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Friday, August 31, 2007

Palestinians poorer than ever.

This is from the IPS. There will probably be little media coverage of the UN meeting or this report. I note that there were anti-Hamas demonstrations in Gaza today. No doubt poverty is worst there. Israel will never grant Hamas any of the tax revenue they have collected and that belongs to the Palestinians. Some has gone to Abbas of course as a reward for going along with Israel and the US.

MIDEAST: Palestinians Poorer Than Ever
By David Cronin

BRUSSELS, Aug 31 (IPS) - Poverty in the Palestinian territories has reached "unprecedented levels" because they have been held under an "economic siege" for almost seven years, a United Nations body has found.

During 2006 the number of Palestinians living in 'deep poverty' almost doubled to more than 1 million. Some 46 percent of public sector employees do not have enough food to meet their basic needs, with 53 percent of households in the Gaza reporting that their incomes declined in the last year by more than half.

This data is contained in a report, released Aug. 30, by the UN Conference on Trade and Development (UNCTAD).

It stated that an ostensible Israeli policy of 'separating' the Palestinian authorities from Arab and world markets by restricting the movement of people and goods has "squeezed the economy to a size smaller than a decade ago."

The Palestinians' reliance on imports as a proportion of their gross domestic product rose to 86 percent last year -- up from 75 percent in 2005, equating to the loss of 500 million dollars to the economy.

UNCTAD also complained that Israel declined to hand over more than 800 million dollars in tax revenues it had purportedly collected for the Palestinian Authority during 2006. Because of this refusal -- the second since 2002 -- the authorities' revenues shrank to under 600 million dollars, half what they were in 2005.

The report's publication coincided with a UN-sponsored conference on resolving the Middle East conflict in Brussels.

Controversially, the conference, which featured campaigners from the international Palestinian solidarity movement, was described as anti-Israel in some press reports.

Yet this allegation was dismissed by Paul Badji, a Senegalese diplomat who chairs the UN Committee on the Exercise of the Inalienable Rights of the Palestinian People. "It is not anti-Israel to defend the rights of Palestinians," he said.

Leila Shahid, delegate general of Palestine to the European Union, reminded the conference that it is 40 years since Israel began "the longest occupation in contemporary history."

Delivering a statement on behalf of Palestinian President Mahmoud Abbas, she said that by setting up 550 permanent and mobile checkpoints, Israel has turned the West Bank into "a group of isolated cantons, while over 11,000 Palestinians, including elected representatives and municipal council members, languish in prison, and targeted assassinations continue."

Pierre Galand from the European Coordination of Committees and Associations for Palestine said he did not believe that the U.S. President George W. Bush and his administration could "do peace a favour by granting 30 billion dollars of military aid to Israel, an increase of about a quarter of the American military aid to the Israeli state for the next ten years.

"We do not believe either that Germany aided peace in the Middle East when delivering in August 2006, during the war against Lebanon, two submarines with nuclear capacity and a 4,500 km radius of action," he added.

But Riyad Mansour, the Palestinian envoy to the UN, welcomed efforts by Washington to convene a Middle East peace conference.

"There is no question that the U.S. is a very powerful country and very influential in our region," he told IPS. "Therefore, its participation in brokering a conference for the autumn could possibly be very constructive. It could help to get all the parties to the conflict to move in the right direction."

Jamal Juma, coordinator of the Anti-Apartheid Wall Campaign in Jerusalem, strongly denounced the 760 km 'security fence' that Israel has been constructing in the West Bank. This barrier is being constructed in defiance of the International Court of Justice. In 2004, the Hague-based court declared that the wall flouted international law by infringing on the rights of the Palestinians.

"What Israel is creating on the ground is a ghetto system worse than the apartheid system in South Africa," Juma said.

Angela Godfrey-Goldstein from the Israeli Committee Against House Demolitions pointed out that both South Africa's former president Nelson Mandela and Archbishop Desmond Tutu have drawn parallels between the plight of the Palestinians and that of their country's black majority under apartheid.

She urged an international boycott of Israel similar to that which led many governments to impose economic sanctions against South Africa during the 1980s.

Clare Short, the former secretary for international development in the British government, said that Israel has razed 18,000 Palestinian homes since 1967 and that "each demolition is a war crime."

Short noted that a free trade agreement between Israel and the European Union contains clauses relating to respect for human rights. She asked why these provisions have not been invoked "to insist on Israeli compliance with international law."

New York-based Rabbi Yisroel Dovid Weiss, a spokesman for Jews United Against Zionism, said that the conduct of Israeli forces in the Palestinian territories is helping foment anti-Semitism. He also took issue with Israeli politicians who cite the Holocaust to defend attacks on Palestinians, which they claim are necessary to protect Israel's security.

"The state of Israel is not doing Jews a favour," he told IPS. "My grandparents died in Auschwitz and it is wrong to dig them up and use them to oppress the Palestinian people. They should not be used as a pawn." (END/2007)

Pentagon won't make surge recommendation to Bush

I guess the president will have to take the blame or praise himself. It sounds also as if there is no wide consensus on what should be done.

Pentagon won't make surge recommendation to Bush
By Nancy A. Youssef | McClatchy Newspapers
Posted on Wednesday, August 29, 2007 email | print tool nameclose
tool goes here
WASHINGTON — In a sign that top commanders are divided over what course to pursue in Iraq, the Pentagon said Wednesday that it won't make a single, unified recommendation to President Bush during next month's strategy assessment, but instead will allow top commanders to make individual presentations.

"Consensus is not the goal of the process," Geoff Morrell, a Pentagon spokesman, told reporters. "If there are differences, the president will hear them."

Military analysts called the move unusual for an institution that ordinarily does not air its differences in public, especially while its troops are deployed in combat.

"The professional military guys are going to the non-professional military guys and saying 'Resolve this,'" said Jeffrey White, a military analyst for the Washington Institute for Near East Policy. "That's what it sounds like."

White said it suggests that the military commanders want to be able to distance themselves from Iraq strategy by making it clear that whatever course is followed is the president's decision, not what commanders agreed on.

Bush has said on several occasions that he will follow the recommendation of Army Gen. David Petraeus, the top U.S. commander in Iraq, but the Pentagon plan makes certain that other points of view are heard.

Morrell said the commanders will make their presentations to Bush at around the same time that Petraeus appears before Congress to assess progress in Iraq in mid September.

Morrell said that those making presentations to the president would include Marine Gen. Peter Pace, the outgoing chairman of the Joint Chiefs of Staff, Adm. William Fallon, the commander of U.S. Central Command, which has responsibility for U.S. military actions in the Middle East, Army Gen. George Casey, the chief of staff of the Army, and Petraeus. In addition, Secretary of Defense Robert Gates will share his opinion with the president.

Pentagon commanders are known to be divided over how to proceed in Iraq.

Pentagon officials have told McClatchy Newspapers that Casey, who was the top commander in Iraq, wants the U.S. to draw down forces and focus on training the Iraqi forces, as it did during his tenure in Iraq, and worries about the strain the war is having on the Army.

Earlier this week, the Los Angeles Times reported that Pace would recommend reducing the number of troops in Baghdad because the deployments are straining the military.

Petraeus, however, is expected to argue that the number of U.S. troops should be kept at their current levels, saying that the increase in U.S. forces this year is beginning to reduce sectarian violence.

Gates' position is not known, but he was a member of the Iraq Study Group, which advocated a phased withdrawal of U.S. troops from Iraq. The surge, which sent an additional 28,000 troops to Iraq between February and June, was crafted as the secretary took over the department in December, and it is not considered his plan.

The surge, which called for about 28,000 additional troops into Baghdad, has pushed the number of troops serving in Iraq to its highest level since Saddam Hussein's regime fell in April 2003.

The increase was intended to reduce violence so that Iraq's politicians would have time to broker deals on some of the country's most divisive issues. Instead, Prime Minister Nouri al Maliki's government is floundering and Iraq's various political and ethnic factions are battling for control of the country.

An assessment by 16 U.S. intelligence agencies last week foresaw little progress during the next 12 months in efforts to reconcile Iraq's warring ethnic groups. It also reported that civilian deaths and violence remained at high levels.

Morrell said that making individual presentations about Iraq policy rather than trying to reach a consensus before talking to the president will lead to a more honest discussion.

Gates is "looking for a way to sort of make sure that the normal bureaucratic massaging that sometimes eliminates the rough edges or the sharp differences between individuals does not victimize this process so that the president can get distinct — if that's the way it turns out to be — points of view on where we are and where we need to go," Morrell said.

At the same time, Morrell made it clear that the decision rests with the president, not the military.

"I think once [the president] receives the advice from Gen. Petraeus — and as I have outlined — and others, my understanding is that he has a decision to make," Morrell said.

McClatchy Newspapers 2007

Philippine anti-terror law protested.

This is from the Tribune.
Often religious groups especially the Catholic Bishops speak out vociferously against the government often joining in demonstrations or even sponsoring them.
Imagine mainstream religious groups in the US talking about US state terrorism!
What makes the contrast even more striking is that the Philippines suffer from terrorist attacks of various sorts on a regular basis. (Of course even this should be taken in perspective. Your likelihood of suffering from violence of a garden variety criminal sort is far more likely than ever suffering from terrorist violence)


Religious groups also want HSA junked


By Benjamin B. Pulta and Sherwin C. Olaes

08/31/2007


After lawyers groups and a number of political personalities having done so the other day, religious groups now have asked the Supreme Court (SC) to void the recently enacted anti-terror law of the country because it apparently espouses a “culture of violence.”

The Association of Major Religious Superiors in the Philippines and the Inter-Faith JPIC (Justice, Peace and Integrity of Creation) Network has written Chief Justice Reynato Puno to ask that the high court junk Republic Act (RA) 9372 or the Human Security Act of 2007 on the ground that the new law merely “legitimizes and reinforces a culture of violence.”

“We believe it is our moral and shared responsibility to denounce structures that obstruct justice, which today takes the form of state terrorism. It is already a known and proved fact that thousands of civilians have been brutally murdered. We further deplore the Human Security Act, which attempts to legalize and reinforce, or make conducive the violation of these rights,” the groups said in their letter.

“This unlawful law is not only a mockery of the Gospel but also of our Constitution,” they moreover averred.

They said the HSA is condemnable because “terrorism,” as defined by the law, is broad and suppresses the rights to speech, press, assembly and redress of grievances by criminalizing the expression of one’s demands toward government.

They also said the law violates the right to due process, the right to privacy and the right to be secure in their persons by institutionalizing “terrorist profiling, surveillance and interception of private communications.”

The two groups attached in their petition letter 2,170 signatures of religious superiors and provincials representing various congregations and priests and seminarians. Also signing the petition letter were bishops, priests and pastors of the various major Protestant denominations.

Last Wednesday, a fifth petition was filed by the Integrated Bar of the Philippines (IBP), the lawyers’ group Counsels for the Defense of Liberties (Codal), former Senators Sergio Osmeña III and Wigberto Tañada asking the SC to declare the law unconstitutional for “suppressing the right of free expression, association and assembly.”

In their petition, they claimed that the crimes related to terrorism are already penalized under the Revised Penal Code and there was no need for another law to provide for the same penalties.

“The ultimate and precise goal of RA 9372 or the Human Security Act of 2007 is its ultimate and precise goal of punishing political verbal expression,” they stressed.

The petitioners also asked the high tribunal to issue a status quo order or a temporary restraining order on the implementation of the HSA pending the resolution of their petition.

But even as more and more sectors are calling for the scrapping of the law, Malacañang yesterday said it is determined to implement it.

While saying the Palace is leaving the matter of responding to the several petitions to the Office of Solicitor General, Executive Secretary Eduardo Ermita emphasized that the HSA’s provisions had been made public and none of them are intent on violating human rights.

Ermita, along with members of the so-called Anti-Terrorism Council of the government,

were named respondents in the suit lodged by the IBP, Codal and the two former lawmakers.

Mrs. Arroyo signed the HSA into law last March to purportedly provide legal muscle to the government’s war against terrorism.

The law, which the President labeled as an “institutional landmark of the 13th (previous) Congress” was the result of the consolidation of House Bill 4839 and Senate Bill 2137, whose principal authors were Rep. Simeon Datumanong and Sen. Juan Ponce Enrile, respectively.

Datumanong was the chairman of the House committee on public order and human rights, while Enrile was the chairman of the Senate committee on justice and human rights in the last Congress.

Mrs. Arroyo said with an anti-terror law in place, the inevitable defeat of the local cells of the homegrown terror group Abu Sayyaf and the Southeast regional terror group Jemaah Islamiyah and the main international terror organization al-Qaeda would happen in the very near future.

Under the law, the crime of terrorism includes piracy in general or mutiny in high seas; rebellion or insurrection; coup d’etat, including acts committed by private persons; murder; kidnapping and serious illegal detention; and, crimes involving destruction such as arson.

The crime of terrorism is punishable by 40 years of imprisonment without the benefit of parole.

The law was made effective last July 15.

Former Philippine President much more popular than incumbent (Arroyo)

Erap is the nickname of the deposed former president Joseph Estrada. He was overthrown by Arroyo through the use of people power, the sort of demonstrations that Arroyo now dreads and regularly derides. Arroyo's rating makes president Bush look popular. However, to give her her due her policies are not nearly as bad as Bush's and the economy is not doing too badly. Inequality in the Philippines is the third worst in Asia but it has not increased during her term.
The ABCDE categories relate to income percentiles. As I understand it A would be the top 20 percent down to E which would be the bottom tweny percent. THe former president is much more trusted by the lowest income levels. He is being tried for corruption. The trial has been going on for years and the judgment will be coming out next month.


Erap gets 64% trust
rating; Gloria, 18%




BY ASHZEL HACHERO

DEPOSED President Joseph Estrada has a trust rating of 64 percent compared to President Arroyo’s 18 percent, according to a Social Weather Stations survey commissioned by the United Opposition.

The survey was conducted July 18-20 in the National Capital Region, Bulacan, Rizal, Cavite and Laguna. It had 600 respondents.

Estrada had a 66 percent approval rating from Class D and 68 percent approval rating from Class E. He, however, obtained a low 10 percent approval rating from Classes ABC.

Nineteen percent said they had "little trust" on the former president. Sixteen percent were undecided.

The survey was conducted as the P4 billion plunder case against Estrada is nearing a decision expected before Sept. 15.

Sixty-two percent said they had "little trust" in Arroyo. Nineteen percent were undecided.

Arroyo got a 28 percent approval rating from Classes ABC while 19 and 10 percent of those belonging to Class D and E said they had "much trust" on her.

Seventy-one percent of the respondents had "little trust" on Jose Miguel Arroyo while only 8 percent said they had "much trust" in him. The remaining 18 percent were undecided.

The First Gentleman got an approval rating (much trust) of 7 percent from Class ABC and 9 and 6 percent from Class D and E.

Asked if their welfare had improved under the present administration, 64 percent responded negatively. In the ABC bracket, 65 percent said "no" while only 25 percent responded positively and the remaining 10 percent were undecided.

Thursday, August 30, 2007

US-Allawi coup may be on its way.

Somehow I doubt that Allawi will ever get to be prime minister. As the elections showed he has little popular support. It would be a disaster if the US actually managed to get him in as premier again. However, the stupidity of the US policy in Iraq seems almost without bounds so maybe the article has a point. Certainly Allawi is trying and making the right noises as she shows.

US-Allawi Coup May Be On Its Way

By Arianna Huffington

08/30/07 "HP" --- - As we all await the Petraeus Report on the state of the surge, we may also need to be anticipating the Allawi Coup.

I'm talking, of course about Ayad Allawi, longtime C.I.A. asset and former interim prime minister of Iraq. He's making quite the PR push to get his old job back, penning an op-ed for the Washington Post, hooking up with Wolf Blitzer on Late Edition on Sunday, and even putting the high-powered GOP lobbying firm Barbour Griffith & Rogers on a $300,000 retainer.
It says everything you need to know about who the true power holders in Iraq are that Allawi, who has a "six-point plan" for Iraq that involves replacing the current Prime Minister, is campaigning in Washington -- not Baghdad. He clearly knows that despite Bush's bathetic paeans to Iraqi sovereignty, the real deciders in Iraq are not the Iraqi people, but a few dozen folks in the White House and the Pentagon. They are Allawi's true constituency.

So where does the White House stand on the idea of Allawi replacing current embattled prime minister Nouri al-Maliki? Well, it depends on whether you think Mitch McConnell was freelancing on Fox News Sunday when he jumped on the bash-Maliki bandwagon, calling the Maliki-led Iraqi government "pretty much a disaster" -- or whether you think he was performing his familiar function as White House water carrier.

Could the White House be seeing in the blame-Maliki-for-the-disaster-in-Iraq meme an opportunity replace the sputtering "give the surge a chance" plan with a "give Allawi a chance" plan?

Let's go to the Blitzer-Allawi interview to see what such a move would mean for the White House.

For starters, Allawi told Blitzer that his "six points call for a full partnership with the United States" and that his "objective is to develop a plan to save Iraq and to save American lives, as well as, of course, Iraqi lives, and to save the American mission in Iraq." Full Partnership? Save the American mission? Surely, music to the White House's ears. And it was good of him to toss in those Iraqi lives -- of course.

So what would an Allawi takeover mean in terms of U.S. troops remaining in Iraq? "If we talk around the region of two to two-and-a-half years," Allawi told Blitzer, "I think we are in the right direction." Who needs Petraeus buying the administration another few months with his report when the Allawi coup can buy them another two-and-a-half years?

And the White House doesn't have to worry about Allawi knowing his lines -- he's already memorized the playbook. When Blitzer asked him when the United States might be able to start reducing our presence in Iraq, Allawi responded with a Bush classic: "As soon as the Iraqi forces are able to stand on their feet and provide security for the Iraqis I think the draw-down should start." Ah: When they stand up, we can stand down! Misty water-colored memories. Being away from Iraq so much, I guess Allawi missed all those reports about the repeated failure of Iraqi forces to "stand on their feet."

So exactly how would an Allawi-for-Maliki switch occur? Allawi says he wants to proceed by "democratic means." But after being appointed interim prime minister by the U.S.-led coalition in June of 2004, Allawi had six months to campaign before the January 2005 legislative elections. He came in third with 14% of the vote.

When Blitzer asked Allawi who is paying for the $300,000 Barbour Griffith & Rogers lobbying contract, Allawi wouldn't say. He was only willing to disclose that the "payment is made by an Iraqi person who was a supporter of us, of the INA, of myself, of our program, and he has supported this wholeheartedly, without any strings attached."

As Spencer Ackerman of TPMmuckracker wrote, perhaps it's being financed by Allawi's old buddy Hazem Shaalan, who Allawi appointed as his defense minister. Shaalan is currently fighting charges that he stole $1 billion from the Iraqi defense budget (out of a total of $1.3 billion). That's some way to endear yourself to the Iraqi people.

Allawi and Shaalan are also closely tied to the Iraqi National Intelligence Service, which is funded and controlled by the C.I.A. and which has been a persistent thorn in relations between the U.S. and Maliki.

Meanwhile, we'll have to see whether Barbour Griffith & Rogers' lobbying will be as effective with administration officials as it has been with Washington's media gatekeepers. Last week, Bush issued a tepid defense of Maliki, saying he is "a good guy, a good man with a difficult job, and I support him." Hmm, didn't he say the same thing about Alberto Gonzales? And Don Rumsfeld?

While I was working on this post, I got a call from John Cusack, who had watched Blitzer's interview with Allawi from Berlin, where he is making a movie. He was stunned by Blitzer's remark to Allawi, after he had read him Maliki's quote about Iraq being able to "find friends elsewhere": "Those words," Blitzer said, "were seen here in Washington as pretty biting, given the enormous amount of support the United States has provided Iraq over these years."

"Can you imagine?" Cusack told me. "We invade their country, an invasion that has resulted in over 100,000 -- and maybe as many as 650,000 -- Iraqi civilians dead; 2 million Iraqis having fled the country, with 1.14 million displaced from their homes within Iraq; and tens of thousands of Iraqis detained -- with many of them tortured. After that 'enormous amount of support,' Iraqis have the temerity to complain?"

Talk about ingratitude. I bet Allawi would never bite the hand that feeds -- and bombs -- him.

Clic

US ready to step into Basra as British withdraw.

If the US step into the Basra area there will be just more bloodshed and the need for more US troops in Iraq. However, the US will not be willing to sit back and see the southern oil fields fall into the wrong hands. Although neither of the two main groups fighting for control are pro-US.

US ready to step into Basra as British pull out
Posted 4 hours 38 minutes ago

The US military is ready to intervene in southern Iraq to quell any unrest as British forces prepare to pull out from their last base in the oil port of Basra, the Pentagon says.

Press reports in London suggest that the British departure and handover of security control to Iraqi forces may be imminent, although the official line is that it will take place before the end of the year.

US forces will not allow any security advances in southern Iraq to be abandoned, Brigadier General Richard Sherlock, deputy director for operational planning at the Department of Defence, told reporters.

As requirements on the ground dictate, "they will reposition forces with the battlefield geography in mind so that they don't give up gains that they've made in different areas, including in Basra and the south," he said.

"As the UK forces reposition ... all that will be taken into account as well as what the security needs for each region are," Sherlock said.

When the 500 British troops evacuate a former palace of Saddam Hussein in Basra and withdraw to a desert airbase, they will leave behind a city in the grip of a brutal turf war between rival militia.

-AFP

Hundreds Arrested in Chile Clashes

There seems to be reaction against neo-liberal policies and the gross inequalities in most South American regimes. Bolivia seems to be experiencing a reaction against the successful grass roots movement by the elites. Not much news about the struggles in Chile in North America.

Hundreds arrested in clashes with
Chileans take to streets in anger at regimeEconomic inequality at heart

of protest in capital

Jonathan Franklin in Santiago and agencies
Thursday August 30, 2007

Guardian

Thousands of Chileans took to the streets yesterday in a burgeoning
middle class revolt against the 17 years of coalition government that
has ruled since the fall of Augusto Pinochet in 1990.

Hundreds of Chileans were arrested as they approached the presidential
palace. Squares in and around the palace became a chaotic mix of
mounted
police, riot troops and teargas. As water cannons blasted protesters,
waves of students counterattacked with rocks. Burning barricades almost

closed central Santiago.

Television images showed senator Alejandro Navarro, of President
Michelle Bachelet's Socialist party, bleeding from the back of his head

after apparently being clubbed by a police officer. The deputy interior

minister, Felipe Harboe, said the incident would be investigated. Mr
Navarro, who was treated in hospital, supported the protest.

"This protest will start to change things. There will be one after
another," said Arturo Martinez, of United Workers Central, the trade
union that organised the protest. The union is tapping into widespread
anger at economic inequality in Chilean society. As riot police and
ruling party politicians tried to play down the protests, the capital
was filled by protesters demanding higher pensions, better public
transport, subsidised housing and a halt to rising food and electricity

prices.

President Bachelet initially defended her record as a progressive
politician, then conceded and promised "subsidies to all" families in
need and a "short-term solution" for economic inequality. "Nobody can
say that my government's programmes are not fair and equitable. I will
not accept questioning of my work on social justice," she said. "The
solutions to these inequalities and the goal of a more equitable Chile
are obtained with dialogue, maturity, work and agreements. Through this

process there will be discord, but also common understanding."

While government officials tried to ignore the protests, union leaders
such as Mr Martinez threatened to lay siege to Santiago by shutting
down
major avenues and roads leading into the city.

Throughout the day, protesters repeatedly attempted to approach the
presidential palace, which late on Tuesday was briefly occupied by
low-income housing residents who stormed the building. At least 30
members managed to scale the iron window grates, dangling from the
palace screaming anti-government slogans.

Yesterday's protest comes after weeks of labour action, including
strikes by poultry workers in southern Chile and copper miners in the
north. Union leaders called the demonstrations to protest against the
government's "neo-liberal" economic policies and to further the
national
debate about the country's minimum wage.

Salaries for workers have been at the forefront of public debate after
recent statements by Bishop Alejandro Goic calling for "an ethical
[minimum] wage" for Chilean workers

Iraq oil law set to pass with majority.

This is from this site. It could hardly pass without a majority! This article seems quite confident. However, there seem to be a lot of groups opposed to the law as it stood. Perhaps it has been modified. The present text does not seem available. So much for democracy, transparency, and accountability. Perhaps the law will be passed in time for the Dubai meetings in September.

Iraqi oil law set to pass with majority
DUBAI: Iraq's draft oil law should pass by a comfortable majority when parliament meets to discuss it after the end of its summer break in September, Iraqi Vice President Adel Abdul-Mahdi said.

"The oil law was completed in cabinet... the draft that was approved in cabinet is the one that will be presented to parliament," he said.

"The parliament remains now in recess and will return at the start of September when we will reaffirm that the law will be presented to the parliament."

The controversial federal oil law has been approved by the Iraqi government after months of talks but has yet to be debated by parliament, which must approve it if it is to pass into law.

The law, which decides who controls the world's third-largest oil reserves, is now in limbo while Iraq's parliament takes its summer break.

No date has been set to debate the law, which aims to provide a legal framework to attract foreign investment and sets up a new state oil firm to oversee the sector.

Washington has pushed Iraq for months to speed up its passage and that of other legislation, which it sees as pivotal to reconciling warring Iraqis, rebuilding Iraq's shattered economy and attracting foreign investment.

The draft oil law aims resolve the sharing in oil profits and most of the reserves are in the Kurdish north and south of the country.

But there has been fierce debate over the shares and how much control regional governments will have over the existing and undiscovered oil reserves, as well as the sorts of contracts that will be included.

Abdul-Mahdi said that some appendices to the law could be included to ensure the broadest possible political consensus, even though the law was expected to pass comfortably as it is.

"There are some parliamentary blocs that call for the addition of some appendices to this law. Fine, the committee is studying this and the appendices could be included in this law despite the fact that if the voting took place in parliament now... the law would be expected to pass with a comfortable majority," Abdul-Mahdi said.

"But in the interests of national consensus, it is seen that their addition would be more beneficial and get a higher level of consensus than the comfortable majority that would be expected if it was presented now."

What's another 50 billion for Iraq?

The Democrats seem to be absolutely toothless with respect to reigning in Bush. He can simply thumb his nose at the Democrats and at the American people. At the same time war supporters have sponsored ghastly ads. They claim that the opposition would have the US withdraw from Iraq for political reasons. As if the US is not in Iraq and staying there for political reasons. It is the pro-war ads that are taking advantage of people's ideals and concern for soldiers to promote political aims just as much as any anti-war moves to force withdrawal are political.
There is the same cynical appeal to people's emotions in Canada when it comes to the Afghan war but nothing so gross and pukish as the US ads.

WASHINGTON (Reuters) - U.S. President George W. Bush is preparing to ask Congress for as much as $50 billion in additional funding for the war in Iraq, The Washington Post reported on Wednesday, citing a White House official.



The request signals increasing White House confidence that it can fend off mounting congressional pressure to begin withdrawing U.S. troops from Iraq, the Post reported.

The additional funds would come on top of about $460 billion in the fiscal 2008 defense budget and $147 billion in a pending supplemental bill to fund the wars in Afghanistan and Iraq, the Post said.

The request is expected to be announced next month after the top U.S. commander in Iraq, Gen. David Petraeus, and U.S. Ambassador Ryan Crocker report to Congress on the state of the war, the newspaper said.

Asked about the Post report, White House spokesman Scott Stanzel said no decision had yet been made about funding requests.

"We have said previously that after Gen. Petraeus reports we will be evaluating what adjustments may need to be made to our pending FY 08 (fiscal 2008) supplemental request," Stanzel said.

"I would decline to speculate on this, as Gen. Petraeus has not testified nor has any decision been made at this stage about whether, when or what specific changes would be made."

Al Sadr declares unilateral ceasefire

Al Sadr is always see-sawing opportunistically from one position to another. Here he even rejects fighting US forces rather than just Iraqis. It may be that he is having continuing troubles controlling his own militia. If so he will not be concerned if the US should eliminate some of his own troublemakers.

Al-Sadr declares ceasefire in Iraq


Ewen MacAskill in Washington
Wednesday August 29, 2007
Guardian Unlimited


Iraqis carry the coffin of a pilgrim killed in clashes between police forces and Shia fighters in Karbala. Photograph: Qassem Zein/AFP/Getty Images



The Iraqi militia leader, Moqtada al-Sadr, called a six-month truce today after fighting with a rival Shia Muslim group in the holy city of Kerbala left more than 50 dead.
A spokesman for the Mahdi army claimed it would lay down its weapons for six months and, during this time, would attack neither rival Shia groups nor the US army.

Mr Sadr, who has thousands of armed men at his command, has called truces before but these have proved to be short-lived.

Although US forces will welcome any respite, most of the attacks they face in the centre and north of the country are from Sunni nationalist groups and al-Qaida in Iraq.

A US military spokesman, Lieutenant Colonel Christopher Garver, said any organisation that worked towards a peaceful Iraq would be appreciated.

Since President George Bush announced in January he was to send an extra 30,000 US troops to Iraq, the Mahdi army has reduced the number of attacks on US forces. Mr Sadr was reported by the US to have sought temporary sanctuary in Iran for a time, though he denied it.

Even when US forces went into Sadr city, a slum area of Baghdad that is the stronghold of Mr Sadr, the widely-predicted bloodbath did not materialise and the Mahdi army has maintained a low profile.

Mr Sadr's truce appears to be in response to a blacklash by fellow Shias over three days of Shia infighting at a time when hundreds of thousands of pilgrims are in Kerbala. The fighting forced many of pilgrims to flee the city.

At least 52 died and 279 were wounded yesterday in the fighting between the Mahdi army and the Supreme Iraqi Islamic Council. A curfew has been imposed on the city.

Hazim al-Araji, an aide to Mr Sadr, read out a statement to Reuters saying the militia would suspend its operations "to restructure it in a way that will preserve its principles". He said Mr Sadr had ordered all his movement's offices shut for three days of mourning.

The restructuring is a hint that he is trying to distance himself from elements in the Mahdi army being blamed for taking violence close to two holy sites, the Imam Hussein and Imam Abbas shrines. He can claim that parts of the Mahdi army is without his control.

Another aide suggested as much when he said the aim was to remove bad members "working for their personal interests ... to hurt the Mahdi Army's reputation".

Both the Mahdi army and the SIIC have close links with their co-religionists in Iran, though the extent of these relationships are a matter of dispute.

Mr Bush has repeatedly accused the Iranian government this year of meddling in Iraq, including providing weapons to insurgents, and ordered US diplomats and military to adopt a more forceful stance towards Iranians in Iraq.

Tehran protested today after eight Iranians, including two with diplomatic credentials, were arrested by US forces at a checkpoint in Baghdad yesterday as they were heading towards the Sheraton Ishtar hotel. They were released today after the Iraqi government interceded on their behalf.

The Iranian foreign ministry spokesman, Mohammad Ali Hosseini, called the arrests an act of "interference" in Iraq's internal affairs. The Iranians had been accompanied by Iraqis who were providing protection. US troops seized three weapons from the cars for which there had been no permits.

The Iranians were apparently part of an official delegation to discuss cooperation on supplying electricity to villages along the Iraqi border.

Hosyhar Zebari, the Iraqi foreign minister, told the BBC: "After we intervened with the embassy and explained the situation that they were here on legal grounds on a legal basis and they have their visas, their credentials, were established then, they were released."

He added that the detention seemed to be simply a matter of "miscommunication and misunderstanding and some misinformation," and had nothing to do with Mr Bush's speech the same day in which he ramped up the threat to Iran.

In Tehran, the Iranian foreign ministry summoned the Swiss diplomat representing American interests in Iran to protest. The US has no diplomatic links with Iran.

The US is still holding Iranians arrested in the north of Iraq earlier this year that it says were members of the Iranian Revolutionary Guard's al-Quds division.

Grading Bush's History Speech

Street must have a strong stomach to actually go through Bush's meanderings paragraph by paragraph subjecting them to a detailed critique. To counterpoise the high sounding phrases about democracy and liberty against the historical realities is quite effective.


ZNet | U.S.

Grading Bush’s History Speech

by Paul Street; August 27, 2007



As a former college history teacher, I have an ingrained habit developed over years of grading. I often mark up things I read, adding commentary in the margins. The commentary is generally addressed to the author by first name.

Yesterday, I read former Yale history major and current day messianic militarist George W. Bush’s speech to the Veterans of Foreign Wars. In this disturbing oration, the United States' "Worst President Ever" (according to distinguished U.S. historian Eric Foner) attempted to make an historical case for continuing the criminal United States occupation of Iraq.



Below I present selected passages of Bush’s speech followed by commentary I have typed up from my red-inked margins. The commentary is addressed to "George," as if the president had submitted his speech as an essay I was expected to evaluate and comment upon.



A grade is given at the end.



THE PRESIDENT: Thank you all. Please be seated. The VFW is one of this nation's finest organizations. You belong to an elite group of Americans. (Applause.) You belong to a group of people who have defended America overseas. You have fought in places from Normandy to Iwo Jima, to Pusan, to Khe Sahn, to Kuwait, to Somalia, Kosovo, Afghanistan, and Iraq. You brought security to the American people; you brought hope to millions across the world.



Street: Careful George. There were strong U.S. imperial ambitions related to – and expressed in --- all of the wars you indirectly reference, including even WWII. The most transparently imperial of them all is the last one: the brazenly colonial occupation you so criminally and disastrously launched against Iraq. The U.S. wars on Korea, Vietnam, Serbia, Afghanistan and Iraq had and (since the last two are ongoing) have nothing to do with defending America or spreading hope abroad. The last two assaults are endangering Americans and spreading hatred abroad.



BUSH: I stand before you as a wartime President. I wish I didn't have to say that, but an enemy that attacked us on September the 11th, 2001, declared war on the United States of America. And war is what we're engaged in. The struggle has been called a clash of civilizations. In truth, it's a struggle for civilization. We fight for a free way of life against a new barbarism -- an ideology whose followers have killed thousands on American soil, and seek to kill again on even a greater scale.



Street: George, please. You know very well that you wanted to be “a wartime president.” Dick Cheney and Karl Rove and other handlers told you (and you certainly agreed) that you needed a quick and easy victory over a defenseless but trumped up foe (Saddam Hussein’s severely weakened Iraqi regime) to guarantee a second term in office. You and your handlers found 9/11 to be a useful and misleading pretext for that war (which didn’t turn out so quick and easy). Now you have turned Iraq into a terrorist training and breeding ground with a terrorist occupation that may have killed 1 million Iraqis and which feeds the flames of Islamic bitterness. Your occupations of Iraq and Afghanistan have managed to identify America’s concept of "freedom" with barbarian torture practices and indiscriminate mass bombings and murder. You have used the terror threat as a pretext to rollback freedom and democracy at home.



BUSH: We fight for the possibility that decent men and women across the broader Middle East can realize their destiny -- and raise up societies based on freedom and justice and personal dignity...I'm confident we'll prevail because we have the greatest force for human liberation the world has ever known -- the men and women of the United States Armed Forces.



Street: George, with all due respect, your claim to support “freedom and justice and dignity” in the Middle East is more than a little dubious. After all, your government is the leading ally, sponsor and arms supplier of possibly the most reactionary and totalitarian government on earth: the arch-repressive Saudi Arabian regime (to whom you have long been especially close). You also strongly support Israel’s oppressive and racist occupation of Palestine. And you can’t enhance “freedom and justice and dignity” in Iraq by killing a million of its people, forcing the exodus of 2 million (including especially the nation’s professional class) and generally devastating its society and infrastructure.



The “greatest force for human liberation the world has ever known” is popular struggle, not the U.S. military, which has a long history of supporting repressive regimes abroad.





BUSH: Now, I know some people doubt the universal appeal of liberty, or worry that the Middle East isn't ready for it. Others believe that America's presence is destabilizing, and that if the United States would just leave a place like Iraq those who kill our troops or target civilians would no longer threaten us.



Street: George, you know very well that the invasion of Iraq had nothing to with a desire to spread “liberty.” You attacked that nation to boost your political profile (that didn’t work out too well, I’m afraid) and to deepen U.S. control of super-strategic Middle Eastern oil resources. You have naturally and consistently opposed substantive and meaningful liberty for the Iraqi people and nation state. That’s why you got rid of Garner and replaced him with Bremer as Iraq viceroy as you could, remember? (Garner thought they should have real elections as soon as possible, but this was too quick for your economic and oil takeover plans).



You are desperate to see the Iraqi government pass an oil law that happens to be opposed by most Iraqis because the law would open Iraq's stupendous petroleum reserves to foreign and principally U.S. control and profit.



The notion that the U.S. occupation has destabilized Iraq is simply an obvious empirical fact readily noted by all honest and competent observers. We Americans are threatened by the Islamic terrorism you fuel with such bloody and illegal actions as the occupation of Iraq.



BUSH: There are many differences between the wars we fought in the Far East and the war on terror we're fighting today. But one important similarity is at their core they're ideological struggles. The militarists of Japan and the communists in Korea and Vietnam were driven by a merciless vision for the proper ordering of humanity. They killed Americans because we stood in the way of their attempt to force their ideology on others. Today, the names and places have changed, but the fundamental character of the struggle has not changed. Like our enemies in the past, the terrorists who wage war in Iraq and Afghanistan and other places seek to spread a political vision of their own -- a harsh plan for life that crushes freedom, tolerance, and dissent. Like our enemies in the past, they kill Americans because we stand in their way of imposing this ideology across a vital region of the world. This enemy is dangerous; this enemy is determined; and this enemy will be defeated.



Street: George, there’s an enormous amount of nonsense and ignorance on display here. The U.S. was fine with European and Japanese fascism until the U.S. miltary was attacked in a colonial possession it had stolen from its island inhabitants – Hawaii. The U.S. empire was attacked because it had been acting to strangle Japan’s economy in accord with perceived U.S. interests in Asia. The Japanese military killed Americans because there was a great power conflict over Asian resources and markets; nothing in the Japanese militarists’ world view required killing Americans.



The U.S. fought a brutal “race war without mercy” (John Dower) against the Japanese because Japan had challenged U.S. imperial interests in a region of the world over which the Japanese had a more legitimate claim to influence. It had nothing to do with Japan’s purported ideological ambitions.



Vietnam was a U.S. colonial war (also quite racist) fought to prevent a small peasant nation from breaking free from imperial control and to stop it from developing outside the supervision of the U.S.-controleld world capitalist system. It was waged against ordinary and predominantly Buddhist Vietnamese peasants and workers who were driven by the desire for social justice and national independence – not by some faceless ideology of international "communism." Vietnamese revolutionaries and independence (freedom) fighters “killed Americans” because the U.S. invaded and attempted to destroy their country. The U.S. savagely killed 3 million Indochinese people between 1962 and 1975.



Iraq is under U.S. occupation because you wanted what you thought would be a quick victory (remember that little “Mission Accomplished” scam you pulled?) for your political resume and because you and your handlers wanted to deepen U.S. control over the remarkable oil resources that sit beneath Iraq’s not-so sovereign soil. You used the “ideological struggle” with radical Islam as a fraudulent pretext to invade. You continue to brandish this false justification to rationalize the continuation of that inherently mass-murderous operation, which happens to be opposed by most U.S. citizens along with the preponderant majority of the morally and politically cognizant planet.



BUSH; At the outset of World War II there were only two democracies in the Far East -- Australia and New Zealand. Today most of the nations in Asia are free, and its democracies reflect the diversity of the region. Some of these nations have constitutional monarchies, some have parliaments, and some have presidents. Some are Christian, some are Muslim, some are Hindu, and some are Buddhist. Yet for all the differences, the free nations of Asia all share one thing in common: Their governments derive their authority from the consent of the governed, and they desire to live in peace with their neighbors.



Street: George, you know very well that U.S. opposes the will of Asian nations and people when that will is perceived to work against U.S. global interests. And by the Jeffersonian criteria you embrace – that governments derive their just authority from the consent of the governed – the current U.S. government should be dissolved. You continue to pursue numerous policies (including but not restricted to the Iraq War) for which ordinary Americans do not give their consent.



You attempted to manufacture mass U.S. consent for the Iraq War through technically illegal and fraudulent means --- false WMD claims, false linkages of Iraq to al Qaeda and 9/11, and false claims to be trying to advance “liberty” to Iraq, etc. You have consistently used your imperial entanglements adn crimes as justification for your repeated efforts to roll back U.S. civil liberties.



BUSH: Along the way to this freer and more hopeful Asia, there were a lot of doubters. Many times in the decades that followed World War II, American policy in Asia was dismissed as hopeless and naive. And when we listen to criticism of the difficult work our generation is undertaking in the Middle East today, we can hear the echoes of the same arguments made about the Far East years ago.



In the aftermath of Japan's surrender, many thought it naive to help the Japanese transform themselves into a democracy. Then as now, the critics argued that some people were simply not fit for freedom.



Street: George,the problem with you and your fellow war-makers isn’t that you are naïvely pursuing freedom and hope. The problem is that you are cynical imperialists who use deceptive and disingenuous claims (falsely claiming in this case to be spreading exporting democracy and “helping” others) as cover for your efforts to deepen U.S. control over global energy resources and (you hoped) to advance your own political career.



You don’t help make people “fit for freedom” by deepening America’s already advanced devastation of their society. But then, actual freedom is the last thing you and your comrades want for the Iraqis.



BUSH: Finally, there's Vietnam. This is a complex and painful subject for many Americans. The tragedy of Vietnam is too large to be contained in one speech.



Street: George, I’ll give you one sentence: the tragedy of Vietnam is a long record of outside imperial domination that reached its apex when the U.S. killed millions of Vietnamese to prevent them from completing a socially egalitarian national independence revolution in the 1960s and 1970s



BUSH: I'm going to limit myself to one argument that has particular significance today. Then as now, people argued the real problem was America's presence and that if we would just withdraw, the killing would end. The argument that America's presence in Indochina was dangerous had a long pedigree...many argued that if we pulled out there would be no consequences for the Vietnamese people.



Street: Let’s see: 2 million dead Vietnamese plus 57,000 dead Americans....what’s your definition of “dangerous” presence?



And who argued “no consequences?” The antiwar movement you are attempting to criticize here argued that a U.S. pullout would permit the Vietnamese to consolidate their national independence movement and would save untold numbers of lives being lost because of the United States’ determination to sustain a hated colonial invasion.



BUSH: Three decades later, there is a legitimate debate about how we got into the Vietnam War and how we left...Whatever your position is on that debate, one unmistakable legacy of Vietnam is that the price of America's withdrawal was paid by millions of innocent citizens whose agonies would add to our vocabulary new terms like "boat people," "re-education camps," and "killing fields."



Street: George, this is too much. After killing 3 million Indochinese and practically bombing Vietnam and parts of Laos and Cambodia “back to the Stone Age” you have the audacity to claim that subsequent miseries there – exacerbated by a crushing U.S. embargo meant to complete Vietnam’s transformation into a basket case --- were because of our withdrawal? Have you ever heard about the critical role that Nixon and Kissinger’s mass bombing campaign in Cambodia played in the rise of the Khmer Rouge?



The U.S “crucifixion of Southeast Asia” (Noam Chomsky’s excellent phrase) is critical context for the consolidation of authoritarian and totalitarian regimes in Vietnam and Cambodia. Curiously enough, it was the North Vietnamese regime that most significantly intervened against the killing fields in Cambodia.



Do you really think we should have stuck around to directly kill, what, 10 million Indochinese and lost, how many --- 100,000, 200,000 troops?



Interesting, isn’t it, that YOU were a draft dodger, even through you supported the war. That wouldn't have been a good thing to mention to the VFW folks, I guess.



BUSH: There was another price to our withdrawal from Vietnam, and we can hear it in the words of the enemy we face in today's struggle -- those who came to our soil and killed thousands of citizens on September the 11th, 2001. In an interview with a Pakistani newspaper after the 9/11 attacks, Osama bin Laden declared that "the American people had risen against their government's war in Vietnam. And they must do the same today."



His number two man, Zawahiri, has also invoked Vietnam. In a letter to al Qaeda's chief of operations in Iraq, Zawahiri pointed to "the aftermath of the collapse of the American power in Vietnam and how they ran and left their agents."



Zawahiri later returned to this theme, declaring that the Americans "know better than others that there is no hope in victory. The Vietnam specter is closing every outlet." Here at home, some can argue our withdrawal from Vietnam carried no price to American credibility -- but the terrorists see it differently.



Street: George, don’t you think this line about how the terrorists “came to our soil and killed thousands of citizens” is getting a little OLD after we’ve spent five and half years fighting state terrorist wars of imperial aggression that have killed HUNDREDS of THOUSANDS of innocent Arab and Pashtun (and other) citizens on THEIR SOIL?



Another question here is what kind of “credibility” America wants in the world: the true integrity that emerges from engaging peacefully and democratically with the world or the dangerous, false, terrorist and terrorism-inviting authority that comes from delivering on the promise to butcher masses of people from land, sea and sky? Imperial state mass murder garners only the latter type of so-called “respect.”



The Nazi Third Reich had similar concerns about credibility. So does any good Mafia boss!



BUSH: Iraq is one of several fronts in the war on terror -- but it's the central front -- it's the central front for the enemy that attacked us and wants to attack us again. And it's the central front for the United States and to withdraw without getting the job done would be devastating.



Street: George, even the overworked, bewildered, atomized, and heavily propagandized (the childish tale notion that the U.S. invaded Iraq to “help” it is still ubiquitous across dominant narrow U.S. media and political spectrums) American people no longer believe this. The U.S. majority no longer accepts your conflation of the terrorist U.S. war on Iraq with the so-called war on terror. And they think your war on Iraq is endangering us – with good reason. It's been this way for a while now.



BUSH: Unlike in Vietnam, if we withdraw before the job is done, this enemy will follow us home. And that is why, for the security of the United States of America, we must defeat them overseas so we do not face them in the United States of America.



Street: But George, the U.S. didn’t leave before “getting the job done” in Vietnam. It devastated Vietnam so thoroughly that the country was incapable of becoming a successful model of democratic and independent development outside U.S. (and world capitalist) supervision. That was the basic minimal job of the U.S. assault (readily discernible in U.S. planning documents) and it WAS attained. (We had more than a few assigned readings on this, George)



That point aside, you’ve got the whole Middle Eastern danger thing backwards. Americans faced and continue to face threats from Islamic terrorists precisely because of our -- well, your --- vicious, alienating and (sorry) imperialist foreign policy. The U.S. must dismantle its massive Empire in the Middle East or continue to face the threat of terrorist assault.





BUSH: In Iraq, our moral obligations and our strategic interests are one. So we pursue the extremists wherever we find them and we stand with the Iraqis at this difficult hour -- because the shadow of terror will never be lifted from our world and the American people will never be safe until the people of the Middle East know the freedom that our Creator meant for all.





Street: whose American moral obligations and whose American "strategic interests," George? The moral obligation to encourage freedom and justice there stands in direct contradiction to you and your fellow imperialists’ determination to seize control of Iraq’s oil reserves (the essence of your "strategic interests"). You do not stand with the Iraqis (the great majority of whom have long wanted the U.S. to leave) on that or countless other vital matters. And your glorious Armed Forces (the very military you refused to “serve” with during the 1960s) are in many ways the very “shadow of terror” you claim to oppose as far as millions of Iraqis are concerned.



Again with the “freedom” nonsense that nobody outside your closed imperial circle pretends to believe.



And for God’s sake, you must know how volatile that “Creator meant for all” line must be in the Muslim world. But then that’s the point, isn’t it? You are all about egging your opposite number messianic fundamentalists on, aren’t you? You are all about advancing permanent war as the glorious agent of wealth and power concentration at home and abroad. Much of your "base" (the top 1 percent) likes that.



BUSH: In a world where the terrorists are willing to act on their twisted beliefs with sickening acts of barbarism...



Street: George, please take a look in the mirror of your own nation’s twisted imperial record, which you have taken to a new level of hypocrisy and shame.





Grade: D.



George, you have a chilling “Orwellian” penchant for distorting and selectively interpreting the past, something that has unfortunate implications for your understanding of the present and future. This would be less of a problem if you did not shockingly happen to still be the “Commander in Chief" (as you love to describe yourself). This is the fifth straight inadequate paper you've handed in. Please schedule an appointment with me as soon as possible.



Paul Street's latest book is Racial Oppression in the Global Metropolis (New York: Rowman and Littlefield, 2007). Paul can be reached at paulstreet99@yahoo.com.

Critique of Summers

This seems a reasonable criticism of Summers. Dean does by the way think that there should be some steps taken to help people who may lose their homes but not speculators as Summers bailout would seem to do. I assume Summers would claim that the bailout might serve to calm the markets and prevent even further stock losses and create confidence.

Summers Calls for Bailing Out the Wall Street Boys

By Dean Baker | bio
In a Financial Times column whose logic escapes me, former Treasury Secretary Larry Summers calls for having the huge government created housing intermediaries, Fannie Mae and Freddie Mac, step in and start buying up more mortgages and mortgage backed securities. Summers’ says “if there is ever a moment when they should expand their activities it is now, when mortgage liquidity is drying up."

Let’s check the scorecard. The value of hundreds of billions of dollars of mortgage backed securities has just fallen through the floor because investors now realize that a very high percentage of the mortgages that back these securities will go into foreclosure. Now, why do we want a government agency to buy assets that are rapidly losing their value?




At the moment, it looks to me like we are seeing high-flying speculators getting nailed for making really stupid investment decisions. Being a mushy headed liberal sort, I like to see the government reach out to help people who are trying to get an education, who have lost their job, or need health care, but making really stupid investment decisions is not on my list. Perhaps Summers could write another piece explaining why it should be.

Summers begins his column by listing prior financial crises, starting with the stock market crash in 1987, and puts the current mortgage meltdown in this context. While I would not suggest a one-size fits all approach to financial crises, the government’s role in most of the crises on this list can be seriously questioned. For example, did the response to the 1987 stock market crash lead investors to believe that the Fed would/could bail out the stock market, and thereby lay the basis for the huge bubble of the 90s? In the same vein, did the Fed’s involvement in the unwinding of the Long-Term Capital Management’s position give a green light to investors to speculate in hedge funds, knowing that the Fed would step in to prevent the worst outcomes.

Bailouts have both immediate and long-term effects. When the immediate effect is to transfer taxpayer dollars to some of the richest people in the country that is bad news. If the long-term effect is lead investors to believe that they can engage in risky investments and the government will come to their rescue if things go badly, this is even worse news. So, I’ll take a pass on Larry Summers bailout.

Wednesday, August 29, 2007

Lawrence Summers on the Credit Crunch

I do not feel qualified to comment on this but at least Summers not only gives his analysis of the causes of the problems but also possible solutions.


This is where Fannie and Freddie step in
By Lawrence Summers
Financial Times
August 26 2007

Over the past 20 years major financial disruptions have taken place
roughly
every three years, starting with the 1987 stock market crash; the
Savings &
Loans collapse and credit crunch of the early 1990s; the 1994 Mexican
crisis; the Asian financial crises of 1997 with the Russian and
Long-Term
Capital Management events of 1998; the bursting of the technology
bubble in
2000; the potential disruptions of the payments system after the events
of
September 11 2001 and the deflationary scare in the credit markets in
2002
after the collapse of Enron.

This record suggests that by 2007 the world had been overdue a major
disruption. Sure enough the problems of subprime mortgages –
initially seen
as a confined issue – went systemic as the market began to doubt the
creditworthiness of even the strongest institutions and rushed to buy
US
Treasury debt. Financial crises differ in detail but, just as there are
plot
cycles common to literary tragedies, they follow a common arc.

First there is a period of overconfidence, rising asset values and
growing
leverage as investors increase their faith in strategies that have
enjoyed a
long run of success. Second, there is a surprise that leads investors
to
seek greater safety. In the current case it was the discovery of huge
problems in the subprime sector and the resulting loss of confidence in
the
ratings agencies. Third, as investors rush for the exits, the focus of
risk
analysis shifts from fundamentals to investor behaviour. As some
investors
liquidate their assets, prices fall; others are in turn forced to
liquidate,
further driving prices down. The anticipation of cascading liquidations
leads to more liquidations creating price movements that seemed
inconceivable only a few weeks before. The reduced availability of
credit
then has a negative effect on the real economy. Eventually –
sometimes in a
few months as in the US in 1987 and 1998; sometimes over a decade, as
in
Japan during the 1990s – there is enough price adjustment that
extraordinary
fear gives way to ordinary greed and the process of repair begins.

Only time will tell where we are in this cycle. There have been some
signs
of returning normalcy over the past week, but we cannot judge whether
they
represent a false spring or the end of a crisis phase. There may be
further
shoes to drop in the financial sector. The impact on consumer
confidence and
spending that has driven US expansion over the past several years
remains
unknown.

While it is too soon to draw policy lessons, we can highlight questions
the
crisis points up. Three stand out.

First, this crisis has been propelled by a loss of confidence in
ratings
agencies as large amounts of debt that had been very highly rated has
proven
very risky and headed towards default. There is room for debate over
whether
the errors of the ratings agencies stem from a weak analysis of complex
new
credit instruments, or from the conflicts induced when debt issuers pay
for
their ratings and can shop for the highest rating. But there is no room
for
doubt that – as in previous financial crises involving Mexico, Asia
and
Enron – the ratings agencies dropped the ball. In light of this,
should bank
capital standards or countless investment guidelines be based on
ratings?
What is the alternative? Sarbanes-Oxley was a possibly flawed response
to
the problems Enron highlighted in corporate accounting. What, if any,
legislative response is appropriate to address the ratings concerns?

Second, how should policymakers address crises centred on non-financial
institutions? A premise of the US financial system is that banks accept
much
closer supervision in return for access to the Federal Reserve’s
payments
system and discount window. The problem this time is not that banks
lack
capital or cannot fund themselves. It is that the solvency of a range
of
non-banks is in question, both because of concerns about their economic
fundamentals and because of cascading liquidations as investors who
lose
confidence in them seek to redeem their money and move into safer, more
liquid investments. Central banks that seek to instil confidence by
lending
to banks, or reducing their cost of borrowing, may, as the saying goes,
be
pushing on a string. Is it wise to push banks to become public
financial
utilities in times of crisis? Should there be more lending and/or
regulation
of the non-bank financial institutions?

Third, what is the role for public authorities in supporting the flow
of
credit to the housing sector? The lesson learnt during the S&L debacle
was
that it was catastrophic to finance home ownership through insured
banking
institutions that borrowed short term and then offered long-term
fixed-rate
home mortgages. Now a system reliant on securitisation, adjustable rate
mortgages and non-insured financial institutions has broken down.

I am among the many with serious doubts about the wisdom of the
government
quasi-guarantees that supported the government-sponsored entities,
Fannie
Mae, the Federal National Mortgage Association, and Freddie Mac, the
Federal
Home Loan Mortgage Corp , as they have operated in the mortgage market.
But
surely if there is ever a moment when they should expand their
activities it
is now, when mortgage liquidity is drying up. No doubt, credit
standards in
the subprime market were too low for too long. Now, as borrowers face
higher
costs as their adjustable rate mortgages are reset, is not the time for
the
authorities to get religion and discourage the provision of credit.

This crisis could have a silver lining if it leads to the careful
reflection
on these vital questions.

The writer is the Charles W. Eliot professor at Harvard University

Another area opens for investment in Iraq

The entire article is at Iraq Slogger. There are huge numbers of private contractors in Iraq and there are just not enough spaces in the US military health care facilities in Iraq. Of course the Iraqi facilities are crumbling and ill supplied so no contractor is going to use them. Only Iraqis deserve such ill treatment.

DoD Contractor Medical Care May Be Privatized
Pentagon Explores Options as Contractors Overwhelm US Mil Medical Facilities
By EASON JORDAN Posted 22 hr. 38 min. ago

US arrests and then releases Iranian visitors

Obviously the Iraq government was consulted only after the arrests. The US does not bother to consult the Iraqi govt. on issues such as this. Actions such as this can only inflame both Iranian and Iraqi feelings that the US hasn't the slightest respect for the sovereignty of either country. Maliki has already said that Iran is playing a constructive role in Iraq and the leaders of both countries have recently made visits to the other country.

US forces say free eight Iranians held in Iraq
29 Aug 2007 08:55:26 GMT
Source: Reuters
By Ross Colvin

BAGHDAD, Aug 29 (Reuters) - U.S. forces said on Wednesday they had detained eight Iranians overnight and seized a suitcase full of money from their central Baghdad hotel but later freed them after consultations with the Iraqi government.

A media adviser to Iraqi Prime Minister Nuri al-Maliki, Yasin Majid, said the men had been members of an Iranian delegation invited to Iraq by the Ministry of Electricity to discuss construction of a new power plant.

The U.S. military said in a statement that U.S. troops had stopped four vehicles and detained 15 people, the Iranians and their Iraqi bodyguards, on Tuesday night. They had seized an AK-47 rifle and two pistols belonging to the Iraqis.

The Iranians had then been allowed to travel on to their hotel, the Sheraton Ishtar in the city centre, but troops had followed shortly afterwards and entered their rooms.

"While there, Coalition Forces confiscated a laptop, cellphones and a briefcase full of Iranian and U.S. money," the statement said, adding that the men were then taken to a U.S. military facility for questioning.

"The Iranian nationals had passports. It was later determined that two of the Iranian individuals were carrying diplomatic credentials. The Iranian nationals were released in consultation with the government of Iraq," the statement said.

Videotape of their arrest showed U.S. troops leading 10 men, blindfolded and handcuffed, from the hotel.

The incident comes at a time of rising tensions between the two long-time foes, with U.S. officials stepping up accusations that Iran is supplying deadly roadside bombs and other weapons to Iraqi militias to kill U.S. soldiers, a charge Iran denies.

Iran's official IRNA news agency, quoting Iran's ambassador to Iraq, said U.S. forces handed over the delegation at 7 a.m. (0300 GMT) to Maliki's office. It also said the delegation was in Iraq to sign an electricity contract.

U.S. forces have separately been holding five Iranians since January that they say were providing support to militants.

The military says the five are agents of Iran's Revolutionary Guards Qods force, but Iran insists they are diplomats and has demanded their release.

U.S. generals say Iran is seeking to influence debate on the war in Washington by boosting its support for Shi'ite militias ahead of a report on political and military progress in Iraq due to be presented to the U.S. Congress in two weeks' time.

U.S. ambassador Ryan Crocker formally outlined the U.S. accusations of Iran's meddling in Iraq during two rounds of talks with his Iranian counterpart in Baghdad in May and July.

The talks between the two countries, which have not had diplomatic relations for almost 30 years, were seen as groundbreaking and led to the formation of a committee intended to improve cooperation between the countries on Iraqi security. (Additional reporting by Waleed Ibrahim in Baghdad and Edmund Blair in Tehran)

US poverty declining

The decline should be looked at in light of the fact that during 2000 it was 11.3 so the decline is from very high levels. At the same time as the article notes the number of people not covered by health insurance is growing.

U.S. poverty rate declines significantly

By STEPHEN OHLEMACHER, Associated Press Writer
50 minutes ago

Five years into a national economic recovery, the
share of Americans living in poverty finally dropped.

The nation's poverty rate was 12.3 percent in 2006,
down from 12.6 percent a year before, the Census
Bureau reported Tuesday. Median household income
increased slightly, to $48,200.

The numbers provided some good economic news at a time
when financial markets have been rattled by a slumping
housing market. But they were tempered by an increase
in the number of Americans without health insurance,
from 44.8 million in 2005 to 47 million last year.

Some advocates said the numbers were evidence of an
uneven economy that is leaving many Americans behind.

"Too many Americans find themselves still stuck in the
deep hole dug by economic policies favoring the
wealthy," said Rep. Charles B. Rangel, D-N.Y.,
chairman of the House Ways and Means Committee.
"Income remains lower than it was six years ago,
poverty is higher, and the number of Americans without
health insurance continues to grow."

But Douglas Besharov, a resident scholar at the
conservative American Enterprise Institute, said there
is a lot of good news in the numbers.

"We're looking at a situation where unemployment was
down, and it was down for single mothers, who make up
a substantial portion of the people in poverty,"
Besharov said. "We need a good economy. That's not all
we need, but we should not complain when it helps
lower poverty."

The last significant decline in the poverty rate came
in 2000, during the Clinton administration, when it
went from 11.9 percent to 11.3 percent.

The poverty rate increased every year for the next
four years, peaking at 12.7 percent in 2004. It was
12.6 percent in 2005, but Census officials said that
change was statistically insignificant.

The poverty level is the official measure used to
decide eligibility for federal health, housing,
nutrition and child care benefits. It differs by
family size and makeup. For a family of four with two
children, for example, the poverty level is $20,444.

The poverty rate — the percentage of people living
below poverty — helps shape the debate on the health
of the nation's economy.

Democrats on Capitol Hill said the insurance numbers
justify spending more money for a popular government
health insurance program for children.

Both chambers of Congress recently passed bills that
would dramatically increase funding for the Children's
Health Insurance Program, known as SCHIP. The Bush
administration, however, opposes both measures saying
they would result in people abandoning private
coverage for public coverage for children.

The share of Americans without health insurance hit
15.8 percent last year, the highest percentage since
1998. In 2005, 15.3 percent were without insurance.

The annual increase was fueled mainly by a decline in
the share of workers covered by employer-provided
health insurance, said David Johnson, chief of the
Census Bureau's Housing and Household Economic
Statistics Division.

Two Democrats running for president said the insurance
numbers point to weaknesses in the nation's health
care system.

"These statistics show what most Americans know: tens
of millions of our fellow citizens are completely left
out of the economic progress enjoyed by the
individuals and corporations on the very top," said
Democrat John Edwards, who has made eradicating
poverty a centerpiece of his campaign. "We need truly
universal health care and a national effort to
eliminate poverty."

Sen. Hillary Rodham Clinton noted that there were a
lot fewer people without health insurance when she
first addressed the issue as first lady. In 1993,
there were 39.7 million Americans without health
insurance, according to the Census Bureau.

"It is an even deeper outrage today," she said.

The Census Bureau on Tuesday released 2006 income and
poverty figures for all the states and every city and
county with a population of 65,000 or more.

Among the findings:

_Maryland led the country with a median household
income of $65,144. It was followed by New Jersey,
Connecticut, Hawaii and Massachusetts.

_Mississippi had the lowest median income, at $34,473.
It was followed by West Virginia, Arkansas, Oklahoma
and Alabama.

_Mississippi had the highest poverty rate, at 21.1
percent. It was followed by Louisiana, New Mexico,
Arkansas and West Virginia.

_Maryland had the lowest poverty rate, at 7.8 percent.
It was followed by New Hampshire, Connecticut, New
Jersey and Hawaii.

___

US most armed country.

This figure of course refers only to civilians not the military. The statistics are interesting in that the US actually buys over half of new weapons made every year.


U.S. most armed country with 90 guns per 100 people
Tue Aug 28, 2007 1:43 PM ET
By Laura MacInnis

GENEVA (Reuters) - The United States has 90 guns for every 100
citizens, making it the most heavily armed society in the world, a
report released on Tuesday said.

U.S. citizens own 270 million of the world's 875 million known
firearms, according to the Small Arms Survey 2007 by the Geneva-based
Graduate Institute of International Studies.

About 4.5 million of the 8 million new guns manufactured worldwide
each year are purchased in the United States, it said.

"There is roughly one firearm for every seven people worldwide.
Without the United States, though, this drops to about one firearm
per 10 people," it said.

India had the world's second-largest civilian gun arsenal, with an
estimated 46 million firearms outside law enforcement and the
military, though this represented just four guns per 100 people
there. China, ranked third with 40 million privately held guns, had 3
firearms per 100 people.

Germany, France, Pakistan, Mexico, Brazil and Russia were next in the
ranking of country's overall civilian gun arsenals.

On a per-capita basis, Yemen had the second most heavily armed
citizenry behind the United States, with 61 guns per 100 people,
followed by Finland with 56, Switzerland with 46, Iraq with 39 and
Serbia with 38.

France, Canada, Sweden, Austria and Germany were next, each with
about 30 guns per 100 people, while many poorer countries often
associated with violence ranked much lower. Nigeria, for instance,
had just one gun per 100 people.

"Firearms are very unevenly distributed around the world. The image
we have of certain regions such as Africa or Latin America being
awash with weapons -- these images are certainly misleading," Small
Arms Survey director Keith Krause said.

"Weapons ownership may be correlated with rising levels of wealth,
and that means we need to think about future demand in parts of the
world where economic growth is giving people larger disposable
income," he told a Geneva news conference.

The report, which relied on government data, surveys and media
reports to estimate the size of world arsenals, estimated there were
650 million civilian firearms worldwide, and 225 million held by law
enforcement and military forces.

Five years ago, the Small Arms Survey had estimated there were a
total of just 640 million firearms globally.

"Civilian holdings of weapons worldwide are much larger than we
previously believed," Krause said, attributing the increase largely
to better research and more data on weapon distribution networks.

Only about 12 percent of civilian weapons are thought to be
registered with authorities.

Tuesday, August 28, 2007

Britain hits low point in drug war in Afghanistan.

Cutting opium production was a reason for the UK to send troops to Afghanistan? Comical. Of course before the Taliban were thrown out they had successfully stopped most poppy production and even been rewarded for doing so. Now production is such that over 90 percent of world supply comes from Afghanistan. It is not just the farmers in the area of production but dealers and manufacturers of opium throughout Afghanistan are the problem and as the article notes there are connections to important political and other figures. By the way cutting down production will not necessarily stop funding from the drug trade to the Taliban. The big profits go not to the farmers but to other links in the chain. Cutting production just raises prices and the middlemen's incomes will not decline just those of farmers who will want to throw NATO and the US out as well as kill those who colloborate.

Britain hits low point in opium war
5:00AM Wednesday August 29, 2007



Poppies are flourishing in Afghanistan where opium production is 34 per cent higher than last year. Photo / Reuters
KABUL - Britain faces a war on two fronts in Afghanistan, following the revelation that the province where British troops are deployed has become the biggest source of illicit drugs in the world.

In an annual survey of opium production released this week, the United Nations reported that Helmand province had produced 48 per cent more opium compared to its record-breaking crop last year.

Opium production in Afghanistan as a whole had reached a "frighteningly new level" at 8200 tonnes, 34 per cent higher than last year, the report said.

British troops sent to back up reconstruction efforts in Helmand have been pinned down in the volatile province by resurgent Taleban fighters, who have a stranglehold over the drugs trade, which is funding the resistance.

Although another record opium crop had been expected, the massive jump in the Helmand output since 2006 reflects the level of insecurity in the province, where the insurgency has deepened over the past year. British commanders have described the conflict as the most intense since the Korean war.





Alongside the fight against al Qaeda after the September 11 attacks in 2001, cutting opium production in Afghanistan was one of the main justifications for British involvement in military action in Afghanistan. Opium provides the raw material for heroin.

When he was Prime Minister, Tony Blair repeatedly referred to the fact that Afghan heroin accounts for an overwhelming proportion of the drug available on the streets of Britain and agreed to lead the international coalition's anti-narcotics effort. But yesterday the government was accused by its critics of "failing spectacularly".

"An astonishing 50 per cent of the whole Afghan opium crop comes from one single province: Helmand," said the UN office on drugs and crime in its report. Although cultivation of the opium poppy had decreased in parts of Afghanistan, "where anti-government forces reign, poppies flourish".


"With just 2.5 million inhabitants, this relatively rich southern province has become the world's biggest source of illicit drugs, surpassing the output of entire countries such as Colombia (coca), Morocco (cannabis) and Burma (opium) - which have populations up to 20 times larger."

The head of the UN agency, Antonio Maria Costa, said: "No other country in the world has ever had such a large amount of farmland used for illegal activity, beside China 100 years ago," when it was an opium producer.

He urged Nato to more actively support counter-narcotics operations. "Since drugs are funding insurgency, Afghanistan's military and its allies have a vested interest in destroying heroin labs, closing opium markets and bringing traffickers to justice. Tacit acceptance of opium trafficking is undermining stabilisation efforts."

Britain, which is boosting the number of troops in Helmand to a total 7700 by the end of the northern hemisphere summer, backs greater involvement by Nato in crop eradication, by providing protection and logistical help for Afghan forces involved in the effort.

Diplomats stressed however that British soldiers would not be directly involved in crop eradication.

Given the dramatic failure of the strategy in curbing the opium poppy cultivation, future policy is expected to focus more on forced eradication by a specialised Afghan unit. Britain has already announced an additional £22.5 million ($59 million) for the Afghan interdiction forces.

It is generally admitted that efforts led by the province's governor, Asadullah Wafa have been disappointing since he took on the job eight months ago.

Government corruption, particularly what Costa calls the Karzai administration's "benign tolerance of corruption" is also blamed for the explosion in the opium crop.

Last month Britain's all-party Commons Defence Committee issued a highly critical report on drugs eradication in Afghanistan, that warned that uncertainty among Afghans about the role of international forces could put service personnel at risk.

In a statement, British Prime Minister Gordon Brown said: "The international community is united in its desire to prevent Afghanistan once again becoming a failed state."

He said that progress would be measured "across a wide range of activity - covering governance, reconstruction, economic development and the building up of local security forces."

A Foreign Office spokesman acknowledged that the figures for Helmand were "particularly disappointing".

The spokesman added that "ridding Afghanistan of this curse will take a generation, perhaps more - in Thailand and Pakistan it took 15 to 20 years. There are no short cuts to ending the drug trade and we must be wary of silver bullet solutions, which will not work. "

- Independent

South Korean Hostages Released

Not a peep about what the Taliban received in return for the release. I wonder who else besides the S. Korean representatives were involved. At least lives were saved. I have never been impressed by the argument that negotiations just encourage the hostage takers to take hostages again. Of course it does this but this is more than offset by the value of the lives saved. A partial solution is to provide security for those who may be in harms way and in the Korean's case simply to have refused to let them travel the way they did. Anyway even if hostage takers are not rewarded they will probably continue to take them and just kill them if there is no negotiation.

Cheers and apology greet S.Korea hostage release
28 Aug 2007 15:57:52 GMT
Source: Reuters
Alert Me | Print | Email this article | RSS [-] Text [+]

Background
Afghan turmoil
More By Cheon Jong-woo

SEOUL, Aug 28 (Reuters) - Relatives cheered and hugged each other after being told on Tuesday that 19 South Korean hostages held in Afghanistan by Taliban insurgents for nearly six weeks would be released.

They also apologised to the nation, in a statement broadcast across South Korea, for the trouble their church caused by sending the mostly inexperienced Christian volunteers into one of the world's most dangerous areas.

Relatives have been holding vigil at the Saemmul Church, outside Seoul, since the hostages -- most of them women -- were seized in the Afghan province of Ghazni.

"The families are rejoicing at the news. They are busy calling other family members and friends at the moment to pass on the news," Bang Yong-kyun, pastor at Saemmul Church, told Reuters.

"We knew the negotiation process was turning favourable, but we never thought it would happen so soon," a spokesman for the hostage families, Cha Sung-min, told reporters.

"When the announcement came out, there was a commotion in the room as everyone hugged each other."

Asked what they will do when their loved one finally come home, he replied:

"We will do what we weren't able to do during the incident. We found out that the everyday routines were the most precious moments. Eating breakfast together or having slices of fruit after dinner.

"Those insignificant things are what we treasure the most."

Two male hostages were killed by their captors and two of the women have been released.

South Korea is the biggest source of missionaries after the United States, many of them flocking to the world's hot spots.

Church leaders have been sharply criticised for allowing enthusiastic but ill-trained members to travel by bus in Afghanistan.

There have also been pointed questions about the sensitivity of South Korea's rapidly growing number of Christian missionaries in some of the countries they work in and where other religions dominate.

"We are very sorry to have caused any problems to the country over the kidnappings," said family spokesman Cha. (Additional reporting by Lee Jin-joo)

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Monday, August 27, 2007

UN horrified by increase in Afghanistan opium production

The article leaves out some important facts. Although production may be most in the south certainly the drug trade is also in the north. No doubt many who profit from the trade are also in the government or "former" warlords. While Taliban no doubt are involved there are countless others including many supporters of the Karzai government. Another fact that is left out is that during the Taliban era they were paid to stop production and did so. Colin Powell presented them a check for their good work not all that long before everything turned sour and after 9/11 of course there was no more dealing with the Taliban. The Taliban never did completely stop drug dealing.
Anyway the mission in Afghanistan can at least record one outstanding economic success.

UN horrified by surge in opium trade in Helmand


Despite 7,000 UK troops, Taliban-backed production up 48%

Declan Walsh
Tuesday August 28, 2007
The Guardian


Britain's drug policy in Afghanistan's Helmand province lay in tatters yesterday as the UN declared a "frightening" explosion in opium production across the country, led by Taliban-backed farmers in the volatile south. Opium production soared by 34% to 8,200 tonnes, accounting for 93% of world supply and most of the heroin sold in Britain and Europe, the UN Office on Drugs and Crime reported.
The record crop was fuelled by Helmand, where, despite the deployment of 7,000 British soldiers and millions of pounds in development spending, opium cultivation surged by 48%.


------------------------------------------
The sprawling and violent province is now the world's single largest source of illegal drugs - greater than coca from Colombia, cannabis from Morocco or heroin from Burma, countries with populations up to 20 times greater.
A despondent UNODC noted that no other country has produced illegal narcotics on such a scale since China in the 19th century. "The situation is dramatic and getting worse by the day," said its director general, Antonio Maria Costa.

The sole bright spot was a sharp fall in poppy cultivation in the north, where the number of drug-free provinces doubled from six to 13. Balkh province, which produced 7,200 tonnes last year, eliminated poppy cultivation entirely. The disparity highlights a widening gap between relatively stable northern Afghanistan, where the Kabul government enjoys some authority, and the insurgency-racked south, where it has virtually none.

Favourable weather, Taliban insurgents and corrupt government officials all contributed to this year's record poppy haul, which has edged Afghanistan perilously close to becoming a full narco-state. The opium trade involves 3.3 million of Afghanistan's 23 million population, according to the UNODC, and accounts for more than half of its estimated $7.5bn (£3.7bn) gross domestic product.

Western countries, led by the US, have spent several billion pounds trying to eradicate the trade since 2001. But it has only grown stronger, and this year's dismal results are likely to revive a controversial debate on aerial crop spraying that pits America against the UK.

The US ambassador, William Wood, who was previously posted to Colombia, advocates dispatching squadrons of pesticide-filled crop duster planes to spray the poppy fields. Ground-based eradication destroyed 19,000 hectares this year, or one tenth of the total crop. But British and Afghan officials are trenchantly opposed to aerial spraying, arguing that it would only anger Afghan farmers and drive their families into the arms of the Taliban.

The Taliban have firmly entrenched themselves in the trade. Having vehemently opposed opium as "un-Islamic" in 2000, when the crop was virtually eliminated, the insurgents are now among its greatest champions. In Helmand, Taliban fighters protect poppy-growing farmers in exchange for a slice of their profits, and some commanders help to smuggle drugs. Their profits pay for arms, logistics and militia wages, the UN said.

Embarrassingly for the British, the Taliban have also linked poppy growing with military strategy. The town of Musa Qala, which the British military ceded to Taliban control last February, has become a major drugs hub. Opium is traded openly in the town bazaar and heroin processing labs have moved to the area.

The drug barons run little risk of being caught. No major smuggler has been arrested in Afghanistan since 2001. Yesterday Mr Costa urged President Hamid Karzai to submit a dozen major traffickers - whom he did not name - to the UN Security Council for inclusion on a Taliban sanctions list.

Frustrated western anti-narcotics specialists are also searching for fresh ideas that work. A senior British official said the UK will spend £10m on development projects in Helmand and contribute to a £13m "good performance" fund that rewards drug-free provinces.

Nato may also take a more aggressive role. Although western soldiers will not slash through fields of poppy - something British soldiers have always avoided - their commanders may start to target insurgents who double as drug smugglers. "There will be an overlap between counter-narcotics and counter-insurgency targets. We want people who are big in the insurgency and drugs to realise they don't enjoy impunity," said the British official.

But, he admitted, there was no silver bullet to kill the trade: "I expect it will be a long time before this problem is solved."