I can be most easily reached through the following email address for suggesting new additions to the subscription list or to cancel your subscription to the Bi-Weekly:
channujames@yahoo.com
The Blog Address for the Bi-Weekly is:
http://jvlbiweekly.blogspot.com
Please forward the Blog address for the Bi-Weekly to any who might be interested
Tuesday, September 30th, 2008
Volume 7, No. 17
4 Articles, 20 Pages
1. Lies, Crimes and Cover-Ups
2. Truth and War Mean Nothing At The Party Conferences
3. What The Chemical Industry Doesn't Want You To Know About Everyday Products
4. A Letter to America: You Can't Be Serious
1. LIES, CRIMES AND COVER-UPS
(Human Rights Watch in Venezuela)
BY
JAMES PETRAS
Human Rights Watch, a US-based group claiming to be a non-governmental organization, but which is in fact funded by government-linked quasi-private foundations and a Congressional funded political propaganda organization, the National Endowment for Democracy, has issued a report “A Decade Under Chavez: Political Intolerance and Lost Opportunities for Advancing Human Rights in Venezuela” (9/21/2008 hrw.org). The publication of the “Report” directed by Jose Miguel Vivanco and sub-director Daniel Walkinson led to their expulsion from Venezuela for repeated political-partisan intervention in the internal affairs of the country.
A close reading of the “Report” reveals an astonishing number of blatant falsifications and outright fabrications, glaring deletions of essential facts, deliberate omissions of key contextual and comparative considerations and especially a cover-up of systematic long-term, large-scale security threats to Venezuelan democracy posed by Washington.
We will proceed by providing some key background facts about HRW and Vivanco in order to highlight their role and relations to US imperial power. We will then comment on their methods, data collection and exposition. We will analyze each of HRW charges and finally proceed to evaluate their truth and propaganda value.
Background on Vivanco and HRW
Jose Miguel Vivanco served as a diplomatic functionary under the bloody Chilean dictator Augusto Pinochet between 1986-1989, serving no less as the butcher’s rabid apologist before the Inter-American Commission on Human Rights. His behavior was particularly egregious during the regime’s brutal repression of a mass popular uprising in the squatter settlements of Santiago in 1986-1987. With the return of electoral politics (democracy) in Chile, Vivanco took off to Washington where he set up his own NGO, the Center for Justice and International Law, disguising his right-wing affinities and passing himself off as a ‘human rights’ advocate. In 1994 he was recruited by former US federal prosecutor, Kenneth Roth, to head up the ‘Americas Division’ of Human Rights Watch. HRW demonstrated a real capacity to provide a ‘human rights’ gloss to President Clinton’s policy of ‘humanitarian imperialism’. Roth promoted and supported Clinton’s two-month bombing, destruction and dismemberment of Yugoslavia. HRW covered up the ethnic cleansing of Serbs in Kosovo by the notorious Albanian terrorists and gangsters of the Kosovo Liberation Army and the unprecedented brutal transfer of over 200,000 ethnic Serbs from the Krajina region of Croatia. HRW backed Clinton’s sanctions against Iraq leading to the deaths of over 500,000 Iraqi children. Nowhere did the word ‘genocide’ ever appear in reference to the US Administrations massive destruction of Iraq causing hundreds of thousands of premature deaths.
HRW supported the US invasion and occupation of Afghanistan where Kenneth Roth advised the US generals on how to secure the colonial occupation by avoiding massive civilian deaths. In words and deeds, HRW has played an insidious role as backer and adviser of US imperial intervention, providing the humanitarian ideological cover while issuing harmless and inconsequential reports criticizing ‘ineffective’ excesses, which ‘undermine’ imperial dominance.
HRW most notorious intervention was its claim that Israel’s murderous destruction of the Palestinian city of Jenin was ‘not genocidal’ and thus provided the key argument for the US and Israeli blocking of a UN humanitarian mission and investigative report. As in all of its ‘research’ their report was deeply colored by selective interviews and observations which understated the brutality and killings of Palestinian civilians by the Israeli state – even while the fanatics who run the major pro-Israel organizations accused HRW of bias for even mentioning a single murdered Palestinian.
Method
HRW currently makes a big play of its widespread interviews of a broad cross section of Venezuelan political and civic society government and opposition groups, as well as its consultation of most available documents. Yet the Report on Venezuela does not reflect anything of the sort. There is no careful, straightforward presentation of the government’s elaboration and justification for its actions, no academic critiques of the anti-democratic actions of anti-Chavez mass media; no discussion of the numerous journalists’ accounts which expose systematic US intervention. The Report simply records and reproduces uncritically the claims, arguments and charges of the principle publicists of the opposition while dismissing out of hand any documented counter-claims. In other words, Vivanco and company act as lawyers for the opposition rather than as serious and objective investigators pursuing a balanced and convincing evaluation of the status of democracy in Venezuela.
The political propaganda intent of Vivanco-HRW is evident in the timing of their ‘investigations’ and the publication of their propaganda screeds. Each and every previous HRW hostile ‘report’ has been publicized just prior to major conflicts threatening Venezuelan democratic institutions. In February 2002, barely two months before the US backed military coup against Chavez, HRW joined the chorus of coup planners in condemning the Chavez regimes for undermining the ‘separation of powers’ and calling for the intervention of the Organization of American States. After the coup was defeated through the actions of millions of Venezuelan citizens and loyalists military officers, HRW moved quickly to cover its tracks by denouncing the coup – but subsequently defended the media moguls, trade union bureaucrats and business elites who promoted the coup from prosecution, claiming the coup promoters were merely exercising their ‘human rights’. HRW provides a novel meaning to ‘human rights’ when it includes the right to violently overthrow a democratic government by a military coup d’etat.
Following the military coup in 2002 and the bosses’ lockout of 2003, HRW published a report condemning efforts to impose constitutional constraints on the mass media’s direct involvement in promoting violent actions by opposition groups or terrorists. President Chavez’ “Law for Social Responsibility in Radio and Television” provided greater constitutional guarantee for freedom of speech than most Western European capitalist democracies and was far less restrictive than the measures approved and implemented in Bush’s US Patriot Act, which HRW has never challenged, let alone mounted any campaign against.
Just prior to the political referenda in 2004 and 2007, HRW issued further propaganda broadsides which were almost identical in wording to the opposition (in fact HRW ‘Reports’ were widely published and circulated by all the leading opposition mass media). HRW defended the ‘right’ of the US National Endowment for Democracy to pour millions of dollars to fund opposition ‘NGO’s’, such as SUMATE, accusing the Chavez government of undermining ‘civil society’ organizations. Needless to say, similar activity in the US by an NGO on behalf of any foreign government (with the unique exception of Israel) would require the NGO to register as a foreign agent under very strict US Federal laws; failure to do so would lead to federal prosecution and a jail term of up to 5 years. Apparently, HRW’s self-promoted ‘credibility’ as an international ‘humanitarian’ organization protects it from being invidiously compared to an agent of imperialist propaganda.
HRW: Five Dimensional Propaganda
The HRW Report on Venezuela focuses on five areas of politics and society to make its case that democracy in Venezuela is being undermined by the Presidency of Hugo Chavez: political discrimination, the courts, the media, organized labor and civil society.
1.Political Discrimination
- The Report charges that the government has fired and blacklisted political opponents from some state agencies and from the national oil company.
- Citizen access to social programs is denied based on their political opinions.
- There is discrimination against media outlets, labor unions and civil society in response to legitimate criticism or political activity.
Between December 2002 and 2003, following the failure of the military coup of the previous April, the major business organizations, senior executives of the state oil company and sectors of the trade union bureaucracy organized a political lockout shutting down the oil industry, paralyzing production through sabotage of its computer-run operations and distribution outlets in a publicly stated effort to deny government revenues (80% of which come from oil exports) and overthrow the democratically elected government. After 3 months and over $20 billion dollars in lost revenues and hundreds of millions of dollars in damage to machinery, with the aid of the majority of production workers and technicians, the bosses ‘lockout’ was defeated. Those officials and employees engaged in the political lockout and destruction of equipment and computers were fired. The government followed normal procedures backed by the majority of oil workers, who opposed the lockout, and dismissed the executives and their supporters in order to defend the national patrimony and social and investment programs from the self-declared enemies of an elected government. No sane, competent, constitutional lawyer, international human rights lawyer, UN commissioner or the International Court official considered the action of the Venezuelan government in this matter to constitute ‘political discrimination’. Even the US State Department, at that time, did not object to the firing of their allies engaged in economic sabotage. HRW, on the other hand, is more Pope than the Pope.
Nothing captures the ludicrous extremism of the HRW than its charge that citizens are denied access to social programs. Every international organization involved in assessing and developing large social programs, including UNESCO, the World Health Organization and the UN Food and Agricultural Organization, have praised the extent and quality of the coverage of the social programs instituted by the Chavez government covering 60% of the population and almost 100% of the poor. Since approximately between 20-30% of the poor still vote for the opposition, it is clear that needy citizens critical of the government have equal access to social programs, including food subsidies, free health care and education. This social safety net is more inclusive than ever before in the history of Venezuela. In fact some of the poor suburbs of Caracas, like Catia, which voted down the 2007 referendum, are major recipients of large-scale, long-term social assistance programs.
Only scoundrels or the ill informed could be convinced of the HRW charge of discrimination against mass media outlets, labor unions and civil society groups. The opposition controls 95% of the newspapers, a majority of the television and radio outlets and frequencies, with the widest national circulation. The government has ‘broken’ the ruling class monopoly on information by funding two major TV stations and a growing number of community based radio stations.
There are more trade union members and greater trade union participation in enterprises, internal debates and free elections than ever before under previous regimes. Rival lists and intense competition for office between pro and anti-government lists are common in the trade unions confederation (UNT). The entire HRW ‘Report’ is based on complaints from the authoritarian CTV(Confederation of Venezuelan Workers/Confederacion de Trabajadores de Venezuela) bureaucrats who have lost most of their supporters and are discredited because of their role in supporting the bloody April 2002 coup. They are universally disdained; militant workers have not forgotten their corruption and gangster tactics when they collaborated with previous rightwing regimes and employers.
2. The Courts
HWR claims that President Chavez has “effectively neutralized the judiciary as an independent branch of government”. The claim that the judiciary was ‘independent’ is a new argument for HRW – because a decade earlier when Chavez’ 1999 constitution was approved by referendum, HRW decried the ‘venality, corruption and bias of the entire judicial system’. After years of releasing the leaders of the 2002 coup, postponing rulings and undermining positive legislation by elected legislative bodies and after revelations of high and lower court bribe taking, the Government finally implemented a series of democratically approved reforms, expanding and renewing the judicial system. The fact that the new court appointees do not follow the past practices of the opposition-appointed judges has evoked hysterical cries by HRW that the new reformed courts ‘threaten fundamental rights’. The most bizarre claim by HRM is that the Supreme Court did not ‘counter’ a 2007 constitutional reform package. In fact the Supreme Court approved the placing of constitutional reforms to a popular referendum in which the Chavez government was narrowly defeated. The Venezuelan Supreme Court subsequently respected the popular verdict – unlike US Supreme Court, which overturned the popular vote in the 2000 and 2004 Presidential elections, a constitutional crime against the popular will, which Kenneth Roth, Vivanco and the rest of HRW have yet to condemn.
3. The Media
Every outside media specialist has been highly critical of the advocacy of violent action (leading up to the coup) and gross falsifications and libelous ‘reports’ (including racist epithets against Hugo Chavez) propagated by the ruling class-dominated mass media. A single opposition television network just had one of its many outlets suspended for openly backing the opposition military seizure of power, an action that any Western capitalist democracy would have taken in the wake of a violent uprising. HRW did not, has not and will not condemn the arrest of dozens of US and international journalists, some brutally beaten, covering the Republican and Democratic Presidential Conventions. Nothing even remotely resembling the extraordinary powers of ‘preventive detention’ of journalists by the US Homeland Security/local and state police forces exists in Venezuela. The wanton destruction of journalists’ cameras and tape recorders by the police at the US Republican Party Convention would be un-imaginable in Venezuela today. In contrast the only offense prosecuted in Venezuela against the media is the act of supporting and advocating violence aimed at overthrowing democratic institutions. Like all countries, Venezuela has laws dealing with libel and slander; these are far weaker than any comparable statutes in the countries upholding the tradition of the Magna Carta. HRW blatantly falsifies reality by claiming state control of the print media: All one needs to do is peruse any newsstand in Venezuela to see a multiplicity of lurid anti-government headlines, or tune into the radio or television stations and view news accounts that compete for the worst anti-Chavez propaganda found in the US Fox News or CNN.
4. Organized Labor
HRW claims that the Venezuelan government has violated ‘basic principles of freedom of association’ because it requires state oversight and certification of union elections and that by denying the right to bargain collectively to non-certified unions, it undermines workers’ rights to freely join the union of their choosing and to strike. Practically every government in the West has rules and regulations regarding oversight and certification of union elections, none more onerous than the US starting with the Taft-Hartley Act of the 1940’s and the ‘Right to Work’ Laws current in many states, which have reduced the percentage of unionized workers in the private sector to less than 3%. In contrast, during the Chavez Presidency, the number of unionized workers has more than doubled, in large part because new labor legislation and labor officials have reduced employer prerogatives to arbitrarily fire unionized workers. The only union officials who have been ‘decertified’ are those who were involved in the violent coup of April 2002 and the employers lockout intended to overthrow the government, suspend the constitution and undermine the very existence of free unions. Former Pinochet official Jose Miguel Vivanco delicately overlooks the gangsterism, thuggery and fraudulent election procedures, which ran rampant under the previous rightwing Venezuelan labor confederation, CTV. It was precisely to democratize voting procedures and to break the stranglehold of the old-guard trade union bosses that the government monitors oversaw union elections, many of which had multi-tendency candidates, unfettered debates and free voting for the first time.
I attended union meetings and interviewed high level CTV trade unions officials in 1970, 1976 and 1978 and found high levels of open vote buying, government and employer interference and co-optation, collaboration with the CIA-funded American Institute of Free Labor Development and large-scale pilfering of union pension funds, none of which was denounced by HRW. I attended the founding of the new Venezuelan union confederation, Union Nacional de Trabajadores (UNT) in 2003 and a subsequent national congress. I have witness a totally different unionism, a shift from government-run ‘corporate’ business unionism to independent social movement unionism with a decidedly class oriented approach. The UNT is a multi-tendency confederation in which diverse currents compete, with varying degrees of support and opposition to the Chavez Government. There are few impediments to strikes and there is a high degree of independent political action with no inhibition to workers resorting to strikes in order to demand the ouster of pro-employer labor officials.
For example, this year, steel workers in the Argentine-owned firm SIDOR, went on strike several times protesting private sector firings (HRW, of course never discussed private sector violations of workers rights). Because the Venezuelan Labor Minister tended to take the side of the employers, the steelworkers marched into a meeting where Chavez was speaking and demanded the dismissal of his Minister. After conferring with the workers’ leaders, Chavez fired the Labor Minister, expropriated the steel plant and accepted workers demands for trade union co-management. Never in Venezuelan labor history have workers exercised this degree of labor influence in nationalized plants. There is no doubt that there are government officials who would like to ‘integrate’ labor unions closer to the state; the new unionists do spend too much time in internal debates and internecine struggles instead of organizing the informal and temporary worker sectors. But one fact stands out: Unionized and non-unionized Venezuelan workers have experienced greater social welfare payments, rising living standards, greater job protection and greater free choice in union affiliation than any previous period in their history. It is ironic that Vivanco, who never raised a word against Pinochet’s anti-labor policies, an uncritical apologist of the AFL-CIO (the declining and least effective labor confederation in the industrialized West), should launch a full-scale attack on the fastest growing, independent and militant trade union movement in the Western hemisphere. Needless to say, Vivanco avoids any comparative analysis, least of all between Venezuelan and US labor over the spread of union organizing, internal democracy and labor representation in industry, social benefits and influence over government policy. Nor does HRW refer to the positive assessment by independent international labor organizations regarding union and labor advances under the Chavez Presidency.
5. Civil Society and HRW: The Mother of All Perversities
Jose Miguel Vivanco, who kept quiet during his years as a state functionary serving the Chilean dictator Pinochet, while thousands of protestors were beaten, jailed and even tortured and killed and courageous human rights groups were routinely assaulted, shamelessly claims that President Chavez has adopted “an aggressively adversarial approach to local rights advocates and civil society organization.”
President Chavez has actively promoted a multitude of independent, democratically elected community councils with over 3 million affiliated members, mostly from the poorest half of the population. He has devolved decision-making power to the councils, bypassing the party-dominated municipal and state officials, unlike previous regimes and US AID programs, which channeled funds through loyal local bosses and clients. Never has Venezuela witnessed more intense sustained organization, mobilization and activity of civil society movements. This cuts across the political spectrum, from pro-Chavez to pro-oligarch neighborhood, civic, working class and upper class groups. Nowhere in the world are US-funded groups, engaged in overt extra-parliamentary and even violent confrontations with elected officials, tolerated to the degree that they enjoy freedom of action as in Venezuela. In the US, foreign-funded organizations (with the exception of Israeli-funded groups) are required to register and refrain from engaging in electoral campaigning, let alone in efforts to destabilize legitimately constitutional government agencies. In contrast, Venezuela asked the minimum of foreign government-funded self-styled NGOs in requiring them to register their source of funding and comply with the rules of their constitution, that is, to stay out of virulent partisan political action. Today, as yesterday, all the ‘civil society’ organizations, including these funded by the US, which routinely attack the Chavez government, can operate freely, publish, assemble and demonstrate unimpeded. Their fundamental complaint, echoed by HRW, is that the Chavez government and its supporters criticize them: According to the new HRW definition of civil society freedom, the opposition has the right to attack the government - but not the other way around; some countries can register foreign-funded organizations - but not Venezuela; and some government can jail terrorists and coup-makers and identify and criticize their accomplices – but not Venezuela. The grotesque double-standard, practiced by Human Rights Watch, reveals their political allegiances: Blind to the vices of the US as it descends into a police state and equally blind to the virtues of a growing participatory democracy in Venezuela.
The ‘Report’ contains egregious omissions. It fails to mention that Venezuela, under President Chavez, has experienced twelve internationally supervised and approved elections, including several presidential, congressional and municipal elections, referenda and recall elections. These have been the cleanest elections in Venezuelan history and certainly with more honest vote counting than one would find in the US presidential contests.
The ‘Report’ fails to report on the serious security threats including the recording of phone conversations of active and retired high military officials planning to violently seize power and assassinate President Chavez. Under the extraordinary degree of tolerance in Venezuela, not a single constitutional right has been suspended. In the US, similar terrorist actions and plans would have led to a state of emergency and the probable pre-emptive mass incarceration of thousands of government critics and activists. HRW ignores and downplays security threats to Venezuelan democracy – whether it involves armed incursions from Colombian paramilitary groups allied with the pro-US Venezuelan opposition, the assassination of the chief federal prosecutor Danilo Anderson who was investigating the role of the opposition in the bloody coup of April 2002, the US-backed secessionist movement in the state of Zulia, the collusion of the mass media with violent student mobs in assaulting Chavez supporters on campus or the economic sabotage and panic caused by the private sector’s hoarding of essential food and other commodities in the lead-up to the 2007 referendum.
One of Vivanco’s most glaring omissions is the contrast between Venezuela’s open society approach to the hundreds of thousands of undocumented immigrant workers from Colombia and the US authoritarian practice of criminalizing its undocumented laborers. While the US Homeland Security and Immigration police have implemented arbitrary mass arrests, assaults and deportation of working heads of immigrant families – leaving their wives and children vulnerable to destitution, Chavez has awarded over a million undocumented Colombian immigrant workers and family members with residency papers and the opportunity for citizenship.
HRW has yet to protest Washington’s brutal denial of human rights to its Latin American and Asian immigrant workers in recent months. HRW did not issue a single protest when US-backed local oligarch politicians, local government officials and racist gangs in Bolivia went on a rampage and slaughtered three dozen unarmed Indian peasant workers. Vivanco’s squalid selective slandering of Venezuela is only exceeded by his systematic silence when there are abuses involving US collaborators!
Conclusion
The Human Rights Watch Report on Venezuela is a crude propaganda document that, even in its own terms, lacks the minimum veneer of ‘balance’, which the more sophisticated ‘humanitarian’ imperialists have put out in the past. The omissions are monumental: No mention of President Chavez’ programs which have reduced poverty over the past decade from more than 60% to less than 30%; no recognition of the universal health system which has provided health care to 16 million Venezuelan citizens and residents who were previously denied even minimal access; and no acknowledgment of the subsidized state-run grocery stores which supply the needs of 60% of the population who can now purchase food at 40% of the private retail price.
HRW’s systematic failure to mention the advances experienced by the majority of Venezuelan citizens, while peddling outright lies about civic repression , is characteristic of this mouthpiece of Empire. Its gross distortion about labor rights makes this report a model for any high school or college class on political propaganda.
The widespread coverage and uncritical promotion and citation of the ‘Report’ (and the expulsion of its US-based authors for gross intervention on behalf of the opposition) by all the major newspapers from the New York Times, to Le Monde in France, the London Times, La Stampa in Italy and El Pais in Spain gives substance to the charge that the Report was meant to bolster the US effort to isolate Venezuela rather than pursue legitimate humanitarian goals in Venezuela.
The major purpose of the HRW ‘Report’ was to intervene in the forthcoming November municipal and state elections on the side of the far-right opposition. The ‘Report’ echoes verbatim the unfounded charges and hysterical claims of the candidates supported by the far right and the Bush Administration. HRW always manages to pick the right time to issue their propaganda bromides. Their reports mysteriously coincide with US intervention in electoral processes and destabilization campaigns. In Venezuela today the Report has become one of the most widely promoted propaganda documents of the leading rightist anti-Chavez candidates.
For the partisans of democracy, human rights and self-determination, every effort should be made to expose the insidious role of HRW and its Pinochetista propagandist, Vivanco, for what they are – publicists and promoters of US-backed clients who have given ‘human rights’ a dirty name.
2. TRUTH AND WAR MEAN NOTHING AT THE PARTY CONFERENCES
BY
JOHN PILGER
Britain's political conference season of 2008 will be remembered as The Great Silence. Politicians have come and gone and their mouths have moved in front of large images of themselves, and they often wave at someone.
There has been lots of news about each other. Adam Boulton, the political editor of Sky News, and billed as "the husband of Blair aide Anji Hunter," has published a book of gossip derived from his "unrivaled access to No 10." His revelation is that Tony Blair's mouthpiece told lies. The war criminal himself has been absent, but the former mouthpiece has been signing his own book of gossip, and waving. The club is celebrating itself, including all those, Labour and Tory, who gave the war criminal a standing ovation on his last day in parliament and who have yet to vote on, let alone condemn, Britain's part in the wanton human, social and physical destruction of an entire nation. Instead, there are happy debates such as, "Can hope win?" and, my favorite, "Can foreign policy be a Labour strength?" As Harold Pinter said of unmentionable crimes: "Nothing ever happened. Even while it was happening, it wasn't happening. It didn't matter. It was of no interest."
The Guardian's economics editor, Larry Elliott, has written that the Prime Minister "resembles a tragic hero in a Hardy novel: an essentially good man brought down by one error of judgment." What is this one error of judgment? The bankrolling of two murderous colonial adventures? No. The unprecedented growth of the British arms industry and the sale of weapons to the poorest countries? No. The replacement of manufacturing and public service by an arcane cult serving the ultra-rich? No. The Prime Minister's "folly" is "postponing the election last year." This is the March Hare Factor.
Following the US
Reality can be detected, however, by applying the Orwell Rule and inverting public pronouncements and headlines, such as "Aggressor Russia facing pariah status, US warns," thereby identifying the correct pariah; or by crossing the invisible boundaries that fix the boundaries of political and media discussion. "When truth is replaced by silence," said the Soviet dissident Yevgeny Yevtushenko, "the silence is a lie."
Understanding this silence is critical in a society in which news has become noise. Silence covers the truth that Britain's political parties have converged and now follow the single-ideology model of the United States. This is different from the political consensus of half a century ago that produced what was known as social democracy. Today's political union has no principled social democratic premises. Debate has become just another weasel word and principle, like the language of Chaucer, is bygone. That the poor and the state fund the rich is a given, along with the theft of public services, known as privatization. This was spelt out by Margaret Thatcher but, more importantly, by new Labour's engineers. In The Blair Revolution: Can New Labour Deliver? Peter Mandelson and Roger Liddle declared Britain's new "economic strengths" to be its transnational corporations, the "aerospace" industry (weapons) and "the preeminence of the City of London." The rest was to be asset-stripped, including the peculiar British pursuit of selfless public service. Overlaying this was a new social authoritarianism guided by a hypocrisy based on "values." Mandelson and Liddle demanded "a tough discipline" and a "hardworking majority" and the "proper bringing-up [sic] of children." And in formally launching his Murdochracy, Blair used "moral" and "morality" 18 times in a speech he gave in Australia as a guest of Rupert Murdoch, who had recently found God.
A "think tank" called Demos exemplified this new order. A founder of Demos, Geoff Mulgan, himself rewarded with a job in one of Blair's "policy units," wrote a book called Connexity. "In much of the world today," he offered, "the most pressing problems on the public agenda are not poverty or material shortage . . . but rather the disorders of freedom: the troubles that result from having too many freedoms that are abused rather than constructively used." As if celebrating life in another solar system, he wrote: "For the first time ever, most of the world's most powerful nations do not want to conquer territory."
That reads, now as it ought to have read then, as dark parody in a world where more than 24,000 children die every day from the effects of poverty and at least a million people lie dead in just one territory conquered by the most powerful nations. However, it serves to remind us of the political "culture" that has so successfully fused traditional liberalism with the lunar branch of western political life and allowed our "too many freedoms" to be taken away as ruthlessly and anonymously as wedding parties in Afghanistan have been obliterated by our bombs.
The product of these organized delusions is rarely acknowledged. The current economic crisis, with its threat to jobs and savings and public services, is the direct consequence of a rampant militarism comparable, in large part, with that of the first half of the last century, when Europe's most advanced and cultured nation committed genocide. Since the 1990s, America's military budget has doubled. Like the national debt, it is currently the largest ever. The true figure is not known, because up to 40 per cent is classified "black" – it is hidden. Britain, with a weapons industry second only to the US, has also been militarized. The Iraq invasion has cost $5trn, at least. The 4,500 British troops in Basra almost never leave their base. They are there because the Americans demand it. On 19 September, Robert Gates, the American defense secretary, was in London demanding $20bn from allies like Britain so that the US invasion force in Afghanistan could be increased to 44,000. He said the British force would be increased. It was an order.
In the meantime, an American invasion of Pakistan is under way, secretly authorized by President Bush. The "change" candidate for president, Barack Obama, had already called for an invasion and more aircraft and bombs. The ironies are searing. A Pakistani religious school attacked by American drone missiles, killing 23 people, was set up in the 1980s with CIA backing. It was part of Operation Cyclone, in which the US armed and funded mujahedin groups that became al-Qaeda and the Taliban. The aim was to bring down the Soviet Union. This was achieved; it also brought down the Twin Towers.
War of the world
On 20 September the inevitable response to the latest invasion came with the bombing of the Marriott Hotel in Islamabad. For me, it is reminiscent of President Nixon's invasion of Cambodia in 1970, which was planned as a diversion from the coming defeat in Vietnam. The result was the rise to power of Pol Pot's Khmer Rouge. Today, with Taliban guerrillas closing on Kabul and NATO refusing to conduct serious negotiations, defeat in Afghanistan is also coming.
It is a war of the world. In Latin America, the Bush administration is fomenting incipient military coups in Venezuela, Bolivia, and possibly Paraguay, democracies whose governments have opposed Washington's historic rapacious intervention in its "backyard." Washington's "Plan Colombia" is the model for a mostly unreported assault on Mexico. This is the Merida Initiative, which will allow the United States to fund "the war on drugs and organized crime" in Mexico – a cover, as in Colombia, for militarizing its closest neighbor and ensuring its "business stability."
Britain is tied to all these adventures – a British "School of the Americas" is to be built in Wales, where British soldiers will train killers from all corners of the American empire in the name of "global security."
None of this is as potentially dangerous, or more distorted in permitted public discussion, than the war on Russia. Two years ago, Stephen Cohen, professor of Russian Studies at New York University, wrote a landmark essay in the Nation which has now been reprinted in Britain. He warns of "the gravest threats [posed] by the undeclared Cold War Washington has waged, under both parties, against post-communist Russia during the past 15 years." He describes a catastrophic "relentless winner-take-all of Russia's post-1991 weakness," with two-thirds of the population forced into poverty and life expectancy barely at 59. With most of us in the West unaware, Russia is being encircled by US and NATO bases and missiles in violation of a pledge by the United States not to expand NATO "one inch to the east." The result, writes Cohen, "is a US-built reverse iron curtain [and] a US denial that Russia has any legitimate national interests outside its own territory, even in ethnically akin former republics such as Ukraine, Belarus and Georgia. [There is even] a presumption that Russia does not have full sovereignty within its own borders, as expressed by constant US interventions in Moscow's internal affairs since 1992 . . . the United States is attempting to acquire the nuclear responsibility it could not achieve during the Soviet era."
This danger has grown rapidly as the American media again presents US-Russian relations as "a duel to the death – perhaps literally." The liberal Washington Post, says Cohen, "reads like a bygone Pravda on the Potomac." The same is true in Britain, with the regurgitation of propaganda that Russia was wholly responsible for the war in the Caucasus and must therefore be a "pariah." Sarah Palin, who may end up US president, says she is ready to attack Russia. The steady beat of this drum has seen Moscow return to its old nuclear alerts. Remember the 1980s, writes Cohen, "when the world faced exceedingly grave Cold War perils, and Mikhail Gorbachev unexpectedly emerged to offer a heretical way out. Is there an American leader today ready to retrieve that missed opportunity?" It is an urgent question that must be asked all over the world by those of us still unafraid to break the lethal silence.
Stephen Cohen's article, "The New American Cold War," is reprinted in full in the current issue of the Spokesman, published by the Bertrand Russell Peace Foundation.
3. WHAT THE CHEMICAL INDUSTRY DOESN'T WANT YOU TO KNOW ABOUT EVERYDAY PRODUCTS
BY
ELAINE SHANNON
It takes a lot of nerve to go up against the $3 trillion-a-year global chemical industry.
Ask University of Missouri-Columbia scientists Frederick Vom Saal and Wade Welshons. They've been in the industry's crosshairs for more than a decade, since their experiments turned up the first hard evidence that miniscule amounts of bisphenol A (BPA), an artificial sex hormone and integral component of a vast array of plastic products, caused irreversible changes in the prostates of fetal mice.
Their findings touched off a steady drumbeat that has led to a ban on BPA-laden baby bottles in Canada, mounting support for a similar ban in the U.S., major retailers pulling plastic products off their shelves, a consumer run on glass baby bottles and a blizzard of scientific reports raising increasingly disturbing questions about the chemical's dangers at the trace levels to which people are routinely exposed.
But back in early 1997, when the Missouri team produced its pioneering research on low-dose BPA, challenging the chemical-industrial complex seemed quixotic, even risky. Soon after the report appeared, a scientist from Dow Chemical Company, a major BPA manufacturer, showed up at the Missouri lab, disputed the data and declared, as Vom Saal recalls, "We want you to know how distressed we are by your research."
"It was not a subtle threat," Vom Saal says. "It was really, really clear, and we ended up saying, threatening us is really not a good idea."
The Missouri scientists redoubled their investigations of BPA and churned out more evidence of low-dose BPA toxicity to the reproductive systems of test animals. Industry officials and scientist allies fired back, sometimes in nose-to-nose debates at scientific gatherings, sometimes more insidiously.
"I heard [chemical industry officials] were making blatantly false statements about our research," says Welshons. "They were skilled at creating doubt when none existed."
On at least one occasion, the industry tried to mute Vom Saal's increasingly insistent voice. In 2001, according to three knowledgeable sources, a representative of the American Chemistry Council, the industry trade group, called an official at the Washington-based Society for Women's Health Research (SWHR) to urge that Vom Saal be barred from the dais at an upcoming convocation at Stanford University. Society scientific director Sherry Martz says the industry spokesman objected to Vom Saal's appearance at the prestigious event on grounds that his work was "very controversial, and not everybody believes what he's saying."
"Our response," says Martz, "was no."
By that time, Vom Saal, Welshons and their Missouri colleagues realized that they had a tiger by the tail. The financial stakes were mind-boggling. The global chemical industry produces about 6 billion pounds of BPA annually, generating at least $6 billion in annual sales. The value of BPA-based manufactured goods, from cell phones and computers to epoxy coatings and dental bindings, is probably incalculable. Though scientists have known since the 1930s that BPA mimics estrogen in the body, for unrelated reasons, the chemical serves as an essential building block of hard, clear polycarbonate plastics and tough epoxy resins, ubiquitous materials in the modern world.
"It's probably the largest volume endocrine-disrupting chemical in commerce," says Vom Saal. "This stuff is in everything." Because plastics made with BPA break down easily when heated, microwaved, washed with strong detergents or wrapped around acidic foods like tomatoes, trace amounts of the potent hormone leach into food from epoxy lacquer can linings, polycarbonate bottles and other plastic food packaging.
Environmental Working Group studies have found BPA in more than half the canned foods and beverages sampled from supermarkets across the U.S., in baby bottles and in the linings of nearly all infant formula cans. "Can you imagine," says Vom Saal, "extracting estrogen out of a packet of birth control pills and making baby bottles out of it? It's an act of insanity."
But the industry's increasingly noisy denials backfired. Scientists surge toward burning questions the way news crews chase hurricanes. By the turn of the Millennium, dozens of scientists were launching their own investigations of the chemical. Among them was Washington State University reproductive scientist Patricia Hunt, who had become intrigued with BPA because of a laboratory accident. In 1998, she was studying eggs from normal and mutant mice when, she says, "all of a sudden, the control data went completely crazy and the eggs from perfectly normal females were showing us something really bizarre -- stronger abnormalities than we were seeing in the mutants."
Hunt's search for lab contaminants led to a temporary lab aide who had washed the plastic cages and bottles with a caustic floor detergent, unleashing enough BPA into the control animals' food and water to scramble the chromosome alignment in their eggs.
What Hunt saw under her microscope stunned her. "Like most Americans, I thought, my government protects me from this kind of stuff," she says. The incident convinced her that "we're up against big industry, and they're running pretty effective damage control." She locked down into BPA research for the better part of a decade, eventually concluding that "exposure to low levels of BPA -- levels that we think are in the realm of current human exposure -- can profoundly affect both developing eggs and sperm."
In 2006, Hunt joined Vom Saal, Welshons and 36 other international BPA experts at a conclave sponsored by the National Institutes of Environmental Health Sciences (NIEHS), a Chapel Hill, N.C.-based arm of the National Institutes of Health. In August 2007, the so-called Chapel Hill panel issued a "consensus statement" asserting that, as Vom Saal puts it, "particularly for infants but also for adults, there is an extensive body of evidence from animals that should be taken as a very serious warning that human health is being placed at risk due to the current level of exposure of humans to BPA."
Earlier this month, the National Toxicology Program, an interagency body that assesses human toxins for the federal government, accepted much of the Chapel Hill panel's thinking and took the position that while more research is necessary, low doses of BPA may affect "development of the prostate gland and brain and [cause] behavioral effects in fetuses, infants and children." (Unlike the academic-dominated Chapel Hill panel, the NTP found the BPA threat to adults "negligible.")
The influential NTP assessment directly contradicted the federal Food and Drug Administration's stance that BPA-laden food packaging is safe, even for babies and children. Under pressure from a growing number of health and consumer advocates, lawmakers and scientists, an FDA advisory panel is scheduled to meet Sept.16 to take testimony about whether BPA should be reassessed in terms of food safety, a move that could lead to an end to BPA-laced food packaging.
The chemical industry can be expected to fight aggressively against more regulation. Earlier this year, the industry spent hundreds of thousands of dollars to defeat a California legislative proposal to ban BPA in food packaging. The Chemistry Council and allied companies and industry groups hired an army of lobbyists, including Navigators LLC, the Washington firm that ran Gov. Arnold Schwarzenegger's 2003 campaign and his 2004 budget reform drive. Tactics included an industry email to food banks charging that a BPA ban would mean the end of distributions of canned goods for the poor.
The industry's scorched-earth approach has caused many advocates for toxic law reform, frustrated with skirmishing state by state and toxin by toxin, to line up behind a comprehensive federal legislative proposal, the Kid-Safe Chemicals Act, that would require chemical manufacturers to prove substances like BPA are safe before they go on the market.
Meanwhile, a research team from a Yale University medical school research team has come up with some of the most troubling data yet: after injecting African green monkeys for 28 days with BPA at the level the U.S. Environmental Protection Agency says is safe for people, the researchers found the chemical "causes the loss of connections between brain cells."
"We observed a devastating effect on synapses in the monkey brain," says Yale scientist Tibor Hajszan. In humans, these losses could lead to memory and learning problems and depression.
Industry officials called the study flawed and lacked proof of BPA danger to the human brain. Yale team leader Csaba Leranth says the experiment, the first major neurological study using primates, was designed "to more closely mimic the slow and continuous conditions under which humans would normally be exposed to BPA." He said the study is "more indicative than past research of how BPA may actually affect humans," but his team hopes to conduct additional studies to advance understanding of BPA on primate brain functions.
But, says Leranth, "science is expensive," and grants for ambitious projects are scarcer than ever, due to the Bush administration's commitments overseas and spiraling federal debt.
"Considerable funding has been diverted away from basic and biomedical research since the Iraq war started," says University of Texas-Austin endocrinologist Andrea C. Gore. "It's a very sad time in science." By some estimates, the NIH now funds only 10 to 15 percent of grant applications for biomedical research. "More than 85 percent of grant applications are rejected," says Gore, "an unacceptably low level that is causing scientists to have to cut back or even abandon their research programs."
With no prospect in sight for definitive answers about BPA's dangers to people, federal regulators must confront a mass of incomplete but worrisome evidence and decide whether it's time to say that the chemical's risks to people, especially babies and children, outweigh its benefits. And if they don't, Sen. Charles Schumer, D-NY, and Rep. Ed Markey, D-MA, have introduced legislation that would ban BPA in food packaging -- and make the decision for them.
4. A LETTER TO AMERICA: YOU CANNOT BE SERIOUS
BY
IAN BELL
Dear America, Before you say it, I know: presumptuous. No one can speak to a multitude or to a nation, even if your presidential candidates entertain the fantasy. The United States is too big, too diverse, to allow that sort of intimacy. Is it even, from sea to shining sea, a single nation? Does New Hampshire speak much, or clearly, to New Mexico?
So many cultures, races, nuances. Too many variations from the modern media homogeneity norm, or even, dare I say it, from your cherished self-image. You are still, as Europeans too easily forget, a free association of states, each of them proud, each distinct. Some once styled themselves sovereign; most are jealous still of their remaining rights. That can't be easy.
You disagree among yourselves, too, over what America is and what that means. Even at this distance, we pick up the chatter. We glimpse a few of your tensions. Even your "culture wars" have become a cliché in our discourse. We miss the important details, but as often as not we get it. After all, we pay more attention to you than you ever do to us.
Sorry. Did that sound antipathetic, as in "anti-American"? Let's deal with that. I've said a few things down the years. It is likely that I will say a few more. You have a reserve currency, extraordinary military strength, and an unsurpassed cultural reach: people notice. If they have any sense, they also notice that America is no sort of monolith. But when things are done, by a democracy and in a people's name, we call that "America".
The irony is, in any case, that you are not beset on all sides. A great many foreign people spend a great deal of time defending your actions.
Sometimes, for my money, the very depth of their loyalty is suspicious. Yours is not their country. I'm more of the Bush-didn't-win-Florida school, but I do not hold every last American responsible for the consequences of a convenient (for some) Supreme Court decision. That would be like blaming me for Tony Blair. (And no, I did not vote for Trusted Ally Number One. I like to think I saw the Blessed Cheesemaker coming).
But you still think the world is against you? Try thinking, if you can, as a Russian thinks. Their country, right or wrong. Their patriotic dead. Their great lost empire, their exceptionalism, their certainty that dark and alien others always wish them ill. So how does a Russian view the world when tiny Georgia fires rockets "pre-emptively" on tinier South Ossetia and finds America taking the side of the rocketman "in freedom's name"? Let's just say that our Russian fails to share your perspective.
Or how about a Palestinian? The world cries injustice, historic, enduring, and a continuing justification for resistance, none of it pretty. You talk peace, but you say Israel - now where did this phrase come from? - right or wrong. Do the moral calculus. Stinking anti-Semites who would wipe Israel from the map do not justify every action Israel takes. But that is not, as the world hears it, the word from America.
This is not, historically speaking, a big deal. The American Century may well be at an end, with only the debts - unfeasibly big debts - to be settled. The Chinese, the Arabs, the Europeans, even the Russians hold your IOUs. When the money runs out, aircraft carriers are window dressing. Besides, no-one in the British islands is in a position to talk. Our empire was far more reckless than yours has ever been, and we could not hold a blood-red candle to Spain, France, Germany, Holland or even little Belgium. No-one ever gave thanks for having the Russians or the Chinese in charge. These things come and go.
But you say - Kipling and Rhodes would have understood - that you are the last best hope for mankind. Speaker after speaker at the Republican convention, and more than a few at the Democrat equivalent, talked (boasted?) of the greatest nation in the world ever. No precedent. I refer you once more to British imperial history. I also suggest, though, that when such things are said sincerely, certain obligations follow. You enthuse over Sarah Palin instead.
Perhaps, like so many modern politico-media phenomena, that will pass. Over here, after all, we thought George W Bush was the most improbable thing your conservatism could contrive. Shows you what we know. A George Bush who was merely stupid and mendacious seemed the extreme edge of what the presidential process might produce when someone's vital interests were at stake. But what do we bystanders now understand? If polls are to be trusted (another story) Mr Bush is profoundly unpopular while Ms Palin, his spiritual kid sister, is homecoming queen. You can sense our puzzlement.
Our disgust is something that many of you no doubt take for granted. A book-banning, anti-abortion, creationist with scant consciousness, if any, of the outside world is not a brand that travels well. Ms Palin reportedly does not travel at all, save to cross fly over Canada. Her personal life is none of my concern. Her lipstick seems to suit her. But am I truly supposed to believe that she is suited for high office? That, surely, is the argument behind her impressive approval ratings.
But I forget. According to those around Mr John McCain, the official Republican general election candidate, your presidential contest is "not about the issues". Come again? Have you run out of things to talk about, America? I can see that Mr McCain might have a long list of things he would rather not discuss, most of them involving the incumbent with whom he shares a party. But does your polity truly intend to suspend all disbelief, all debate, all thought, because of a well-groomed moose-killer?
They tell me the other guy is struggling to cope with this new fact of political existence. That, I would have thought, was the sole point and purpose of Ms Palin's elevation to the ticket. When you cannot cope with another man's fluency, trust to slogans and big pictures and what cynical men call "perceptions".
Let's be clear about that, too. I am not one of those Europeans who succumb to the charisma of Mr Obama. I have watched Mr Blair work a room. Unfashionably, I thought the Democrats should have stuck with a deplorable Clinton. I also thought the Obama Berlin gig an absurdity. I do not trust anyone who answers "hope" and "change" to every hard question. And I have no belief in an "anti-war" candidate who proposes dusty death without end in Afghanistan.
Mr Obama remains - you know this bit - the first African-American to have a serious hope of becoming president. Yet what do we find? Merely journalists adjusting every too-close-to-call poll in their heads to accommodate their certain knowledge of race in American life. We Europeans, some of us, do not therefore form judgments. This continent invented industrialised racism, and persists with the habit of mind. But seriously: a black man talking seriously or a moose-killer forbidden to attempt coherent speech? And your choice is?
Too close to call. America, that is almost beyond words. I have neither a personal nor a partisan interest. Ms Palin and Mr Obama alike are foreign to me. Yet if Mr Bush has been a dangerous absurdity, what is the latest Republican president-but-one? Since I'm asking the questions, I'll answer.
Ms Palin is a symbol of deep American introversion, of the fact that you have ceased to take yourselves seriously and, more important, don't much care who knows it. Arguments over the relationship between the wider world and your choices have become irrelevant. You have detached yourself, finally, from the global community. This is isolationism as never before conceived. "American" in my life has been lingua franca, for better or ill. Now you talk to yourself.
And you talk, my friends, in the sort of gibberish that once you spurned. It's not about Ms Palin, as such. It is about the process that creates a candidate-grin manipulated to serve darkness, ignorance, fear, a war economy, and the flaunting of stupidity.
Nice going.
Tuesday, September 30, 2008
Sunday, September 14, 2008
The Jvl Bi-Weekly for 091508
I can be most easily reached through the following email address for suggesting new additions to the subscription list or to cancel your subscription to the Bi-Weekly:
channujames@yahoo.com
The Blog Address for the Bi-Weekly is:
http://jvlbiweekly.blogspot.com
Please forward the Blog address for the Bi-Weekly to any who might be interested
Monday, September 15th, 2008
Volume 7, No. 16
6 Articles, 17
1. Obama, The Prince of Bait-And-Switch
2. US Job Losses Hit Four Year High
3. Al Jazeera Speaks to Howard Zinn
4. The Peaceful Revolution in Farmers' Markets
5. Economic Free Fall?
6. Should Biden Share Blame for Foreclosure Crisis
1. OBAMA, THE PRINCE OF BAIT-AND-SWITCH
(John Pilger describes the denigration of the of civilian casualties in colonial wars, and the anointing of Barack Obama, as he tours the battlefields, sounding more and more like George W. Bush.)
BY
JOHN PILGER
On 12 July, The Times devoted two pages to Afghanistan. It was mostly a complaint about the heat. The reporter, Magnus Linklater, described in detail his discomfort and how he had needed to be sprayed with iced water. He also described the "high drama" and "meticulously practised routine" of evacuating another overheated journalist. For her US Marine rescuers, wrote Linklater, "saving a life took precedence over [their] security". Alongside this was a report whose final paragraph offered the only mention that "47 civilians, most of them women and children, were killed when a US aircraft bombed a wedding party in eastern Afghanistan on Sunday".
Slaughters on this scale are common, and mostly unknown to the British public. I interviewed a woman who had lost eight members of her family, including six children. A 500lb US Mk82 bomb was dropped on her mud, stone and straw house. There was no "enemy" nearby. I interviewed a headmaster whose house disappeared in a fireball caused by another "precision" bomb. Inside were nine people – his wife, his four sons, his brother and his wife, and his sister and her husband. Neither of these mass murders was news. As Harold Pinter wrote of such crimes: "Nothing ever happened. Even while it was happening it wasn't happening. It didn't matter. It was of no interest."
A total of 64 civilians were bombed to death while The Times man was discomforted. Most were guests at the wedding party. Wedding parties are a "coalition" specialty. At least four of them have been obliterated – at Mazar and in Khost, Uruzgan and Nangarhar provinces. Many of the details, including the names of victims, have been compiled by a New Hampshire professor, Marc Herold, whose Afghan Victim Memorial Project is a meticulous work of journalism that shames those who are paid to keep the record straight and report almost everything about the Afghan War through the public relations facilities of the British and American military.
The US and its allies are dropping record numbers of bombs on Afghanistan. This is not news. In the first half of this year, 1,853 bombs were dropped: more than all the bombs of 2006 and most of 2007. "The most frequently used bombs," the Air Force Times reports, "are the 500lb and 2,000lb satellite-guided..." Without this one-sided onslaught, the resurgence of the Taliban, it is clear, might not have happened. Even Hamid Karzai, America's and Britain's puppet, has said so. The presence and the aggression of foreigners have all but united a resistance that now includes former warlords once on the CIA's payroll.
The scandal of this would be headline news, were it not for what George W Bush's former spokesman Scott McClellan has called "complicit enablers" – journalists who serve as little more than official amplifiers. Having declared Afghanistan a "good war", the complicit enablers are now anointing Barack Obama as he tours the bloodfests in Afghanistan and Iraq. What they never say is that Obama is a bomber.
In the New York Times on 14 July, in an article spun to appear as if he is ending the war in Iraq, Obama demanded more war in Afghanistan and, in effect, an invasion of Pakistan. He wants more combat troops, more helicopters, more bombs. Bush may be on his way out, but the Republicans have built an ideological machine that transcends the loss of electoral power – because their collaborators are, as the American writer Mike Whitney put it succinctly, "bait-and-switch" Democrats, of whom Obama is the prince.
Those who write of Obama that "when it comes to international affairs, he will be a huge improvement on Bush" demonstrate the same wilful naivety that backed the bait-and-switch of Bill Clinton – and Tony Blair. Of Blair, wrote the late Hugo Young in 1997, "ideology has surrendered entirely to 'values'... there are no sacred cows [and] no fossilised limits to the ground over which the mind might range in search of a better Britain..."
Eleven years and five wars later, at least a million people lie dead. Barack Obama is the American Blair. That he is a smooth operator and a black man is irrelevant. He is of an enduring, rampant system whose drum majors and cheer squads never see, or want to see, the consequences of 500lb bombs dropped unerringly on mud, stone and straw houses.
Back to Top
2. US JOB LOSSES HIT FOUR-YEAR HIGH
(The Fed is set to keep rates unchanged because of inflationary pressures [EPA].)
AUTHOR UNKNOWN
The unemployment rate in the US has climbed to a four-year high of 5.7 per cent in July after employers shed 51,000 jobs.
The latest data, released by the US labour department on Friday, showed a lack of credit had affected employers' expansion plans and willingness to hire.
So far, the US economy has lost a total of 463,000 jobs this year.
The news comes as car-manufacturing company General Motors posted losses of $15.5bn on Friday.
The rise in the unemployment rate to 5.7 per cent from 5.5 per cent came in June when many young people enter the labour market looking for summer jobs.
But this year, fewer of them were able to find work, the government said.
The unemployment rate for teenagers jumped to 20.3 per cent, the highest since late 1992.
Company job cuts
General Motors (GM) filed a report on Friday showing the third-worst quarterly loss in its history in the second quarter as north American vehicle sales plummeted and the company faced expenses due to labour unrest and its restructuring plan.
The company said it would lose thousands of hourly and salaried workers, speed the closure of lorry and four-wheel-drive vehicle plants, suspending its dividend and raising cash through borrowing and the sale of assets.
GM also said it would reduce production by another 300,000 vehicles, and that could prompt another wave of blue-collar early retirement and buyout offers.
More than 700 Bennigan's restaurants, owned by privately held Metromedia Restaurant Group, are closing, driving more people to unemployment lines.
Chrysler LLC, GM, Wachovia, Cox Enterprises and Pfizer also announced job cuts in July.
A fallout from the housing slump and high energy prices also are weighing on employers.
More job cuts
Job losses have further hit the housing, credit and financial debacles.
Manufacturers cut 35,000 positions, construction companies got rid of 22,000 and retailers shed 17,000 jobs.
Meanwhile, spending on construction projects around the country dropped 0.4 per cent in June as cutbacks in home building eclipsed gains in commercial construction, the US commerce department said.
The Institute for Supply Management's reading of activity from the country's producers of cars, aircraft, appliances and other manufactured goods hit 50, down from 50.2 in June. Readings above 50 signal growth.
Temporary help firms, also viewed as a barometer of demand for future hiring, eliminated 29,000 jobs. Those losses swamped job gains elsewhere, including in the government, education and health care.
In May and June combined, the economy lost 98,000 jobs, according to revised figures. That was not as bad as the 124,000 reductions previously reported.
Back to Top
3. AL JAZEERA SPEAKS TO HOWARD ZINN, THE AUTHOR, AMERICAN HISTORIAN, SOCIAL CRITIC AND ACTIVIST, ABOUT HOW THE IRAQ WAR DAMAGED ATTITUDES TOWARDS THE US AND WHY THE US "EMPIRE" IS CLOSE TO COLLAPSE
Q: Where is the United States heading in terms of world power and influence?
HZ: Obviously, since the war in Iraq, the rest of the world has fallen away from the United States, and if American foreign policy continues in the way it has been - that is aggressive and violent and uncaring about the feelings and thoughts of other people - then the influence of the United States is going to decline more and more.
This is an empire which is on the one hand the most powerful empire that ever existed; on the other hand an empire that is crumbling - an empire that has no future ... because the rest of the world is alienated and simply because this empire is top-heavy with military commitments, with bases around the world, with the exhaustion of its own resources at home.
[This is] leading to more and more discontent and home, so I think the American empire will go the way of other empires and I think it is on its way now.
Q: Is there any hope the US will change its approach to the rest of the world?
HZ: If there is any hope, the hope lies in the American people.
[It] lies in American people becoming resentful enough and indignant enough over what has happened to their country, over the loss of dignity in the world, over the starving of human resources in the United States, the starving of education and health, the takeover of the political mechanism by corporate power and the result this has on the everyday lives of the American people.
[There is also] the higher and higher food prices, the more and more insecurity, the sending of the young people to war.
I think all of this may very well build up into a movement of rebellion.
We have seen movements of rebellion in the past: The labour movement, the civil rights movement, the movement against the war in Vietnam.
I think we may well see, if the United States keeps heading in the same direction, a new popular movement. That is the only hope for the United States.
Q: How did the US get to this point?
HZ: Well, we got to this point because ... I suppose the American people have allowed it to get it to this point because there were enough Americans who were satisfied with their lives, just enough.
Of course, many Americans were not, that is why half of the population doesn't vote, they're alienated.
But there are just enough Americans who have been satisfied, you might say getting some of the "goodies" of the empire, just some of them, just enough people satisfied to support the system, so we got this way because of the ability of the system to maintain itself by satisfying just enough of the population to keep its legitimacy.
And I think that era is coming to an end.
Q: What should the world know about the United States?
HZ: What I find many people in the rest of the world don't know is that there is an opposition in the United States.
Very often, people in the rest of the world think that Bush is popular, they think 'oh, he was elected twice', they don't understand the corruption of the American political system which enabled Bush to win twice.
They don't understand the basic undemocratic nature of the American political system in which all power is concentrated within two parties which are not very far from one another and people cannot easily tell the difference.
So I think we are in a situation where we are going to need some very fundamental changes in American society if the American people are going to be finally satisfied with the kind of society we have.
Q: Do you think the US can recover from its current position?
HZ: Well, I am hoping for a recovery process. I mean, so far we haven't seen it.
You asked about what the people of the rest of the world don't know about the United States, and as I said, they don't know that there is an opposition.
There always has been an opposition, but the opposition has always been either crushed or quieted, kept in the shadows, marginalised so their voices are not heard.
People in the rest of the world hear the voices of the American leaders.
They do not hear the voices of the people all over this country who do not like the American leaders who want different policies.
I think also, people in the rest of the world should know that what they see in Iraq now is really a continuation of a long, long term of American imperial expansion in the world.
I think ... a lot of people in the world think that this war in Iraq is an aberration, that before this the United States was a benign power.
It has never been a benign power, from the very first, from the American Revolution, from the taking-over of Indian land, from the Mexican war, the Spanish-American war.
It is embarrassing to say, but we have a long history in this country of violent expansion and I think not only do most people in other countries [not] know this, most Americans don't know this.
Q: Do you think there is a way out of this and for the future influence of the US on the world to be a positive one?
HZ: Well, you know for the United States to begin to be a positive influence in the world we are going to have to have a new political leadership that is sensitive to the needs of the American people, and those needs do not include war and aggression.
[It must also be] sensitive to the needs of people in other parts of the world, sensitive enough to know that American resources, instead of being devoted to war, should be devoted to helping people who are suffering.
You've got earthquakes and natural disasters all over the world, but the people in the United States have been in the same position as people in other countries.
The natural disasters here [also] brought little positive reaction - look at [Hurricane] Katrina.
The people in this country, the poor people especially and the people of colour especially, have been as much victims of American power as people in other countries.
Q: Is there a way for this to improve?
HZ: Well you know, whatever hope there is lies in that large number of Americans who are decent, who don't want to go to war, who don't want to kill other people.
It is hard to see that hope because these Americans who feel that way have been shut out of the communications system, so their voices are not heard, they are not seen on the television screen, but they exist.
I have gone through, in my life, a number of social movements and I have seen how at the very beginning of these social movements or just before these social movements develop, there didn't seem to be any hope.
I lived in the [US] south for seven years, in the years of the civil rights movements, and it didn't seem that there was any hope, but there was hope under the surface.
And when people organised, and when people began to act, when people began to work together, people began to take risks, people began to oppose the establishment, people began to commit civil disobedience. Well, then that hope became manifest ... it actually turned into change.
It has never been a benign power, from the very first, from the American Revolution, from the taking-over of Indian land, from the Mexican war, the Spanish-American war.
It is embarrassing to say, but we have a long history in this country of violent expansion and I think not only do most people in other countries [not] know this, most Americans don't know this.
Back to Top
4. THE PEACEFUL REVOLUTION IN FARMERS' MARKETS
BY
LYNN PERRIN
A peaceful revolution is taking place across North America. While it is neither underground nor covert, it may soon be quashed by local and provincial policy-makers. They potentially could assert that the revolution is too risky and that laws must be enacted in the public interest.
The revolutionaries in this case are ordinary consumers and farmers wishing to trade directly in local food products via farmers’ markets. Despite the growing popularity of these markets, they have had to overcome and still face ongoing legal and regulatory barriers that inhibit their expansion. These barriers have been justified in the name of food safety and public order.
Local decision-makers maintain barriers by refusing to alter the Vancouver city bylaw that makes it illegal for anyone to sell fresh fruit and vegetables outdoors without an annual “special event” permit. Farmers’ markets are denied the same five-year space allocations granted to community gardens located on parklands, based on the argument of discouraging flea markets and illegal sales. This lack of longer-term security for farmers’ markets reduces the willingness of farmers to participate and ultimately reduces access to local foods for consumers.
Another example of official barriers to farmers’ markets is the 2007 provincial regulations that have closed down smaller meat processors, thus denying cost-effective access to slaughtering facilities for small-scale farmers raising animals. This change also makes it difficult for both producers and their customers at farmers’ markets to have ensured traceability of the products that are sent off to distant slaughterhouses. This traceability is an important element for consumers wishing to have assured food quality and concerned about issues such as hormone additives, pesticide use and genetically modified ingredients.
The rules governing provincial farmers’ markets require that there be a direct interaction between the grower or processor and the consumer, which ensures traceability. This attribute is lacking in the conventional food industry, which depends on food grown or processed an average of 1,300 miles away and handled by up to six people before it reaches the consumer’s mouth. For growers and processors, direct interaction with people who are going to eat the food they produced is one of the main reasons for selling at farmers’ markets.
My research involving interviews and surveys with both suppliers and managers at farmers’ markets confirms that barriers from laws and regulations are retarding growth of this sector of the food industry despite growing consumer demands. These barriers are compounded by other issues such as the loss of farmland through exemptions from the Agricultural Land Reserve, the rising price of farmland and the lack of adequate support for the sector from public officials.
Yet not everything is bleak, and governments in B.C. are slowly coming to see the virtues of the farm-to-fork revolution. This change has been spurred by initiatives such as the 100 Community Food Action Initiatives established by the regional health authorities in 2005 to encourage eating local produce for improved health and food security, the B.C.-originated 100-Mile Diet book and a growing number of food councils that advocate for increased access to locally grown and processed foods. Just this year the B.C. minister of agriculture and lands cited farmers’ markets in the province’s new agricultural plan, Growing a Healthy Future.
Nevertheless, my study found that important obstacles stand in the way of the success of the local food revolution, beyond the impermanence of sites for farmers’ markets and the new meat slaughtering regulations. Officials still perceive small-scale growers, value-added food processors and farmers’ markets as a boutique niche of B.C.’s overall food industry, and this attitude permeates a wide range of public policies and practices that create barriers to accessing local foods.
Several policy recommendations follow from my analysis of institutional, survey and interview materials. Changes must be made so that farmers’ markets are viewed as an integral part of the provincial food system. For example, the B.C. Association of Farmers’ Markets should be included in the B.C. ministry of agriculture’s online InfoBasket as a producer/processor association in every commodity category. Farmers’ market representatives need to be included in the initiation and consultation processes for any proposed legislative and regulatory changes that could affect them. In addition, municipal practices need to be revised to provide longer-term security of venues for farmers’ markets.
It’s time not only to dismantle the barricades, but to welcome the farm-to-fork revolutionaries as an important and growing part of the provincial food industry.
Back to Top
5. ECONOMIC FREE FALL?
BY
WILLIAM GREIDER
Washington can act with breathtaking urgency when the right people want something done. In this case, the people are Wall Street's titans, who are scared witless at the prospect of their historic implosion. Congress quickly agreed to enact a gargantuan bailout, with more to come, to calm the anxieties and halt the deflation of Wall Street giants. Put aside partisan bickering, no time for hearings, no need to think through the deeper implications. We haven't seen "bipartisan cooperation" like this since Washington decided to invade Iraq.
In their haste to do anything the financial guys seem to want, Congress and the lame-duck President are, I fear, sowing far more profound troubles for the country. First, while throwing our money at Wall Street, government is neglecting the grave risk of a deeper catastrophe for the real economy of producers and consumers. Second, Washington's selective generosity for influential financial losers is deforming democracy and opening the path to an awesomely powerful corporate state. Third, the rescue has not succeeded, not yet. Banking faces huge losses ahead, and informed insiders assume a far larger federal bailout will be needed--after the election. No one wants to upset voters by talking about it now. The next President, once in office, can break the bad news. It's not only about the money--with debate silenced, a dangerous line has been crossed. Hundreds of billions in open-ended relief has been delivered to the largest and most powerful mega-banks and investment firms, while government offers only weak gestures of sympathy for struggling producers, workers and consumers.
The bailouts are rewarding the very people and institutions whose reckless behavior caused this financial mess. Yet government demands nothing from them in return--like new rules for prudent behavior and explicit obligations to serve the national interest. Washington ought to compel the financial players to rein in their appetite for profit in order to help save the country from a far worse fate: a depressed economy that cannot regain its normal energies. Instead, the Federal Reserve, the Treasury, the Democratic Congress and of course the Republicans meekly defer to the wise men of high finance, who no longer seem so all-knowing.
Let's review the bidding to date. After panic swept through the global financial community this spring, the Federal Reserve and Treasury rushed in to arrange a sweetheart rescue for Bear Stearns, expending $29 billion to take over the brokerage's ruined assets so JPMorgan Chase, the prestigious banking conglomerate, would agree to buy what was left. At the same time, the Fed and Treasury provided a series of emergency loans and liquidity for endangered investment firms and major banks. Investors were not persuaded. Their panic was not "mental," as former McCain adviser Phil Gramm recently complained. The collapse of the housing bubble had revealed the deep rot and duplicity within the financial system. When investors tried to sell off huge portfolios of spoiled financial assets like mortgage bonds, nobody would buy them. In fact, no one can yet say how much these once esteemed "safe" investments are really worth.
The big banks and investment houses are also stuck with lots of bad paper, and some have dumped it on their unwitting customers. The largest banks and brokerages have already lost enormously, but lending portfolios must shrink a lot more--at least $1 trillion, some estimate. So wary shareholders are naturally dumping financial-sector stocks.
Most recently, the investors' fears were turned on Fannie Mae and Freddie Mac, the huge quasi-private corporations that package and circulate trillions in debt securities with implicit federal backing. Treasury Secretary Henry Paulson (formerly of Goldman Sachs) boldly proposed a $300 billion commitment to buy up Fannie Mae stock and save the plunging share price--that is, save the shareholders from their mistakes. So much for market discipline. For everyone else, Washington recommends a cold shower.
Talk about warped priorities! The government puts up $29 billion as a "sweetener" for JP Morgan but can only come up with $4 billion for Cleveland, Detroit and other urban ruins. Even the mortgage-relief bill is a tepid gesture. It basically asks, but does not compel, the bankers to act kindlier toward millions of defaulting families.
A generation of conservative propaganda, arguing that markets make wiser decisions than government, has been destroyed by these events. The interventions amount to socialism, American style, in which the government decides which private enterprises are "too big to fail." Trouble is, it was the government itself that created most of these mastodons--including the all-purpose banking conglomerates. The mega-banks arose in the 1990s, when a Democratic President and Republican Congress repealed the New Deal-era Glass-Steagall Act, which prevented commercial banks from blending their business with investment banking. That combination was the source of incestuous self-dealing and fraudulent stock valuations that led directly to the Crash of 1929 and the Great Depression that followed.
Even before Congress and Bill Clinton repealed the law, the Federal Reserve had aggressively cleared the way by unilaterally authorizing Citigroup to cross the line. Wall Street proceeded, with accounting tricks described as "modernization," to re-create the same scandals from the 1920s in more sophisticated fashion. The financial crisis began when these gimmicky innovations blew up.
Democrats who imagine they can reap partisan advantage from this crisis don't know the history. The blame is bipartisan; so also is the disgrace. In 1980, before Ronald Reagan even came to town, Democrats deregulated the financial system by repealing federal interest-rate ceilings and other regulatory restraints--a step that doomed the savings and loan industry and eliminated a major competitor for the bankers. Democrats have collaborated with Republicans on behalf of their financial patrons every step of the way.
The same legislation also repealed the federal law prohibiting usury--the predatory practices that ruin debtors of modest means by lending on terms that ensure borrowers will fail. Usurious lending is now commonplace in America, from credit cards and "payday loans" to the notorious subprime mortgages. The prohibition on usury really involves an ancient moral principle, one common to Judaism, Christianity and Islam: people of great wealth must not be allowed to use it to ruin others who lack the same advantages. A decent society cannot endure it.
The fast-acting politicians may hope to cover over their past mistakes before the public figures out what's happening (that is, who is screwing whom). But the Federal Reserve has a similar reason to move aggressively: the Fed was a central architect and agitator in creating the circumstances that led to the collapse in Wall Street's financial worth. The central bank tipped its monetary policy hard in one direction--favoring capital over labor, creditors over debtors, finance over the real economy--and held it there for roughly twenty-five years. On one side, it targeted wages and restrained economic growth to make sure workers could not bargain for higher compensation in slack labor markets. On the other side, it stripped away or refused to enforce prudential regulations that restrained the excesses of banking and finance. In The Nation a few years back, I referred to Alan Greenspan as the "one-eyed chairman" [September 19, 2005] who could see inflation in the real economy--even when it didn't exist--but was blind to the roaring inflation in the financial system.
The Fed's lopsided focus on behalf of the moneyed interests, combined with its refusal to apply regulatory laws with due diligence, eventually destabilized the overall economy. Trying to correct for previous errors, the Fed, with its overzealous free-market ideology, swung monetary policy back and forth to extremes, first tightening credit without good reason, then rapidly cutting interest rates to nearly zero. This erratic behavior encouraged a series of financial bubbles in interest-sensitive assets--first the stock market, during the late 1990s tech-stock boom, then housing--but the Fed declined to do anything or even admit the bubbles existed. The nation is now stuck with the consequences of its blindness.
The Federal Reserve's dereliction of duty is central to the financial failures. It betrayed the purpose for which the central bank was first created, in 1913, abandoning the sense of balance the Fed had long pursued and that Congress requires. Most politicians, not to mention the press, are too intimidated to question the Fed's daunting power, but their ignorance is about to compound the problem. Instead of demanding answers, the political system is about to expand the Fed's governing powers--despite its failure to protect us. Treasury Secretary Paulson proposed and Democratic leaders have agreed to make the insulated Fed the "supercop" that oversees not only commercial banks and banking conglomerates but also the largest investment houses or anyone else big enough to destabilize the system. This "reform" would definitely reassure club members who are already too cozy with the central bankers. Everyone else would be left deeper in the dark.
The political system, once again, is rewarding failure. The Fed is an unreliable watchdog, ideologically biased and compromised by its conflicting obligations. Is it supposed to discipline the big money players or keep them afloat? Putting the secretive central bank in charge, with its unlimited powers to prop up troubled firms, would further eviscerate democracy, not to mention economic justice.
If Congress enacts this concept early next year, the privileged group of protected financial interests is sure to grow larger, because other nonfinancial firms could devise ways to reconfigure themselves so they too would qualify for club membership. A very large manufacturing conglomerate--General Electric, for instance--might absorb elements of banking in order to be covered by the Fed's umbrella (GE Capital is already among the largest pools of investment capital). Private-equity firms, with their buccaneer style of corporate management, are already trying to buy into banking, with encouragement from the Fed (the Service Employees International Union has mounted a campaign to stop them). A new President could stop the whole deal, of course, but John McCain has surrounded himself with influential advisers who were co-architects of this financial disaster. For that matter, so has Barack Obama.
The nation, meanwhile, is flirting with historic catastrophe. Nobody yet knows how bad it is, but the peril is vastly larger than previous episodes, like the savings and loan bailout of the late 1980s. The dangers are compounded by the fact that the United States is now utterly dependent on foreign creditors--Japan and China lead the list--who have been propping us up with their lending. Thanks to growing trade deficits and debt, foreign portfolio holdings of US long-term debt securities have more than doubled since 1994, from 7.9 percent to 18.8 percent as of June 2007. If these countries get fed up with their losses and pull the plug, the US economy will be a long, long time coming back.
The gravest danger is that the national economy will weaken further and spiral downward into a negative cycle that feeds on itself: as conditions darken, people hunker down and wait for the storm to pass--consumers stop buying, banks stop lending, producing companies cut their workforces. That feeds more defaulted loan losses back into the banking system's balance sheets. This vicious cycle is essentially what led to the Great Depression after the stock market crash of 1929. I offer not a prediction but a warning. The comparison may sound farfetched now, but US policy-makers and politicians are putting us at risk of historic deflationary forces that, once they take hold, are very difficult to reverse.
A more aggressive response from Washington would address the real economy's troubles as seriously as it does Wall Street's. Financial firms have lost capital on a huge scale--more of them will fail or be bought by foreign investors. But Wall Street cannot get well this time if the economy remains stuck in the ditch. Washington needs to revive the "animal spirits" of the nation at large. The $152 billion stimulus package enacted so far is piddling and ought to be three or four times larger. Instead of sending the money to Iraq, we should be spending it here on getting people back to work, building and repairing our tattered infrastructure, investing in worthwhile projects that can help stimulate the economy in rough weather.
An agenda of deeper reforms can boost public confidence even as it undoes a lot of the damage caused by the financiers and bankers. Some suggestions:
§ Nationalize Fannie Mae and other government-supported enterprises instead of coddling them. Restore them to their original status as nonprofit federal agencies that provide a valuable service to housing and other markets. Make the investors eat their losses. Buy the shares at 2 cents on the dollar. Without a federal guarantee, these firms are doomed anyway.
§ Resolve the democratic contradiction of "too big to fail" bailouts by dismantling the firms that are too big to fail--especially the newly created banking conglomerates that have done so much harm. Restore the boundaries between commercial banking and investment banking. In any case, market pressures are likely to shrink those behemoths as banks sell off their parts to survive. For the remaining big boys, revive antitrust enforcement. Set stern new conditions for emergency lending from government--supervised receivership, stricter lending rules to prevent recidivism and severe penalties for greed-crazed shareholders and executives.
§ Assign the Federal Reserve's regulatory role to a new public agency that is visible and politically accountable. Make the Fed a subsidiary agency of the Treasury Department and reform its decision-making on money and credit to restore an equitable balance between competing goals and interests--seeking full employment but also stable money and moderate inflation.
§ Begin the hard task of re-creating a regulated financial system Americans can trust, one that recognizes its obligations to the broad national interest. This requires regulatory reforms to cover moneypots like private-equity funds and to clear away the blatant conflicts of interest and double-dealing on Wall Street, and also to give responsible shareholders, workers and other interests a greater voice in corporate management and greater protection against rip-offs of personal savings.
§ Re-enact the federal law against usury. The details are difficult and can follow later, but this would be a meaningful first step toward restoring moral obligations in the financial sector. People would understand it, and so would a lot of the money guys. Maybe in the deepening crisis, Washington will begin to grasp that money is also a moral issue.
Back to Top
6. SHOULD BIDEN SHARE BLAME FOR FORECLOSURE CRISIS? (Experts: Many Americans Lost Homes Due to a Bill Championed by Biden)
BY
JUSTIN ROOD
Experts say hundreds of thousands of Americans may have lost their homes due to a bill championed by Sen. Joseph Biden, D-Del., Barack Obama's vice-presidential running mate.
At least two studies have concluded that the United States' foreclosure crisis was exacerbated by a 2005 law that overhauled the nation's bankruptcy law. That conclusion is echoed by other experts, although the banking and credit industry disputes it.
Congressional Republicans drove the effort to pass the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005. But Biden who has enjoyed hundreds of thousands of dollars in campaign donations from credit industry executives endorsed the measure early on and worked to gather Democratic support for it.
Biden's early and vocal support was "essential" to the bill's passage, said Travis Plunkett of the Washington D.C.-based advocacy group Consumer Federation, which opposed the measure. Biden "went out of his way to undermine criticism of the legislation," and his efforts helped convince other Democrats to support the bill.
"Biden was a fairly strong proponent of that bankruptcy bill," said Philip Corwin, a consultant for the American Bankers Association, which represents banks and lenders. However, Biden was "not in our pocket in any way," he added.
Biden's Senate office did not provide comment for this story.
Asked if the Obama/Biden campaign was concerned Biden's record was a liability when discussing economic security, David Wade, a spokesman for the Obama/Biden campaign, said, "Barack Obama and Joe Biden have real solutions for struggling families in danger of losing their homes because of the Bush economy and abusive lending practices."
BAPCPA "is directly responsible for the rising foreclosure rate since the end of 2005," concluded a 2007 study by Credit Suisse. The law "increased foreclosures and the number of homes for sale," echoed a July 2008 study by U.S. Treasury researcher David Bernstein. That study estimated the law had pushed foreclosures or forced sales on 200,000 homeowners since it went into effect, but noted that was a rough, "back-of-the-envelope" calculation.
"Trying to tie the forclosure crisis to the [2005 bankruptcy] bill is a stretch," said the ABA's Corwin. Corwin called the Credit Suisse report "junk" and said the Bernstein study wasn't "worth the paper it was written on."
The head author of the 2007 Credit Suisse report clarified his earlier findings in an email Wednesday. "The law likely contributed to increased foreclosures early on," said researcher Rod Dubitsky, but combined with other key factors, including subprime lending practices, to create the current crisis. Bernstein did not respond to a request for an interview.
The bill was backed by banks and credit card companies including MBNA, which is headquartered in Delaware, Biden's home state. They wanted the bill because it would make it harder for Americans to use bankruptcy to avoid repaying credit card debt. MBNA executives had been Biden's single largest source of campaign donations, and MBNA has employed Biden's son Hunter as a company executive, lobbyist and consultant. The Obama campaign has said Hunter Biden did no work for MBNA on the bankruptcy bill. MBNA has since been bought by Bank of America.
Over the past two years, sub-prime mortgage borrowing and a weakening economy have pushed increasing numbers of Americans into dire financial straits. Under the old rules, many could have declared bankruptcy, shed much of their debt, restructured their mortgages and held onto their homes, according to experts and the two reports.
But the 2005 law Biden championed made it more expensive and more difficult to declare bankruptcy, experts conclude. That forced hundreds of thousands of distressed homeowners to sell their homes, or default on their mortgages, after which the bank would sell their former home, according to the studies. That flood of homes going up for sale in an already-weakening market further depressed home prices, according to the two reports, snowballing into the current crisis.
BAPCPA "increased home foreclosures, increased the dollar value of financial assets in default, and put additional downward price pressure on real estate markets," concluded the Bernstein report. Bernstein conducted the report as an individual, not as a representative the Treasury Department.
Back to Top
channujames@yahoo.com
The Blog Address for the Bi-Weekly is:
http://jvlbiweekly.blogspot.com
Please forward the Blog address for the Bi-Weekly to any who might be interested
Monday, September 15th, 2008
Volume 7, No. 16
6 Articles, 17
1. Obama, The Prince of Bait-And-Switch
2. US Job Losses Hit Four Year High
3. Al Jazeera Speaks to Howard Zinn
4. The Peaceful Revolution in Farmers' Markets
5. Economic Free Fall?
6. Should Biden Share Blame for Foreclosure Crisis
1. OBAMA, THE PRINCE OF BAIT-AND-SWITCH
(John Pilger describes the denigration of the of civilian casualties in colonial wars, and the anointing of Barack Obama, as he tours the battlefields, sounding more and more like George W. Bush.)
BY
JOHN PILGER
On 12 July, The Times devoted two pages to Afghanistan. It was mostly a complaint about the heat. The reporter, Magnus Linklater, described in detail his discomfort and how he had needed to be sprayed with iced water. He also described the "high drama" and "meticulously practised routine" of evacuating another overheated journalist. For her US Marine rescuers, wrote Linklater, "saving a life took precedence over [their] security". Alongside this was a report whose final paragraph offered the only mention that "47 civilians, most of them women and children, were killed when a US aircraft bombed a wedding party in eastern Afghanistan on Sunday".
Slaughters on this scale are common, and mostly unknown to the British public. I interviewed a woman who had lost eight members of her family, including six children. A 500lb US Mk82 bomb was dropped on her mud, stone and straw house. There was no "enemy" nearby. I interviewed a headmaster whose house disappeared in a fireball caused by another "precision" bomb. Inside were nine people – his wife, his four sons, his brother and his wife, and his sister and her husband. Neither of these mass murders was news. As Harold Pinter wrote of such crimes: "Nothing ever happened. Even while it was happening it wasn't happening. It didn't matter. It was of no interest."
A total of 64 civilians were bombed to death while The Times man was discomforted. Most were guests at the wedding party. Wedding parties are a "coalition" specialty. At least four of them have been obliterated – at Mazar and in Khost, Uruzgan and Nangarhar provinces. Many of the details, including the names of victims, have been compiled by a New Hampshire professor, Marc Herold, whose Afghan Victim Memorial Project is a meticulous work of journalism that shames those who are paid to keep the record straight and report almost everything about the Afghan War through the public relations facilities of the British and American military.
The US and its allies are dropping record numbers of bombs on Afghanistan. This is not news. In the first half of this year, 1,853 bombs were dropped: more than all the bombs of 2006 and most of 2007. "The most frequently used bombs," the Air Force Times reports, "are the 500lb and 2,000lb satellite-guided..." Without this one-sided onslaught, the resurgence of the Taliban, it is clear, might not have happened. Even Hamid Karzai, America's and Britain's puppet, has said so. The presence and the aggression of foreigners have all but united a resistance that now includes former warlords once on the CIA's payroll.
The scandal of this would be headline news, were it not for what George W Bush's former spokesman Scott McClellan has called "complicit enablers" – journalists who serve as little more than official amplifiers. Having declared Afghanistan a "good war", the complicit enablers are now anointing Barack Obama as he tours the bloodfests in Afghanistan and Iraq. What they never say is that Obama is a bomber.
In the New York Times on 14 July, in an article spun to appear as if he is ending the war in Iraq, Obama demanded more war in Afghanistan and, in effect, an invasion of Pakistan. He wants more combat troops, more helicopters, more bombs. Bush may be on his way out, but the Republicans have built an ideological machine that transcends the loss of electoral power – because their collaborators are, as the American writer Mike Whitney put it succinctly, "bait-and-switch" Democrats, of whom Obama is the prince.
Those who write of Obama that "when it comes to international affairs, he will be a huge improvement on Bush" demonstrate the same wilful naivety that backed the bait-and-switch of Bill Clinton – and Tony Blair. Of Blair, wrote the late Hugo Young in 1997, "ideology has surrendered entirely to 'values'... there are no sacred cows [and] no fossilised limits to the ground over which the mind might range in search of a better Britain..."
Eleven years and five wars later, at least a million people lie dead. Barack Obama is the American Blair. That he is a smooth operator and a black man is irrelevant. He is of an enduring, rampant system whose drum majors and cheer squads never see, or want to see, the consequences of 500lb bombs dropped unerringly on mud, stone and straw houses.
Back to Top
2. US JOB LOSSES HIT FOUR-YEAR HIGH
(The Fed is set to keep rates unchanged because of inflationary pressures [EPA].)
AUTHOR UNKNOWN
The unemployment rate in the US has climbed to a four-year high of 5.7 per cent in July after employers shed 51,000 jobs.
The latest data, released by the US labour department on Friday, showed a lack of credit had affected employers' expansion plans and willingness to hire.
So far, the US economy has lost a total of 463,000 jobs this year.
The news comes as car-manufacturing company General Motors posted losses of $15.5bn on Friday.
The rise in the unemployment rate to 5.7 per cent from 5.5 per cent came in June when many young people enter the labour market looking for summer jobs.
But this year, fewer of them were able to find work, the government said.
The unemployment rate for teenagers jumped to 20.3 per cent, the highest since late 1992.
Company job cuts
General Motors (GM) filed a report on Friday showing the third-worst quarterly loss in its history in the second quarter as north American vehicle sales plummeted and the company faced expenses due to labour unrest and its restructuring plan.
The company said it would lose thousands of hourly and salaried workers, speed the closure of lorry and four-wheel-drive vehicle plants, suspending its dividend and raising cash through borrowing and the sale of assets.
GM also said it would reduce production by another 300,000 vehicles, and that could prompt another wave of blue-collar early retirement and buyout offers.
More than 700 Bennigan's restaurants, owned by privately held Metromedia Restaurant Group, are closing, driving more people to unemployment lines.
Chrysler LLC, GM, Wachovia, Cox Enterprises and Pfizer also announced job cuts in July.
A fallout from the housing slump and high energy prices also are weighing on employers.
More job cuts
Job losses have further hit the housing, credit and financial debacles.
Manufacturers cut 35,000 positions, construction companies got rid of 22,000 and retailers shed 17,000 jobs.
Meanwhile, spending on construction projects around the country dropped 0.4 per cent in June as cutbacks in home building eclipsed gains in commercial construction, the US commerce department said.
The Institute for Supply Management's reading of activity from the country's producers of cars, aircraft, appliances and other manufactured goods hit 50, down from 50.2 in June. Readings above 50 signal growth.
Temporary help firms, also viewed as a barometer of demand for future hiring, eliminated 29,000 jobs. Those losses swamped job gains elsewhere, including in the government, education and health care.
In May and June combined, the economy lost 98,000 jobs, according to revised figures. That was not as bad as the 124,000 reductions previously reported.
Back to Top
3. AL JAZEERA SPEAKS TO HOWARD ZINN, THE AUTHOR, AMERICAN HISTORIAN, SOCIAL CRITIC AND ACTIVIST, ABOUT HOW THE IRAQ WAR DAMAGED ATTITUDES TOWARDS THE US AND WHY THE US "EMPIRE" IS CLOSE TO COLLAPSE
Q: Where is the United States heading in terms of world power and influence?
HZ: Obviously, since the war in Iraq, the rest of the world has fallen away from the United States, and if American foreign policy continues in the way it has been - that is aggressive and violent and uncaring about the feelings and thoughts of other people - then the influence of the United States is going to decline more and more.
This is an empire which is on the one hand the most powerful empire that ever existed; on the other hand an empire that is crumbling - an empire that has no future ... because the rest of the world is alienated and simply because this empire is top-heavy with military commitments, with bases around the world, with the exhaustion of its own resources at home.
[This is] leading to more and more discontent and home, so I think the American empire will go the way of other empires and I think it is on its way now.
Q: Is there any hope the US will change its approach to the rest of the world?
HZ: If there is any hope, the hope lies in the American people.
[It] lies in American people becoming resentful enough and indignant enough over what has happened to their country, over the loss of dignity in the world, over the starving of human resources in the United States, the starving of education and health, the takeover of the political mechanism by corporate power and the result this has on the everyday lives of the American people.
[There is also] the higher and higher food prices, the more and more insecurity, the sending of the young people to war.
I think all of this may very well build up into a movement of rebellion.
We have seen movements of rebellion in the past: The labour movement, the civil rights movement, the movement against the war in Vietnam.
I think we may well see, if the United States keeps heading in the same direction, a new popular movement. That is the only hope for the United States.
Q: How did the US get to this point?
HZ: Well, we got to this point because ... I suppose the American people have allowed it to get it to this point because there were enough Americans who were satisfied with their lives, just enough.
Of course, many Americans were not, that is why half of the population doesn't vote, they're alienated.
But there are just enough Americans who have been satisfied, you might say getting some of the "goodies" of the empire, just some of them, just enough people satisfied to support the system, so we got this way because of the ability of the system to maintain itself by satisfying just enough of the population to keep its legitimacy.
And I think that era is coming to an end.
Q: What should the world know about the United States?
HZ: What I find many people in the rest of the world don't know is that there is an opposition in the United States.
Very often, people in the rest of the world think that Bush is popular, they think 'oh, he was elected twice', they don't understand the corruption of the American political system which enabled Bush to win twice.
They don't understand the basic undemocratic nature of the American political system in which all power is concentrated within two parties which are not very far from one another and people cannot easily tell the difference.
So I think we are in a situation where we are going to need some very fundamental changes in American society if the American people are going to be finally satisfied with the kind of society we have.
Q: Do you think the US can recover from its current position?
HZ: Well, I am hoping for a recovery process. I mean, so far we haven't seen it.
You asked about what the people of the rest of the world don't know about the United States, and as I said, they don't know that there is an opposition.
There always has been an opposition, but the opposition has always been either crushed or quieted, kept in the shadows, marginalised so their voices are not heard.
People in the rest of the world hear the voices of the American leaders.
They do not hear the voices of the people all over this country who do not like the American leaders who want different policies.
I think also, people in the rest of the world should know that what they see in Iraq now is really a continuation of a long, long term of American imperial expansion in the world.
I think ... a lot of people in the world think that this war in Iraq is an aberration, that before this the United States was a benign power.
It has never been a benign power, from the very first, from the American Revolution, from the taking-over of Indian land, from the Mexican war, the Spanish-American war.
It is embarrassing to say, but we have a long history in this country of violent expansion and I think not only do most people in other countries [not] know this, most Americans don't know this.
Q: Do you think there is a way out of this and for the future influence of the US on the world to be a positive one?
HZ: Well, you know for the United States to begin to be a positive influence in the world we are going to have to have a new political leadership that is sensitive to the needs of the American people, and those needs do not include war and aggression.
[It must also be] sensitive to the needs of people in other parts of the world, sensitive enough to know that American resources, instead of being devoted to war, should be devoted to helping people who are suffering.
You've got earthquakes and natural disasters all over the world, but the people in the United States have been in the same position as people in other countries.
The natural disasters here [also] brought little positive reaction - look at [Hurricane] Katrina.
The people in this country, the poor people especially and the people of colour especially, have been as much victims of American power as people in other countries.
Q: Is there a way for this to improve?
HZ: Well you know, whatever hope there is lies in that large number of Americans who are decent, who don't want to go to war, who don't want to kill other people.
It is hard to see that hope because these Americans who feel that way have been shut out of the communications system, so their voices are not heard, they are not seen on the television screen, but they exist.
I have gone through, in my life, a number of social movements and I have seen how at the very beginning of these social movements or just before these social movements develop, there didn't seem to be any hope.
I lived in the [US] south for seven years, in the years of the civil rights movements, and it didn't seem that there was any hope, but there was hope under the surface.
And when people organised, and when people began to act, when people began to work together, people began to take risks, people began to oppose the establishment, people began to commit civil disobedience. Well, then that hope became manifest ... it actually turned into change.
It has never been a benign power, from the very first, from the American Revolution, from the taking-over of Indian land, from the Mexican war, the Spanish-American war.
It is embarrassing to say, but we have a long history in this country of violent expansion and I think not only do most people in other countries [not] know this, most Americans don't know this.
Back to Top
4. THE PEACEFUL REVOLUTION IN FARMERS' MARKETS
BY
LYNN PERRIN
A peaceful revolution is taking place across North America. While it is neither underground nor covert, it may soon be quashed by local and provincial policy-makers. They potentially could assert that the revolution is too risky and that laws must be enacted in the public interest.
The revolutionaries in this case are ordinary consumers and farmers wishing to trade directly in local food products via farmers’ markets. Despite the growing popularity of these markets, they have had to overcome and still face ongoing legal and regulatory barriers that inhibit their expansion. These barriers have been justified in the name of food safety and public order.
Local decision-makers maintain barriers by refusing to alter the Vancouver city bylaw that makes it illegal for anyone to sell fresh fruit and vegetables outdoors without an annual “special event” permit. Farmers’ markets are denied the same five-year space allocations granted to community gardens located on parklands, based on the argument of discouraging flea markets and illegal sales. This lack of longer-term security for farmers’ markets reduces the willingness of farmers to participate and ultimately reduces access to local foods for consumers.
Another example of official barriers to farmers’ markets is the 2007 provincial regulations that have closed down smaller meat processors, thus denying cost-effective access to slaughtering facilities for small-scale farmers raising animals. This change also makes it difficult for both producers and their customers at farmers’ markets to have ensured traceability of the products that are sent off to distant slaughterhouses. This traceability is an important element for consumers wishing to have assured food quality and concerned about issues such as hormone additives, pesticide use and genetically modified ingredients.
The rules governing provincial farmers’ markets require that there be a direct interaction between the grower or processor and the consumer, which ensures traceability. This attribute is lacking in the conventional food industry, which depends on food grown or processed an average of 1,300 miles away and handled by up to six people before it reaches the consumer’s mouth. For growers and processors, direct interaction with people who are going to eat the food they produced is one of the main reasons for selling at farmers’ markets.
My research involving interviews and surveys with both suppliers and managers at farmers’ markets confirms that barriers from laws and regulations are retarding growth of this sector of the food industry despite growing consumer demands. These barriers are compounded by other issues such as the loss of farmland through exemptions from the Agricultural Land Reserve, the rising price of farmland and the lack of adequate support for the sector from public officials.
Yet not everything is bleak, and governments in B.C. are slowly coming to see the virtues of the farm-to-fork revolution. This change has been spurred by initiatives such as the 100 Community Food Action Initiatives established by the regional health authorities in 2005 to encourage eating local produce for improved health and food security, the B.C.-originated 100-Mile Diet book and a growing number of food councils that advocate for increased access to locally grown and processed foods. Just this year the B.C. minister of agriculture and lands cited farmers’ markets in the province’s new agricultural plan, Growing a Healthy Future.
Nevertheless, my study found that important obstacles stand in the way of the success of the local food revolution, beyond the impermanence of sites for farmers’ markets and the new meat slaughtering regulations. Officials still perceive small-scale growers, value-added food processors and farmers’ markets as a boutique niche of B.C.’s overall food industry, and this attitude permeates a wide range of public policies and practices that create barriers to accessing local foods.
Several policy recommendations follow from my analysis of institutional, survey and interview materials. Changes must be made so that farmers’ markets are viewed as an integral part of the provincial food system. For example, the B.C. Association of Farmers’ Markets should be included in the B.C. ministry of agriculture’s online InfoBasket as a producer/processor association in every commodity category. Farmers’ market representatives need to be included in the initiation and consultation processes for any proposed legislative and regulatory changes that could affect them. In addition, municipal practices need to be revised to provide longer-term security of venues for farmers’ markets.
It’s time not only to dismantle the barricades, but to welcome the farm-to-fork revolutionaries as an important and growing part of the provincial food industry.
Back to Top
5. ECONOMIC FREE FALL?
BY
WILLIAM GREIDER
Washington can act with breathtaking urgency when the right people want something done. In this case, the people are Wall Street's titans, who are scared witless at the prospect of their historic implosion. Congress quickly agreed to enact a gargantuan bailout, with more to come, to calm the anxieties and halt the deflation of Wall Street giants. Put aside partisan bickering, no time for hearings, no need to think through the deeper implications. We haven't seen "bipartisan cooperation" like this since Washington decided to invade Iraq.
In their haste to do anything the financial guys seem to want, Congress and the lame-duck President are, I fear, sowing far more profound troubles for the country. First, while throwing our money at Wall Street, government is neglecting the grave risk of a deeper catastrophe for the real economy of producers and consumers. Second, Washington's selective generosity for influential financial losers is deforming democracy and opening the path to an awesomely powerful corporate state. Third, the rescue has not succeeded, not yet. Banking faces huge losses ahead, and informed insiders assume a far larger federal bailout will be needed--after the election. No one wants to upset voters by talking about it now. The next President, once in office, can break the bad news. It's not only about the money--with debate silenced, a dangerous line has been crossed. Hundreds of billions in open-ended relief has been delivered to the largest and most powerful mega-banks and investment firms, while government offers only weak gestures of sympathy for struggling producers, workers and consumers.
The bailouts are rewarding the very people and institutions whose reckless behavior caused this financial mess. Yet government demands nothing from them in return--like new rules for prudent behavior and explicit obligations to serve the national interest. Washington ought to compel the financial players to rein in their appetite for profit in order to help save the country from a far worse fate: a depressed economy that cannot regain its normal energies. Instead, the Federal Reserve, the Treasury, the Democratic Congress and of course the Republicans meekly defer to the wise men of high finance, who no longer seem so all-knowing.
Let's review the bidding to date. After panic swept through the global financial community this spring, the Federal Reserve and Treasury rushed in to arrange a sweetheart rescue for Bear Stearns, expending $29 billion to take over the brokerage's ruined assets so JPMorgan Chase, the prestigious banking conglomerate, would agree to buy what was left. At the same time, the Fed and Treasury provided a series of emergency loans and liquidity for endangered investment firms and major banks. Investors were not persuaded. Their panic was not "mental," as former McCain adviser Phil Gramm recently complained. The collapse of the housing bubble had revealed the deep rot and duplicity within the financial system. When investors tried to sell off huge portfolios of spoiled financial assets like mortgage bonds, nobody would buy them. In fact, no one can yet say how much these once esteemed "safe" investments are really worth.
The big banks and investment houses are also stuck with lots of bad paper, and some have dumped it on their unwitting customers. The largest banks and brokerages have already lost enormously, but lending portfolios must shrink a lot more--at least $1 trillion, some estimate. So wary shareholders are naturally dumping financial-sector stocks.
Most recently, the investors' fears were turned on Fannie Mae and Freddie Mac, the huge quasi-private corporations that package and circulate trillions in debt securities with implicit federal backing. Treasury Secretary Henry Paulson (formerly of Goldman Sachs) boldly proposed a $300 billion commitment to buy up Fannie Mae stock and save the plunging share price--that is, save the shareholders from their mistakes. So much for market discipline. For everyone else, Washington recommends a cold shower.
Talk about warped priorities! The government puts up $29 billion as a "sweetener" for JP Morgan but can only come up with $4 billion for Cleveland, Detroit and other urban ruins. Even the mortgage-relief bill is a tepid gesture. It basically asks, but does not compel, the bankers to act kindlier toward millions of defaulting families.
A generation of conservative propaganda, arguing that markets make wiser decisions than government, has been destroyed by these events. The interventions amount to socialism, American style, in which the government decides which private enterprises are "too big to fail." Trouble is, it was the government itself that created most of these mastodons--including the all-purpose banking conglomerates. The mega-banks arose in the 1990s, when a Democratic President and Republican Congress repealed the New Deal-era Glass-Steagall Act, which prevented commercial banks from blending their business with investment banking. That combination was the source of incestuous self-dealing and fraudulent stock valuations that led directly to the Crash of 1929 and the Great Depression that followed.
Even before Congress and Bill Clinton repealed the law, the Federal Reserve had aggressively cleared the way by unilaterally authorizing Citigroup to cross the line. Wall Street proceeded, with accounting tricks described as "modernization," to re-create the same scandals from the 1920s in more sophisticated fashion. The financial crisis began when these gimmicky innovations blew up.
Democrats who imagine they can reap partisan advantage from this crisis don't know the history. The blame is bipartisan; so also is the disgrace. In 1980, before Ronald Reagan even came to town, Democrats deregulated the financial system by repealing federal interest-rate ceilings and other regulatory restraints--a step that doomed the savings and loan industry and eliminated a major competitor for the bankers. Democrats have collaborated with Republicans on behalf of their financial patrons every step of the way.
The same legislation also repealed the federal law prohibiting usury--the predatory practices that ruin debtors of modest means by lending on terms that ensure borrowers will fail. Usurious lending is now commonplace in America, from credit cards and "payday loans" to the notorious subprime mortgages. The prohibition on usury really involves an ancient moral principle, one common to Judaism, Christianity and Islam: people of great wealth must not be allowed to use it to ruin others who lack the same advantages. A decent society cannot endure it.
The fast-acting politicians may hope to cover over their past mistakes before the public figures out what's happening (that is, who is screwing whom). But the Federal Reserve has a similar reason to move aggressively: the Fed was a central architect and agitator in creating the circumstances that led to the collapse in Wall Street's financial worth. The central bank tipped its monetary policy hard in one direction--favoring capital over labor, creditors over debtors, finance over the real economy--and held it there for roughly twenty-five years. On one side, it targeted wages and restrained economic growth to make sure workers could not bargain for higher compensation in slack labor markets. On the other side, it stripped away or refused to enforce prudential regulations that restrained the excesses of banking and finance. In The Nation a few years back, I referred to Alan Greenspan as the "one-eyed chairman" [September 19, 2005] who could see inflation in the real economy--even when it didn't exist--but was blind to the roaring inflation in the financial system.
The Fed's lopsided focus on behalf of the moneyed interests, combined with its refusal to apply regulatory laws with due diligence, eventually destabilized the overall economy. Trying to correct for previous errors, the Fed, with its overzealous free-market ideology, swung monetary policy back and forth to extremes, first tightening credit without good reason, then rapidly cutting interest rates to nearly zero. This erratic behavior encouraged a series of financial bubbles in interest-sensitive assets--first the stock market, during the late 1990s tech-stock boom, then housing--but the Fed declined to do anything or even admit the bubbles existed. The nation is now stuck with the consequences of its blindness.
The Federal Reserve's dereliction of duty is central to the financial failures. It betrayed the purpose for which the central bank was first created, in 1913, abandoning the sense of balance the Fed had long pursued and that Congress requires. Most politicians, not to mention the press, are too intimidated to question the Fed's daunting power, but their ignorance is about to compound the problem. Instead of demanding answers, the political system is about to expand the Fed's governing powers--despite its failure to protect us. Treasury Secretary Paulson proposed and Democratic leaders have agreed to make the insulated Fed the "supercop" that oversees not only commercial banks and banking conglomerates but also the largest investment houses or anyone else big enough to destabilize the system. This "reform" would definitely reassure club members who are already too cozy with the central bankers. Everyone else would be left deeper in the dark.
The political system, once again, is rewarding failure. The Fed is an unreliable watchdog, ideologically biased and compromised by its conflicting obligations. Is it supposed to discipline the big money players or keep them afloat? Putting the secretive central bank in charge, with its unlimited powers to prop up troubled firms, would further eviscerate democracy, not to mention economic justice.
If Congress enacts this concept early next year, the privileged group of protected financial interests is sure to grow larger, because other nonfinancial firms could devise ways to reconfigure themselves so they too would qualify for club membership. A very large manufacturing conglomerate--General Electric, for instance--might absorb elements of banking in order to be covered by the Fed's umbrella (GE Capital is already among the largest pools of investment capital). Private-equity firms, with their buccaneer style of corporate management, are already trying to buy into banking, with encouragement from the Fed (the Service Employees International Union has mounted a campaign to stop them). A new President could stop the whole deal, of course, but John McCain has surrounded himself with influential advisers who were co-architects of this financial disaster. For that matter, so has Barack Obama.
The nation, meanwhile, is flirting with historic catastrophe. Nobody yet knows how bad it is, but the peril is vastly larger than previous episodes, like the savings and loan bailout of the late 1980s. The dangers are compounded by the fact that the United States is now utterly dependent on foreign creditors--Japan and China lead the list--who have been propping us up with their lending. Thanks to growing trade deficits and debt, foreign portfolio holdings of US long-term debt securities have more than doubled since 1994, from 7.9 percent to 18.8 percent as of June 2007. If these countries get fed up with their losses and pull the plug, the US economy will be a long, long time coming back.
The gravest danger is that the national economy will weaken further and spiral downward into a negative cycle that feeds on itself: as conditions darken, people hunker down and wait for the storm to pass--consumers stop buying, banks stop lending, producing companies cut their workforces. That feeds more defaulted loan losses back into the banking system's balance sheets. This vicious cycle is essentially what led to the Great Depression after the stock market crash of 1929. I offer not a prediction but a warning. The comparison may sound farfetched now, but US policy-makers and politicians are putting us at risk of historic deflationary forces that, once they take hold, are very difficult to reverse.
A more aggressive response from Washington would address the real economy's troubles as seriously as it does Wall Street's. Financial firms have lost capital on a huge scale--more of them will fail or be bought by foreign investors. But Wall Street cannot get well this time if the economy remains stuck in the ditch. Washington needs to revive the "animal spirits" of the nation at large. The $152 billion stimulus package enacted so far is piddling and ought to be three or four times larger. Instead of sending the money to Iraq, we should be spending it here on getting people back to work, building and repairing our tattered infrastructure, investing in worthwhile projects that can help stimulate the economy in rough weather.
An agenda of deeper reforms can boost public confidence even as it undoes a lot of the damage caused by the financiers and bankers. Some suggestions:
§ Nationalize Fannie Mae and other government-supported enterprises instead of coddling them. Restore them to their original status as nonprofit federal agencies that provide a valuable service to housing and other markets. Make the investors eat their losses. Buy the shares at 2 cents on the dollar. Without a federal guarantee, these firms are doomed anyway.
§ Resolve the democratic contradiction of "too big to fail" bailouts by dismantling the firms that are too big to fail--especially the newly created banking conglomerates that have done so much harm. Restore the boundaries between commercial banking and investment banking. In any case, market pressures are likely to shrink those behemoths as banks sell off their parts to survive. For the remaining big boys, revive antitrust enforcement. Set stern new conditions for emergency lending from government--supervised receivership, stricter lending rules to prevent recidivism and severe penalties for greed-crazed shareholders and executives.
§ Assign the Federal Reserve's regulatory role to a new public agency that is visible and politically accountable. Make the Fed a subsidiary agency of the Treasury Department and reform its decision-making on money and credit to restore an equitable balance between competing goals and interests--seeking full employment but also stable money and moderate inflation.
§ Begin the hard task of re-creating a regulated financial system Americans can trust, one that recognizes its obligations to the broad national interest. This requires regulatory reforms to cover moneypots like private-equity funds and to clear away the blatant conflicts of interest and double-dealing on Wall Street, and also to give responsible shareholders, workers and other interests a greater voice in corporate management and greater protection against rip-offs of personal savings.
§ Re-enact the federal law against usury. The details are difficult and can follow later, but this would be a meaningful first step toward restoring moral obligations in the financial sector. People would understand it, and so would a lot of the money guys. Maybe in the deepening crisis, Washington will begin to grasp that money is also a moral issue.
Back to Top
6. SHOULD BIDEN SHARE BLAME FOR FORECLOSURE CRISIS? (Experts: Many Americans Lost Homes Due to a Bill Championed by Biden)
BY
JUSTIN ROOD
Experts say hundreds of thousands of Americans may have lost their homes due to a bill championed by Sen. Joseph Biden, D-Del., Barack Obama's vice-presidential running mate.
At least two studies have concluded that the United States' foreclosure crisis was exacerbated by a 2005 law that overhauled the nation's bankruptcy law. That conclusion is echoed by other experts, although the banking and credit industry disputes it.
Congressional Republicans drove the effort to pass the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005. But Biden who has enjoyed hundreds of thousands of dollars in campaign donations from credit industry executives endorsed the measure early on and worked to gather Democratic support for it.
Biden's early and vocal support was "essential" to the bill's passage, said Travis Plunkett of the Washington D.C.-based advocacy group Consumer Federation, which opposed the measure. Biden "went out of his way to undermine criticism of the legislation," and his efforts helped convince other Democrats to support the bill.
"Biden was a fairly strong proponent of that bankruptcy bill," said Philip Corwin, a consultant for the American Bankers Association, which represents banks and lenders. However, Biden was "not in our pocket in any way," he added.
Biden's Senate office did not provide comment for this story.
Asked if the Obama/Biden campaign was concerned Biden's record was a liability when discussing economic security, David Wade, a spokesman for the Obama/Biden campaign, said, "Barack Obama and Joe Biden have real solutions for struggling families in danger of losing their homes because of the Bush economy and abusive lending practices."
BAPCPA "is directly responsible for the rising foreclosure rate since the end of 2005," concluded a 2007 study by Credit Suisse. The law "increased foreclosures and the number of homes for sale," echoed a July 2008 study by U.S. Treasury researcher David Bernstein. That study estimated the law had pushed foreclosures or forced sales on 200,000 homeowners since it went into effect, but noted that was a rough, "back-of-the-envelope" calculation.
"Trying to tie the forclosure crisis to the [2005 bankruptcy] bill is a stretch," said the ABA's Corwin. Corwin called the Credit Suisse report "junk" and said the Bernstein study wasn't "worth the paper it was written on."
The head author of the 2007 Credit Suisse report clarified his earlier findings in an email Wednesday. "The law likely contributed to increased foreclosures early on," said researcher Rod Dubitsky, but combined with other key factors, including subprime lending practices, to create the current crisis. Bernstein did not respond to a request for an interview.
The bill was backed by banks and credit card companies including MBNA, which is headquartered in Delaware, Biden's home state. They wanted the bill because it would make it harder for Americans to use bankruptcy to avoid repaying credit card debt. MBNA executives had been Biden's single largest source of campaign donations, and MBNA has employed Biden's son Hunter as a company executive, lobbyist and consultant. The Obama campaign has said Hunter Biden did no work for MBNA on the bankruptcy bill. MBNA has since been bought by Bank of America.
Over the past two years, sub-prime mortgage borrowing and a weakening economy have pushed increasing numbers of Americans into dire financial straits. Under the old rules, many could have declared bankruptcy, shed much of their debt, restructured their mortgages and held onto their homes, according to experts and the two reports.
But the 2005 law Biden championed made it more expensive and more difficult to declare bankruptcy, experts conclude. That forced hundreds of thousands of distressed homeowners to sell their homes, or default on their mortgages, after which the bank would sell their former home, according to the studies. That flood of homes going up for sale in an already-weakening market further depressed home prices, according to the two reports, snowballing into the current crisis.
BAPCPA "increased home foreclosures, increased the dollar value of financial assets in default, and put additional downward price pressure on real estate markets," concluded the Bernstein report. Bernstein conducted the report as an individual, not as a representative the Treasury Department.
Back to Top
Subscribe to:
Posts (Atom)