “structural
adjustments” imposed on other debtor economies. U.S. interest-rate and tax reductions in the face
of exploding trade and budget deficits are seen as the height of hypocrisy in view of the austerity
programs that Washington forces on other countries via the IMF and other Washington vehicles.
The United States tells debtor economies to sell off their public utilities and natural resources, raise
their interest rates and increase taxes while gutting their social safety nets to squeeze out money to
pay creditors. And at home, Congress blocked, on grounds of national security, China’s CNOOK from
buying Unocal, much as it blocked Dubai from buying US ports and blocked other sovereign wealth
funds from buying into key infrastructure. Foreigners are invited to emulate the Japanese purchase
of white elephant trophies such as Rockefeller Center, on which investors quickly lost a billion dollars
and ended up walking away.
In this respect the US has given China and other payments-surplus nations no alternative but to find
a way to avoid further dollar buildups. To date, China’s attempts to diversify its dollar holdings
beyond Treasury bonds have not proved very successful. For starters, Hank Paulson of Goldman
Sachs steered its central bank into higher-yielding Fannie Mae and Freddie Mac securities, explaining
that these were de facto public obligations. They collapsed in 2008, but at least the U.S. Government
took over these two mortgage-lending agencies, formally adding their $5.2 trillion in obligations to
the national debt. In fact, it was largely foreign official investment that prompted the bailout.
Imposing a loss for foreign official agencies would have broken the Treasury-bill standard then and
there, not only by utterly destroying US credibility but because there simply are too few
Government bonds to absorb the dollars being flooded into the world economy by the soaring US
balance-of-payments deficits.
in late 2007, seeking more of an equity position to protect the value of their dollar holdings as the
Federal Reserve’s credit bubble drove interest rates down, China’s sovereign wealth funds sought to
diversify. China bought stakes in the well-connected Blackstone equity fund and Morgan Stanley on
Wall Street, Barclays in Britain, South Africa’s Standard Bank (once affiliated with Chase Manhattan
back in the apartheid 1960s) and in the soon-to-collapse Belgian financial conglomerate Fortis. But
the US financial sector was collapsing under the weight of its debt pyramiding, and prices for shares
plunged for banks and investment firms across the globe.
Foreigners see the IMF, World Bank and World Trade Organization as Washington surrogates in a
financial system backed by American military bases and aircraft carriers encircling the globe. But
this military domination is a vestige of an American empire no longer able to rule by economic
strength. US military power is muscle-bound, based more on atomic weaponry and long-distance air
strikes than on ground operations, which have become too politically unpopular to mount on any large
scale.
On the economic front there is no foreseeable way in which the United States can work off the $4
trillion it owes foreign governments, their central banks and the sovereign wealth funds set up to
dispose of the global dollar glut. America has become a deadbeat –a militarily aggressive one -- as it
sruggles to hold onto the immense power it once earned by economic means. The problem for the
rest of the world is how to constrain its behavior. Yu Yongding, a former Chinese central bank
advisor now with China’s Academy of Sciences, suggested that US Treasury Secretary Tim Geithner
be advised that the United States should “save” first and foremost by cutting back its military
budget. “U.S. tax revenue,” he said, “is not likely to increase in the short term because of low
economic growth, inflexible expenditures and the cost of ‘fighting two wars.’”
At present foreign savings are what finance the US budget deficit by buying most Treasury bonds.
The consequence is taxation without representation for foreign voters as to how the US Government
uses their forced savings. It therefore is necessary for the financial diplomats to broaden the scope
of their policy-making beyond the private-sector marketplace. Exchange rates are determined by
many factors besides “consumers wielding credit cards,” the usual euphemism that the US media cite
for America’s balance-of-payments deficit. Since the 13th century, war has been a dominating factor
in the balance of payments of leading nations – and of their national debts. Government bond financing
consists mainly of war debts, as normal peacetime budgets tend to be balanced. This links the war
budget directly to the balance of payments and exchange rates.
Foreign nations see themselves stuck with unpayable IOUs under conditions where, if they move to
stop the US free lunch, the dollar will plunge and their dollar holdings will fall in value relative to
their own domestic currencies and other currencies. If China’s currency rises by 10 per cent against
the dollar, its central bank will show the equivalent of a $200 million loss on its $2 trillion of dollar
holdings as denominated in yuan. This explains why, when bond ratings agencies talk of the US
Treasury securities losing their AAA rating, they don’t mean that the government cannot simply print
the paper dollars to “make good” on these bonds. They mean that dollars will depreciate in
international value. And that is just what is now occurring. When U.S. Treasury Secretary Geithner
assumed an earnest mien and told an audience at Peking University in early June that he believed in a
“strong dollar” and China’s US investments therefore were safe and sound, he was greeted with
derisive laughter.
Anticipation of a rise in China’s exchange rate provides an incentive for speculators to seek to borrow
in dollars to buy renminbi and benefit from the appreciation. For China, the problem is that this
speculative inflow would become a self-fulfilling prophecy by forcing up its currency. So the problem
of international reserves is inherently linked to that of capital controls. Why should China see its
profitable companies sold for yet more freely-created US dollars, which the central bank must use
to buy low-yielding US Treasury bills or lose yet further money on Wall Street?
To steer round this quandary it is necessary to reverse the philosophy of open capital markets that
the world has held ever since Bretton Woods in 1944. On the occasion of Mr. Geithner’s visit to China,
Zhou Xiaochuan, minister of the Peoples Bank of China, the country’s central bank, said pointedly that
this was the first time since the semiannual talks began in 2006 that “China needed to learn from
American mistakes as well as its successes” when it came to deregulating capital markets and
dismantling controls.
So an era is winding to its end. In the face of continued US overspending, de-dollarization threatens
to force countries to return to the kind of dual exchange rates common between World Wars I and
II: one exchange rate for commodity trade, another for capital movements and investments, at least
from dollar-area economies.
Even without capital controls, the nations meeting at Yekaterinburg are taking steps to avoid being
the unwilling recipients of yet more dollars. Seeing that U.S. global hegemony cannot continue without
the spending power that they themselves supply, governments are attempting to hasten what
Chalmers Johnson has called “the sorrows of empire” in his book by that name – the bankruptcy of
the US financial-military world order. If China, Russia and their non-aligned allies have their way, the
United States will no longer live off the savings of others in the form of its own recycled dollars, nor
have the money for unlimited military expenditures and adventures.
US officials wanted to attend the Yekaterinburg meeting as observers. They were told No. It is a
word that Americans will hear much more in the future.
Michael Hudson is a former Wall Street economist. A Distinguished Research Professor at University
of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The
Economic Strategy of American Empire (new ed., Pluto Press, 2002) He can be reached via his
website, mh@michael-hudson.com
Obama Pot Calls Iranian Kettle Black
Criminalizing Dissent
By DAVE LINDORFF
President Barack Obama, referring to the violent attacks on protesters against the controversial
election results in Iran’s just-completed presidential election, this week lectured Iran’s government,
saying, “Peaceful dissent should never be subject to violence.”
Referring to the tens and hundreds of thousands of frustrated and angry Iranians who have taken to
the streets accusing Iranian authorities of rigging the election in favor of incumbent President
Mahmoud Ahmadinejad, Obama said that “the Iranian people and their voices should be heard and
respected."
But there is a certain hypocrisy going on here.
Just days ago, the ACLU of Northern California issued a <a href=”http://www.ibabuzz.
com/politics/2009/06/10/defense-department-sees-protests-as-terrorism/”>press release</a>
announcing that it had filed a complaint over a Pentagon anti-terrorism training manual. That training
manual, aimed at Pentagon personnel, describes domestic protests as “low-level terrorist activity.”
As Staff Attorney Ann Brick and ACLU Washington National Security Policy Council member Michael
German write in their complaint letter to the Department of Defense, “For the DoD to instruct its
employees that lawful protest activities should be treated as ‘low-level terrorism’ is deeply
disturbing in and of itself. It is an even more egregious insult to constitutional values, however, when
viewed in the context of a long-term pattern of domestic security initiatives that have attempted to
equate lawful dissent with terrorism.”
The ACLU has documented that the government has been and continues a policy of spying on
legitimate peaceful protest organizations—particularly those that have been opposing America’s wars
and its military policies, and the new president has said nothing and done nothing about terminating
this egregious assault on First Amendment freedom of speech and assembly. Given that President
Obama has also done nothing since taking office to undo the USA PATRIOT Act, which codifies much
activity that traditionally would have been called dissent as a crime, or to publicly reverse the policy
of the last eight years during which non-violent protest organizations have been spied on and
infiltrated by agents of the military and by the FBI, and during which actual protesters have been
harassed, penned into fenced-off “free speech zones,” assaulted by armed police and arrested, his
pontificating to Iran about the sanctity of dissent rings particularly hollow.
Imagine, if you will, what this government’s response would be to having hundreds of thousands of
American protesters gather in the center of Washington, DC without a permit, to protest the policies
of the national government. There would be riot police in the thousands, some mounted on horseback.
There would be federal troops. There would be police charges against demonstrators. There would
be tear gas and arrests.
How do we know this? It happens every time there are major protests in Washington—even when
protests are granted permits.
This writer spent three days in the Federal Detention Center at Occoquan, VA, back in 1967 for
participating in a peaceful anti-war protest at the Pentagon that year. I was one of hundreds at that
event who found himself, as a peaceful demonstrator, confronting armed federal troops with fixed
bayonets at that event. Not much has changed since ‘67, as others have met the same fate over the
years in Washington and around the country. Certainly there is every reason to assume that, if the
public finally loses patience over the current administration’s continuation of the wars in Iraq and
Afghanistan, its failure to really tackle the health care crisis, and its limp response to the economic
crisis, and if people descend on Washington or perhaps New York City en masse to protest, those
people will be met with the same kind of draconian, police-state style response that protesters have
met in the past--or that protesters are being met with in Iran today.
If the Pentagon is teaching its people to equate protest with “low-level terrorism,” how different,
really, is Washington from Tehran?
Dave Lindorff is a Philadelphia-based journalist and columnist. His latest book is “The Case for
Impeachment” (St. Martin’s Press, 2006 and now available in paperback). He can be reached at
dlindorff@mindspring.com
Profit Over Common Sense
Congress and the Health Business Lobby
By KEVIN ZEESE
Yesterday, as Senator Tom Harkin (D-IO) left the health care hearing room he leaned over to me
and said:
“I used to sell insurance. The basic rule is the larger the pool the less expensive the health care.
Today we have 1,300 separate pools – separate health care plans – and that is why health care is so
expensive; 700 pools would be more efficient and less expensive and one pool would be the least
expensive. That’s why single payer is the answer.”
Nothing like common sense.
But, common sense was not on display in the Senate yesterday. Instead, the senate is seeking a path
to the goal of universal coverage by protecting the least efficient model – the for-profit insurance
industry that through waste, fraud, abuse and bureaucracy eats up 31% the cost of health care.
Chris Dodd (D-CT) who chaired the hearing, standing in for the ailing Ted Kennedy, has received $2.1
million from insurance industry throughout his career, another $547,000 from the pharmaceutical
industry, and $467,000 from health care professionals. Dodd opened the hearing stating the stark
facts:
We spend more than $2 trillion on health care every year- more than 18 percent of our GDP. By
2040, 34 cents of every dollar we spend could be on healthcare. That is not simply unacceptable – it’s
unsustainable. Premiums and out-of-pocket costs for individuals and families alike continue to
skyrocket.
It was evident, throughout the day that money was on the mind of the senators. But, they could not
look into the face of the obviously most efficient path, single payer, instead they were going through
contortions to protect their benefactors from the insurance industry.
The senators and witnesses showed there is a lot of division over financing health care and no easy
solution – so long as the first goal is to protect the insurance industry. Business groups wanted to tax
employee benefits not take away the business tax credit for companies that provide health care.
These are the only two big pots of money the senate sees. There was also talk about making
Americans healthier to save money, certainly a good goal. But, Sen. McCain (R-AZ), probably
correctly if rudely, mocked witnesses who said health care could be paid for by doing away with
inefficiencies and wellness programs. McCain favors taxing health care benefits.
Of course, both the business tax credit and not taxing health benefits are two reasons the health
insurance industry is able to acquire massive wealth. These are annual, indirect taxpayer giveaways to
the insurance industry that demonstrate how government is already paying for health care.
Taxpayers are just doing so in the most inefficient way. Rather than actually using tax dollars to pay
for health care, they are used to pay for insurance and all the profits and waste that goes with it.
Senator Bernie Sanders (I-VT), the sponsor of S.703, the single payer bill in the Senate, finally got
his chance to speak and railed against the waste of the health insurance model, criticized their
massive profits and emphasized that health care was a human right. He pointed his question to the
lone witness advocating for single payer of the dozen testifying, Dr. Margaret Flowers of Physicians
for National Health Plan.
Flowers, who had been arrested just six weeks ago for protesting the exclusion of single payer from
discussions in the Senate Finance Committee, went into a long list of reasons why the multi-payer
system is so expensive – inefficiencies built into the system, insurance companies making massive
profits while people died from lack of health care access, hospitals needing massive billing
departments creating bigger administrative staff than nursing staff, doctors spending 20% of their
overhead on dealing with the insurance industry, fee for service payments that lead to unecessary
treatments and expensive, often unneeded tests, malpractice litigation because patients do not have
access to health care to bad health care outcomes. . .
Flowers was still going strong, the list was incomplete, when Sanders cut her off, saying I only have a
few minutes for questioning.
Sitting next to Flowers was the CEO of Aetna Insurance, Ronald Williams. The senators fawned over
him, except for Sanders who pointed out Medicare was more popular that Aetna. Williams makes
anywhere from $13 million annually in salary and stock according to Insurance Industry News to
$30.86 million annually according to Forbes. Insurance Industry News reports that if Aetna grows
by 15% by 2010 Williams gets an addition $4.3 million. Is he not the perfect example of what is
wrong with health care in America? Profits are the top priority of corporate interests, and usually
short term profits. Should the insurance industry be striving to grow so rapidly when they already
gobble up too many health care dollars?
The senate also struggled with how to make sure everyone is covered with health insurance. Again the
divisions were obvious. Business groups said there should not be an employer mandate, but rather an
individual mandate. Unions said there should be an employer mandate not an individual mandate. Big
businesses said there should be no subsidy for small businesses that would be unfair to big
businesses. Republicans scoffed at the idea of expanding Medicaid to more of the working poor – too
expensive, unaffordable, they pointed out. The public insurance option was described as unfair to the
insurance industry and too expensive to implement. The Democrats squirmed uncomfortably at
choices that they know will upset some powerful interest group.
What a mess! The effort to protect the insurance industry at all costs is making real health care
reform impossible. Maybe, because the Democrats want to do something, anything, so badly they will
find a way to pass something, but if they do it will not work, it will be very costly and the group that
will benefit most clearly will be the health insurance industry which will reap hundreds of billions in
corporate welfare every year from the deform of health care in America. Of course, incumbents who
support it will benefit with campaign donations from the industry. Pay to play politics on display in
America.
Margaret Flowers, MD was the first witness to testify at the senate hearing on June 12. Her
comments focused on health care as a human right. She pointed out how FDR was the first to try and
put in place a social security system that included a single payer health care system. And, how years
of trying the “uniquely American approach” of the market solution – for-profit health care – had
failed the country and put health care on a path to government deficit with health care costs already
a cause in two-thirds of bankruptcies. She urged the senate to not tinker with a broken system but
instead to take a new path and adopt a national health plan with single payer as the financing system.
Sadly, there were four doctors on the panel and only one, Flowers, who spoke of health care as a
human right. Perhaps the AMA was the most despicable. Not only did they oppose single payer –
something supported by 60% of doctors according to a survey of the AMA data base – but they even
opposed the weak public insurance option. The AMA spokesperson said they would only support
market approaches. No wonder the AMA is shrinking rapidly. While not long ago it represented 70%
of American doctors, they are now down to only 30%. At this hearing, their callous disregard of the
needs of patients and their disregard of the opinions of doctors showed why they are a shell of an
organization.
Sen. Sanders pointed out the historic breakthrough of having the first witness for single payer being
allowed to testify as part of the health care reform discussion. The audience began to applaud,
Sanders warned “be careful, you might get arrested.”
The day before this hearing a House subcommittee held a session on single payer health care. One
witness Dr. Walter Tsou, a University of Pennsylvania professor, former health commissioner and an
adviser to Physicians for a National Health Program responded to the claim that single payer was too
radical saying "Our most famous radical document begins with the words, 'We the People.' Not 'We
the Insurers,'" he said. "It is time for our own generation's revolution."
And, it will take the people speaking out and getting active to make real health care reform possible.
If you don’t want to see another massive transfer of wealth to the insurance industry while
Americans continue to lack health care, you need to take action. Tell your representatives that you
want a national health plan funded by a single payer system. The insurers are working hard, the
American people have to work harder. The time is now.
You can take action by clicking here.
Kevin Zeese is the executive director of ProsperityAgenda.US which is working for an economy for
all and not just the elites.
Published on Wednesday, June 10, 2009 by CommonDreams.org
The IMF Accountability Moment
The Obama administration's budgetary Machiavellianism has backfired.
by Robert Weissman
Seeking to avoid a direct up-or-down vote on a proposal to send $108 billion to the International
Monetary Fund, the administration, at the last moment, had the money stuck into a supplemental
appropriations bill to fund the wars in Iraq and Afghanistan.
That maneuver turned out to be too clever by a turn.
Republicans in the House of Representatives -- opposed to the process by which the IMF money was
added, frustrated with the IMF unaccountability and critical of international institutions in general --
have announced they will oppose the appropriations bill.
Meanwhile, 51 antiwar Democrats in the House voted against the appropriations bill when it was first
under consideration, and 41 Democrats (overlapping substantially but not entirely with the 51 antiwar
Democrats) have raised concerns about funding the IMF without attaching meaningful conditions.
This unlikely coalition is poised to defeat the supplemental, unless the administration can peel off 18
of the antiwar Democrats to support the bill. The administration may need more than 18 if other
Democrats vote against the bill because of the IMF money (this might include Blue Dog Democrats
who object to the budgetary impact of the IMF funding and the ways in which the IMF money will aid
European banks, as well as progressives).
Defeating the bill will be a meaningful statement against the wars, and against unconditional money
for the IMF.
The White House and Congressional leadership are pressuring Progressive Dems to support the
supplemental, warning of the cost of dealing a legislative defeat to President Obama. Whether they
can stand up to the pressure -- and thus the outcome of the supplemental -- will depend in significant
part on how much the public mobilizes to urge a vote against the wars and the IMF. You can take
action through this "Citizen Whip" site maintained by firedoglake.com.
Emanuel of course wields enormous power, but his arguments are misplaced. A defeat on the
supplemental will be self-inflicted, not the work of progressives unsympathetic to the president.
If the administration and House leadership are unable to garner sufficient votes to pass the
supplemental, they can pull the IMF funding. Republicans will support a war-only bill. But antiwar
forces will have shown their seriousness and power.
And, the administration can seek funding for the IMF later this year, hopefully moving through
normal legislative procedures. That would enable a legitimate debate over the merits of IMF
funding. Critics would raise concerns that the money will be used to bail out European banks that lent
recklessly in Eastern Europe. Appropriations Committee Chair David Obey has highlighted this issue,
and noted the incongruity of aiding the European banks while Europe refuses to employ the
stimulative measures adopted by the United States and China, among others.
Critics would also focus on the contractionary policies -- primarily reduced government spending and
higher interest rates -- that the IMF is imposing on borrowing countries hit by a global financial crisis
not of their making. These policies are the opposite of the stimulative policies that the IMF
recommends for rich countries, and directly contrary to the global stimulus that was the rationale
for the decision of the G-20 (the world's most economically powerful countries) to increase IMF
resources by $750 billion.
On the ground in borrowing countries, these policies deepen the harmful impact of the economic
crisis, and translate into serious human depredations. Less money is available for health, education
and other key government programs; unemployment skyrockets; and families struggle to subsist.
The IMF's favored contractionary policies also conflict with the economic logic of providing loans in
the context of an economic crisis. "The main purpose of providing balance of payments support to a
developing country in a time of recession or approaching recession is to enable the government to
pursue the expansionary fiscal and monetary policies necessary to stabilize the economy," explains
the Center for Economic and Policy Research in a recent paper.
To be clear, the IMF has a response to these arguments: It says it has changed, and is much more
reticent about demanding borrowing countries adopt contractionary policies than it once was. And, it
says it aims to protect social spending in crisis-affected countries.
Putting it mildly, the evidence does not exactly comport with this story. But in any case, it is a claim
that should be examined through a proper legislative process.
And, if the IMF takes the position that it only imposes contractionary policies when absolutely
necessary, then it should be receptive to the top-line requests from IMF campaigners. These include
demands that no contractionary conditions be included in IMF programs absent a quantitative showing
that such conditions are necessary and cannot be delayed, and that health and education spending be
exempted from IMF-mandated budget restraints.
Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, and director of
Essential Action.
Published on Wednesday, June 10, 2009 by The Chicago Tribune
US Needs New Industrial Policy
by Jesse Jackson
'The fight for American manufacturing is the fight for America's future," President Barack Obama
declared as he pledged billions to help save and reorganize Chrysler and General Motors. Yet, he
also says he doesn't want to manage the car companies.
"The sooner we can get out of that business, the better off we're going to be." But that sentiment --
widely praised by editorials across the country -- contradicts the commitment needed to revive
American manufacturing.
Clearly, the future of an America that makes things will center on what happens to America's
automotive industry. The auto industry still accounts for one-fourth of U.S. manufacturing output and
provides jobs for about one of every 10 manufacturing workers. It is, in the words of AFL-CIO
economist Ron Blackwell, "the spine of the country's manufacturing capacity."
The auto companies are battered by massive overcapacity in the industry across the globe and
burdened with pensions and health care promised to retirees while competitors are free of such
costs. Auto companies in Korea, Japan, France and Germany get significant government protection
and subsidies. The U.S. companies have suffered without that help.
Obama has boldly pointed to a new American economy, one where finance is the servant of the real
economy, not the master. In this economy, America builds the future -- making fuel-efficient cars,
windmills and batteries and solar panels vital to the next economy. The skilled workers and high
technology of the Midwest will produce the products that will dominate the global green markets of
the future.
That transition will require planning, an industrial policy and government commitment. If Obama
simply lends money to Chrysler and GM, forces their bankruptcy and downsizing and then walks away,
the result is likely to be failure. We've seen plans by Chrysler and GM to expand production abroad
while eliminating U.S. plants at home.
We did not provide taxpayer money to save the brand General Motors. We provided it to save highly
skilled U.S. jobs and U.S. manufacturing capacity.
Last week, I attended a Senate hearing on Chrysler and GM's bankruptcies. Not once did I hear
anybody speak about health insurance, credit, trade policy or the price of oil and gas or about the
need to link the bank bailout to stemming the tide of home foreclosures and stimulating jobs and
business.
We need an industrial plan that helps forge new industry and new markets. Public investment in mass
transit -- buses, subways, fast rail -- and subsidies for fuel-efficient cars help generate the market.
Significant investment in research and development for the next generation of products helps
capture the future. Resources to retool factories and retrain workers are needed to build the new
generation of fuel-efficient cars or renewable energy sources.
We need an industrial policy that bridges the gap between the old manufacturing sector and the
emerging "green economy." Republicans don't get this. They would let GM and Chrysler go belly up
rather than try to restructure them.
Obama has stepped up to help the companies restructure, but has yet to detail an industrial policy
that will ensure that U.S. workers benefit. The restructuring has been done almost in a vacuum, as if
it were a commercial deal, with most of the discussion focused on how to slash work forces, close
dealers, shut down plants and cut obligations to current and retired workers.
No doubt GM and Chrysler have been mismanaged. Reductions in the work force and dealerships are
inevitable. But to revive U.S. manufacturing, the re- organization must focus on what will be built, on
new markets and new technologies -- not only on what gets cut. And that requires the commitment
and engagement of the federal government.
Crisis creates opportunity. In this crisis, it is time for America to put aside the failed ideas of the
past and step up boldly to ensure that America once more builds the future.
© 2009 The Chicago Tribune
Jesse Jackson writes a regular column for The Chicago Tribune.
________________________________________
Article printed from www.CommonDreams.org
URL to article: http://www.commondreams.org/view/2009/06/10-9
The gangsters made Arnold a big star because they were impressed with his big muscles and like
Reagan, took directions well. After making 800 million for the mob they made him governor. I few
months ago I saw him sitting outside of a Brentwood restaurant with his workout buddies. He flies in
to Sacramento when the gangsters tell him to. I hear they plan on bringing him back to Hollywood to
make movies when his term is over. I was told Julia Roberts is done but they plan on bringing Arnold
back. Whatever.
Tax breaks to corporations undermine California budget
Redwood Times
Posted: 06/18/2009 03:12:21 PM PDT
To the Editor:
We Californians are reeling at the prospect of state parks closing and nearly 1 million children losing
health care because of the budget crisis.
Yet I learned today a new analysis by the California Budget Project (www.cbp.org) details the
corporate tax breaks tucked into budget deals by Gov. Arnold Schwarzenegger and the Legislature.
Those tax breaks will cost the state $640 million for the fiscal year that ends this month - and $2.5
billion a year when they take full effect.
Ross, executive director for the California Budget Project, found these tax breaks at full
implementation would be enough to pay for the entire cost of three programs Gov. Arnold
Schwarzenegger is proposing to eliminate: CalWORKS, the welfare-to-work program; Healthy
Families, the health insurance program for poor children; and cash assistance payments to low-income
elderly and those with severe disabilities.
Yet the dirty trick for you and me and our representatives: repealing the loopholes requires a two-
thirds vote because it would be considered a tax increase. Write them now.
Please read more: http://www.mercurynews.com/breakingnews/ci_12511192?nclick_check=1.
Dr. Lauren J Oliver
Redway
The three steps to financial reform
By George Soros
Published: June 16 2009 19:47 | Last updated: June 16 2009 19:47
The Obama administration is expected on Wednesday to propose a reorganisation of the way we
regulate financial markets. I am not an advocate of too much regulation. Having gone too far in
deregulating – which contributed to the current crisis – we must resist the temptation to go too far in
the opposite direction. While markets are imperfect, regulators are even more so. Not only are they
human, they are also bureaucratic and subject to political influences, therefore regulations should be
kept to a minimum.
Three principles should guide reform. First, since markets are bubble-prone, regulators must accept
responsibility for preventing bubbles from growing too big. Alan Greenspan, the former chairman of
the Federal Reserve, and others have expressly refused that responsibility. If markets cannot
recognise bubbles, they argued, neither can regulators. They were right and yet the authorities must
accept the assignment, even knowing that they are bound to be wrong. They will, however, have the
benefit of feedback from the markets so they can and must continually recalibrate to correct their
mistakes.
Second, to control asset bubbles it is not enough to control the money supply; we must also control
the availability of credit. This cannot be done with monetary tools alone – we must also use credit
controls such as margin requirements and minimum capital requirements. Currently these tend to be
fixed irrespective of the market’s mood. Part of the authorities’ job is to counteract these moods.
Margin and minimum capital requirements should be adjusted to suit market conditions. Regulators
should vary the loan-to-value ratio on commercial and residential mortgages for risk-weighting
purposes to forestall real estate bubbles.
Third, we must reconceptualise the meaning of market risk. The efficient market hypothesis
postulates that markets tend towards equilibrium and deviations occur in a random fashion;
moreover, markets are supposed to function without any discontinuity in the sequence of prices.
Under these conditions market risks can be equated with the risks affecting individual market
participants. As long as they manage their risks properly, regulators ought to be happy.
But the efficient market hypothesis is unrealistic. Markets are subject to imbalances that individual
participants may ignore if they think they can liquidate their positions. Regulators cannot ignore these
imbalances. If too many participants are on the same side, positions cannot be liquidated without
causing a discontinuity or, worse, a collapse. In that case the authorities may have to come to the
rescue. That means that there is systemic risk in the market in addition to the risks most market
participants perceived prior to the crisis.
The securitisation of mortgages added a new dimension of systemic risk. Financial engineers claimed
they were reducing risks through geographic diversification: in fact they were increasing them by
creating an agency problem. The agents were more interested in maximising fee income than in
protecting the interests of bondholders. That is the verity that was ignored by regulators and
market participants alike.
To avert a repetition, the agents must have “skin in the game” but the 5 per cent proposed by the
administration is more symbolic than substantive. I would consider 10 per cent as the minimum
requirement. To allow for possible discontinuities in markets securities held by banks should carry a
higher risk rating than they do under the Basel Accords. Banks should pay for the implicit guarantee
they enjoy by using less leverage and accepting restrictions on how they invest depositors’ money;
they should not be allowed to speculate for their own account with other people’s money.
It is probably impractical to separate investment banking from commercial banking as the US did
with the Glass-Steagall Act of 1933. But there has to be an internal firewall that separates
proprietary trading from commercial banking. Proprietary trading ought to be financed out of a bank’
s own capital. If a bank is too big to fail, regulators must go even further to protect its capital from
undue risk. They must regulate the compensation packages of proprietary traders so that risks and
rewards are properly aligned. This may push proprietary trading out of banks into hedge funds. That
is where it properly belongs. Hedge funds and other large investors must also be closely monitored
to ensure that they do not build up dangerous imbalances.
Finally, I have strong views on the regulation of derivatives. The prevailing opinion is that they ought
to be traded on regulated exchanges. That is not enough. The issuance and trading of derivatives
ought to be as strictly regulated as stocks. Regulators ought to insist that derivatives be
homogenous, standardised and transparent.
Custom-made derivatives only serve to improve the profit margin of the financial engineers designing
them. In fact, some derivatives ought not to be traded at all. I have in mind credit default swaps.
Consider the recent bankruptcy of AbitibiBowater and that of General Motors. In both cases, some
bondholders owned CDS and stood to gain more by bankruptcy than by reorganisation. It is like
buying life insurance on someone else’s life and owning a licence to kill him. CDS are instruments of
destruction that ought to be outlawed.
The writer is chairman of Soros Fund Management and author of ‘The Crash of 2008’ (PublicAffairs
2009)
Copyright The Financial Times Limited 2009
Why are Powerful People Afraid to Give Us the Right to Choose a Public Plan?
We Need a Holistic, Cradle-to-the-Grave National Health Care System
By CAROL MILLER
In the 15 years since Congress gave up on universal health care, about 300,000 Americans have died
from the lack of health coverage alone, using the government’s own data.
Added to the tragic death toll is the economic toll. More than a half-million individuals and families
declare medical bankruptcy every year; most of them have health insurance. Actually, they thought
they had health insurance because they pay for insurance. People learn the hard way that when help is
really needed for a catastrophic health crisis, private insurance does not protect them from financial
ruin.
We stand again as a nation at the same fork in the road on the path to improve access to health care
for all of our neighbors and family members.
One choice is the fork that brings us together to weave a safety net. This fork is the Medicare-for-
all approach; everybody in, nobody out. Imagine a cradle-to-grave, holistic system based on public
health, prevention, wellness, a medical home for everyone and — according to the Congressional
Budget Office — doing all of this while saving money. This is the single-payer choice.
Then there is the other fork: forcing everyone to have insurance by building on the current broken
system. This is the déjà vu path. Choosing this path continues corporate rationing, procedure-based
sickness care, out-of-control costs and obscene CEO and executive compensation. During the last
debate on universal health care, Congress fell for industry promises of savings through an expansion
of managed care. After a year or so, all voluntary “savings” were gone and the bad old days of
skyrocketing costs were back.
Secret Bailout
It’s bailout fever now; every corporation and industry wants theirs. Some are out in the open like
Wall Street, American International Group and the automakers. One big corporate bailout is secret,
disguised as a uniquely American way of doing business.
I’m talking about the for-profit corporate sickness insurance industry. An industry that takes in
money, lots of money, much of it from us, the taxpayers, and in return pays for as little health care
as possible to maximize profits for their investors.
It is strange to listen to the Members of Congress criticize the Big Three automakers, when at the
same time they not only continue to support, but even propose expanding the for-profit, corporate
health insurance industry. At least automakers make something. They have the capability to retool
and build better and more efficient cars, light rail, solar panels or even better mousetraps.
Strategy for Passage
There are two issues on the table. First is the fate of the various “reform” bills as they continue to
be introduced and move through Congress, and second is the strategy for actually passing reform
this year. Watching the same mistakes that killed the Clinton-era reforms being made again — by
Democrats and Republicans — is painful.
There are three health reform choices being proposed this year. One choice is the completely public
option, universal, single-payer social insurance, which the president and Congress are trying very
hard to keep “off the table.” The middle ground has an insurance mandate with an individual choice of
either private, likely for-profit, insurance or a public insurance plan, for example, buying in to
Medicare. The third option provides the least choice, a mandate to buy private insurance.
This is where strategy matters. By leaving the universal, social insurance option out of the debate, it
is easier for the industry, media and some Members of Congress to paint the mixed public-private
plan as an extreme rather than what it is — the middle ground. And while not ideal, the mixed plan is
a place for Congressional compromise.
Why are powerful people afraid to give us the right to choose a public plan? Are they afraid we will
learn that more than $1 billion every day is wasted on insurance overhead? Or that more than a
trillion dollars bleeds from the health care system every two and a half years — money not spent on
health care but on insurance administration, advertising, marketing and corporate profits?
In surveys of the American people, Medicare is always ranked as the best and most popular
government program. If Congress fails to enact a universal social insurance plan, enrolling in
Medicare or a new public program must be a choice for the uninsured and underinsured.
If we are lucky, we will see real courage from Congress this year. Every Member knows that sooner
or later, because of the economics, the United States will join the rest of the developed world and
create a national health plan. This is privately conceded even by the biggest insurance industry
boosters on Capitol Hill. Without real reform, there will be more tinkering at the edges until the
tsunami of medical costs finally forces the government to do the right thing.
During these challenging economic times, we have the chance to complete the promise of full social
insurance. Universal access to health care has been deferred for 74 years since it was stripped
from the Social Security Act of 1935 — and that is long enough.
Carol Miller is a rural and public health activist who lives in a small village in Ojo Sarco, N.M. Miller
has public service in Washington, D.C., in both Republican and Democratic administrations, including
the Clinton Health Care Task Force. In 1994 she was the health reform policy adviser for the
National Rural Health Association and the New Mexico secretary of health.
This article originally appeared in Roll Call.
I have a new idea for a Palestinian state. I would deport all the Jews in the US and Europe to Israel
then if they don’t get a real Palestinian state I would bomb Israel.
June 18, 2009
What Does He Mean When He Says "Yes"?
The Case of Netanyahu and the Curious Incident
By URI AVNERY
"You must be celebrating,” the interviewer from a popular radio station told me after Netanyahu’s
speech. “After all, he is accepting the plan which you proposed 42 years ago!” (Actually it was 60
years ago, but who is counting?)
The front page of Haaretz carried an article by Gideon Levy, in which he wrote that “the courageous
call of Uri Avnery and his friends four decades ago is now being echoed, though feebly, from end to
end (of the Israeli political spectrum).”
I would be lying if I denied feeling a brief glow of satisfaction, but it faded quickly. This was no
“historic” speech, not even a “great” speech. It was a clever speech.
It contained some sanctimonious verbiage to appease Barack Obama, followed right away by the
opposite, to pacify the Israeli extreme right. Not much more.
NETANYAHU DECLARED that “our hand is extended for peace.”
In my ears, that rang a bell: in the 1956 Sinai war, a member of my editorial staff was attached to
the brigade that conquered Sharm-al-Sheikh. Since he had grown up in Egypt, he interviewed the
senior captured Egyptian officer, a colonel. “Every time David Ben-Gurion announced that his hand
was stretched out for peace,” the Egyptian told him, “we were put on high alert.”
And indeed, that was Ben-Gurion’s method. Before every provocation he would declare that “our
hands are extended for peace”, adding conditions that he knew were totally unacceptable to the
other side. Thus an ideal situation (for him) was created: The world saw Israel as a peace-loving
country, while the Arabs looked like serial peace-killers. Our secret weapon is the Arab refusal, it
used to be joked in Jerusalem at the time.
This week, Netanyahu wheeled out the same old trick.
* * *
I DO NOT underrate, of course, the significance of the chief of the Likud uttering the two words:
“Palestinian state”.
Words carry political weight. Once released into the world, they have a life of their own. Unlike
dogs, they cannot be called back.
In a popular Israeli love song, the boy asks the girl: “When you say no, what do you mean?” One could
well ask: When Netanyahu says yes, what does he mean?
But even if the words “Palestinian state” passed his lips only under duress, and when Netanyahu has
no intention at all of turning them into reality, it is still important that the head of the government and
the chief of the Likud was compelled to utter them. The idea of the Palestinian state has now become
a part of the national consensus, and only a handful of ultra-rightists reject it directly. But this is only
the beginning. The main struggle will be about turning the idea into reality.
* * *
THE ENTIRE speech was addressed to one single person: Barack Obama. It was not designed to
appeal to the Palestinians. It was quite clear that the Palestinians are only the passive object of a
discussion between the President of the USA and the Prime Minister of Israel. Except in some tired
old clichés, Netanyahu spoke about them, not to them.
He is ready, so he says, to conduct negotiations with the “Palestinian community”, and that, of course,
“without preconditions”. Meaning: without Palestinian preconditions. On Netanyahu’s part, there are
plenty of preconditions, every one of which is designed to make certain that no Palestinian, no Arab
and indeed no Muslim will agree to enter negotiations.
Condition 1: The Arabs have to recognize Israel as “the nation-state of the Jewish people” (and not
just “a Jewish state”, as many in the media erroneously reported.) As Hosny Mubarak has already
answered: No Arab will accept this, because it would mean that 1.5 million Arab citizens of Israel are
cut off from the state, and because it would deny in advance the Right of Return of the Palestinian
refugees - the main bargaining chip of the Arab side.
It should be remembered that when the United Nations resolved in 1947 to partition Palestine
between a “Jewish state” and an “Arab state”, they did not mean to define the character of the
states. They were just stating facts: there are two mutually hostile populations in the country, and
therefore the country has to be divided between them. (Anyhow, 40% of the population of the
“Jewish” state was to consist of Arabs.)
Condition 2: The Palestinian Authority must first of all establish its rule over the Gaza Strip. How?
After all, the Israeli government prevents travel between the West Bank and the Gaza Strip, and no
Palestinian force can pass from one to the other. And the solution of the problem by establishing a
Palestinian unity government is also ruled out: Netanyahu flatly declared that there would be no
negotiations with a Palestinian leadership that includes “terrorists who want to annihilate us” – his way
of referring to Hamas.
Condition 3: The Palestinian state will be demilitarized. This is not a new idea. All peace plans that
have been put forward up to now speak about security arrangements that would protect Israel from
Palestinian attacks and Palestine from Israeli attacks. But that is not what Netanyahu has in mind: he
did not speak about mutuality, but about domination. Israel would control the air space and the
border crossings of the Palestinian state, turning it into a kind of giant Gaza Strip. Also, Netanyahu’s
style was deliberately overbearing and humiliating: he obviously hopes that the word ‘demilitarized”
would be enough to get the Palestinians to say “no”.
Condition 4: Undivided Jerusalem will remain under Israeli rule. This was not proposed as an opening
gambit for negotiations but presented as a final decision. That by itself ensures that no Palestinian,
nor any Arab or even any Muslim, could accept the proposal.
In the Oslo Agreement, Israel undertook to negotiate about the future of Jerusalem. It is an
accepted legal rule that if one undertakes to negotiate, one accepts to do so bona fide, on the basis
of give and take. Therefore, all peace plans provide that East Jerusalem - wholly or partly – will be
returned to Arab rule.
Condition 5: Between Israel and the Palestinian state there will be “defensible borders”. These are
code-words for extensive annexations by Israel. Their meaning: no return to the 1967 borders, not
even with a swap of territory that would allow for some of the large settlements to be joined to
Israel. In order to create “defensible borders”, a major part of the occupied Palestinian territories
(which altogether make up just 22% of pre-1948 Palestine) will be absorbed into Israel.
Condition 6: The refugee problem will be solved “outside the territory of Israel”. Meaning: not a
single refugee will be allowed to return. True, all realistic people agree that there can be no return
of millions of refugees. According to the Arab peace initiative, the solution must be “mutually agreed”
– which means that Israel has to agree to any solution. The assumption is that the two parties will
agree on the return of a symbolic number. This is a highly charged and sensitive matter, which must
be treated with prudence and the utmost sensitivity. Netanyahu does the opposite: his provocative
statement, devoid of all empathy, is clearly designed to bring about an automatic refusal.
Condition 7: No settlement freeze. The “normal life” of the settlers will continue. Meaning: the
building activity for the “natural increase” will go on. This illustrates the saying of Michael Tarazy, a
legal advisor to the PLO: “We are negotiating about sharing a pizza, and in the meantime Israel is
eating it.”
All this was in the speech. No less interesting is what was not in it. For example, the words: Road
Map. Annapolis. Palestine. The Arab peace plan. Occupation. Palestinian Sovereignty. Opening of the
Gaza Strip border crossings. Golan Heights. And, even more important: there was not a hint of
respect for the enemy who must be turned into a friend, in the words of the ancient Jewish saying.
* * *
SO WHAT is more important? The verbal recognition of “a Palestinian state” or the conditions which
empty these words of all content?
The public response is interesting. In an opinion poll taken immediately after the speech, 71%
supported it, but 55% believed that Netanyahu just “gave in to American pressure”, and 70% did not
believe that a Palestinian state would really come about during the next few years.
What exactly do the 71% support? The “Palestinian state” solution or the conditions which obstruct
its implementation – or both?
There is, of course, an extreme right-wing minority which prefers a head-on collision with the United
States to giving up any territory between the Mediterranean Sea and the Jordan River. Along the
road to Jerusalem one can see large posters showing a manipulated photo of Obama wearing an Arab
headdress. (It sends a shiver down the spine, because it reminds us of seeing exactly the same
poster with Yitzhak Rabin under the keffiyeh.) But the great majority of the people understand that
a break with the US must be avoided at all costs.
Netanyahu and the right-wing hoped that the Palestinians would reject his words outright, thus
painting themselves as serial peace refusers, while the Israeli government would be seen as taking
the first small but significant step towards peace. They are sure that this could be achieved for
nothing: the Palestinian state will not be set up, the Israeli government will not give up anything, the
occupation will remain, settlement activity will go on and Obama will accept all this.
* * *
SO THE main question is: how will Obama react?
The first reaction was minor. A politely positive response.
Obama is not seeking a frontal collision with the Israeli government. It seems that he wants to exert
“soft” pressure, vigorously but quietly. To my mind, that is a wise approach.
A few hours before the speech, I met with ex-President Jimmy Carter. The meeting took place at
the American Colony hotel in East Jerusalem. It was organized by Gush Shalom, with several other
Israeli peace organizations taking part. In my opening remarks, I pointed out that we were in exactly
the same room where 16 years ago, while the Oslo agreement was being signed in Washington, Israeli
peace activists and the leaders of the Palestinian population in Jerusalem met and opened bottles of
champagne. The euphoria of those moments has disappeared without leaving a trace.
Israelis and Palestinians have lost hope. On both sides, the overwhelming majority wants an end to the
conflict but do not believe that peace is possible – and each side blames the other. Our task is to
rekindle the belief that it is indeed possible.
For this there is a need for a dramatic event, a kind of invigorating electric shock – like the historic
visit of Anwar Sadat to Jerusalem in 1977. I suggested that Obama should come to Jerusalem and
speak directly to the Israeli public, perhaps even from the Knesset rostrum, like Sadat.
After listening intently to the participants, the former President encouraged us in our activities and
put forward some proposals of his own.
* * *
THE DECISIVE point at this moment is, of course, the matter of the settlements. Will Obama insist
on a total freeze of all building activity or not?
Netanyahu hopes to wriggle out of it. He has now found a new gimmick: projects that have already
started must be allowed to be finished. One cannot stop them in the middle. The plans have already
been approved. The tenants are waiting for their apartments, and they must not be made to suffer.
The Supreme Court will not allow a freeze. (A particularly ridiculous argument, like the court allowing
a thief to spend some more of the money he has stolen before passing sentence.)
If Obama falls for this, he should not be surprised to find out belatedly that these projects include
100,000 new housing units.
This brings us to the most important fact of this week: the settlers did not raise hell after
Netanyahu’s speech. On the contrary. Here and there some feeble criticism could be heard, but the
large and armed settler population kept remarkably quiet.
Which brings us back to the unforgettable Sherlock Holmes, who explained how he solved one of his
mysteries by drawing attention to “the curious incident of the dog in the night-time.”
“But the dog did nothing in the night-time!” someone objected.
“That was the curious incident,” remarked Holmes.
Uri Avnery is an Israeli writer and peace activist with Gush Shalom. He is a contributor to
CounterPunch's book The Politics of Anti-Semitism.
I was the first to expose this news story. It was the least I could do for the gangsters who owe me
billions.
Fed faces cover-up claim on BofA merger
By Krishna Guha and Tom Braithwaite in Washington
Published: June 24 2009 23:57 | Last updated: June 24 2009 23:57
A Republican congressman on Wednesday accused the Federal Reserve of a “cover-up” over the
Bank of America-Merrill Lynch takeover, raising the stakes ahead of Fed chairman Ben Bernanke’s
appearance on Thursday before a House subcommittee investigating the deal.
Darrell Issa, the senior Republican on the subcommittee, said the Fed “engaged in a cover-up and
deliberately hid concerns and pertinent details regarding the merger from other federal regulatory
agencies”.
Dennis Kucinich, the Democratic chairman of the subcommittee, dismissed Mr Issa’s concerns, but
signalled he would attack the Fed’s handling of the BofA-Merrill deal on different lines.
A Republican memorandum cites excerpts from e-mails written by Fed officials in which they appear
to suggest they did not share complete information about ongoing discussions with BofA with the
Securities and Exchange Commission and the OCC, BofA’s regulator.
Mr Issa also repeated the claim that Mr Bernanke and the Fed “made inappropriate threats to fire
Bank of America management unless they went ahead with the shotgun wedding that was the Merrill
Lynch acquisition”.
The Fed declined to comment ahead of the hearing. However, a person familiar with Fed thinking said
the central bank and other regulators had good working relationships and that the Fed had made no
effort ever to withhold information from any other regulator.
In an April 30 letter to Mr Kucinich, Mr Bernanke stated that he did not press BofA management to
hide mounting losses at Merrill from its shareholders, and did not threaten to fire the board if it
tried to pull out of the deal.
Mr Kucinich raised different concerns about the Fed’s role. “In spite of the doubts felt about Ken
Lewis’s management of Bank of America, the Fed’s leadership orchestrated an aid package that
attached no meaningful conditions to the money,” he said.
Copyright The Financial Times Limited 2009
North Korea: "Sanity" at the Brink
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Nations that chart a self-defining course, seeking to use their land, labor, natural resources, and
markets as they see fit, free from the smothering embrace of the US corporate global order,
frequently become a target of defamation. Their leaders often have their moral sanity called into
question by US officials and US media, as has been the case at one time or another with Castro,
Noriega, Ortega, Qaddafi, Aristide, Milosevic, Saddam Hussein, Hugo Chavez, and others.
So it comes as no surprise that the rulers of the Democratic People's Republic of Korea (DPRK or
North Korea) have been routinely described as mentally unbalanced by our policymakers and pundits.
Senior Defense Department officials refer to the DPRK as a country "not of this planet," led by
"dysfunctional" autocrats. One government official, quoted in the New York Times, wondered aloud
"if they are really totally crazy." The New Yorker magazine called them "balmy," and late-night TV
host David Letterman got into the act by labeling Kim Jong-il a "madman maniac."
To be sure, there are things about the DPRK that one might wonder about, including its dynastic
leadership system, its highly dictatorial one-party rule, and the chaos that seems implanted in the
heart of its "planned" economy.
But in its much advertised effort to become a nuclear power, North Korea is actually displaying more
sanity than first meets the eye. The Pyongyang leadership seems to know something about US global
policy that our own policymakers and pundits have overlooked. In a word, the United States has never
attacked or invaded any nation that has a nuclear arsenal.
The countries directly battered by US military actions in recent decades (Grenada, Panama, Iraq,
Libya, Somalia, Yugoslavia, Afghanistan, then again Iraq), along with numerous other states that have
been threatened at one time or another for being "anti-American" or "anti-West" (Iran, Cuba, South
Yemen, Venezuela, Syria, North Korea, and others) have one thing in common: not one of them has
wielded a nuclear deterrence-until now.
Let us provide a little background. Put aside the entire Korean War (1950-53) in which US aerial
power destroyed most of the DPRK's infrastructure and tens of thousands of its civilians. Consider
more recent events. In the jingoist tide that followed the September 11, 2001 attacks on the World
Trade Center and the Pentagon, President George W. Bush claimed the right to initiate any military
action against any "terrorist" nation, organization, or individual of his choosing. Such a claim to
arbitrary power-in violation of international law, the UN charter, and the US Constitution-
transformed the president into something of an absolute monarch who could exercise life and death
power over any quarter of the Earth. Needless to say, numerous nations--the DPRK among them-
were considerably discomforted by the US president's elevation to King of the Planet.
It was only in 2008 that President Bush finally removed North Korea from a list of states that
allegedly sponsor terrorism. But there remains another more devilishly disquieting hit list that
Pyongyang recalls. In December 2001, two months after 9/11, Vice President Dick Cheney referred
chillingly to "forty or fifty countries" that might need military disciplining. A month later in his 2002
State of the Union message, President Bush pruned the list down to three especially dangerous
culprits: Iraq, Iran, and North Korea, who, he said, composed an "axis of evil."
It was a curious lumping together of three nations that had little in common. In Iraq the leadership
was secular, in Iran it was a near Islamic theocracy. And far from being allies, the two countries
were serious enemies. Meanwhile the DPRK, had no historical, cultural, or geographical links to either
Iraq or Iran. But it could witness what was happening.
The first to get hit was Iraq, nation #1 on the short list of accused evil doers. Before the Gulf War
of 1990-91 and the subsequent decade of sanctions, Iraq had the highest standard of living in the
Middle East. But years of war, sanctions, and occupation reduced the country to shambles, its
infrastructure shattered and much of its population drenched in blood and misery.
Were it not that Iraq has proven to be such a costly venture, the United States long ago would have
been moving against Iran, #2 on the axis-of-evil hit list. As we might expect, Iranian president
Mahmoud Amadinijad has been diagnosed in the US media as "dangerously unstable." The Pentagon
has announced that thousands of key sites in Iran have been mapped and targeted for aerial attack.
All sorts of threats have been directed against Tehran for having pursued an enriched uranium
program-which every nation in the world has a right to do. And on a recent Sunday TV program,
Secretary of State Hillary Clinton warned that the United States might undertake a "first strike"
against Iran to prevent its nuclear weapons development.
Rather than passively await its fate sitting in Washington's crosshairs, nation #3 on the US hit list is
trying to pack a deterrence. The DPRK's attempt at self-defense is characterized in US official
circles and US media as wild aggression. Secretary Clinton warned that the United States would not
be "blackmailed by North Korea." Defense Secretary Robert Gates fulminated, "We will not stand
idly by as North Korea builds the capability to wreak destruction on any target in Asia-or on us." The
DPRK's nuclear program, Gates warns, is a "harbinger of a dark future."
President Obama condemned North Korea's "belligerent provocative behavior" as posing a "grave
threat." In June 2009, the UN Security Council unanimously passed a US-sponsored resolution
ratcheting up the financial, trade, and military sanctions against the DPRK, a nation already hard hit
by sanctions. In response to the Security Council's action, Kim Jong il's government announced it
would no longer "even think about giving up its nuclear weapons" and would enlarge its efforts to
produce more of them.
In his earlier Cairo speech Obama stated, "No single nation should pick and choose which nation holds
nuclear weapons." But that is exactly what the United States is trying to do in regard to a benighted
North Korea--and Iran. Physicist and political writer Manuel Garcia, Jr., observes that Washington's
policy "is to encourage other nations to abide by the terms of the Nuclear Non-Proliferation Treaty--
and renounce nuclear weapons--while exempting itself." Others must disarm so that Washington may
more easily rule over them, Garcia concludes.
US leaders still refuse to give any guarantee that they will not try to topple Pyongyang's communist
government. There is talk of putting the DPRK back on the list of state sponsors of terrorism, though
Secretary Clinton admits that evidence is wanting to support such a designation.
From its lonely and precarious perch the North cannot help feeling vulnerable. Consider the
intimidating military threat it faces. The DPRK's outdated and ill-equipped army is no match for the
conventional forces of the United States, South Korea, and Japan. The United States maintains a
large attack base in South Korea. As Paul Sack reminds us in a recent correspondence to the New
York Times, at least once a year the US military conducts joint exercises with South Korean forces,
practicing a land invasion of the DPRK. The US Air Force maintains a "nuclear umbrella" over South
Korea with nuclear arsenals in Okinawa, Guam, and Hawaii. Japan not only says it can produce nuclear
bombs within a year, it seems increasingly willing to do so. And the newly installed leadership in South
Korea is showing itself to be anything but friendly toward Pyongyang.
The DPRK's nuclear arsenal is a two-edged sword. It can deter attack or invite attack. It may cause
US officials to think twice before cinching a tighter knot around the North, or it may cause them to
move aggressively toward a confrontation that no one really wants.
After years of encirclement and repeated rebuffs from Washington, years of threat, isolation, and
demonization, the Pyongyang leaders are convinced that the best way to resist superpower attack
and domination is by developing a nuclear arsenal. It does not really sound so crazy. As already
mentioned, the United States does not invade countries that are armed with long-range nuclear
missiles (at least not thus far).
Having been pushed to the brink for so long, the North Koreans are now taking a gamble, upping the
ante, pursuing an arguably "sane" deterrence policy in the otherwise insane world configured by an
overweening and voracious empire.
-----------------
Michael Parenti's recent books include: Contrary Notions: The Michael Parenti Reader (City Lights);
Democracy for the Few, 8th ed. (Wadsworth); and God and His Demons (Prometheus Books,
forthcoming). For further information, visit his website: www.michaelparenti.org.
Published on Monday, June 22, 2009 by TruthDig.com
Iran Had a Democracy Before We Took It Away
by Chris Hedges
Iranians do not need or want us to teach them about liberty and representative government. They
have long embodied this struggle. It is we who need to be taught. It was Washington that
orchestrated the 1953 coup to topple Iran’s democratically elected government, the first in the
Middle East, and install the compliant shah in power. It was Washington that forced Prime Minister
Mohammed Mossadegh, a man who cared as much for his country as he did for the rule of law and
democracy, to spend the rest of his life under house arrest. We gave to the Iranian people the
corrupt regime of the shah and his savage secret police and the primitive clerics that rose out of the
swamp of the dictator’s Iran. Iranians know they once had a democracy until we took it away.
The fundamental problem in the Middle East is not a degenerate and corrupt Islam. The fundamental
problem is a degenerate and corrupt Christendom. We have not brought freedom and democracy and
enlightenment to the Muslim world. We have brought the opposite. We have used the iron fist of the
American military to implant our oil companies in Iraq, occupy Afghanistan and ensure that the region
is submissive and cowed. We have supported a government in Israel that has carried out egregious
war crimes in Lebanon and Gaza and is daily stealing ever greater portions of Palestinian land. We
have established a network of military bases, some the size of small cities, in Iraq, Afghanistan,
Saudi Arabia, Turkey and Kuwait, and we have secured basing rights in the Gulf states of Bahrain,
Qatar, Oman and the United Arab Emirates. We have expanded our military operations to
Uzbekistan, Pakistan, Kyrgyzstan, Tajikistan, Egypt, Algeria and Yemen. And no one naively believes,
except perhaps us, that we have any intention of leaving.
We are the biggest problem in the Middle East. We have through our cruelty and violence created
and legitimized the Mahmoud Ahmadinejads and the Osama bin Ladens. The longer we lurch around
the region dropping iron fragmentation bombs and seizing Muslim land the more these monsters,
reflections of our own distorted image, will proliferate. The theologian Reinhold Niebuhr wrote that
“the most significant moral characteristic of a nation is its hypocrisy.” But our hypocrisy no longer
fools anyone but ourselves. It will ensure our imperial and economic collapse.
The history of modern Iran is the history of a people battling tyranny. These tyrants were almost
always propped up and funded by foreign powers. This suppression and distortion of legitimate
democratic movements over the decades resulted in the 1979 revolution that brought the Iranian
clerics to power, unleashing another tragic cycle of Iranian resistance.
“The central story of Iran over the last 200 years has been national humiliation at the hands of
foreign powers who have subjugated and looted the country,” Stephen Kinzer, the author of “All the
Shah’s Men: An American Coup and the Roots of Middle East Terror,” told me. “For a long time the
perpetrators were the British and Russians. Beginning in 1953, the United States began taking over
that role. In that year, the American and British secret services overthrew an elected government,
wiped away Iranian democracy, and set the country on the path to dictatorship.”
“Then, in the 1980s, the U.S. sided with Saddam Hussein in the Iran-Iraq war, providing him with
military equipment and intelligence that helped make it possible for his army to kill hundreds of
thousands of Iranians,” Kinzer said. “Given this history, the moral credibility of the U.S. to pose as a
promoter of democracy in Iran is close to nil.
Especially ludicrous is the sight of people in Washington calling for intervention on behalf of
democracy in Iran when just last year they were calling for the bombing of Iran. If they had had
their way then, many of the brave protesters on the streets of Tehran today—the ones they hold up
as heroes of democracy—would be dead now.”
Washington has never recovered from the loss of Iran—something our intelligence services never
saw coming. The overthrow of the shah, the humiliation of the embassy hostages, the laborious piecing
together of tiny shreds of paper from classified embassy documents to expose America’s venal role
in thwarting democratic movements in Iran and the region, allowed the outside world to see the dark
heart of the American empire. Washington has demonized Iran ever since, painting it as an irrational
and barbaric country filled with primitive, religious zealots. But Iranians, as these street protests
illustrate, have proved in recent years far more courageous in the defense of democracy than most
Americans.
Where were we when our election was stolen from us in 2000 by Republican operatives and a
Supreme Court that overturned all legal precedent to anoint George W. Bush president? Did tens of
thousands of us fill the squares of our major cities and denounce the fraud? Did we mobilize day
after day to restore transparency and accountability to our election process? Did we fight back with
the same courage and tenacity as the citizens of Iran? Did Al Gore defy the power elite and, as
opposition candidate Mir Hossein Mousavi has done, demand a recount at the risk of being killed?
President Obama retreated in his Cairo speech into our spectacular moral nihilism, suggesting that
our crimes matched the crimes of Iran, that there is, in his words, "a tumultuous history between us."
He went on: "In the middle of the Cold War, the United States played a role in the overthrow of a
democratically elected Iranian government. Since the Islamic Revolution, Iran has played a role in
acts of hostage-taking and violence against U.S. troops and civilians." It all, he seemed to say,
balances out.
I am no friend of the Iranian regime, which helped create and arm Hezbollah, is certainly meddling in
Iraq, has persecuted human rights activists, gays, women and religious and ethnic minorities,
embraces racism and intolerance and uses its power to deny popular will. But I do not remember
Iran orchestrating a coup in the United States to replace an elected government with a brutal
dictator who for decades persecuted, assassinated and imprisoned democracy activists. I do not
remember Iran arming and funding a neighboring state to wage war against our country. Iran never
shot down one of our passenger jets as did the USS Vincennes-caustically nicknamed Robocruiser by
the crews of other American vessels-when in June 1988 it fired missiles at an Airbus filled with
Iranian civilians, killing everyone on board. Iran is not sponsoring terrorism within the United States,
as our intelligence services currently do in Iran. The attacks on Iranian soil include suicide bombings,
kidnappings, beheadings, sabotage and "targeted assassinations" of government officials, scientists
and other Iranian leaders. What would we do if the situation was reversed? How would we react if
Iran carried out these policies against us?
We are, and have long been, the primary engine for radicalism in the Middle East. The greatest favor
we can do for democracy activists in Iran, as well as in Iraq, Afghanistan, the Gulf and the
dictatorships that dot North Africa, is withdraw our troops from the region and begin to speak to
Iranians and the rest of the Muslim world in the civilized language of diplomacy, respect and mutual
interests. The longer we cling to the doomed doctrine of permanent war the more we give credibility
to the extremists who need, indeed yearn for, an enemy that speaks in their crude slogans of
nationalist cant and violence. The louder the Israelis and their idiot allies in Washington call for the
bombing of Iran to thwart its nuclear ambitions, the happier are the bankrupt clerics who are
ordering the beating and murder of demonstrators. We may laugh when crowds supporting
Ahmadinejad call us "the Great Satan," but there is a very palpable reality that has informed the
terrible algebra of their hatred.
Our intoxication with our military prowess blinds us to all possibilities of hope and mutual cooperation.
It was Mohammed Khatami, the president of Iran from 1997 to 2005-perhaps the only honorable
Middle East leader of our time-whose refusal to countenance violence by his own supporters led to
the demise of his lofty "civil society" at the hands of more ruthless, less scrupulous opponents. It
was Khatami who proclaimed that "the death of even one Jew is a crime." And we sputtered back to
this great and civilized man the primitive slogans of all deformed militarists. We were captive, as all
bigots are, to our demons, and could not hear any sound but our own shouting. It is time to banish
these demons. It is time to stand not with the helmeted goons who beat protesters, not with those in
the Pentagon who make endless wars, but with the unarmed demonstrators in Iran who daily show us
what we must become.
The fight of the Iranian people is our fight. And, perhaps for the first time, we can match our actions
to our ideals. We have no right under post-Nuremberg laws to occupy Iraq or Afghanistan. These
occupations are defined by these statutes as criminal "wars of aggression." They are war crimes. We
have no right to use force, including the state-sponsored terrorism we unleash on Iran, to turn the
Middle East into a private gas station for our large oil companies. We have no right to empower
Israel's continuing occupation of Palestine, a flagrant violation of international law. The resistance you
see in Iran will not end until Iranians, and all those burdened with repression in the Middle East, free
themselves from the tyranny that comes from within and without. Let us, for once, be on the side of
those who share our democratic ideals.
© 2009 TruthDig.com
Chris Hedges writes a regular column for Truthdig.com. Hedges graduated from Harvard Divinity
School and was for nearly two decades a foreign correspondent for The New York Times. He is the
author of many books, including: War Is A Force That Gives Us Meaning, What Every Person Should
Know About War, and American Fascists: The Christian Right and the War on America. His most
recent book, Empire of Illusion: The End of Literacy and the Triumph of Spectacle, will be out in July,
but is available for pre-order.
Published on Tuesday, June 23, 2009 by Consortium News
Serving the Medical-Industrial Complex
by Robert Parry
The usual knock on government programs is that they're not as efficient as the private sector, which
we're told can provide the same product for less money and with higher quality. Thus, it should be no
big deal when the public and private collide because the private sector should prevail.
However, in providing health insurance, those rules clearly don't apply, which is why congressional
Republicans and so-called "centrist" Democrats are going to such lengths to deny the American
people access to a public option on health insurance.
Indeed, if a public option were to be piggybacked onto the existing Medicare bureaucracy, the
chances for savings could be impressive for average Americans and the overall American economy.
Insurance middlemen could be eliminated; investigators who ferret out "preexisting conditions"
wouldn't be needed; doctors could save on administrative costs; the burden on U.S. industry
providing health benefits could be reduced; and more money could be freed to cover the nearly 50
million uninsured or for actual doctoring.
For a nation facing multiple fiscal crises - all complicated by the costs of health care - one might think
that the most sure thing in the health care debate would be to allow a cost-saving public option, which
as President Barack Obama says would help keep private health insurers "honest" regarding their
promises to trim waste and control premiums.
According to a New York Times/CBS poll, that point is obvious to 72 percent of the American people
who favor "offering everyone a government administered health insurance plan like Medicare that
would compete with private health insurance plans."
It's also reflected in a study cited by Sen. Chuck Grassley, R-Iowa, and other insurance industry
defenders saying that 119 million Americans would bolt from their private insurers to the public
option if they were given the chance.
To put that figure in perspective, it is about two-thirds of Americans who have private insurance
through their employers or as individuals. In other words, the industry's defenders say two of every
three customers want out.
Though some analysts doubt the defection rate would reach 119 million, Grassley's argument is that
Americans would so prefer a government-run plan that it would destroy the private insurance
industry - and that therefore the public option simply can't be permitted.
Grassley's fear of 119 million Americans voting with their pocketbooks against private health
insurance represents a remarkable admission of failure by the industry and its backers. It says, in
effect, that the industry's treatment of its customers has been so highhanded over the decades that
the industry can only survive if Americans are left with the unappetizing choice of private coverage
or no coverage.
Representing Whom?
So, not only are the Republicans - and some Democrats - standing against the desires for 72 percent
of the population but, in effect, they also are trying to lock in 119 million unhappy customers for a
profit-making industry. To add another windfall for the insurance industry, Congress may compel the
near 50 million uninsured to buy insurance under penalty of fines.
Even in the sorry history of special-interest-dominated Washington, it is rare for politicians to so
blatantly adopt defense of a private industry over the will of the people.
One might think that Democrats would take this club and beat the Republicans over the head with it.
The Democrats could argue that the public option is not only popular but could save money for
struggling U.S. businesses by bringing down their health insurance costs and freeing up more money
for investment and for the hiring of new workers.
One of the key factors that drove General Motors into bankruptcy was how its health insurance
benefits for employees inflated the company's costs-per-worker total and thus hurt its
competitiveness against rivals who operate in countries where the government pays for health care.
The public option issue also would seem ready-made for Democrats given that the New York
Times/CBS poll found that a solid majority of Americans (57 percent) were willing to pay higher
taxes so that all Americans could have "health insurance that they can't lose no matter what." [NYT,
June 21, 2009]
Nevertheless, key "centrist" Democrats, such as Sens. Max Baucus of Montana and Kent Conrad of
North Dakota, are ready to scuttle the public option to secure a few GOP votes so they can claim
their plan is "bipartisan." Conrad has called for substituting a privately run, non-profit "cooperative"
for the public option.
While Conrad's "cooperative," which would be ostensibly owned by its members, has some superficial
appeal, it would require the creation of an entirely new bureaucracy - rather than relying on the
government's existing infrastructure for Medicare - and would likely be run by high-paid executives
recruited from the existing private insurance industry.
Critics of Conrad's plan also note that the cooperative would have far less leverage in negotiating
lower prices from pharmaceutical companies and other parts of the medical industry, so the savings
would be marginal - which is exactly why the idea appeals to industry groups.
Patrons and the People
It goes without saying that the medical-industry complex has made generous contributions to all the
key lawmakers, especially those like Grassley and Baucus who are at the top of the influential Senate
Banking Committee.
But the obsession of some Senate Democrats, like Conrad, to find "common ground" with Republicans
seems to go beyond simply rewarding benefactors. Though it's clear that many, if not most,
Republicans have a single-minded goal - to sabotage the Obama administration - Democrats
nevertheless continue in their quest for the elusive "bipartisanship."
This quest goes on despite the fact that Republicans were trounced in the last two elections, are
down to 40 senators, and are facing historically low approval ratings. Still, "centrist" Democrats
insist on bending over backwards to accommodate the GOP desires, even when those desires fly in
the face of popular opinion and do not represent the most sensible policies.
These Democrats - sometimes including President Obama - appear deeply influenced by Inside-the-
Beltway chatter coming from pundits who still reflect the Ronald-Reagan-to-George-W.-Bush
conventional wisdom that "government is the problem," that tax cuts are the answer to every
question, and that "self-regulating markets" have made bureaucrats largely irrelevant.
Despite the nation's cascading crises - which can be traced to too little government, excessive tax
cuts and a lack of sound regulation - the chattering class has not been shaken from its biases. So, the
minority Republicans are given far more time and space than they reasonably deserve (and much
more than minority Democrats got during George W. Bush's presidency).
Amid Republican charges of "socialism," the reaction of Democrats, like Baucus and Conrad, is to
position themselves in what they must consider the safe center, earning praise from the pundits for
their courageous willingness to stand up to the Democratic "base" - and to the overwhelming majority
of Americans - in order to stop the public option.
But Baucus and Conrad will likely find that the safe center isn't so safe. When half-measures and
half-baked compromises leave the American people disappointed or angry, the fault will be laid on
the government's failure to do the job right.
And that failure will be cited by Republicans and the pundits as further proof of the superiority of
the private sector.
© 2009 Consortium News
Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and
Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written
with two of his sons, Sam and Nat. His two previous books are Secrecy & Privilege: The Rise of the
Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & 'Project
Truth'.
Published on Tuesday, June 23, 2009 by CommonDreams.org
Israeli Leader Reveals Why Israeli Shuns Negotiation
by Ira Chernus
Israeli government officials are experts at finding excuses to avoid negotiating with Palestinians.
Israel’s Minister of Strategic Affairs, Moshe Ya'alon, pulled out an old one the other day: "There is
no partner on the Palestinian side, we just give, and we get nothing."
Others have now come up with a new one: Israeli Prime Minister Benjamin Netanyahu said in his
recent speech, “Let us begin peace negotiations immediately without prior conditions”; but the
Palestinians, backed by the Obama administration, are demanding a halt to settlement expansion as a
precondition to talks.
Either way, it seems, the Palestinians (as usual) must take all the blame.
But now, in a rare moment of unguarded honesty, Israel’s second ranking leader, Ehud Barak --
Defense Minister, former Prime Minister, former head of the military -- has let the truth slip out.
According to Israel’s premier newspaper, Ha’aretz, Barak told reporters: “In negotiations with the
Palestinians, Israel is the ‘only one that can give, the Palestinians are the underdog and the talks are
asymmetrical.’ But in regional talks, Barak said, it becomes clear that Israel is the isolated party.”
Israel has to look like the isolated underdog to keep up the myth that it is the innocent, virtuous,
aggrieved party. That has always been a fundamental principle of Israeli strategy: Someone else
must take all the blame for the conflict that keeps Israelis as well as their neighbors insecure. The
only difference now is that a top Israeli leader has admitted it in public.
Barak knows perfectly well that the other excuses for avoiding direct negotiations with the
Palestinians are bogus.
Take the “no partner” ploy. For many years the Israelis had a universally-accepted Palestinian
partner, Yasser Arafat. Arafat could not embrace Barak’s so-called “generous offer” at Camp David
in 2000 because it was actually an offer to create a state of Palestine that was bound to fail. The
New York Times recently called it, quite rightly, an “archipelago” of small clumps of land separated
by Israeli settlements, security roads, and check points. The Israelis continue to offer only variants
on the same impossible plan.
When Arafat turned down the offer, knowing that his people would never tolerate it, the Israelis
launched a calculated plan to make him “irrelevant” and then proclaim that they had “no partner for
peace.” Unfortunately, the plan worked all too well.
After Arafat’s death and the electoral victory of Hamas, the Israelis’ great fear was that the two
major Palestinian parties, Hamas and Fatah, would create a unified government, whose head would
obviously be a partner for peace. So they torpedoed every effort in that direction, exacerbating
(with U.S. help) the conflict between the two parties that continues to the present day.
Palestinian unity efforts continue, too. Fatah leader Mahmoud Abbas has just ordered the release of
all Hamas prisoners held by his security forces, in a goodwill gesture aimed at speeding the
formation of a single Palestinian government. We can expect some kind of high-profile Israeli
violence to break up that effort any day now, to make sure there is “no partner for peace.”
The other Israeli argument against negotiations -- the claim of Palestinian preconditions -- is equally
bogus. It was Netanyahu who recited, in his major address, a litany of conditions the Palestinians
would have to accept in any settlement, many of them so painful that he can be quite sure they’re
impossible for his foe to swallow: no capital in Jerusalem, no right of return (not even a symbolic
one), no withdrawal from or even freeze on settlements, and a state at some vague future date with
no army, no control of their air space, no right to sign treaties unless Israel approves them.
As Barak rightly pointed out, Israel is in a position to demand such preconditions because it has all
the power. It is “the only one that can give,” and that leaves it in a position to dictate the outcome of
negotiations from the beginning. Against all that, the Palestinian negotiators have to come up with
some way to shift the power balance a tiny bit in their direction. Otherwise, they will sit down at the
negotiating table powerless. And then, why should they bother to talk at all?
So against all of Israel’s preconditions they’ve come up with this one, relatively minor precondition of
their own: freezing expansion of the settlements immediately, which means only that Israel should
begin complying with international law. Full compliance with Article 47 of the Fourth Geneva
Convention would mean removing all the quarter-million or so Jewish settlers from the occupied
territories, as Tony Judt recently pointed out. However, as Judt noted, Netanyahu has made it
painfully clear that the settlements will stay: “His government has no intention of recognizing
international law or opinion with respect to Israel’s land-grab in “Judea and Samaria.”
That makes it all the more important for the Israelis to find some way to avoid direct talks with the
Palestinians while keeping up their image as the innocent underdogs. Hence, as Barak said quite
plainly, they will resist two-way talks with the Palestinians and demand a regional peace conference --
which can be dragged on for years, with the settlement issue lost amid the vast complexities of
regional matters, while the settlements themselves continue to grow quite unnaturally. Thank you, Mr.
Defense Minister, for that rare moment of honesty.
Ira Chernus, a Professor of Religious Studies at the University of Colorado at Boulder, is the author
of American Nonviolence: The History of an Idea and Monsters To Destroy: The Neoconservative
War on Terror and Sin. He can be contacted at chernus@colorado.edu.
Published on Wednesday, June 24, 2009 by The Baltimore Sun
What Happened to the Crackdown on Executive Pay?
by Chuck Collins & Sam Pizzigati
Last February, amid public anger over millions in bonuses at bailed-out insurance giant AIG, our top
national political leaders rushed to express their outrage - and even took some steps to place a lid on
over-the-top executive pay.
That lid has now come off.
Treasury Secretary Timothy Geithner, with his just-released rules and proposals on executive pay,
has essentially turned the specific executive pay limits that President Barack Obama announced and
Congress legislated this past winter into mushy prescriptions that pose no real threat to the
windfalls to which CEOs have so thoroughly become accustomed.
Remember that $500,000 "cap" on executive compensation that the White House announced back in
February? That maximum has now become a minimum. Under the new Treasury rules, a new federal
pay czar will "automatically approve" any paycheck from a troubled enterprise like AIG that doesn't
top half a million - and even allow with that paycheck "additional compensation paid in the form of long-
term restricted stock."
None of this backpedaling on executive pay reform should surprise us. Ever since the early 1980s,
the years when pay for power suits first started pirouetting up, up and away, the pattern has
become depressingly familiar. A CEO walks off with a windfall. A Wall Street highflyer hits an
unimaginably massive jackpot. Editorial writers tut-tut. News magazines run cover stories about
corporate greed. Lawmakers hold hearings and earnestly insist on "pay for performance."
And nothing changes. The outrages just keep getting more outrageous.
Two decades ago, a commentator labeled Warner Communications CEO Steve Ross the "prince of
pay." Mr. Ross was averaging, in the 1980s, all of $16 million a year.
In 1993, Walt Disney CEO Michael Eisner took home $203 million. An outraged Business Week called
that sum the most any CEO "has made in a single year - or probably in an entire career in the history
of American business."
Four years later, Mr. Eisner took home even more. He cashed out a stash of stock options and
cleared $565 million, the "biggest payday for an executive in history," The Washington Post
exclaimed.
These days, that $565 million payday almost seems ordinary. In 2007, the financial world's top 50
hedge fund managers averaged $581 million each.
We need to end, and soon, this endless escalation of what our power suits get to stuff in their
pockets. We simply can't afford to continue down the economic road we've been traveling.
Outrageously huge rewards, the economic meltdown of the past year has made perfectly plain, have
no redeeming social value. They serve only to create incentives for outrageous behavior. We need to
start discouraging that behavior - and we can. The best place to start: the federal tax code.
Right now, our tax code actually encourages excessive executive pay. The more companies shell out in
executive bonuses and stock awards, for instance, the more they can deduct off their taxes.
Consider, for instance, Lockheed Martin, a company that feeds almost exclusively off government
contracts. Lockheed recently announced that its CEO took home $26.5 million in 2008. Under current
law, almost all of that $26.5 million qualifies as a tax deduction for the company.
One member of Congress, Rep. Barbara Lee from California, is moving to end taxpayer subsidies for
excessive executive pay. Ms. Lee has introduced legislation, the Income Equity Act, which denies
corporations tax deductions on any executive compensation that runs over $500,000 or 25 times the
pay of a company's lowest-wage worker.
Enacting this legislation, says Ms. Lee, "would discourage skyrocketing pay at the top and encourage
companies to raise the pay of workers at the bottom."
That pay at the bottom desperately needs raising. Average Americans today, after adjusting for
inflation, are making less in weekly wages than they made back in the 1970s.
And that's no accident. For three decades now, America's corporate aristocrats have "performed" -
and pocketed personal fortunes - by attacking the well-being of average Americans. Over those
years, they've downsized workers and outsourced jobs. They've gutted pensions and benefits.
They've hollowed out our middle class.
We need to start heading in a different direction. And quick.
© 2009 The Baltimore Sun
Chuck Collins is a senior scholar at the Institute for Policy Studies in its Boston office, where he
directs the Program on Inequality and the Common Good. Sam Pizzigati, an Institute associate fellow
who lives in Kensington, edits "Too Much," an online weekly on excess and inequality. They are co-
authors of "Executive Excess," a yearly report on CEO pay.
Published on Wednesday, June 24, 2009 by Creators Syndicate
Today's Perpetrators of Gas Pump Thievery
by Jim Hightower
Like a Fourth of July crescendo of fireworks, our gasoline prices are rising higher and higher. While
this is tough on consumers, we're assured by a covey of tongue-clucking industry analysts that
nothing can be done about it, for it's simply the law of supply and demand in action - so suck it up, and
pay up.
But hold your BPExxonMobilShellChevron horses right there. Supply and demand? The supply of
crude oil has risen this year to its highest level in nearly two decades, even while the demand for
gasoline has dropped dramatically, having fallen this month to a 10-year low. Let's see - supply up,
demand down. That's a classic market formula for cheaper prices at the pump. Yet our prices have
steadily moved up, rising by two-thirds since the beginning of the year (and by 60 cents a gallon in
the past two months alone).
What's going on here is not the "magic of the marketplace," but some hocus-pocus by brand-name
dealers. What might surprise you, though, is that the wheeler-dealers now jacking up our pump prices
don't operate under the BPExxonMobilShellChevron brands - but the logos of Goldman Sachs,
Morgan Stanley and other Wall Street traders that have been placing vast, unregulated, secretive
bets on the future price of oil. They're playing an electronic casino game in a global "dark market" of
exotic derivatives and credit swaps.
If this sounds vaguely familiar to you, it's because this is the same game that Wall Street played
with subprime mortgages, leading to the present crash of our economy. And, yes, these are the exact
same banksters that you and I are presently bailing out with our trillions of tax dollars.
Yet, there they go again. By pooling money from sheltered hedge funds, sovereign state funds,
offshore accounts and other super-wealthy investors, speculators like Goldman and Morgan have
quietly been buying trillions of dollars worth of oil derivatives - which essentially are bets that oil
prices will rise to a certain level by a certain date.
Unlike those investors who actually purchase contracts for future delivery of oil, there is no limit on
how much money these gamblers can put into the oil market. Nor do they have to report to anyone
how much they have bet, even though their massive infusion of money is totally and artificially
distorting the real value of petroleum.
As CNBC television's top energy correspondent, Sharon Epperson, reported last month, "It's this
money flow - rather than the fundamental supply-demand data - that's driving oil prices higher."
Why is this allowed? Because the Commodity Futures' Modernization Act of 2000 included a
provision that was quietly tucked into the law by then-Sen. Phil Gramm, R-Texas, specifically
prohibiting any regulation of such commodity-based derivatives. Among the enthusiastic backers of
this legalized thievery were Robert Rubin, the Wall Streeter who was Bill Clinton's treasury
secretary, and his protege, Larry Summers, who is now Barack Obama's chief economic advisor.
This bipartisan cabal created a speculative mechanism that's presently sucking money out of your
pocket with every gallon of gas you pump. Meanwhile, every dollar that Goldman, Morgan and the rest
use to inflate oil prices is a dollar they are not investing in real economic activity that could create
middle-class jobs.
Of course, Wall Street culprits are trying to keep their involvement hush-hush. When a McClatchy
newspaper reporter approached Goldman Sachs about it, the response was terse: "Goldman Sachs
declines to comment for your story."
As Woody Guthrie wrote in a song about outlaws: "Some'll rob you with a six-gun/Some with a
fountain pen." It's time to regulate Wall Street's gas-pump thievery - and to put a few of the
perpetrators in jail.
© 2009 Creators Syndicate
National radio commentator, writer, public speaker, and author of the book, Swim Against The
Current: Even A Dead Fish Can Go With The Flow , Jim Hightower has spent three decades battling
the Powers That Be on behalf of the Powers That Ought To Be - consumers, working families,
environmentalists, small businesses, and just-plain-folks.
________________________________________
Article printed from www.CommonDreams.org
URL to article: http://www.commondreams.org/view/2009/06/24-7
Published on Wednesday, June 24, 2009 by TruthDig.com
Foreclosure Fiasco
by Robert Scheer
It's not working. The Bush-Obama strategy of throwing trillions at the banks to solve the mortgage
crisis is a huge bust. The financial moguls, while tickled pink to have $1.25 trillion in toxic assets
covered by the feds, along with hundreds of billions in direct handouts, are not using that money to
turn around the free fall in housing foreclosures.
As The Wall Street Journal reported Tuesday, "The Mortgage Bankers Association cut its forecast
of home-mortgage lending this year by 27% amid deflating hopes for a boom in refinancing." The
same association said that the total refinancing under the administration's much ballyhooed Home
Affordable Refinance Program is "very low."
Aside from a tight mortgage market, the problem in preventing foreclosures has to do with
homeowners losing their jobs. Here again the administration, continuing the Bush strategy, is working
the wrong end of the problem. Although President Obama was wise enough to at least launch a job
stimulus program, a far greater amount of federal funding benefits Wall Street as opposed to Main
Street.
State and local governments have been forced into draconian budget cuts, firing workers who are
among the most reliable in making their mortgage payments-when they have jobs. Yet the Obama
administration won't spend even a small fraction of what it has wasted on the banks to cover state
shortfalls.
California couldn't get the White House to guarantee $5.5 billion in short-term notes to avert severe
cuts in state and local payrolls, from prison guards to schoolteachers. Compare that with the $50
billion already given to Citigroup, plus an astounding $300 billion to guarantee that institution's toxic
assets. Citigroup benefits from being a bank "too big to fail," although through its irresponsible
actions to get that large it did as much as any company to cause this mess.
How big a mess? According to the Federal Reserve's most recent report, seven straight quarters of
declining household wealth have left Americans $14 trillion poorer. Many who thought they were
middle class have now joined the ranks of the poor. Food banks are strapped and welfare rolls are
dramatically on the rise, as the WSJ reports, with a 27 percent year-to-year increase in Oregon, 23
percent in South Carolina and 10 percent in California. And you have to be very poor to get on
welfare, thanks to President Clinton's so-called welfare reform, which he signed into law before he
ramped up the radical deregulation of the financial services industry, enabling our economic downturn.
Citigroup, the prime mover for ending the sensible restraints of the Glass-Steagall Act of 1933, is
now a pathetic ward of the state. But back in the day President Clinton would tour the country with
Citigroup founder Sandy Weill touting the wonderful work that Weill and other moguls were doing to
invest in economically depressed communities. It wasn't really happening then, and now millions of
folks in those communities have seen their houses snatched from them as if they were just pieces in a
game of Monopoly that Clinton and his fat-cat buddy were playing.
Once Weill got the radical deregulation law he wanted, he issued a statement giving credit: "In
particular, we congratulate President Clinton, Treasury Secretary Larry Summers, NEC [National
Economic Council] Chairman Gene Sperling, Under Secretary of the Treasury Gary Gensler, Assistant
Treasury Secretaries Linda Robertson and Greg Baer."
Summers is now Obama's top economic adviser, Sperling has been appointed legal counselor at
Treasury, and Gensler, a former partner in Goldman Sachs, is head of the Commodity Futures
Trading Commission, which he once attempted to prevent from regulating derivatives when it was run
by Brooksley Born. Robertson worked for Summers in pushing through the Commodity Futures
Modernization Act, which freed the derivatives market from adult supervision and contained the
"Enron Loophole," permitting that company to go wild. Robertson then became the top Washington
lobbyist for Enron and was recently appointed senior adviser to Fed Chair Ben S. Bernanke. Baer
went to work as a corporate counsel for Bank of America, which announced his appointment with a
press release crediting him with having "coordinated Treasury policy" during the Clinton years in
getting Glass-Steagall repealed. As a result of deregulation, B of A too spiraled out of control and
ended up as a beneficiary of the Treasury's welfare program.
Why was I so naive as to have expected this Democratic president to not do the bidding of the banks
when the last president from that party joined the Republicans in giving the moguls everything they
wanted? Please, Obama, prove me wrong.
© 2009 TruthDig.com
Robert Scheer is editor of Truthdig.com and a regular columnist for The San Francisco Chronicle.
Spreading the Wealth Around to the Insurance Industry & Friends
June 24, 2009 By Dean Baker
Source: Truthout
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This is the time when the excrement starts hitting the fan. The lobbyists are in overdrive, rounding
up members of Congress just like the cowboys of the Old West would bring in the herd.
The industry groups will also have their friends in the news media working overtime hyping any
possible obstacle to health care reform. And they are filling the airwaves with scary ads, warning
that people will never be able to see a doctor again if meaningful health care reform passes.
Since there are trillions of dollars at stake, the effort is understandable. The basic story is simple.
The insurance, pharmaceutical, and medical supply industries, along with the hospitals and the
American Medical Association have rigged the deck so that they get rich at the public's expense.
They have structured our health care system so that we pay more than twice as much per person as
people in other wealthy countries, even though we get worse care by many measures.
The bloat in the health care sector is projected to grow rapidly over the next decade as health care
consumes an ever larger share of the economy. The Centers for Medicare and Medicaid Services
(CMS) estimates that just the increase in health care spending over the next decade will cost us
$4.3 trillion. That is equal to a health care tax of $57,000 for an average family of four.
Who benefits from the taxpayers' generosity? CMS projects that $1.4 trillion, or $18,500 per
family will go to the hospitals. Doctors and the pharmaceutical companies are each expected to score
about $550 billion, costing families $7,300. And the insurance industry's share of GDP is projected
to rise by $360 billion, or $4,800 for an average family.
These massive transfers are not the result of the wonders of the free market. These folks are
getting money out of our pockets because their friends in Congress have rigged the deck so the
money flows from us to them. For example, the government grants the pharmaceutical industry
patent monopolies that prevent normal competition in the prescription drug market.
Unlike every other country in the world, the United States lets the drug companies use their
government-granted monopolies to charge whatever they want. As a result, we pay nearly twice as
much for our prescription drugs as people in countries like Canada and Germany.
Similarly, doctors are able to tightly control the supply of both U.S. trained physicians and the
number of doctors that can enter the country from abroad. If custodians had the same control over
the labor market for janitors, they would all be making $80,000 a year. We pay close to twice as
much for our doctors as people in other wealthy countries. The gap is especially wide for highly paid
specialists like neurosurgeons and cardiologists.
Of course the insurance industry is a total mess. They pocket more than 15 cents for every dollar
they pay out to providers. By comparison, the administrative costs of Medicare are less than 2
percent of its revenue. If the insurers ever had to compete with a publicly run insurance plan on a
level playing field, they would be blown out of the water.
We know that private insurers can't compete because we already had this experiment with the
Medicare program. When private insurers had to compete on a level playing field with the traditional
government-run plan they were almost driven from the market. That is why they got their friends in
Congress to pass Medicare Advantage. This program spreads the wealth around by giving the private
insurers a subsidy of more than 11 percent per patient.
As Congress debates health care reform we should be very clear what is going on. It is easy to
devise reforms that will reduce costs without jeopardizing the quality of care.
That is not the fight. The fight is over whether Congress will leave in place structures that will siphon
an ever larger amount of money out of taxpayers' pockets and put this money in the hands of the
insurance industry, the hospitals, the drug companies and the doctors.
Getting a robust public plan, that both individuals and employers can buy into, will be the key indicator
of whether Congress is still determined to redistribute income into the hands of the insurers, the
drug companies and the rest. A robust Medicare-type plan will not only reduce the insurance
industry's tax on our health care, it will also be able to bargain for lower prices from the drug
companies, the medical supply companies and other health care providers.
For this reason, most of the industry is united against any sort of serious public plan. Their latest
compromise is a system of small cooperative insurers that will have no bargaining power. That's a
cute joke, but it has nothing to do with health care reform.
So keep hold of your scorecard. Unless Congress creates a serious public plan, you can expect to be
hit with the largest tax increase in the history of the world - all of it going into the pockets of the
health care industry.
-- This article was published on June 22, 2009 by Truthout.
The Financial Crisis Slams Into Europe
Do Americans Realize How The Crisis Breeds Global Chaos?
March 14, 2009 By Danny Schechter
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KREMS, AUSTRIA: Obsessed as we are about our own crumbling economy, it's hard for most
Americans to see and appreciate the global nature of the crisis and how it is impacting and will impact
others throughout the world. We don't recognize how many in other countries blame the fall of their
own economies on a kind of "financial aids" born in the USA."
And even as protests spread with Britain just putting its own army on alert for fear of disruptions
this summer by anarchists with bent on class war with slogans like "burn a banker," mass
demonstrations show no sign of abating in France, Iceland, Ireland Greece and other EU countries.
People here have politicized economic issues perhaps because of a more thorough and diverse media
environment as well as an expectation that their governments have a duty to protect their people.
When I arrived in Vienna for a film forum and festival at the Danube University, I was surprised to
see merchandise and remainders marked down to flea market prices at stalls in the usual pricey
booths at an airport usually only known for pedaling luxury brands.
Some think the European Union and the Euro zone may not survive the tremors. European Commission
President Jose Manuel Barroso said on Friday. "The European Union is facing an unprecedented
situation due to the economic crisis and needs to work at different levels to restore credit flows."
He said the bloc's economy is expected to contract by 2 percent this year.
General Motors wants a bailout from European governments too with 32,000 jobs at risk.
Eastern Europe is feeling the crunch worst with its currencies reeling. Western Europe has so far
declined to come to their requests for more bailouts from Hungary, for example, once a model for
how the free market can replace Soviet bloc economics.
There are waves of protests underway in the East. Left publications report "thousands of
demonstrators in Lithuania, Latvia and Bulgaria have attacked government buildings and called on
their governments to resign as unemployment soars in Eastern Europe.
Experts predict a regional increase of 15 million to 18 million unemployed in the coming months, with
no relief as jobs for immigrants disappear in Western Europe and the United States."
Writes Mike Whitney: "The global economy is decelerating at the fastest pace on record. 40 percent
of global wealth has been wiped out. The banking system is insolvent, unemployment is soaring, tax
revenues are falling, the markets are in shock, housing is crashing, deficits are soaring, and consumer
confidence is at its lowest point in history."
When you look at some of the numbers, you can see the time bombs that are ticking away, According
to Ed Bonawitz, many countries are in deep hock, "Ireland's external debt, at US$1.8 trillion, equals
900% of the country's US$200 billion GDP. The United Kingdom's external debt of US$10.5 trillion
equals 456% of its US$2.3 trillion GDP. Switzerland's external debt of US$1.3 trillion equals 433%
of its US$300 billion GDP." Now that the credit markets are locked tight, renegotiating the terms of
these loans is virtually impossible.' U.S. Banks are said to have a loan ratio of around 26-to-1. And
European Banks have one that is around 60-to-1.
F. Wiliam Engdahl writes: "The problems in Eastern Europe which are just now emerging with full
force are, if you will, an indirect consequence of the libertine monetary policies of the Greenspan Fed
from 2002 until 2006, the period where Wall Street's asset backed securitization Ponzi Scheme
took off.
The riskiness of these eastern European loans is now coming to light as the global economic recession
in both east and west Europe is forcing western banks to pull back, refusing to renew loans or
'rollover' the credits, leaving thousands of borrowers with unpayable loan debts. The dimension of
the eastern European emerging loan crisis pales anything yet realized...
According to my well-informed City of London sources, the new concerns over bank exposures to
eastern Europe will define the next wave of the global financial crisis, one they believe could be even
more devastating than the US sub-prime securitization collapse which triggered the entire crisis of
confidence. "
Because of globalization and the interwoven nature of the world economy, what is happening there will
make things worse for us here,
Reuters reports: "A new report suggesting Eastern Europe's economic slump will drag Western
banks further into the red fanned fears that emerging economies will deepen the recession in the
West. No wonder international agencies are up in arms."
One issue that is just getting attention Europe is unregulated activity by Hedge Funds and controlling
enormous amounts of money stashed in untaxed off shore accounts. European leaders have now
agreed a tough stance on hedge funds, the highly speculative products that many blame for fuelling
instability in financial markets. Another major issue involves Swiss Banks. US tax authorities
demanded the names of 52,000 Americans banking in secret accounts to evade taxes.
Bloomberg reports: "In the past two weeks, Finance Minister Hans-Rudolf Merz said he's willing to
collect taxes on offshore accounts for the U.S., and Justice Minister Eveline Widmer-Schlumpf
offered cooperation on some cases of tax evasion.
"That's de facto abolishing banking secrecy," said Regula Staempfli, a Swiss political scientist in
Brussels."
There is also a darker dimension with reports that legitimate businesses are turning to the mafia and
organized crime gangs for the billions they need
to stay in business. Douglas Farah writes in the Counterrorism blog:
"There is strong anecdotal evidence that cartels from South America to Southeast Asia and Europe ...
are stepping in to credit breach, building relations with businessmen desperate to stay in business,
who would not normally look to the "informal" economy for a loan.
This will serve to extend the tentacles of these groups even further into the legal society and
financial structure. As (one) article notes, "Stronger organized crime means a weaker state."
A story in the Washington Post "says a new report estimated that organized crime syndicates in Italy
- including Naples's Camorra, Sicily's Cosa Nostra, Calabria's 'Ndrangheta - collect about 250 million
euros, or $315 million, from retailers every day. That is about a billion dollars every three days, or
about $122 billion a year siphoned out of a single economy. Is it any wonder Italy is a constant
economic wreck?"
If trends continue, there is apt to be more opportunities for the criminal class and more of a fusion
between so the supposedly legitimate business world and the supposedly illegitimate one.
Tony Soprano, are you paying attention?
Regulators are also monitoring missing money. Here's a headline from the Financial Times: "Lehman
Brothers' US liquidators have asked Barclays to explain what happened to an estimated $3.3bn
earmarked for bonuses and other liabilities that the UK bank received when it acquired part of the
bankrupt Wall Street company last year?
Funny business like this seems to be part of the way this business is run.
Increasingly, banking bosses are sounding like mob underbosses. Here's a quote attributed to Jimmy
Cayne, former chief of Bear Stearns about Tim Geithner who engineered the sale of his bank to JP
Morgan at a sizable loss:
"The audacity of that p- in front of the American people announcing he was deciding whether or not a
firm of this stature and this whatever was good enough to get a loan ... This guy thinks he's got a big
d-. He's got nothing, except maybe a boyfriend ... Who the f- asked you? You're not an elected
officer. You're a clerk. Believe me, you're a clerk. I want to open up on this f--r, that's all I can tell
you."
This is getting nasty. It may be time to go to the mattresses. As economies crumble and the center
doesn't hold, as poet W.H, Auden wrote, things fall apart.
News Dissector Danny Schechter is making a film based on his book PLUNDER; Investigating Our
Economic Calamity (Cosimo Books at Amazon.com) He apologizes for inaccurately quoting Karl Marx
last week because of a web hoax. Comments to Dissector@mediachannel.org
These are Obama's Wars Now
June 22, 2009 By Joshua Frank
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It's time to toss those Obama t-shirts in the trash.
Last Monday the Democrat controlled House voted 226-202 to approve a rushed $106 billion dollar
war spending bill, guaranteeing more carnage in Iraq and Afghanistan (and lately Pakistan) until
September 30, 2009, which marks the end of the budget year. The Senate voted overwhelmingly in
favor of the bill's first draft last month, with the final vote on a compromised version to occur in the
Senate sometime in the next couple of weeks.
The majority of opposition in the House came from Republicans who opposed an add-on to the bill that
would open up a $5 billion International Monetary Fund line of credit for developing countries. This
opposition in the House led Senate Majority Leader Harry Reid on Tuesday to quip, "It'll be
interesting to see what happens here. Are my Republican colleagues [in the Senate] going to join with
us to fund the troops? I hope so."
No longer can the blame for the turmoil in Iraq and Afghanistan rest at the feet of George W. Bush
alone. This is now Obama's War on Terror, fully funded and operated by the Democratic Party.
The bill that passed the House on Monday, once approved by the Senate, will not be part of the
regular defense budget as it's off the books entirely. Following the attacks on September 11, 2001,
Congress has passed similar emergency spending bills to finance US military ventures in the Middle
East. The combined "supplementals" are fast approaching $1 trillion, with 30% going to fund the war
in Afghanistan.
In addition to the latest increase in war funds, Obama is also asking for an additional $130 billion to
be added on to the defense budget for the new fiscal year starting on October 1. The president is
upholding his campaign promise to escalate the war in Afghanistan, which also means increasing the
use of remote controlled drone planes in neighboring Pakistan that are to blame for hundreds of
civilian deaths since Obama took office last January.
Despite Obama's historic (albeit rhetoric filled) speech in Cairo, the new Commander in Chief is still
not about to radically change, let alone reform, the US's long-standing role in the Middle East. A
master of his craft, Obama is simply candy coating the delivery of US imperialism in the region. Given
the lack of opposition to Obama's policies back home, it is becoming clear that he may well be more
dangerous than his predecessor when it comes to the US's motivations internationally.
Had Bush pushed for more military funds at this stage, the antiwar movement (if you can call it that)
would have been organizing opposition weeks in advance, calling out the neocons for wasting our
scarce tax dollars during a recession on a never-ending, directionless war. But since Obama's a
Democrat, a beloved one at that, mums the word.
Certainly a few progressive Democrats are dismayed by what the Obama administration is up to, but
how many of these Democrats that are upset now will be willing to break rank and oppose their party
when it matters most, like during the midterm elections coming up next year? Obama had the
majority of antiwar support shored up while he ran for the presidency, with absolutely no demands
put on his candidacy. And not surprisingly, antiwar progressives have little to show for their fawning
support.
All this begs a few questions: If not now, when exactly will Obama's policies be scrutinized with the
same veracity that Bush's were? When will the media end its love affair with Obama and hold his feet
to the fire like they did Bush once the wheels fell off the war in Iraq? When will progressives see
their issues as paramount and oppose Obama and the Democratic Party until they embrace their
concerns?
If these questions are not answered soon, we are in many more years of war and bloodshed, funded
by US taxpayers and approved by a Democrat controlled White House and Congress.
Joshua Frank is the author of Left Out! How Liberals Helped Reelect George W. Bush (Common
Courage Press, 2005), and along with Jeffrey St. Clair, the editor of Red State Rebels: Tales of
Grassroots Resistance in the Heartland, published by AK Press in July 2008.
Who Can We Bank On, Who Can We Trust, As Crisis Sharpens?
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June, 22 2009By Schechter, Danny
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Washington Seems Tethered At The Hip To Wall Street and Does It's Bidding
Can it possibly be true that the Congress can't walk and chew gum at the same time? This question is
prompted by the announcement that financial reform is being pushed back as health care becomes
the priority.
This makes me nervous for two reasons. First, it portends a long drawn out legislative battle on
health care reform with more time for industry lobbyists and the Congresspersons and Senate
persons on their payrolls to compromise away or wreck the change we so deeply need.
Second, it confirms that the lobbyists for financial institutions-the people responsible for the
collapse of our economy---have been scheming and wrangling to gut the reforms that could stop
anther economic breakdown. Reviving this industry without restructuring and re-regulating it just
guarantees another disaster down the line.
Bear in mind that that disaster is already underway despite what you may be reading about "green
shoots" and signs that a turnaround is coming because unemployment didn't go down as much as
expected-only 500,000 plus a month.
In fact, many observers see a deeper crash still coming with a depression quietly deepening, even if
most us cling to our perennial optimism and trust in the changemaker we can believe in. The
Telegraph's Ambrose Evan-Pritchard, who unfortunately has been more prescient than wrong, whines:
"Those of us who still question whether the world has purged its toxins are reduced to the same tiny
band of moaning Druids from early 2007, when we shook our heads in disbelief as the carry trade
swept Iceland to fresh madness and bankers laughed off sub-prime rot at Bear Stearns. We
learned then to thicken our skins with walnut juice, lie down in dark rooms, and dissent from Goldman
Sachs."
You may recall Dennis Kucinich asking his colleagues aloud if he was in the Congress of the United
States or the "board room of Goldman Sachs" as if the former is a wholly owned subsisidiary of the
latter. Or perhaps, there was a merger between the two in the sense that Wall Street may be down
but by more means out. It is "clawing back" its influence with a new lobbying surge which is allowing
Goldman and the big banks to pay back their TARP Money and get out from under the spectre of new
regulations, compensation limits and the like.
The Empire inside the Empire is striking back.
Meanwhile we still live with a fog of misinformation, disinformation and no information. Basic
information about monies from the Federal Reserve to Banks and financial institution has not been
disclosed. Bear in mind the Banks control the Fed-and free marketers ran the economy, not the
government.
Writes Bob Chapman of International Forecaster:
"Not one banking or Wall Street executive owned up to what really happened to cause the crisis.
They are totally lacking in honesty, integrity and decency. As it now stands we'll never know the true
inside story of what really went on. We have seen no civil or criminal charges against any of these
crooks. Not even investigations. Whatever happened to RICO.Over the past 25 years our financial
industry has descended into darkness and corruption and the people who caused it are getting away
scott free"
Wow, what an indictment! Example: do we really know the purpose or the TARP program that gave
money to banks that apparently didn't need it, but didn't say no. (The other side of giving loans to
borrowers who couldn't afford them?)
The Ritholtz blog suggests:
"It was $700 billion dollar pile of money in search of a justification for its existence.
Most people still look at TARP the wrong way. When trying to discern what the true basis of it was,
we eliminated what made no sense whatsoever, and what was left were a few strange ideas. When
you eliminate the impossible, what's left, no matter how improbable, becomes the best explanation.
What was that explanation? In Bailout Nation, we discuss the possibility that The TARP was all a giant
ruse, a Hank Paulson engineered scam to cover up the simple fact that CitiGroup (C) was teetering on
the brink of implosion. A loan just to Citi alone would have been problematic, went this line of brilliant
reasoning, so instead, we gave money to all the big banks""
Oh, that explains it.
Shamus Cooke writes on Global Research: "History will likely show that these bailouts involved the
largest transfer of wealth ever - from the working class to that small group of billionaires who own
the corporations. This fact is recognized by most people now and is such common knowledge that even
the mainstream media feels comfortable discussing it. . . matter-of-factly.
These corporations have also exerted tremendous influence in other realms of politics, working
towards destroying Obama's campaign promises of health care, job creation, civil liberties, the
Employee Free Choice Act, peace, etc.
In each case, the promised reform was gutted of its essence, and "compromise" versions of the bills
are now being discussed: instead of universal health care, we will likely be universally mandated to
purchase health insurance; instead of "job creation" we are told that the stimulus has "saved jobs"
(contrary to the evidence); while troops are "drawing down" from Iraq, the war in
Afghanistan/Pakistan is being escalated; instead of allowing workers to organize unions easier, a
compromise version â€" Employee Free Choice Act, minus card check - seems more politically
"pragmatic," etc."
At the heart of the crisis is the plight of homeowners who we know were defrauded in large
numbers, victims like the Madoff investors Yet the former are getting reimbursed to some degree,
the latter are not. Bills to help them have been killed with Matt Renner on Truthout reporting:
"A new analysis from a government watchdog group shows senators who killed off a consumer-
friendly change in law aimed at addressing the foreclosure crisis received more money in campaign
contributions from the industries their vote aided. Senators who voted against the consumer-friendly
amendment received $3.98 million from the financial industry during the 2008 election cycle, while
proponents of the bill received $2.65 million."
Could this be more corruption? Of course , but they call it politics as usual. And, that's not the
worst of it, is that foreclosures are still rising and now affecting non-subprime lenders with little
relief in sight.
Back to the banks: I have been reading complex web posts showing how the stress tests of banks
were rigged and more may be needed. I have been reading about how the unemployment figures
undercount folks out of work with the real numbers probably doubled, with minorities possibly
tripled. I have been reading essays arguing that the notion that the government is "saving jobs" is not
quantifiable with no statistical back uo.
I have been followeing the campaign to get the Federal Rserve Bank to disclose its showering of
money on financial institutions-something it refuses to do,
Who can we trust and bank on? The President wants to give us confidence but seems to be playing a
confidence game. The Banks are dissembling when they are not lying. The most trenchant critics-may
they be wrong-believe a total collapse is in the offing,
And the rest of us, mostly puzzled and paralyzed, unable to comprehend the severity of the
situation, the billions, no make that trillions, gone. How do we make sense of the game playing in State
Governments like those in California and New York a caricature of responsibility. The jobs are going
and the Banksters are still going for it, sucking up what they can in a race to the bottom.
Who can we trust? Who Can We Bank on? You tell me.
Mediachannel's News Dissector Danny Schechter is making a film based on his book PLUNDER:
Investigating Our Economic Calamity (newsdissector.com/plunder) Comments to
Dissector@mediachannel.org
How the Financial Reform Plan Protects the Status Quo
Obama's (Latest) Surrender to Wall Street
By MICHAEL HUDSON
In reaching across the aisle for Republican support – and no doubt future campaign contributions
from the financial sector Pres. Obama is morphing into Joe Lieberman. There also is a touch of Boris
Yeltsin in his sponsorship of a financial “reform” ominously similar to what advisor Larry Summers
backed in Russia – relinquishing government power to a banking elite. The Financial Regulatory Reform
proposal promotes Wall Street’s “product,” debt creation, at the expense of the economy at large,
and lets financial chieftains continue to self-regulate the debt industry – and to keep scot-free all
their gains from the past decade’s worth of fraudulent lending.
Confronting the wreckage of a debt crisis worse than any since the Great Depression, Mr. Obama has
achieved what no Republican could have: rescuing the Bush Administration’s pro-creditor policies that
fostered the Bubble Economy in the first place. “Most of the financial sector lobby community is
happy with what has emerged,” the Financial Times summarized. A spokesman for the Financial
Services Forum, a major Wall Street lobbying organization, called the proposals “careful and
balanced.”1/ With such endorsements, victims of predatory lending have good reason to worry. The
Obama plan is just the opposite from reforming the financial system along lines that progressive
Democrats and other critics have urged.
The plan’s six most fatal flaws are apparent in its preamble, which lays out a false diagnosis of the
financial problem in a way that whitewashes Wall Street (in contrast to Mr. Obama’s nice televised
populist speech giving verbal criticism to “culture of irresponsibility”). A false diagnosis must lead to
wrong-headed cures – rarely by accident. There invariably is a financial beneficiary who gains from
blind spots in a legal “reform” package.
1. Regulatory capture. Preparing the ground for future Alan Greenspan “free market” ideologues
The most serious problem is “regulatory capture”: control of the public regulatory process by the
special interests being regulated. Mr. Obama’s speech introducing his reform was forthright in
acknowledging that “some companies shop for the regulator of their choice … That is why, as part of
these reforms, we will dismantle the Office of Thrift Supervision [OTS] and close loopholes that
have allowed important institutions to cherry-pick among banking rules. We will offer only one
federal banking charter, regulated by a strengthened federal supervisor.” It was the OTS, after
all, that AIG and Washington Mutual chose as their regulator, as did GE Capital. The most
incompetent, most ideologically opposed to serious regulation, its idea of a “free market” in practice
was one free for fraud-ridden subprime lenders to do whatever they wanted.
One could go down the list of non-enforcement agencies – the Securities and Exchange Commission
(SEC) not responding to warnings about Bernie Madoff, and the most deregulatory agency of them
all: the Federal Reserve under Bubblemeister Alan Greenspan. Traditionally, the Fed has acted as
lobby for the commercial banking system and indeed for Wall Street as a whole. (Its shares are
owned by the commercial bank members of its system.) The Fed’s refusal to intervene to stop the
subprime mortgage bubble, fraudulent lending and other elements of the Greenspan Chairmanship
does not give much faith that it will take actions that will interfere with Wall Street’s money-making
at the expense of the rest of the economy. Even today, the Fed is stonewalling Congress by refusing
to release details on its $2 trillion “cash for trash” giveaway to favored Wall Street institutions.
It is supposed to be the Treasury’s role to represent the public interest. Unfortunately, appointing
Treasury Secretaries from the ranks of Wall Street management – or giving Wall Street veto power
over the nominee – undermines this mission. Elsewhere in what is supposed to be the regulatory
system of public-private checks and balances, the simple tactic of underfunding the criminal justice
system, the FBI, state and local prosecutors – or actively blocking them, as George Bush did – leaves
the economy without adequate protection against financial fraud and predatory credit. Putting the
Congressional financial committee heads up for sale to the highest campaign contributors caps the
process of transforming economic democracy into oligarchy.
Meaningful regulation should start with the premise that the right of banks to create credit out of
thin air (actually, out of strokes on a computer keyboard, as long as bankers can find borrowers to
sign IOUs) is a public utility. Mr. Obama and his Treasury do not agree. They treat credit creation as
a private Wall Street monopoly, to be regulated more in name than in practice. The result is a
Thatcherite giveaway to the banking sector – and as Tim Geithner noted, Wall Street institutions of
all stripes, from brokerage houses to automobile lenders and retail stores are now declaring
themselves “banks” in order to get government handouts to anyone who is a creditor (but nothing for
their debtors). This is part of the New Class War that the Bush-Obama administration has sponsored
to polarize the economy between creditors and debtors.
The politically astute way to deregulate a public utility – especially in the wake of a financial crisis
that has much of the population up in arms – is to shed crocodile tears over Wall Street’s “culture of
irresponsibility,” as Mr. Obama did on Wednesday, and then claim that you are “centralizing”
regulation to make it stronger rather than weaker. If you are going to block future bank regulation,
of course you promise that your act will provide greater public oversight. Mr. Obama has tapped the
Federal Reserve for this role. But this is precisely what exacerbated the Greenspan Bubble.
The deregulation-by-centralization ploy peaked when Pres. George W. Bush used it to nullify
attempts by state attorney generals to prosecute Countrywide Financial, Washington Mutual,
Citibank and other financial crooks as criminal enterprises for making fraudulent subprime mortgage
loans. The ruse Mr. Bush used to block their lawsuits was an obscure small-print rule from the 1864
National Bank Act giving Washington the power to overrule local states in bringing criminal charges.
The motivation for this Civil War law was clear enough: Local governments and their courts tended to
be venal and corrupt. Washington asserted its oversight so as to prosecute “wildcat banking” in an
era when bankers issued their own bank notes, many of which were worth much less than their face
value when their holders tried to spend them.
Pres. Bush turned this law on its head, blocking eleven state AGs from prosecuting financial fraud.
Taking matters out of their hands, he assigned the complaints to the Washington national bank
regulator – who refused to prosecute, claiming that fraud was all part of America’s wonderful free
market. This has cost the U.S. economy over a trillion dollars so far. Washington has preferred to let
the banks make their fraudulent loans, and then pay them in full (along with the financial companies
they’ve victimized, but not the personal debtors of course) for their bad loans that defaulted, so as
to “save the system.”
Mr. Obama’s reform does not propose repealing or qualifying this clause of the National Bank Act so
as to permit any prosecutor to prosecute (but not to allow prosecutions of financial fraud to be
blocked). Placing regulatory power in the Fed has the potential to annull any serious fraud
prosecution. This is the Robert Rubin and Larry Summers-style free market – free for criminalized
finance to proceed unchecked. And if Mr. Summers is to become the next Fed Chairman … well, you
can guess where this will lead on the regulation/deregulatory spectrum between creditors and
debtors!
2. Failure to give meaningful teeth to fraud reduction
Sound regulations against fraud are on the books, many of them from the New Deal. But as the
Bubble Economy saw levels of financial fraud unprecedented since the 1920s, officials who wanted to
prevent abuses found their departments un-funded. Mr. Obama’s proposal fails to address this
problem. “There are … millions of Americans who signed contracts they did not always understand
offered by lenders who did not always tell the truth,” he acknowledged in introducing his plan on
June 17. Mr. Obama promised “enforcement will be the rule, not the exception.” But where is the
funding for the FBI’s criminal fraud division? Where is effective consumer protection from insurance
companies that don’t pay, from crooked contractors and mortgage companies using property
appraisers, lawyers and collection agencies, or from stockbrokers packaging junk mortgages into
junk securities? They’ve been given a fortune in recent years – and can keep it to set themselves up
to make yet a new killing. It looks as if as little will be done to financial fraud as will be done to the
Guantanamo torturers and the high-ups who condoned their actions.
Much attention has been given to the Consumer Financial Products Agency, whose role has been
defined largely by Elizabeth Warren of the Harvard Law School. Its main aim is to enforce truth-in-
lending laws on credit-card companies and mortgage lenders. (Weren’t these laws already on the
books?) This is progress, but surely much more is needed. One way to make credit-card rates more
economic would be for the government to provide its own rival service. After all, credit cards have
become a major form of payment today. Isn’t electronic payment really a public utility? The
difference is that unlike electric and gas utilities or railroads, there is no regulation to keep fees in
line with economically necessary basic costs to the card issuer. It is fine to hear that one finally will
be able to read clearly how much one is being exploited. But why not stop the exploitation in the first
place?
Republicans may simply try to make the Consumer Financial Products Agency only “advisory,” without
real regulatory power. So even if Congress doesn’t kill the proposal, Mr. Obama doesn’t have to
worry too much about offending his number-one donor constituency. Serious regulation over Wall
Street will have about as much effect as the corporate “social responsibility” desk to which
companies assign employees on their way out. At the Senate hearings on June 18, Sen. Robert
Menendez of New Jersey asked Mr. Geithner “whether the council that would watch over the
financial regulators has any power to do anything other than make recommendations. Mr. Geithner
[said] they may not have gotten the balance exactly right, but he didn’t want the council to have the
authority to unilaterally force changes on the regulators it oversees.”
To really protect consumers, why not counter extortionate credit-card practices by re-introducing
anti-usury laws? They were evaded initially by companies incorporating themselves in states with
“race to the bottom” laws. If Washington can override state prosecutors to prevent punishment of
financial fraud, why can’t it override such ploys by the usury industry? Here’s where centralized
federal law really should count for something.
3. Failure to reverse the shift to pro-creditor bankruptcy laws
The Obama plan allows Wall Street to keep on selling its product – debt, growing at exponential
rates – as if finance were an “industry” like manufacturing. (In this spirit the Dow Jones Industrial
Average now contains the leading financial-sector firms, although it dropped Citicorp when its shares
dropped below the $1 cutoff point.) The reality is that tax favoritism for finance and debt leveraging
is largely responsible for de-industrializing the economy. More and more income is being diverted
away from buying goods and services in order to pay lenders on debts run up in the past. What is
needed to free economies from such debt is repeal of the pro-creditor reversal that Congress
passed in 2005 in response to lobbying by the credit card and banking industry. Making it harder for
personal debtors to go bankrupt, this law blocked courts from rolling back debt to the population’s
ability to pay.
Obama’s plan fails to rectify matters. It treats the financial “services” issue in isolation from the
economy’s debt problem and general economic welfare. FDIC head Sheila Bair has proposed limiting
mortgage interest to 32 per cent of the debtor’s family income. The alternative is for home
foreclosures to continue, expropriating many recent buyers and also owners who have borrowed
against their homes to pay off their higher-interest credit-card debt or simply to maintainliving
standards that their paychecks no longer cover.
Ever since colonial times, New York State has had the Fraudulent Conveyance Law on its books. This
wise legislation states that if a bank makes a loan to a borrower without knowing how the debtor can
reasonably meet the terms of the loans out of normal income, the loan is deemed fraudulent and
therefore null and void.
4. Failure to re-introduce Glass Steagall or otherwise limit lenders “too big to fail”
In presenting his program, Mr. Obama misrepresented a major cause of the Bubble Economy. It all
seemed to be caused by the impersonal force of technology “A regulatory regime,” he claimed,
“basically crafted in the wake of a 20th century economic crisis – the Great Depression – was
overwhelmed by the speed, scope, and sophistication of a 21st century global economy.” Not exactly.
The capstone of FDR’s New Deal was the Glass-Steagall Act separating commercial banking from
investment banking. This blocked the financial conflict of interest between serving retail bank
customers and investment-bank profiteering.
One consequence of Glass-Steagall was to make the merger between Citibank and Travelers
Insurance illegal. To save Citibank officials from suffering the consequences of breaking the law –
and in the process, to open the doors to the conglomerate movement that brought down the economy
– President Clinton took the advice of Messrs. Summers and Greenspan and signed into law the repeal
of Glass-Steagall in 1999. Banks were permitted to buy insurance companies’ real estate and stock
brokers and law firms to package junk mortgages into junked collateralized debt obligations (CDOs),
cover them with junk-insurance policies written by A.I.G. and other companies taking fees for
promising to pay money they did not have, and get bailed out with trillions of dollars of “taxpayer”
money in the form of the Federal Reserve and Treasury’s “cash for trash” swaps.
5. Failure to deter credit default swaps and other “casino capitalist” gambles
On Mr. Summers’ watch under the Clintons, the word “reform” came to mean what it meant in Russia,
where he had a free hand in the 1990s: a giveaway of public assets to financial insiders. In the United
States this involved stripping away the true reforms put in place from the Progressive Era to the
New Deal. Among the excuses being cited is the need to free “innovation.” But financial innovation is
not like that of manufacturing. Instead of raising productivity to produce more with less labor (and
hence at falling prices), financial innovation aims at extracting more from debtors and from money-
management clients and funds. Under free competition, for example, modern electronic technology
enables banks to clear checks in a single day. But “financial engineering” has gone hand in hand with
political engineering, permitting the banking monopoly to adhere to old pony express schedules – and
keeping depositors’ money as “float,” that is, as an interest-free loan.
The main achievement of financial engineering has been to create mathematically opaque derivatives.
As no less a speculator than George Soros has noted: “Financial engineers claimed they were reducing
risks through geographic diversification: in fact they were increasing them by creating an agency
problem. The agents were more interested in maximizing fee income than in protecting the interests
of bondholders. … Custom-made derivatives only serve to improve the profit margin of the financial
engineers designing them.” The only cure is to ban credit default swaps outright. But they have
become Wall Street’s leading profit center. Mr. Obama’s reform does not interfere with that cash
cow.
As for the “technology” of credit evaluation, modern web searching should enable any creditor or
hapless buyer of packaged bank mortgages to check the estimated price of any home or building on-
line – or any credit reporting score on individuals, for that matter. Banks have no interest in doing this
when it interferes with their rip-offs. “We’ve seen a system that allowed lenders to profit by
providing loans to borrowers who would never repay,” Mr. Obama explained, “because the lender
offloaded the loan, and the consequences, to someone else.” Much of today’s institutionalized financial
irresponsibility indeed stems from the fact that banks today no longer hold the mortgages they
originated. Instead, they “offloadi” their loans and give bonuses to officers based on their loan
volume without any consideration for loan quality or reality. It used to be